The Ministry of Defence (MOD), yesterday said it had not erred in the disposal of the Gulfstream GIII aircraft. The aircraft was sold to the China International Aero-Technology Import and Export Corporation (CACTIC) as a trade-in for the purchase of four K8 jets and one K8 simulator, Defence Minister, Kwame Addo-Kufuor told a packed Burma Camp Conference Hall last Tuesday.
He said in early May of this year, it became obvious that certain decisions had to be taken urgently on the Gulfstream aircraft.
Following this, during discussions between the Ghana Air Force and CACTIC, the idea to trade-in the old aircraft for the purchase of the four jets and a simulator was considered. He said even though the aircraft had been disposed of, the arrangements for the transaction were on-going and would be sent to Parliament for consideration.
However, two separate contracts were being considered about the disposal of the Gulfstream aircraft, he said.
The first contract involved the disposal of the Gulfstream jet for five million dollars for part-payment for the K8 jets and the simulator. The second contract involved the acquisition of the four K8 jets and the simulator.
In respect of the first contract, Dr Addo-Kufuor stated that legal advice available to the MOD indicated that the disposal of old government property did not need prior parliamentary approval.
But the second contract, which was an international transaction to which the Government of Ghana was a party and which has financial implications for the Consolidated Fund, made it mandatory to bring such transaction before Parliament.
Dr Addo-Kufuor said the confusion that the deal had generated among politicians and the media arose from the fact that part of the proceeds from the sale of the aircraft would be used as part-payment for the new jets and simulator, if the latter contract were approved by Parliament.
The MOD refrained from putting a price tag on the contract, even though some speculations had put the cost of a single jet as high as 20 million dollars, giving a combined value of over 80 million dollars.
But the Minister refuted this, saying that within the terms of the contract, Ghana would acquire the jets for less than 30 percent of the figure speculated. He said the exact figure on the contract would be made available to the Parliamentary Committee on Defence and Interior.
Air Vice Marshal Julius Boateng, Chief of Air Staff of the Ghana Armed Forces (GAF), who briefed the media on the technicalities surrounding the disposal of the Gulfstream aircraft, said action was initiated in August 2004 to reactivate the aircraft, which had been in storage at the Air Force Base in Accra since January 2001.
He said that up to that time, routine minor maintenance of the aircraft such as running the engines, greasing and taxing to exercise the moving parts were being performed until the Auxiliary Power Unit developed problems.
At that point, he said, it became necessary to seek outside technical support, as the Air Force did not have the capacity to deal with the problem.
Consequently, Mr James Sturges, and Airframe and Power plant Mechanic, whom the Air Force had been dealing with in matters pertaining to the maintenance of the Gulfstream sine it took delivery of the aircraft in 1999 was contacted.
Mr Sturges then recommended Whispering Wings, a firm specializing in Gulfstream support and consultation, owned by one Mr Norman Rea. He said Rea and Sturges were therefore contracted to inspect, service, discover and undertake preliminary works for evaluation of the condition of the aircraft.
They came up with recommendations, in September 2004 among which there was the need for a follow up inspection after the Air Force had procured and repaired some parts.
The Chief of Air Staff stated that as the aircraft was approaching the deadline for mandatory major inspection, that involved the overhaul of the engine and airframe in mid-May 2006, a follow up request was made to the consultants in December 2005. He said it was not until March this year that they arrived to evaluate the aircraft.
The team after their evaluation estimated an amount of between 4,460,000 dollars and 6,460,000 would be required to bring the aircraft from its current state to an airworthy status. He said that according to the evaluating team, the current market value of an airworthy Gulfstream in service was worth 6.5 million dollars.
But a Gulfstream in the condition of that of Ghana was valued at lees that one million dollars on an "as is where is" basis.
Air Vice Marshal Boateng said that arising from the situation, the Air Force was thus faced with the options of spending between 4.46 and 6.46 million dollars to refurbish the aircraft and selling it for an amount of about 6.5 million dollars, or selling the aircraft on "as is where is" basis.
This sale had to be done by mid-May when the engines of the aircraft would be due for mandatory overhaul.
The maximum market value the consultants placed on the aircraft after the necessary repairs and inspections had been effected, was 6.5 million dollars. He said that the team however cautioned that if the overhaul was not done by mid-May 2006, they could not foresee any offer for sale on the "as is where is" basis of the aircraft to exceed one million dollars, because the life of the engines would have expired by mid-May.
Chief of Air Staff said the Air Force in earlier discussion with CACTIC on the possible acquisition of the K8 jets, the idea of a trade-in of the Gulfstream for the four jets and flight simulator was mooted.
He said that in subsequent discussions following the consultant's evaluation report on the aircraft, CATIC offered to accept the Gulfstream as down-payment for the jets and simulator, together with recommended spare parts, tools, documents and ammunition, primary training, conversion and maintenance training for specified number of personnel and technical assistance.
Air Vice Marshal Boateng said after CATIC made an offer of five million dollars for the aircraft, the Ghana Air Force made a submission to the MOD recommending the proposal.
Government approved this and consequently the Ghana Air Force took the necessary steps to ensure that CATIC took possession of the Gulfstream aircraft for its repairs before the mid-May 2006 engine expiry date.
He noted that the full details of the CATIC contract on the K8 aircrafts had not been finalised, but that the understanding, which had been arrived at, was for CATIC to take delivery of the Gulfstream as a possible deposit in the trade-in arrangement to show Government's commitment for the purchase of the jets and flight simulator.
He said the arrangement was put in place to enable CATIC move the aircraft to a repair facility before its engines were timed out. "The purchase agreement when concluded will be presented to the appropriate authority", he added.