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PARAMOUNT GROUP, INC.

(PGRE)
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Paramount : Presidential Jet 'Sale' Continues to Haunt Former President Joyce Banda

09/23/2021 | 05:06am EDT

Many Malawians have taken to social media calling for President Chakwera's government to institute an investigation into the controversial sale of presidential jet, Dassault Falcon 900EX, which many think was never sold but was clandestinely given to some foreigners who are operating it to off-set a debt we owe to them.

In reaction to a lead story 'I'm ready for jet probe-JB', which appeared in The Nation of Wednesday, September 22, 2021, Gomonda David wrote on Facebook that only in Malawi will gangsters unite in order to protect (JB) and continue plundering state resources.

Flytone Simukoko said DPP (government) failed to prosecute her and he does not think Tonse government, of which she is part, will make any progress. Christopher Magombo said unless JB is arrested, he will not trust this Tonse government.

Although the former President claimed the jet was sold in 2013, she continued to charter and used the plane whenever she flew out on official trips. The government bought the presidential jet in 2009 under the former President, late Bingu wa Mutharika.

The Nation reported that Banda says she is not cowed by the prospect of a probe into her administration's decision to sell the presidential jet as proposed by Public Accounts Committee (PAC) of Parliament.

PAC wants to conduct a public inquiry into the matter and it has since written the Ministry of Finance and the Office of the President and Cabinet (OPC) to inquire on events surrounding the transaction.

PAC chairperson Shadreck Namalomba on Monday said Treasury responded to their query, indicating that it was not involved in the transaction.

Banda said all people who were involved in the transaction are "alive and well" to give more details on the deal. She said such public officers include former OPC Principal Secretary (Administration) Clement Chinthu Phiri and former chief secretaries to the government--now renamed Secretary to the President and Cabinet-- Bright Msaka and Hawa Ndilowe.

Banda's administration argued at the time that the plane was a burden to the economy with annual running costs estimated at over K200 million.

In March 2014, contrary to earlier claims that the proceeds from the jet sale were used for maize purchases, former minister of Finance Maxwell Mkwezalamba said that the $15 million (about K6.3 billion) did not go into the Malawi Government's consolidated account.

He said instead the Attorney General facilitated the transfer of the funds from Bohnox Enterprises, which bought the jet, to Paramount Group, its parent company. Mkwezalamba said government owed Paramount Group$19.2 million (about K8.2 billion) in respect of military equipment procured sometime back.

He said government cash flow could not meet the demand for payment of the equipment.

Namalomba on Monday said the country was still in the dark on the sale of the jet; hence, the need to conduct a public inquiry to establish what really happened.

He said: "Malawians should know whether the presidential jet was disposed of in good faith, whether there was corruption involved or some people benefitted unfairly from the jet sale.

"If in the end some people did benefit, then they must pay back the money. If criminal merit is considered, then they must be prosecuted. That jet was a national asset."

Namalomba further said PAC was already behind schedule on the presidential jet inquiry and that as soon as OPC gives a response, the public inquiry will start.

In 2009, the Bingu wa Mutharika administration purchased the presidential jet at an estimated cost of K16 billion ($22 million), which was later sold during Banda's administration. It was indicated that part of the proceeds were used to purchase maize.

State House during Banda's time issued a statement that claims that the jet was clandestinely sold were not true.

"It is worth making a reminder that the Dr. Joyce Banda administration operates on a transparent and open door policy to facilitate access to any information that members of the general public, including the media, may wish to have about their government.

"Our view is that the claims that the presidential jet was never sold are motivated by a deliberate, ill-intentioned and calculated gimmick of creating a wrong suggestion that President Dr. Joyce Banda does not keep her word and should not be trusted; is involved in clandestine activities using government property and, thus, is not worthy of public confidence; and is irresponsible for which she must not be relied upon.

"With the Tri-partite elections day looming, we are convinced, the intention of those peddling these falsehoods is to mislead the public and curtail their interest in Dr. Joyce Banda with the hope that, in turn, her opponents will get the political advantages which they are failing to get through an open and smart campaign," read the statement.

The statement said the Bingu administration procured the Dassault Falcon 900EX aircraft for the use by the President of the Republic in late 2009 in Florida, the United States of America. The plane was acquired using a single source method of procurement because that administration felt that "circumstances surrounding the procurement of a presidential jet are sensitive in nature eligible for special treatment."

It said some challenges were allowed by that administration to unnecessarily increase the management and operating costs of the aircraft, which included use of hired pilots instead of using own trained crew members, the purchase did not include first line spare parts and equipment that are normally used by engineers and technicians as well as aircraft documentation, and the absence of a hanger to accommodate the aircraft for storage, maintenance and records.

"At the time when Dr. Joyce Banda took office, the economy of the country was in turmoil and yet government was expected to continue spending on some fixed and direct operating costs associated with managing and operating the aircraft. These included costs on continued aircraft maintenance programme (CAMP), maintenance service programme (MSP) for engines, auxiliary Power Unit (APU), insurance premiums, navigation charts and software, and Pilot Simulator Training.

"It is worth noting that from the time that the plane was bought in 2009 to April 2012 when Dr. Joyce Banda succeeded late Professor Bingu wa Mutharika, about K1 billion (then) had been spent on the aircraft on fixed and direct operating costs. And in 2012/2013 budget, government spent close to K200 million through maintenance programs that were mandatory to maintain the plane's worthiness. Government also risked paying huge fines for not flying the aircraft as per manufacturer's specifications.

"To avoid the fines, the aircraft's battery and auxiliary power unit was being run every 10 days, the engines every 30 days and the aircraft had to be flown once in every three months for at least 30-45 minutes. This entailed hiring foreign pilots to fly the aircraft which cost in excess of 22, 000 Euros at the time

"When President Dr. Joyce Banda took over the reigns of power, she stated that although government has a right to own a presidential jet, the economic situation she had inherited was not conducive to warrant the mandatory high maintenance and overhead costs that were associated with owning the jet. Therefore, the plane had to be disposed of.

"To demonstrate that the Dr. Joyce Banda administration did not decide to get rid of the plane out of malice, government looked at the option of placing the aircraft under a management contract, but it, too, proved not prudent in terms of the Expenditure Control Measures that government is still implementing to this very day.

"It is worth discussing that through a tender process, four South African based companies namely; ExecuJet Aviation Group, Flight Logics SA (Pty) Ltd, Fortune Air and Absolute Aviation Solution submitted bids.

"ExecuJet Aviation Group emerged as the successful bidder and demanded an annual management fee of US$676, 731. 00 (about K204 million). This meant that government would annually still incur expenses, it was trying to avoid, on management and other non-fixed costs.

"In view of realizing that under the management contract huge amounts of money would still have to be spent every year through management fees and other maintenance expenses regardless of whether the aircraft made profit or not, government took the decision to put the plane up for outright sale," said the statement that time.

Copyright Nyasa Times. Distributed by AllAfrica Global Media (allAfrica.com)., source News Service English

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Managers and Directors
Albert P. Behler Chairman, President & Chief Executive Officer
Wilbur N. Paes Treasurer, Chief Operating & Financial Officer
Todd Januzzi Chief Information & Technology Officer
Peter David Linneman Lead Independent Director
Katharina Otto-Bernstein Independent Director
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