Browne says jet costs US$52M
By CLINT CHAN TACK Friday, March 14 2008
click on pic to zoom in
GOLDEN SPORTS: Reigning King of Carnival Brian Mac Farlane paid tribute to the top ten winners of the 2008 FCB Sports Awards with this elaborate 'Gold...
MINISTER in the Ministry of Finance Mariano Browne fuelled further controversy over Caribbean Airlines’ (CA) plan to acquire a $400 million (US$65 million) executive jet, when he disclosed yesterday that US$52 million ($312 million) and not US$63 million ($378 million) was advanced to CA, for the jet acquisition.
Browne said if CA and Bombardier fail to seal the deal to purchase the Global XRS jet on Monday, Government will support CA in acquiring another jet. “That remains the position at today’s date,” he said.
Addressing yesterday’s post-Cabinet news conference at Whitehall, Browne revealed the money advanced to CA to acquire the jet was less than the US$63 million which Works and Transport Minister Colm Imbert told Parliament last week Friday as being placed in a CA bank account for this purpose.
CA chairman Arthur Lok Jack confirmed this figure at a news conference at the Hilton on Wednesday. “The figure that you are speaking of is an advance to CA, it is not US$63 million, it is US$52 million. The advance is just that,” Browne said.
Pressed by reporters to clarify the disparity between these figures, Browne explained that CA chairman Arthur Lok Jack asked Government for US$65 million (US$63 million to buy the jet, US$2 million for spare parts) but, “the amount that was advanced was not that.”
“We have advanced less than that because the plane is not yet complete. The plane is in production,” the minister stated.
Browne said because the US company that originally intended to buy this jet was “in two minds” about the transaction, it advanced “approximately 80 percent of the cost of the aircraft to stay in their position.” He suggested this was why the full US$65 million which Cabinet approved at its regular meeting on February 28 was not advanced to CA to date.
He explained that the US$65 million came from Government’s recurrent account and did not require Parliament’s approval to be spent. Browne said after the national budget is presented, the Finance Minister is allowed under law to make variations within appropriation as and when required. Outside of these variations, the Finance Minister brings a supplementary appropriation bill to Parliament. Browne said such a bill was passed in Parliament in January, approving an additional expenditure of $1.3 billion of which $434 million was allocated to CA for capitalisation costs. Asked if the monies allocated to acquire the jet were monies owed to former BWIA workers, Browne replied, “Absolutely not! As far as I know, all of the company’s liabilities under BWIA have been extinguished and do not exist. No employee whose severance payments were agreed and settled remains unpaid at today’s date. In fact, I’m pretty certain that every BWIA employee obligations has been met.”
Browne said CA did a cost benefit analysis on the jet but, “I would not recommend that the details be made public. I do not recommend that any enterprise run it strategic plans on the front page of any newspaper.” Browne admitted that while Government would be subject to certain inquiries as CA’s sole shareholder, “We cannot run the business of the airline on the front page of the paper and disclose all the details or negotiations that are ongoing.”