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Skyhawk sale bungled

Hon Murray McCully
National Party Defence Spokesman

31 May 2006
Skyhawk sale bungled

The Government's sale of the Skyhawk and Aermacchi jets, announced just before the election, is starting to look like a complete bungle, says National Party Defence spokesman Murray McCully.

He is urging the Labour Government to come clean about the state of the sale to US company Tactical Air Services.

“Eight months after the announcement, and five years after the Government scrapped the air strike wing, no deposit has been paid, no planes have been prepared for delivery, no consents have been given by the US State Department, and no one in the Air Force believes the transaction will proceed.

“It’s about time the Government explained this strange state of affairs.

“The previous Defence Minister announced last September during the height of the election campaign that the planes would be ‘progressively shipped to the US over the next few months’.

“The Minister also told us that the required consents had been ‘extensively discussed with the respective foreign government departments and no problems were anticipated in finalising the arrangements’.

“Well, there appear to be significant problems.

"While the Government is providing an explanation for the delays, it might also like to tell us what the sale agent, Ernst Young, has been paid for a transaction that is obviously going nowhere. Payments totaling $1.1 million have previously been made to the firm.

“The Government might also want to tell the public what it’s costing to store and maintain the planes. Previous figures have put that bill at $300,000 a month.

“When the transaction was announced we were told that the cost of making the sale would be an estimated $35 million – a figure that has to be deducted from the total price of $155 million. I want to know how much of that cost has been incurred so far.

“It’s starting to look like this transaction, announced so triumphantly a week before the election, has turned into a major bungle. It’s also clear that the Government is being less than candid with the New Zealand public on this issue,” says Mr McCully.

ENDS

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