Russia - Ghana relations/

Concerning the Russian helicopters baying by Ghana Armed Forces

Statement by the Defence Minister

Statment presented by the Hon.Minister for Defence, Dr.Kwame Addo Kufuor at the Weekly Press Brief today in Accra.

In January this year, Parliament approved a loan of US $55 million for the GAF to enable MOD acquire equipment including helicopters to facilitate Ghana's participation in UN peacekeeping operations.

As part of the preparation for the GAF to take part on UN peacekeeping operations in the Democratic Republic of the Congo, the Ministry on the 20th August 2002 signed a contract agreement with Messrs Wellfind Ltd of UK for the supply of transport helicopters to GAF. The total sum of these helicopters was US$14,640.000.00. The total contract sum therefore amounted to US $19,695.600.00.

This agreement was entered into with the understanding that Messrs Wellfind Ltd was a bona fide agent of Messrs Kazan Helicopters of Russia for the supply of Transport helicopters. To buttress this fact, a GAF delegation and Wellfind representatives met in London on 3rd September 2002 to affirm all the technical details leading to the supply of helicopters. At this meeting in London, on 3rd September 2002, Kazan helicopters of Russian was represented.

Going through Wellfind Ltd of UK to purchase the KAZAN helicopters from Russia enabled Ministry of Defence to fulfill a major requirement in the agreement with Barclays to secure the loan, that is the equipment was to be purchased from North America or countries who currently enjoy membership of the European Union .

The ministry of Defence later discovered that the relationship between its supplier - Messrs Wellfind of the UK and the manufacturer of the helicopters - Messrs Kazan of Russia had developed some difficulties. It therefore became necessary to take steps to ensure that the national interest was not compromised as a result of the disagreements between the two companies.

Therefore on the 10th April 2002, the Ministry of Defence suspended the contract and I emphasize suspended. The contract was not cancelled. This suspension, communicated to the Ministry of Finance and Economic Planning ensured that no monies were paid to Wellfind till the situation had become clearer.

In the letter to Messrs Wellfind Ltd. Suspending the contract, the Ministry of Defence merely indicated that the agreement had been suspended "due to some unanticipated financial circumstance beyond its control". The letter also said and I quote, "We wish however to assure you of our goodwill and will in future not hesitate to contact you to revisit the contract".

Subsequently, written correspondence from Messrs Kazan of Moscow informed the Ministry of Defence that Rosoboronexport of Russia had the monopoly or exclusive right to supply all types of helicopters produced by Kazan.

After several attempts to clarity issues concerning the provision of the helicopters, spares, training and other ancillary products, the Ministry of Defence made representation to the AG's office for legal advice on the matter. The A-G's office requested Wellfind Ltd to produce financial guarantees to ensure that initial payments that would be made to the company would be secured to enable MOD carry out the terms of the contract. Wellfind Ltd agreed.

Colleague Ministers, Honourable Members of Parliament, Ladies and Gentlemen, I wish to emphasize the following points:

The Ministry of Defence has not signed any contract with any Russian Company. The only contract signed is that with Messrs Wellfind Ltd.

No payment has been made to any company for purchase of the helicopters. Wellfind Ltd has not been paid anything. The money earmarked for the purchase of the helicopters is currently at Barclays Bank, High Street Accra.

On the advice of the A-G's office, wellfind Ltd has been requested to provide financial guarantees to access initial payments that will be made to the company; and Wellfind has agreed to this.

The Armed Forces Council under the Chairmanship of H.E. The Vice President has been kept informed of all developments concerning the purchase of the helicopters.

The Chairman and Ranking Member of the Parliamentary Committee on Defence and Interior have also been fully briefed.

The Ministry of Defence is in touch with Wellfind, and once this company and Kazan are able to sort out their differences, and financial guarantees are provided, the Wellfind Ltd contract will be fully operational.

All the actions and precautions taken by the Ministry of Defence had only one objective: to protect the resources of the State of Ghana so that there would be no financial loss to the State.

In view of the current developments, the Russian Embassy in Accra has been approached to assist speed up the purchases.

Colleague Ministers, Ladies and Gentlemen, this briefly is the story of MOD and Wellfind Ltd, UK. The Ministry of Defence would wish once again to assure the public that it has been guided by the policy of transparency and adherence to the laid down procurement procedures of military hardware in all its transaction.

Thank you for your attention.

Source: ISD 25/09/03

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