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Thursday, January 26, 2017

Irish Gov jet sold for €418,000 has insurance value of $5m

The luxury Government jet sold to a US firm in January 2015 for just €418,000 without any formal cost assessment is now insured for $5m and has recently flown from New York to Paris and Barbados.

The situation was revealed at the latest Dáil public accounts committee today, amid ongoing concerns the taxpayer needlessly lost out on badly needed funds when the plane was sold two years ago.

Last year, a Comptroller and Auditor General report found that despite the Air Corps pricing the Government jet at €750,000 and related spare parts at €405,000, the equipment was sold in January 2015 for just €418,000 and €53,000 respectively.

The sale of the Gulfstream IV jet to US firm Journey Aviation came after concerns over the age of the plane, which had travelled 13,000 miles since becoming operational since 1992 and was grounded since 2014.

Despite widespread criticism of the cut-price sale and the fact no clear attempt to seek a wide range of other offers was apparent, the Department of Defence strongly insisted at the time that it obtained the best deal possible for the country due to the age, repairs required and condition of the plane.

However, addressing the deal during a four-hour PAC meeting with Department of Defence general secretary Maurice Quinn, Sinn Féin TD David Cullinane said the same plane is now insured by Journey Aviation for $5m and is being used by high level executives to travel the globe.

"I don't want to hear about extenuating circumstances, Journey Aviation did a full analysis of costs because it was prudent of them to do so. Did we?

"This is the same plane. It is in use. On November 23 it flew from Allentown [in Pennsylvania] to New York. On November 28 it flew from New York to Paris. On December 3 it flew from New York to Barbados.

"It seems it is in flight, it seems it is of value. The copy of the insurance cert has it insured at a value of $5m. That, for me, is a far cry from the same jet you said was lying in a hanger [when it was sold in January 2015]," Mr Cullinane said.

Responding to the revelation and similar concerns raised by Labour's Alan Kelly and Independent Catherine Connolly, Department of Defence general secretary Mr Quinn said the insurance figure does not fully take account of the "emergency" situation facing the Irish Government at the time of the jet's sale.

Under questioning, he said the Department was told in July 2014 that it needed to spend upwards of €1.4m to maintain and repair the jet, and that it was expected that an overhaul of its engines by 2018/19 would cost another €2.5m.

Given the fact the plane was at the time at a Gulf Jet base in the US and in need of repairs, he said a decision was taken to sell the plane and its spare parts for what was deemed a reasonable price.

However, despite the explanation, he later admitted the only cost assessment undertaken by the Government was an informal review by a director of Irish firm Atron for just under €1,000.

Reacting to the $5m insurance rate, Fine Gael TD Noel Rock said in his view the State in fact achieved a better deal by selling the plane for such a low cost than by keeping it because of the maintenance expense that would have been involved.

He described the $5m figure as "sensationalist" and said it included additional costs such as the loss of the plane.

Fianna Fáil TD Shane Cassells also said the decision to sell the plane was in the country's best interests as it had broken down a number of times, including one occasion when it had to be towed because it was blocking Air Force One in the US.

Mr Quinn said he believes the plane's condition has improved substantially since it was sold two years ago due to investment from Journey Aviation.

However, he said it was "speculative" whether the Government would have made money if it had repaired the plane before selling it, when asked by Fianna Fáil TD Bobby Aylward.

The Government jet controversy is not the first time serious questions have been raised over the price the Department of Defence has accepted for lucrative State equipment.

In November 2008, it emerged that four Irish defence forces helicopters sold to a US company for just over €300,000 were later bought by the Chilean navy for almost €19m.

Fiachra Ó Cionnaith