Creative Accounting on PNG’s Falcon Jet Sale?

Prime Minister Peter O’Neill announced yesterday in Parliament that the controversial Executive Falcon Jet acquired by the Somare/Temu Government has been sold for $US30 million. This comes seven months after Peter O’Neill announced in his inaugural speech in August 2011 that he had directed the  management of Air Niugini to put the aircraft up for sale.

The Falcon was originally purchased for K120 million (US$ 58 million) and its impending sale was one of the first major decisions by the new O’Neill/Namah Government; and as alluded to in O’Neill’s inaugural speech, the money gained from the sale will be reinvested into the ailing health infrastructure of the country.

However, there seems to be a slight issue with the number crunching done on the transaction. Peter O’Neill seems to have got his figures mixed up. In responding to questions to Dame Kidu, the leader of the Opposition, he states that “we will be making about K130 – 150 million” from the sale which suggests that the State would be making a small profit from the sale of the Falcon.

Hold on, since when did a selling price of $US30 million make K130 million? $US30 million on current exchange rates  translates into approximately K60 million.

How did the Prime Minister make that contradictory conclusion? If indeed, as O’Neill stated in Parliament, the Falcon was sold for $US30 million then the State has effectively recovered just under 50% of its original investment.

Maybe the newly formed Opposition team of two can chase this up or alternatively, the Post Courier could do some real journalism and actually critically think about what they publish on their front page.

~ by Tavurvur on February 23, 2012.

2 Responses to “Creative Accounting on PNG’s Falcon Jet Sale?”

  1. It is so early for the Government to sell the plane. Best they sell the first Kumul and not the jet.

  2. Quite possibly the first Kumul will now be used for government business as opposed to the Falcon jet. The Falcon jet apparently cost the taxpayer US$22 million per year in maintenance costs.

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