How Ghana Parliament debated the loan to buy two C-295 Airbus military aircraft
Mr William O. Boafo (NPP –– Akropong): Mr Speaker, I beg to second the Motion moved by the Chairman of the Finance Committee.
Mr Speaker, the purpose of the Motion is to ask the House to approve the procurement of CASA 295 for the Ghana Air Force and they are two in number. Mr Speaker, the CASA 295 is being procured to replace the Fokker 27, which are two in number now –– the aircraft which are operational now. They are two in number.
Mr Speaker, the F27 has been performing very useful duties for the Ghana Air Force, the Ghana Armed Forces and the civilian population.
Mr Speaker, we recalled that at the meeting of the Committee, one of the members of the Committee who happens to be a veteran, recounted how he was rescued by the F27 when he was involved in an accident, for an emergency treatment at the 37 Military Hospital.
So, Mr Speaker, there is no doubt that these two planes, if they are procured to replace the F27 would perform equally the same duties.
Mr Speaker, the CASA 295 has a maximum range of 5,630 and the cruising speed is 480 (km/hr) kilometres per hour and it has been manufactured or done in such a way that it can be operated on a short prepared runway and it can also take off and land in the same manner.
Mr Speaker, it is also to be noted that this particular aircraft has a sitting capacity of between 48 and 75 personnel and it could also help in peacekeeping operations by carting or transporting troops to and from operation areas which we have early on mentioned, like Liberia, la Cote d’ Ivoire, Lebanon and Democratic Republic (DR) of Congo or Sudan.
Mr Speaker, the two observations that one will make on this issue are that, the price of the aircraft as indicated in the Report of the Committee is $24 million plus. So the two aircraft will cost approximately $49 million plus. Mr Speaker, as we pointed out when we were considering the E190 aircraft, it appears that there is some difference on the Internet between the prices. We have the unitary cost stated on the Internet as $22 million, and in this case, where we do not have any configuration, we are wondering why there is a difference of about $2 million, so far as the unitary cost is concerned.
This maybe, is something we discovered after the Report. So we need an explanation on this issue. Mr Speaker, the other important issue that we have to bring to the attention of the House is that, with these aircraft, their maintenance is not something which we should play with at all.
This is because it is very costly to maintain them and having regard to the level of budgetary allocation to the Ministry of Defence as of now, we are wondering whether this could be accomplished, especially, in view of the fact that, there are proposed draw down of our troops in the peacekeeping operations where we hope to get some money to supplement the budgetary allocation to the Ministry of Defence for maintenance of these aircrafts.
So the other issue which we would like to notice, is the low level of budgetary support for the Ministry of Defence for the maintenance of these aircraft.
So one would have expected that the procurement of these aircraft would take that into account, and equally, that the purchasing of these aircraft must also be phased out so that we do not have them breaking down simultaneously to increase the cost of maintenance. It is just like the number of fire tenders which were procured.
So many of them at the same time, which is likely to face the issue of breaking down at the same time and crippling the Ghana National Fire Service. Mr Speaker, these are the observations that we would like to make on the procurement of CASA 295. These observations aside, I humbly support the Motion moved by the Hon Chairman of the Finance Committee.
Question proposed. 2.15 p.m.
Mr Moses A. Asaga (NDC –– Nabdam): Mr Speaker, I think it is heart-warming that at long last, we are trying to get a new transport plane for the military. The configuration for this particular aircraft has a lot of advantages and that is why I say it is heart-warming.
Mr Speaker, you know very well that for regions that are far away from KorleBu and Kumasi, anytime there is an accident, we would normally call on the military to support us with MEDIVAC, and the current transport –– [Interruption.]
Mr Boafo –– rose –– 2.17 p.m. –– [MR FIRST DEPUTY SPEAKER IN THE CHAIR] Mr First Deputy Speaker: Hon Member, do you have a point of order?
Mr Boafo: Mr Speaker, yes. So far as this CASA 295 is concerned, we were not told at the meeting that it would be reconfigured.
Mr Asaga: Mr Speaker, I did not say, “reconfigured” –– Mr First Deputy Speaker: Hon Member, take that on board and continue with your submission.
Mr Asaga: Mr Speaker, like I was saying, in the North, anytime we have very vital and serious accidents, there is always the call on the military to assist with MEDIVAC and we agree that with the acquisition of this CASA 295, this would go a long way to assist. The current one which some of us have been having the privilege to board is almost like a flying coffin and I am surprised that for the last 30 years, governments did not come to the aid of the military to get them a new and modern transport plane. Secondly, it has this advantage where it can even land on semi-prepared runways.
An example is the Paga airstrip, which is not able to take certain aircraft because it is a semi-prepared runway. With the new aircraft, we would now have the opportunity for the military aircraft to land in Paga. I think that we all need to support this particular purchase of the aircraft. I think that it is long overdue and we must commend the Hon Minister for Defence and the Government for that matter, for taking this issue up very seriously.
[MR BOAFO] [MR ASAGA] [MR OWUSU-AGYEMANG] On this note and the fact that my Hon Colleague, W. O. Boafo has seconded the Motion, we would not want a situation where now my Hon Colleagues would be abstaining.
This is because previously, he seconded the Motion on the other aircraft and spoke strongly in support of it, only for the Hon Members on his side to abandon him and abstain. So I hope that this time we would all vote for this particular Motion.
Thank you, Mr Speaker –– [Interruption.]
Papa Owusu-Ankomah: On a point of order. Mr Speaker, the Hon Member should not be saying these things because individual Hon Members have their own views and no Hon Member has abandoned anyone. I do not think that we need to bring this up at this time; it is so unnecessary. We have dealt with that and we are moving ahead.
Mr Hackman Owusu-Agyemang (NPP –– New Juaben North):
Mr Speaker, this one –– [Interruption.] Mr Boafo –– rose ––
Mr First Deputy Speaker: Hon Boafo, what is it?
Mr Boafo: Mr Speaker, as a member of the joint Committee which has brought the Report and if I rise up to second it, I cannot blow hot and cold. I had to support the Report; so what Hon Asaga said, I take it with a pinch of salt.
Mr Owusu-Agyemang: Mr Speaker, at Committee level, this is one procurement that did not generate too much heat. The terms seem “a bit more civilised” than the terms of the previous one where it was “libor plus 4 per cent”, but now, it is libor plus 1.6 per cent. The arrangement fee is 0.875 per cent, repayment period, up to 10 years although it does not state grace period.
The other one, for example, in one instance, there was “15 working days grace”. I do not know by what stretch of imagination those who negotiated this will call “15 days as a grace period of paying”. That is the time, maybe, it takes to run a cheque through the system.
Mr Speaker, the issue here is that this CASA 295 was also the subject matter of the Procurement Agency’s agreement but again, it did not say –– There are several transport planes including the Cs that we know, the 27s that we know; we discussed all these, but the Ghana Armed Forces chose this; fair enough. The very fundamental issue is that when you have a sole sourcing, then you must do due diligence, you must do value for money. This issue was raised –– In fact, I raised the issue and then on the Embraer and the answer was –– The Hon Deputy Minister for Finance and Economic Planning could not answer it but our own Hon Dr Akoto Osei said, maybe, because it was for the military. Then I crosschecked with Hon Kan Dapaah and he says that we should not circumvent the Procurement Law because it has to do with the military. What we are looking for is value for money and so, if you have a sole sourcing because that is the equipment suited for them, then I want this House to insist and to record that these must go for value for money audit.
For example, if this Embraer which costs $32 million and something and now put down for $55 million, excluding the re-configuration and the fuel tanks and everything, if we have sent it to the Crown Agents or to a similar agency to tell us what is the value for money, we would have known. So it is very important that where we have sole sourcing and it is coming by way of a loan –– [Interruption.]
Mr Terkpeh –– rose –– Mr First Deputy Speaker: Hon Deputy Minister, do you have a point of order?
Mr Terkpeh: Mr Speaker, I have a point of information. The Hon Member quoted me as having made a submission at the Committee and I wish to clarify it that, the point I made was that we had different procurement rules including one that goes to the Public Procurement Authority. That was the emphasis that I was making at the Committee. I did not wish to tell the Committee that we were not capable of providing answers to the question. 2.25 p.m.
Mr Owusu-Agyemang: Mr Speaker, I do not think my Dear Hon Colleague has answered the issue and the concern that we have. What I am saying is that if we subject these things to some kind of value for money audit, then you would come to the conclusion which would be acceptable by all. Assuming, for example, we had gone to the Crown Agents or a similar agency and they said the CASA was up to this price, yes, but the configuration was up to us –– That one, we considered it. That was whopping, another $18 million, $20 million, and that is where we had a lot of difficulty accepting the $55 million as the basic price of the aircraft. Therefore, if things must come here, then we must be seen to have done a thorough job.
This business of committees being hurried through, Mr Speaker, is not the best of things. Mr Speaker, in other jurisdictions, they would be taking about two weeks to examine the Embraer situation because of these controversies that surrounded it. What I am saying is that, if the Public Procurement Law (PPL) –– and if there is no special procurement law for the military or the Ghana Armed Forces, then they must also be subject to review. The point was made that a lot of single sole sourcing was being done.
Mr Speaker, in that case, to make sure that we do not compromise the integrity of the PPL, there is absolute need to make sure that due process is followed. In this instance, we do not know, we did not search for the CASA and its price, we have agreed to let it go, support it but what we are saying, Mr Speaker, is that in future, it will be useful to have somebody else take a look at it for us. Otherwise, the approval process becomes a bit tricky and then people begin to ask what due diligence you did. In these days of transparency and accountability in governance, and as I said, the Right to Information Act also coming on stream, we would not be doing ourselves any good service if we do not adhere to that.
So Mr Speaker –– [Interruption.]
Alhaji Sumani Abukari: On a point of order. Mr Speaker, my Hon Friend who raised these points said he raised them at the Committee meeting. Yes, he did. But he got responses. He was told by the Ministry of Finance and Economic Planning officials there that due diligence was done, value for money was done. Another member pointed out to him that this Crown Agency was a thing of the past.
We have our own institutions in Ghana which we are encouraged to use. So we must encourage and utilise our own institutions like the PPA. So I am surprised here, he is still talking about due diligence and Crown Agents and some colonial recipes, et cetera; it is not necessary now.
Mr Owusu-Agyemang: Mr Speaker, it is not a matter of colonial. Nobody was able, including the Hon Minister, to tell us of the agency in Ghana even if it is local, indigenous which did the due diligence, which did the comparative analysis of the prices. We asked for it and the Hon Deputy Minister has just answered it, that that was not done. What was done, we were told by the Minister was that the military had gone and done their homework and that is what they have brought. Doing your own homework, marking your own marks to get 80 per cent out of 100, is not the way to go. That is what they did in the first year and they got 80 per cent out of 100. That is not the way to go; the way to go is to make sure that the people of Ghana –– [Interruption.]
Mr Terkpeh: On a point of order. Mr Speaker, I rise on a point of information. Mr Speaker, I think the presumption that when we have used our own Public Procurement Agencies (PPA), including the Central Tender Board and the National Procurement Authority, somehow, they are not up to scratch and do not have the appropriate procedures and mechanisms to ensure due diligence. This presumption is something which I think is erroneous and must be corrected. I sought to make this point and the point I made was that, the procedures within the PPA were robust enough and it is not only when we have subjected procurement to an external agency like the Crown Agency that we can be assured that the proper thing has been done. Indeed, Mr Speaker, the object of the Board of the PPA is to harmonise the processes of public procurement in the public service to secure a judicious economic and efficient use of State resources. Therefore, I think we must accept that the PPA, which provides guidelines for all the entities, institutions and bodies that we have in the country has the necessary and requisite procedures to ensure value for money as well.
Mr Owusu-Agyemang: Mr Speaker, I was at the Committee and that was not what was said. Our understanding by the Public Procurement Authority and by the same Hon Minister and by the Hon Minister for Defence was that, they had given permission for it to be done, not at a particular specified price. They had been given permission, yes, to sole source but at a specific price. The way we asked –– I will challenge the Hon Deputy Minister and the Minister for Finance and Economic Planning to show the submission to the Procurement Authority whether it did say that we should buy the Embraer at a price of $88 million including the hangar. That was not done; they only justified the fact that there was need to go that way.
Mr Speaker –– Mr First Deputy Speaker: Hon Member, the Motion is about CASA 295 but you keep on referring to the rule of relevance.
Mr Owusu-Agyemang: Mr Speaker, all the three were taken together. We had the Embraer, the CASA and the MPP Guardian Surveillance; all of them were taken together. Mr First Deputy Speaker: But here, the Motions are not being taken together, they are taken separately.
Mr Owusu-Agyemang: Mr Speaker, the point that I am making which I am canvassing and which I want your support and that of this House is that, even where the sole sourcing is done, we must be told which agency did the due diligence, and which agency did the value for money. In this instance, nobody could tell us but we decided at the Committee level to part it nonetheless. So I am surprised that the Hon Chairman of the Committee on Defence and Interior is saying that this was discussed. It was not discussed. Having said that it is not a controversial thing in my view or hopefully, for all of us to support. What we are saying is that, even if it is the military, they are subject to civilian authority and they must bring things just as any other agency will bring, then we know that what we have approved for them is for the people of Ghana. It cannot be the case that they set the examinations and they mark themselves. They are the ones looking for it; they go and come to say, “this is the price” and there you end. If the Hon Minister can tell us, they should tell us who vetted this whole thing.
Nobody vetted it but we are letting it go. But I am saying that next time round, we should make sure that the vetting process is complete and absolute. In fact, elsewhere, the committee that met with Embraer and also with CASA should meet the Committee on Defence and Interior and even Finance and discuss it. Here we are, we have done some of them, shylock-like in these provisions and then some which are reasonable. This is our job as Members of Parliament (MPs), as lawmakers and we have to make the Ministers comply and everybody else complies with it.
I am very passionate about the Ghana Armed Forces and the military always understanding, that they are subject to civilian rule and whatever everybody does, they must also do it. Maybe, the unfortunate thing is that the head is also a General; that is where the problem is.
So it is all Generals through. But sometimes, if you have a civilian head, then you know the way to go. On that note, Mr Speaker, I support the Hon Minister’s Motion for the amount of money to buy the two CASA planes. I hope that just as we said at the Committee level, that it would be well maintained, and that provision had been made to all these five aircraft or so that we are getting now in addition to the ones that we have already that we have been flying and all the rest, but not that they come and they are parked somewhere after a while. That is what we said at the meeting. Thank you, Mr Speaker. 2.35 p.m.
Deputy Minister for Water Resources, Works and Housing (Maj.) (Dr) (Alhaji) Mustapha Ahmed (retd) (MP)): Mr Speaker, first and foremost, I want to thank the Committee for doing such a good work and also to thank the Ministry for taking such a bold decision to bring this Motion here for approval, to equip the Ghana Armed Forces, so that they can be efficient in the performance of their duties.
[MR KYEI-MENSAH-BONSU] As has been stated, these two equipment, the aircraft that are being acquired are going to be put to a very good use.
Mr Speaker, I have had the opportunity of using the services of the Air Force aircraft while I was in service in Tamale. It came in very handy when we had situations of air medical evacuations (Medivacs) in Navrongo, in Wa and other places in the North. I believe that with the arrangements put in place in this package, the maintenance, as has been mentioned, would be attended to rigorously to ensure that these aircraft are used and will remain very useful to the nation for a long time to come. On this note, Mr Speaker, I wish to recommend that the House approves this Loan Agreement for the Air Force. Thank you very much.
Mr Joseph B. Aidoo (NPP –– Amenfi East): Mr Speaker, I have risen to lend support to the Motion. Mr Speaker, it amazes me to hear the Hon Member for Nabdam, Hon Asaga say that the procurement of these aircraft is long overdue. Mr Speaker, this morning, I indicated that the path they treaded in 2008, we would want to disassociate ourselves from that path; we will not go there.
Mr Speaker, the –– [Interruption.] Mr Alban S. K. Bagbin –– rose ––
Mr First Deputy Speaker: Hon Minister for Water Resources, Works and Housing, do you have a point of order?
Mr Bagbin: Mr Speaker I have a point of order. This House and the country is unrelentedly being misled by submissions here that we were irresponsible in our opposition in this House.
In fact, Hon Asiamah used that word. Because we opposed their Motion in trying to acquire an aircraft, he said that. But it was important to note that in 2008, it was Highly Indebted Poor Countries (HIPC) that we were in but ––
Mr First Deputy Speaker: Hon Asiamah is not on the floor now.
Mr Bagbin: No, I am referring to what he is also saying. This is because he is following the same thing. It is the same thing that ––
Mr First Deputy Speaker: Let us limit it to what the Hon Member for Amenfi East is saying, otherwise, we would open the Pandora box.
Mr Bagbin: Yes, I just wanted to say that he was also referring to the same thing, I mean the Hon Member for Amenfi East.
Mr Speaker, in 2008, Mr Kwame Pianim told all of us that if the Ghana Telecom had not been sold, it would have been difficult to run the economy. This year, we are not even in the Third World now. This country now is in the middle income, the economies are different, the situations are different. Inflation at that time and inflation today, interest rate, the economy and everything, they are different. So at that time, we used the season, it was not advisable to acquire those aircraft at those prices that time. It is not the same this year. So they cannot be referring to that; they are misleading the people of this country.
We are not being irresponsible at all; we were responsible in Opposition.
Mr Kyei-Mensah-Bonsu: Mr Speaker, for the record, this country achieved or attained middle income status not in 2010 or 2011 but in 2008, when this one came up for debate here. It is true. Ask the Hon Minister for Finance and Economic Planning. If he cares to know, he should ask him. Ask him! If he does not know, he should not mislead this country.
Mr First Deputy Speaker: Hon Member for Amenfi East, continue.
Mr J. B. Aidoo: Mr Speaker, the intervention of the Hon Minister for Water Resources, Works and Housing,in my view, should not have come at all.
Mr Speaker, in 2008 when the need arose for us to get military aircraft, his opening sentence, when he got up on the floor of the House and with your indulgence, I will read for the entire House to hear. Mr Speaker, this is what he said. That is coming from the then Minority Leader, Mr A. S. K. Bagbin and this is from the Official Report of Wednesday, 19th March, 2008; column 2198 and Mr Speaker, this is what he said.
This is his opening sentence: “Mr Speaker, I stand to call on this House to wholeheartedly reject this Motion”. “Wholeheartedly”, we are not even yet to reject it. We are not rejecting it. He said the House should wholeheartedly reject it and that is why I said we would not tread that path. We are not going their way; we would not go their way. We want to go the right way for Ghanaians.
Mr Speaker, what we are looking for –– [Pause.] –– [Interruption.] Mr Bagbin –– rose ––
Mr First Deputy Speaker: Hon Minister for Water Resources, Works and Housing, do you have a point of order to what he has said?
Mr Bagbin: That was why, Mr Speaker, I said I used the word “unrelenting”. This is because I am saying that the conditions are not the same; they are not; they are not the same.
Mr First Deputy Speaker: They have disputed that. Hon Minister, they have disputed that point.
Mr Bagbin: Why? I have my figures.
Mr J. B. Aidoo: Mr Speaker, what we are doing today is to look for tactical military transport aircraft for our Ghana Armed Forces; it is in the right direction.
And unlike the –– [Interruption.] Alhaji Fuseini –– rose ––
Mr First Deputy Speaker: Do you have a point of order?
Alhaji Fuseini: Yes, Mr Speaker. Mr Speaker, the –– Mr First Deputy Speaker: What order has the Hon Member on the floor breached?
Alhaji Fuseini: He has breached an order from the Standing Orders. He said that the opening statement of the then Minority Leader –– I have worked with the then Minority Leader as a lawyer. I have worked with him as a Member of Parliament in the Minority and I know that when he makes statements, especially, when he makes important opening statements, he has a basis. I thought the Hon Member would go further to read and tell us why the then Hon Minority Leader called on the House to wholeheartedly reject that loan agreement.
If he does so, he will see clearly that there was basis for that call. Mr First Deputy Speaker: Hon Member, continue.
Mr J. B. Aidoo: Mr Speaker, I think I [MR J. B. AIDOO] have already referred Hon Members to the Official Report. If he cares, he can go and then look at it.
Mr Speaker, I was indicating that unlike the Embraer which we dealt with this morning, the unitary price of this batch of aircraft is within the range because we are talking of an average price of $24 million –– [Interruption.]
Mr I. K. Asiamah –– rose ––
Mr First Deputy Speaker: Hon Asiamah, do you have a point of order against the Hon Member on the floor?
Mr I. K. Asiamah: Yes, thank you so much.
Mr Speaker, I have all the respect for the former Minority Leader; there is no way I can attack his personality. What I said was that, in Opposition, we were being responsible; I never attacked his side. That was all that I said. But we have to be responsible as an Opposition. So if he says we are being responsible –– unless he accepts the fact that maybe, I do not want to say that. But if I say as Opposition, we are being responsible, I think I have the right to be responsible as an Opposition Member. In my view, it is a statement that has no harm at all and yes, I did not use the word “irresponsible” on his side; I did not say that. I said as a Member of this House and an Opposition Member, I should be more responsible and as for me, it is important. So in my view, I never attacked him. He knows I respect him so much; he is my role model in this House, one of the people I respect and he knows it personally. So he should not take it personally. But at that time, he was wrong.
Mr Second Deputy Speaker: Hon Member for Amenfi East. Hon Members, let us make progress.
2.45 p.m.
Mr J. B. Aidoo: Mr Speaker, I was indicating that if you take the unitary cost of the CASA 295, it is just about $22 million and that is the July, 2011 price. So if what the Committee’s Report is indicating, that $24 million is anything to go by, then it means that it is within range. Of course, there is a difference of about $2 million which, maybe, when the Hon Minister is concluding, he may want to explain to us. But Mr Speaker, if you compare this with what we dealt with this morning, that is the Embraer 190, whereby, –– [Interruptions] – – Oh!
My attention has been drawn because I was quoting my figures in dollars, that is what is on the ––[Interruptions.] But if it is in euros, then it is quite high. If it is in euros –– 24 million euros, then it is quite high because the unitary price on the international market of a CASA is $22 million. So we need an explanation to that. And that goes to reinforce the earlier argument that we were making, that if you take the Embraer, the unit price as of July, 2011 was around $40 million, the highest is $43 million. But their Embraer –– [Interruption] –– “Umbrella”, yes, not the NDC one.
Mr Speaker, if you look at the price which was quoted for us, it was $65 million; that was the unit price compared with the market price of $40 million.
Mr Speaker, in the Committee’s Report, I have taken note of a few things. One, the technical training courses, technical assistants to be ferried, travelling, living allowances for buyer’s representatives, all these are free and that makes this facility very receptive to us. These conditions are good. But Mr Speaker, when you take the Appendix, that is the last page of the Appendix, and you look at the Sales Contract, you would note that the down payment of 24 million euros ought to be paid on the 30th of June, 2011. This is a clear indication that already, this amount has been paid. If it has been paid –– This is because today is 19th of July and they should have paid the amount –– you know the deadline ––
Interruption.]
Today is what –– 20th. All right. Then thanks for the correction. Today is 20th of July, 2011 and the down payment which is almost equivalent to the cost of one of the aircraft should have been done by the end of last month.
Mr Speaker, this is a clear indication that this payment has been done and we are only here to rubber stamp what the Executive had done; and in my opinion, unless maybe, the Hon Minister can explain, I would want an explanation to that effect why they should bring a loan facility to this House for us to rubber stamp in contradiction of what the Constitution is enjoining all of us to do.
Mr Speaker, if the Hon Minister could explain that I would urge Members to support this Motion. It is not controversial, it is a good facility, except that he has to clear these concerns for us. With that, I thank you. Mr First Deputy Speaker: Hon Members, that brings us to the end –– Would there be –– Yes, Hon Minority Leader, you did not indicate that you wanted to contribute when I said that it was one each from both sides.
Minority Leader (Mr Osei KyeiMensah-Bonsu): Well, Mr Speaker, I thought because two others were up already, you were referring to them and selecting one of the two, that was why I did not –– but I may, with your indulgence, want to make a few points. Mr Speaker, as has already been said by Hon Colleagues who have spoken earlier, I think in principle, this is something that we should be supporting.
The CASA 295 Military Transport Aircraft is, as has been said, a tactical military transport aircraft. It is going to provide tactical and logistics support, and it is also to facilitate air dropping and medical evacuation, as well as even providing humanitarian assistance to the civilian populace.
Mr Speaker, to date, countries that have purchased the CASA aircraft, include Spain where it is manufactured, Poland, Brazil, Switzerland, Jordan and the United Arab Emirates.
Mr Speaker, the United Arab Emirate’s four purchases are for maritime patrol missions. The small size C-295 will, without doubt, complement the medium-size E190 transport aircraft which has just been approved.
Mr Speaker, Brazil has purchased 12 of the C-295 aircraft to date. Finland has also purchased two, to replace their aged Fokker 27 aircraft. Mr Speaker, but again, we go to the issues that we raised. This aircraft, to the best of my knowledge, is not going to be configured. Again, we look at the shell cost. On the Internet from the manufacturers, the aircraft, otherwise, called “Persuader”, is the same aircraft.
Mr Speaker, the cost price of the C-295, the Shell is $22 million from the manufacturers –– their own Website. Here, we are saying that it is €24.5 million. Again, you wonder where these figures are being conjured from.
Mr Speaker, the capacity of the aircraft is the same; the cargo weight is 9,250 kilograms or 20,392 pounds, the maximum take-off weight –– all these things are provided for in the Agreement that is before us –– the same thing. So how come the price variations once again?
Mr Speaker, we have said that we want the military to be supported, and if we can make savings and purchase more of the aircraft for them, so be it. But it cannot be that the manufacturers themselves are telling us that the Shell cost is $22 million and you come before us and tell us that it is €24.5 million. It cannot be justified.
Mr Speaker, the €24.5 million certainly, is going to be in the region of about $35 million –– $35 million for the purchase of one, when we know that the manufacturers themselves are saying that the cost of the C-295, also known as “Persuader” is going for $22 million.
2.55 p.m.
Mr Speaker, it is for this reason that we said these matters should go back to the joint Committee, for them to do proper due diligence and then come back to us. [Interruptions.]
This is 2011–– is 2011 price. That is what they have said.
Mr Speaker, it is unjustifiable –– [Laughter] –– Mr Speaker, this is too serious to be reduced to a laughing matter as the Hon Majority Leader is inducing it to.
Mr Speaker, it is too serious a matter. Mr Speaker, the dimensions of this, the length is 24.5 metres; the wingspan is 25.8 metres; it is the same thing. So why?
Mr Speaker, would the Hon Minister explain to us whether it is a typographical error? When I saw it, I looked at the figure first; I really felt that it was in dollars, so I said, “well, if it is $24.5 million, it goes up by $2.5 million” and I said, “we could accommodate that”, only to notice that the currency is euros. It takes it to about $35 million. It is unacceptable.
Mr Speaker, the Shell cost is unacceptable. Mr Speaker, interestingly, this Agreement was referred only recently to the Attorney-General and Minister for Justice for advice –– 21st June, 2011. It is here.
Mr Speaker, the Attorney-General and Minister for Justice proffered his opinion on it on 21st June, 2011. The same day, it went to the Hon Minister for Finance and Economic Planning and on the same day, he also okayed it and sent it to the Presidency –– the Office of the President –– on the same day, 21st June, 2011, we had Executive approval. Aba! Aba! What is this?
Mr Speaker, Hon E. T. Mensah –– 19th March, 2008, even though the programme had been with us for about two months, said Government was applying indecent haste to the consideration of that matter. Two months. This one, one day. From the Attorney-General’s Office to the Ministry of Finance and Economic Planning to the Presidency and all of them date-stamped 21st June, 2011.
But I would not want to qualify it as “indecent haste” but the picture speaks for itself –– [Interruption.]
Mr John Tia Akologu: On a point of order.
Mr Speaker, I am rather surprised about the posture the Hon Minority Leader is taking in this issue. What he is implying now is like somebody did not do due diligence on certain things and acted hastily to do certain things. But this House, by our own Standing Orders, we also do similar things–– when we set aside Standing Orders to be able to carry out urgent business in this House. So, I see nothing wrong if an Hon Minister will set aside any other thing and attend to an urgent issue and another Hon Minister will do the same thing, so that we get this nation going.
I do not want us to tread that path, so that this House will be disabled in carrying out our work when we are to set aside the Standing Orders to deal with urgent matters. So, please, the Hon Minority Leader should understand that in matters of urgency, there is action that should be taken and certain things might have to be overlooked, so that these actions are taken.
So, I do not want this House to trap itself such that when we are setting aside our Standing Orders, people will criticise for not doing due diligence.
Mr Kyei-Mensah-Bonsu: Mr Speaker, with respect to my Hon Colleague, I do not know what value he has added to what I have said.
Mr Speaker, the Attorney-General, in proffering his opinion, went through the Motions and suggested clause by clause –– reconsideration of so many parts. It is here. It is a three-page weighted opinion that the Attorney-General and Minister for Justice proffered.
Mr Speaker, I want to believe that what the Attorney-General did could not have been done in one hour.
Mr Speaker, when I say that the letter goes to him that 21st June, 2011 and then he proffers this opinion as expressed here within one day, transmits same to the Hon Minister for Finance and Economic Planning who relates same to the Office of the President, same day, it is simply incredulous. Simply incredulous. Simply incredulous if he wants to understand this.
Mr Speaker, I believe there are matters that should concern us and this House, as was said by Hon Kunbuor on 19th March, 2008, we should be looking for value for money in this effort. Yes, we want the military to be equipped and properly, so within the limits of our abilities. But it cannot be said that a product that is advertised for $22 million comes to Ghana and comes to €24.5 million. It cannot be comprehended by anybody –– and there is no re-configuration.
Mr Speaker, that is the seriousness of the matter.
Mr Speaker, I would want to believe –– [Interruptions.]
Maj. (Dr) (Alhaji) Ahmed (retd): On a point of order. Mr Speaker, the Hon Minority Leader is grossly misleading this House with reference to the pricing that he is quoting from the Internet. Mr Speaker, the price on the Internet refers to the Shell price of an aircraft.
Mr Speaker, what we are dealing with is the operational price of the aircraft. The aircraft that he has seen on the Internet, if he wants to buy that aircraft, I would want to advise him that he will have to request for the equipment that will make that aircraft operational at an extra cost. He would have to request for radar –– different types of radar.
He would have to request for all the things that will make that aircraft operational. Indeed, what we have here is the aircraft which will be delivered to Ghana and which is fully operational and will meet the specifications of our Air Force.
3.05 p.m.
Mr Kyei-Mensah-Bonsu: Mr Speaker, this really is becoming a rather unproductive exercise. The Hon Deputy Minister for Water Resources, Works and Housing would often not listen to what we are saying and when we have finished, he takes us back. I said exactly that. That the –– we are talking about the cost of the Shell; yes, additional equipment would be certainly mounted. Those ones are covered –– additional equipment.
They come with additional cost; they have been specified. So what is he saying? I am not unmindful of that.
Mr Speaker, I am referring to ––
Mr First Deputy Speaker: The point that he is making is that, that aircraft, the price that you are quoting –– if I get him right –– that aircraft cannot fly, it is the Shell. But for us to make it operational, he has drawn a distinction between the operational price and the Shell price. Well, that is the point he is trying to make –– a difference between the operational price and the Shell price, whatever that means – – operational price and the Shell price.
Mr Kyei-Mensah-Bonsu: Mr Speaker, he is misleading everybody in this country, including himself. Mr Speaker, the price he has been quoting here is the FFP –– the Firm Fixed Price of the aircraft that could be airborne and travel anywhere.
You require additional equipment for whatever purposes that you want it to serve. Those ones have been specified below. If he had looked at them, he would furnish himself with these details. Mr Speaker, it is unfortunate that the Hon Deputy Minister for Water Resources, Works and Housing, himself, a retired Military man –– I know he is not retarded –– I know. He is retired but not retarded –– [Interruption.]
Lt. Gen. Smith (retd) –– rose ––
Mr Kyei-Mensah-Bonsu: This path that he is treading –– he is my Friend –– this path that he is charting for himself ––
Mr First Deputy Speaker: Hon Minister for Defence, do you have a point of order?
Lt. Gen. Smith (retd): Mr Speaker, what the Hon Mustapha said is quite right. We have operational cost and if Hon Members would remember, I did say that a technical team sits with the manufacturers and they negotiate.
For instance, this particular aircraft, the delivery time, when you sign the contract, is 24 months and looking at our situation now, we do not have any transport aircraft in the system; we needed the aircraft urgently. These things have been going on for the past two and a half years. So there is the need to get these aircraft home –– and the negotiating team sat with them. As I speak now, they have given us six to eight months to deliver the aircraft. All these things are taken into consideration. As he said, operational time; and that is what we had to negotiate. All the “free of charge” things you see there, we negotiated for them.
Mr Kyei-Mensah-Bonsu: Mr Speaker, I do not think –– we agree with what the Hon Minister has said but the Hon Minister is not, by any stretch of imagination, telling us that alone –– the operational time of delivery –– is going to add close to about 10 million to one aircraft. The Hon Minister is not telling us that.
Mr Speaker, clearly, there is a deficit of rationalisation. It cannot be rationalised in any way; it cannot. In 2008, when the matter came up for debate in this House, people were perhaps, very unmindful of the fact that you do not pick an aircraft from the Shell, that you had to give yourself sometime for it to be manufactured. But I am not going there. I am only addressing the matter relating to the Shell cost.
Certainly, it may come up somewhat. But I am suggesting strongly to the Hon Minister, that he cannot justify that $22 million would now translate to $24.5 million , which would then take us to more than $35 million. If we are able to make savings –– Mr Speaker, I keep insisting, if there is a way of making savings and ploughing it back to the Military, so be it. How many helicopters cannot $10 million or 11 million, which we believe is excess purchase for the military?
I do not think that this is justifiable at all –– [Interruption.]
Alhaji Fuseini: On a point of order.
Mr Speaker, the Hon Minority Leader keeps reminding us that in 2008 we said many things and we were very unmindful of the Shell price. Yes, he did not want to believe that people were unmindful of that.
That is very welcome because the Obeng Manu of late, once told us that “repeating mistakes has never been considered as experience”. So if he knows that we were unmindful, he knows we were unmindful, and he knew at that time that the Shell price would not let an aircraft fly, why does he want to repeat the mistakes of the past?
Let us make progress and approve of the facility, so that we will learn that –– [Interruption] –– sothat we would learn from the admonition of Obeng-Manu.
Mr Kyei-Mensah-Bonsu: Mr Speaker, I think the issues have been raised and I do not want to repeat myself. If the Hon Minister, has a way of making savings to plough back to the military, to do more purchases for the military, please, he should ensure that it is done.
But I do not think that, seriously speaking, we can approve of this in this state. Certainly, it is not the best; it is not the best. I do not want to go the path of E. T. Mensah who said that, “this is being done indecently to attract kickbacks for some people”. I do not want to go that path at all –– [Interruption.]
Maj. (Dr) (Alhaji) Ahmed (retd)–– rose ––
Mr Kyei-Mensah-Bonsu: I do not want to go that path at all. No, I have not said it. I said, “I do not want to go there” ––
Mr First Deputy Speaker: Hon Deputy Minister, do you have a point of order?
Maj. (Dr) (Alhaji) Ahmed (retd): Mr Speaker, in 2003, there was a similar issue here from the Ministry of Defence with regard to the acquisition of four helicopters for the Ghana Armed Forces. A similar objection was raised and a search on the Internet showed that one helicopter from Russia would cost $5 million. But then, the Minister for Defence at the time, took pains to explain to us that that $5 million was just the cost of the Shell price and therefore, for four helicopters, we paid $44 million.
This House approved that loan for the Ghana Armed Forces to acquire four helicopters for use in the United Nations Peacekeeping Operations. It is the same scenario that the Hon Minority Leader is raising today. So Mr Speaker, I want to refer the Hon Minority Leader to that scenario and to take –– [Interruption] ––
Thank you very much, Mr Speaker.
Mr First Deputy Speaker: Hon Minority Leader, you were winding up.
Mr Kyei-Mensah-Bonsu: Mr Speaker, yes; I will certainly wind up. Mr Speaker, this House, in 2003, never approved of any purchases of helicopters from Russia. We never. He should not pollute this air for us; we never did that.
Mr Speaker, when Hon Members get up on the floor of this House, they are required to speak to the truth –– and he is a former military man, and he does that. It is not right.
Mr Speaker, finally, as I said, the terms, in my view, are better than the one that we dealt with earlier. This one, the interest, that is yieldable, plus 1.60 per annum, represents a better condition than what we did which involved four per cent per annum ––libor plus 4 per cent, which is what we raised.
So this is a better arrangement except that the cost, in my view, there is much suspicion about how 22 million has become close to $35 million. That is unacceptable. Under no circumstances, can anybody justify that, in particular, when the aircraft is not being reconfigured.
So Mr Speaker, as I indicated earlier, I think the better approach would be to refer this back to the Committee, let them do better due diligence on it. I do not want to go on the path of the sole sourcing and so on. I do not want to go there.
That is what has already been done. We are being told that we had to do down payment on or before 30th June, 2011.
Mr Speaker, we want to know from the Hon Minister whether this commitment has been done. If that commitment has already been done, he must explain how come it was done without the approval of this House. Mr Speaker, with that, I would want to thank you for indulging me.
3.15 p.m.
Mr First Deputy Speaker: Hon Minister, do you want to say something?
Lt. Gen. Smith (retd): Mr Speaker, in connection with the down payment, the Attorney-General’s Department (A-G) took a long time to respond to our request when we sent the purchasing agreement to it. We just received it.
As I speak now, a representative from the company is here with the Air Force and my Legal Department incorporating all the comments that the A-G’s Department observed on the contract. They are going on right now –– [Interruption.]
Mr Kyei-Mensah-Bonsu: Mr Speaker, what ought to be responded to is the down payment. Mr First Deputy Speaker: They want to know –– if you look at the sales payment that has been attached as an Appendix, whether the money must be down payment before 30th of June and they want to hear whether the money has been paid or not yet paid.
Lt. Gen. Smith (reted): Mr Speaker, the A-G’s Department made the same observation; the team is here; we are correcting these things and discuss them with the Ministry of Finance and Economic Planning before the final agreement will be signed.
Mr Terkpeh: Mr Speaker, I just wish to inform the House that no payment has been made. Usually, in the course of negotiations, we make the banks and contractors aware of the fact that the ratification by Parliament is a very important element of what we do and therefore, we have notified them. I heard that payment could not be made.
Mr First Deputy Speaker: So have you asked for extension and if so, up to when?
Mr Terkpeh: Mr Speaker, as the Hon Minister indicated, we are in discussions with them and immediately this ratification is –– But Mr Speaker, while on my feet, I also wish to –– I was trying to catch your eye –– state that the opinion was not given on the same day.
I think the Hon Minority Leader was looking at two different –– the stamp with the 21st is actually the stamp from the Ministry of Finance and Economic Planning which is the date on which the letter was received from the Ministry of Justice. If you read the first paragraph, it says that: “This is in response to your letter dated 1st June.” So in actual fact, that explains the delay which the Hon Minister is talking about ––
Mr First Deputy Speaker: Hon Deputy Minister, it is not the date on the letter, it is the stamp, the date as being received, that is the point the Hon Member –– the point he is making is that we have 21st stamped on the document. A letter can be dated on a particular day but it might not be received in a particular Ministry on that –– that is the point he is making. So you look at the stamp. So what are the dates with regard to the stamping?
Mr Terkpeh: Mr Speaker, what I am saying is that the letter from the Ministry of Justice is dated 21st June and given the distance between the Ministry of Finance and Economic Planning and the –– [Interruption.]
No, I am making a point. The letter was received on the same day. However, the letter from the Ministry of Finance and Economic Planning to the Attorney-General is dated, as in the first paragraph, June 1. So the opinion could not have been given on the same day. The notification was received the same day the letter was written but the opinion took effect from the 1st of June when this letter was written. That is what I wish to –– [Interruption.]
Dr A. A. Osei: Mr Speaker, my good Friend, the Hon Deputy Minister is missing the point the Hon Minority Leader was making. The statement my Minority Leader said was that the letter from the Attorney-General (A-G) brought to the Ministry of Finance and Economic Planning is dated 21st June. If the Hon Deputy Minister is listening.
The issue is not when the Ministry first wrote to the Attorney-General. The fact is that the Ministry of Justice’s letter is dated 21st June; the Ministry of Finance and Economic Planning received it on 21st June and the letter from the President is dated 21st June. That is the point he was making.
[An Hon Member: When did the Ministry act on it.]
Let us not go there. I think the point has been made. The less you try to respond to these issues the better for all of us to move ahead.
Mr First Deputy Speaker: Hon Members, that brings us to the end of the debate. Question put and Motion agreed to.
RESOLUTIONS
GoG/Deutsche Bank Sociedad Anonima Espanola (Spain) Credit Agreement Deputy Minister for Finance and Economic Planning (Mr Seth Terkpeh) (on behalf of the Minister for Finance and Economic Planning): Mr Speaker, I beg to move, that WHEREAS by the provisions of article 181 of the Constitution and section 7 of the Loans Act, 1970 (Act 335), the terms and conditions of any loan raised by the Government of Ghana on behalf of itself or any public institution or authority shall not come into operation unless the said terms and conditions have been laid before Parliament and approved by Parliament by a Resolution supported by the votes of a majority of all Members of Parliament; PURSUANT to the provisions of the said article 181 of the Constitution and section 7 of the Loans Act, 1970 (Act 335), at the request of the Government of Ghana acting through the Minister responsible for Finance and Economic Planning, there has been laid before Parliament the terms and conditions of the Credit Agreement between the Government of the Republic of Ghana and the Deutsche Bank Sociedad Anónima Española (Spain) for an amount of sixty million, thirty-four thousand, six hundred and thirty-six euros (€60,034,636.00) for the acquisition of two (2) C-295 military aircraft for the Ghana Armed Forces.
THIS HONOURABLE HOUSE HEREBY RESOLVES AS FOLLOWS: IN ACCORDANCE with the provisions of the said article 181 of the Constitution and section 7 of the Loans Act, 1970 (Act 335), this House approves the Credit Agreement between the Government of the Republic of Ghana and the Deutsche Bank Sociedad Anónima Española (Spain) for an amount of sixty million, thirty-four thousand, six hundred and thirty-six euros (€60,034,636.00) for the acquisition of two (2) C-295 military aircraft for the Ghana Armed Forces.
Mr J. K. Avedzi: Mr Speaker, I beg to second the Motion. Question put and Motion agreed to. Resolved accordingly.
Chairman of the Committee (Mr. James K. Avedzi): Mr Speaker, I beg to move, that this Honourable House adopts the Report of the joint Committee on Finance and Defence and Interior on the Credit Agreement between the Government of the Republic of Ghana and the Deutsche Bank Sociedad Anónima Española (Spain) for an amount of sixty million, thirty-four thousand, six hundred and thirty-six euros (€60,034,636.00) for the acquisition of two (2) C-295 military aircrafts for the Ghana Armed Forces.
In doing so, I present your Committee’s Report.
Introduction
The Loan Agreement between the Government of Ghana and the Deutsche Bank S.A.E of Spain for an amount of sixty million, thirty-four thousand, six hundred and thirty-six euros (€60,034,636.00) for the acquisition of two (2) CASA 295 Military Transport Aircraft to re-equip the Ghana Armed Forces (GAF) was laid in the House on Tuesday, 5th July, 2011 and referred to the joint Committee on Finance and Defence and Interior for consideration and report in accordance with article 181 of the Constitution and Orders 158 and 171 of the Standing Orders of the House.
The Committee met and considered the Agreement with the Hon Minister for Defence, Lt. Gen. J. Henry Smith (retd), the Hon Deputy Minister for Finance and Economic Planning, Mr Seth Terkpeh, and officials/officers from the Ministry of Finance and Economic Planning, the Attorney-General’s Department and the Ghana Air Force, and hereby presents this Report to the House in accordance with Order 161 (1) of the Standing Orders of the House.
2.0. Background
The Ghana Air Force (GAF) has been confronted with challenges of equipment over the last two decades. The Military High Council accordingly submitted requirements in this regard in its 2010 to 2013 Strategic Plan which was approved by the Ghana Armed Forces Command for implementation.
The strategic plan document, among others, emphasised the need to replace the ageing transport aircraft, such as Fokker F27 with an average age of thirty- one (31) years were programmed to retire from the Service in 2010. Indeed, for the past thirty-four (34) years, the Fokker F27 fleet have been the main aircraft used by the Air Force in providing domestic transport services and support to the military in such operations as troop-lift, paratroop operations and logistics support.
The acquisition of the CASA 295 Aircraft is therefore, recommended as a replacement aircraft for the Fokker F27 to enable the Ghana Air Force render uninterrupted services in both internal and external operations. Currently, only two Fokker F27 aircraft are left on inventory and these have become prone to frequent breakdown from ageing and high maintenance costs due to the scarcity of parts. These factors coupled with the operational requirements necessitated the search for a replacement aircraft.
3.0. Purpose of the loan
The purpose of the loan is to obtain funds for the acquisition of two CASA- 295 as a strategic requirement for the Ghana Air Force, to enable it air-lift logistics, medical and transport support not only to the military but equally to the civilian population.
4.0 Terms and conditions of the loan
The terms of the loan are as follows:
Loan Amount –– €60,034,636
Repayment Period –– Up to 10 years
Interest Rate-Euribor + 1.60% per annum
Management Fee –– 0.50% per annum
Arrangement Fee –– 0.875% flat
5.0. Observations
The Committee observed that the CASA 295 aircraft can also be used for a full range of tactical applications from special missions service and troop rotations to humanitarian and medical evacuation flights, maritime patrol duties and logistics support.
The Committee was also informed that the CASA-295 can stay on surveillance for 12 hours when on maritime patrol duties. As regards its medivac role it can carry twenty -four (24) stretchers and will greatly enhance the evacuation of patients from regional hospitals to Korle-Bu Teaching Hospital or the 37 Military Hospital. Its acquisition will more importantly enhance the capability of the Air Force in its maritime role with the Navy in support of the oil and gas industry and anti-drug trafficking operations.
The Committee was further informed that the CASA 295 is a twin turbo transport aircraft and can fully satisfy the requirements of the Ghana Air Force for its operations.
It also has the following features:
1. It has a range of 5, 630 kilometres and a cruising speed of 480 km/hr. It is capable of operating from semi prepared runways and has short take-off and landing capabilities.
2. The aircraft has a 41-foot cabin which can be filled with two or three rows of foldable seats to accommodate 48 fully equipped paratroopers or up to 75 troops.
-The aircraft can carry a payload of 9,250 kilograms or three land rovers at a go which can be loaded through a ramp door located at the rear.
3. The aircraft’s flight deck is fitted with dual controls and equipped with digital integrated avionics compartment with four colour liquid crystal displays which are compatible with Night Vision Goggles. Lt Gen. J. H. Smith (retd.) informed the Committee that the GAF provided about 5,000 troops for UN and AU Peacekeeping Operations in Liberia, DR Congo, Lebanon, La Cote d’lvoire and Sudan.
This is aimed at enhancing the operational effectiveness of the troops and the earnings from the UN Peacekeeping Operations can generate enough earnings for the maintenance of the aircraft. The Committee was informed that the CASA 295 is the most reliable aircraft which is being used by most countries.
On the issue concerning the price of the aircraft, the Ministry of Defence provided the Sales Contract to the Committee for verification and was found to be satisfactory to the Committee. The breakdown of the estimated cost as per the Purchase Agreement is attached as Appendix “A”.
6.0 Recommendation and conclusion
The Committee, having carefully examined the importance of the facility, recommends to the House to adopt the Report of the joint Committee on Finance and Defence and Interior and approve by Resolution, the Loan Agreement between the Government of Ghana and the Deutsche Bank SAE of Spain for an amount of sixty million, thirty-four thousand, six hundred and thirty-six Euros (€60,034,636.00), for the acquisition of two (2) CASA 295 Military Transport Aircraft to re-equip the GAF in accordance with article 181 of the Constitution, sections 3 and 7 of the Loans Act, 1970 (Act 335) and the Standing Orders of the House.
Respectfully submitted.
Source: Parliamentary Reports of July 20, 2011 (Hansard)