Hot exchanges in Parliament as purchase of presidential jet is debated

Parliament appeals to striking teachers to resume work

Accra (Greater Accra), 16 February 2000

A constitutional issue was raised in Parliament on Tuesday as to the legality or otherwise of the mode of acquisition of the Gulfstream III aircraft popularly known as the "Presidential Jet".

This came about when the debate on a motion for the adoption of the House's Finance Committee's report on an agreement between the government and Gallen Limited for the lease of the aircraft came up.

While the Majority Group said the lease agreement was properly and constitutionally executed, the Minority said that the transaction was in clear violation of the Constitution since it was contracted without the prior approval of Parliament.

Moving for the adoption of the report, Commodore Steve Obimpeh, Chairman of the Finance Committee, said some members at the committee level, expressed the view that the lease agreement should have been presented for parliamentary scrutiny and approval before its execution in accordance with Article 181 of the Constitution.

He said the Minister of Finance, however, intimated that the purchase agreement was a preliminary step in a lengthy negotiation process, and as such, it was important to exercise discretion and secrecy in order not to alert other competitors interested in the same aircraft before the conclusion of the negotiations.

Besides, he said, the lease agreement was transacted under Article 181 (5) of the Constitution, which does not provide any clear cut guidelines on the constitutional procedure to deal with lease agreements and at what period Parliament should be informed.

Article 181 clause (1) states in part that: "Parliament may, by a resolution authorise the government to enter into an agreement for the granting of a loan out of any public fund or public account.

Clause two says that any such agreement entered into shall be laid before Parliament and shall not come into operation unless it is approved by a resolution of the House.

Clause (5) of the same Article states: This article shall, with the necessary modifications by Parliament, apply to an international business or economic transaction to which the government is a party as it applies to a loan.

The report said in the reasoning of some members of the Finance Committee, the lease agreement, being an international business or economic transaction, should be considered under Article 181 (5) of the Constitution.

The Article according to them enjoins Parliament to fashion out modalities for considering agreements such as the lease before the House.

It said in the candid opinion of the Committee there was the urgent need for Parliament to address whatever limitations Article 181 (5) imposes.

Notwithstanding, the Committee took note of the Minister's explanation that the lease of the aircraft was based on its conviction that there is a marked difference between a lease agreement and a loan agreement.

The Committee explained that under a loan agreement, the borrower is obliged to honour the terms and conditions in its entirety until the entire loan is repaid.

On the other hand, it said, in a lease agreement as in Gulf Stream III, the lessee can "walk out" of the lease agreement after having given the appropriate notice to the lessor and would, therefore, be no more obliged to make further payments.

The report said the Committee was informed that the down payment and the first semi-annual payment for the lease agreement, was drawn from the contingency vote of the 1999 Appropriation Act (Act 568).

That "this is quite distinct from the contingency fund provided for by the Constitution under Article 177" Article 177 states in part that "there shall be paid into the Contingency Fund monies voted for the purpose by Parliament".

That advances may be made from that fund, which are authorised by Parliament, when an urgent or unforeseen need for expenditure for which no other provision exists to meet the need".

The report said the Minister of Finance informed the Committee that the purchase agreement was entered into on February 4, 1999 and it was negotiated between the government and Trans Air Trade S.A.

Thereafter, Trans Air Trade, the government and Gallen Limited entered into a "Novation Agreement", which released and discharged the government from buying the aircraft from Trans Air.

The report said according to the Minister, the Novation Agreement gave the right of purchase of the jet to Gallen Limited, which then paid for the aircraft, thus becoming the owner.

It said the Committee was informed that since the decision of the government was to lease the aircraft, the question of a loan to purchase it did not arise.

The Committee put the total cost of the aircraft at 16.68 million dollars and gave the breakdown as 13.5 million dollars for cost price and 3.18 million dollars for the provision of five pilots, five mechanics, spare parts and modification works.

It said after the conclusion of the agreement, the government made a deposit of 2.95 million dollars, representing a down payment of 1.45 million dollars and first semi-annual payment of 1.5 million dollars, in accordance with the terms of the lease agreement, to secure the aircraft.

The report said the Committee was informed that subsequent payments would be provided for under respective annual budgets, adding that the period of the lease spans five years.

The Finance Committee asked the House to come out with modalities under which such international business or economic transactions would be dealt with as provided under Article 181 (5) of the Constitution.

It said majority of its members "are satisfied that the lease agreement is for a good cause and, therefore, recommends it for approval by the House".

Seconding the motion, Mr Joseph Emmanuel Ackah, NDC-Jomoro, supported the view of the Committee and said Parliament should enact appropriate legislation to clear doubts about Article 181 (5).

He said with the successful conclusion of the lease agreement, the old Presidential jet referred to as the 'Flying Coffin', would be replaced by a more reliable and safer aircraft.

Opposing the motion, Dr Kofi Konadu Apraku, the Minority Spokesman on Finance, said it could not have been a worse time for the Minister to seek parliamentary approval for the lease agreement, considering the economic crisis facing the country.

He said the Minister has failed to address the economic problem facing the country as requested by the House.

Instead of the Finance Minister coming to Parliament with solutions to the economic crisis, he rather came "asking us to rubber stamp a deal that stinks to the high heavens".

On a point of order, Mr. George Buadi, NDC- Amenfi East, said Dr Apraku is a member of the Finance Committee and since there was no Minority report of disagreement, there was only the motion for the approval of the lease agreement.

The Speaker, Mr. Justice Daniel Francis Annan, explained that what has been presented to the House was the Majority report, reflecting the viewpoint of the majority of the members.

He said since the motion is for the approval of the report, Dr Apraku was entitled to express contrary views on the report.

Continuing, Dr Apraku noted that the Minister had admitted that the down payment was made to Gallen Limited by the government from the Consolidated Fund.

He said, "this is a violation of the Constitution" since the Minister did not seek prior approval of Parliament before such a transaction, quoting Article 181 and 181 (6) to buttress his argument.

He said the Minister had ample opportunity to have put such a financial outlay in the budget or the contingency vote but "his disrespect and contempt for Parliament was his only motivation for not consulting the House".

Dr Apraku told the MPs that "this is the one time the House must rise in unison and assert itself by taking a decision that reflects national interest and not partisan consideration".

He challenged the total cost of the acquisition of the aircraft as presented in the Committee's report and said, "it stands at almost 20 million dollars".

Alhaji Malik Al-Hassan Yakubu, NPP-Yendi, opposing the motion, said the issue at stake is how the acquisition of the aircraft was pursued.

He said the manner in which the government executed the lease agreement "is an affront to Parliament", quoting Article 181 to support his assertion.

He said clause (5) of Article 181 does not stand alone but in tandem with other clauses of the article, whose thrust requires that any such transaction must have prior parliamentary approval.

He said Parliament was even denied access to all the documents that went into the lease agreement, adding, "if there is a time to censure the Minister, it is now.

"We are dealing with a matter not so much a question of money involved but the Constitution and the integrity of Parliament".

Squadron-Leader Clend Sowu, NDC-Anlo wondered how Article 181 (5) should be operated since no guidelines have been provided by Parliament.

He said airlifting of relief items to the recent flood victims in the North have been financed from the same contingency vote.

"We on this side of the House think that the purchase of the aircraft is of priority".

Nana Akufo Addo, the Minority Spokesman on Constitutional and Legal Affairs, questioned the transparency and propriety of the transaction between the government and Gallen Limited, saying how come that a sovereign government entered into a contractual agreement with a company whose shareholders are not known.

He said the owners of the aircraft are not known to anybody in the country and asked the Minister to tell the House who the owners are.

Responding, the Minister said Gallen is owned by "HSBC", which established it as a special purpose company to transact the lease agreement and that this device had been used in many high financial transactions.

Nana Akufo Addo said it is stated in all Constitutions of the country since 1969 that any expenditure out of the Consolidated Fund should have prior parliamentary approval.

He said the current Constitution also provides for emergency expenditures and asked whether the Minister was trying to find excuse in the ambiguity in Article 181 (5).

He said the Minister using the article to justify his action is an argument that is "dangerous and subversive of the role of Parliament".

Nana Akufo Addo noted that before the process of committing the state into the agreement, the Minister had already made a down payment, adding the transaction should have been carried out in its entirety before any money was spent.

The Minority ranking member said the heart of the matter is that money had been spent, before Parliament was being informed.

The Speaker intervened and asked the members to address their minds to the question of the source of funding and the authorisation of the spending, saying "these are the two issues at stake".

Nana Akufo Addo said although the amount spent was taken from the contingency vote the fact still remains that it was a liability on the Consolidated Fund for which the Minister should have sought prior parliamentary approval.

He said what the Minister did was a way to evade the constitutional provision and described the action as "illegal and in violation of the Constitution".

He said public interest has not benefited from this transaction, adding that the Minister's "action is reprehensible" and called on the House to reject the lease agreement.

The debate continues on Wednesday.

GRi

Return to top

Accra (Greater Accra), 16 February 2000

Parliament on Tuesday appealed to striking teachers in public schools to resume work because all their concerns are being addressed.

The House's Committee on Education made the appeal after a lengthy interaction with the Director-General of the Ghana Education Service (GES), Prof. Christopher Ameyaw Akumfi and representatives of the Ghana National Association of Teachers (GNAT).

The Committee submitted that "it is now confident that measures have been put in place to address the problems of teachers".

The Committee said that they have the word of the Director General that "the situation is being rectified but stressed that "we will not abandon the teachers if Prof Ameyaw Akumfi does not fulfil his promise".

GRi

Return to top