The Government of Guyana has borrowed a US$ 23.27 million loan from India to buy two Dornier 228 airplanes from an Indian Aeronautics Company when they could have gotten four for the same price.
According to reports, the two aircraft arrived on Easter Monday, some 16 days after a loan agreement was signed between Guyana’s Ministry of Finance and the Indian EXIM (Export-Import) Bank. The airplanes were purchased from Hindustan Aeronautics Limited (HAL).
On March 10 last year the Indian government purchased six similar planes for its air force from the same company at a price of US$31.9 million. The Defense Ministry of India was the one who made the announcement and it was widely reported on Twitter and multiple media houses.
One excerpt from the Economic Times, a media company, said: “The Defense Ministry sealed a deal with HAL to procure six Dornier aircraft at a cost of Rs 667 crore for the Indian Air Force.
Rs 667 Crore is equivalent to US$31.9 Million and that means that the Indian government had purchased 6 of the same aircraft from the same company at a price of US$5.3 million for one. At this price Guyana could have purchased four of these aircraft with US$23.27 million and still have over U$2 million left over for other expenses.
Opposition Member of Parliament and General Secretary of the Guyana Teachers Union, Coretta McDonald on Tuesday during her online show a called “Advancing Cause” had alleged that perhaps the Indian government might have purchased these planes from the company and then resold them Guyana. Vice President Bharrat Jagdeo at his weekly party press conference refuted her claims calling it false.
According to him Guyana bought the aircraft directly from the company at price of US$8 million dollars for one (US$16 million for the two) and spent the remaining U$7.27 million on spare parts, training of Guyanese pilots and delivery of the planes to country. A cost of US$8 million is still almost three million US dollars more than what the Indian Government had purchased the same aircraft for. “These are aircraft that are new”, Jadeo said before giving a breakdown of how Guyana spent the loan that it has to pay back with interest. “That is 16 million dollars, we then bought 6.3 million dollars in spares for these two aircraft including reserve engine propellers etc. and then about another million dollars in training of 19 persons including the pilots, engineers, etc., technicians”
He continued that part of the loan was also spent to deliver the planes to Guyana and bring a team from India to work with Guyana Defence Force pilots. According to Jagdeo the government got a good deal from India with a “cheap interest rate”. He said too the planes are suitable for Guyana’s needs. “They can carry 19 passengers, and fly directly to Barbados… you don’t have to even refuel can they can land on almost all of our airstrips”, Jagdeo said. (Kaieteur News)…[+]