Labour’s Air Malta board dropped the RJs inquiry
File photo by Gino Galea.
A Labour-appointed Air Malta board cancelled an important inquiry into the controversial RJ70s fleet ordered by the previous board, The Sunday Times has learnt.
Former chairman Louis Grech admitted his board stopped the inquiry in 1997 and instead appointed a non-Maltese company specialising in aviation matters to draw up a report on all aspects relating to the selection on purchase of the Avro RJs.
According to Mr Grech, the report had concluded that opting for the Avro liners was “a high risk and costly decision”, which was extremely detrimental to Air Malta at the time and would haunt the airline for years to come.
Sources close to Air Malta told this newspaper Mr Grech’s new disclosure is not documented in the company’s board minutes.
Confronted with this information yesterday, Mr Grech said a long time had passed and he was not sure that this information was minuted.
“It should be, but I don’t exactly recall,”he said.
Mr Grech did not wish to name the non-Maltese company that reported on all the aspects of the Avro purchase.
The issue over the 1994 RJs’ purchase was resurrected some weeks ago after former Nationalist MP Jeffrey Pullicino Orlando alleged Richard Cachia Caruana – a former Air Malta director – had colluded with the 1996-1998 Labour government.
Mr Cachia Caruana denied the allegations - supported by an affidavit by ex-Labour Minister Karmenu Vella – and instead challenged Dr Pullicino Orlando to publish the conclusions of an inquiry the board had ordered to find those responsible for omitting crucial trip guarantee costs from the purchase.
Last week, The Sunday Times revealed that former Judge Godwin Muscat Azzopardi – who was entrusted to conduct this inquiry – had been told to abort his investigation.
However, Judge Muscat Azzopardi did not recall why, nor who had given the order to stop.
In his replies, Mr Grech, who was appointed Air Malta chairman a few days after the previous board’s resignation in 1997, said the inquiry was stopped as its scope would not have addressed the fundamental problem with the purchase of the RJs.
“It should not have taken the former Air Malta board almost three years to realise that the trip cost guarantee did not form part of the final contractual agreement of the RJs, especially since it was clearly evident that the trip cost was excessively high from the very start of the RJs operation,” he said.
He also said this crucial trip cost guarantee was again excluded in the purchase contract of another fleet of aircraft; the RJ85s bought two years after the RJ70s.
Irrespective of the inquiry’s outcome, Mr Grech said: “It seemed evident to the new board that it was in fact the former board of directors that had to shoulder the responsibility, particularly those executive directors who were directly responsible and involved in the supervision of the negotiations and signing of the final contract with the manufacturer.”
When contacted, Anthony J. Paris, who was executive director at Air Malta when the RJs were bought, said he did not recollect the report by the “non-Maltese company” cited by Mr Grech.
Turning the tables on to the former Air Malta chairman, Mr Paris said: “The RJ85 contract was signed during the tenure of Louis’s board.
The new board (chaired by Mr Grech) could have stopped the purchase of the RJ85s and simply lost the deposit,” he charged.
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Anthony Castillo
Aug 12th 2012, 19:49
In my believe Mr Grech is risponsible for all this so he have to anwer for all this and why the minister of that day did not say anything about it where he should be always in touch with the chairman of the Air Malta. Could you please let us tell us why you put it under the carpet Mr Carmenu Vella.(Bhal dejjem iz zejt jitla f' wicc l - ilma hu bekk is sewwa jirbah zgur, nahseb li kellu ragun RCC).
Stephen Spiteri
Aug 12th 2012, 19:02
Whoever it was, PN or PL appointed, one thing we are all sure about. You were playing about with taxpayers' money, we are now bearing the brunt of your shameful decision, and whoever did it went away scot free. With both parties throwing mud at each other, the real aim achieved is that of creating a smokescreen so thick that the real culprits got away with it.....
Philip Hili
Aug 12th 2012, 18:22
"Sources close to Air Malta told this newspaper Mr Grech’s new disclosure is not documented in the company’s board minutes.
Confronted with this information yesterday, Mr Grech said a long time had passed and he was not sure that this information was minuted.
“It should be, but I don’t exactly recall,”he said."
MR. GRECH SHOULD KNOW THAT IF THIS NEW DISCLOSURE WAS NOT DOCUMENTED IN THE COMPANY'S BOARD MINUTES, he should have corrected the minutes of the next meeting when the minutes of the previous meeting will be read. If he did not correct the minutes of the previous meeting Ganni Borg!! would like to know WHY those minutes were not corrected. Any wrong doing?
Mr. Grech, if you do not recall what was minuted, all you have to do is to go through the minutes of that meeting, ( I presume they are still available) and check. Why Karmenu Vella, did not published that report of enquiry? Is there is something to hide from the public?
Alfred Falzon
Aug 12th 2012, 17:40
It sounds fishy on both sides...
PN, PL (former MLP) in Government pointing an accusing finger at each other, the latter having had a good opportunity when in Government to redress the situation...
Yet, nobody is inclined to recollect what really happened...
Memory blanks or a case of wilful amnesia?!
Alfred A. Falzon
As usual, the pot calling the kettle black!!
Philip Hili
Aug 13th 2012, 09:26
@ Alfred Falzon
"It sounds fishy on both sides..."
Why from both sides? The PN had nothing to hide at that time, so much so that the PN is enquiring why the report of the enquiry was not published. Don't forget, the minister in charge of Air Malta at that time was Karmenu Vella, one of the prime witnesses in the RCC case.
As per yesterday's news - back page of the "Sunday Times of Malta", it was during the then chairman appointed by Dr. Alfred Sant when the enquiry report was stopped, WHY, and WHO gave instructions to stop the enquiry?? At that time, the Chairman was the Labour MEP Mr. Louis Borg. I ask again, ANY WRONG DOINGS? Because if there were no wrong doings from any side, the enquiry report must have been concluded and made public so that the tax payer rests his mind that what was being fabricated at that time with regards the RJ 70's was either true or untrue!
On the other hand, if there was something wrong and which was committed by the PREVIOUS board of Directors appointed by the PN administration, what kept Karmenu Vella from publishing the enquiry report? Surely not because he or the Labour administration wanted to hide such delicate information from the tax payer, which information the tax payer had every right to know, taking into consideration the attacks on certain high ranking people in the administration of the company!!!!!
Joseph Grech Attard
Aug 12th 2012, 17:11
The only fact that is sure is that the RJ's started the downfall of Air Malta. Whoever was on the board of directors when they were bought should shoulder responsibility. No amount of stretching can shift the blame to others. What was done was done. It was of no use crying over spilled milk. the smell is of putrefaction when one considers that 18 years have passed and nobody has ever raised the question before!!
Lino Busuttil
Aug 12th 2012, 17:44
You are wrong, there were questions raised and an inquiry but somehow the bad guys won over the good guys and it was all hushed up.
Lawrence Fenech
Aug 12th 2012, 16:30
Aqta kemm ser inzidu passiggieri bil karnivalata ta' tpingija fuq l-Airmalta xoghol ta' cheap airlines, 2 milljoni Euro mormijin u hadd ma kien ikkunsultat, u miljuni ohra fuq tarag li ma kienx hemm bzonnhom ghal-issa.
Fejn hu Gonzi u Tonio, dan Davies ma jikkontrollah hadd jew kollow mar f'idejn Austin u kollox jghaddi basta jiddeciedu barranin.
GL Calleja
Aug 12th 2012, 15:46
In the face of all this mismanagement and frivolous spending, and nobody wants to claim responsibility our Finance Minister, namely Tonio Fenech is giving Air Malta aka " MALTA " almost 200,000,000Million euros bail out money to spend freely. Again may I remind everybody that this is TAX PAYER's money that Air Malta is again squandering. All we are getting from the past boards and top management is lapses of memory and a lot of finger pointing. It is time to protect the TAX PAYER from such squandering. So we import a foreign CEO because we are called CWIEC. What do you think is going to happen when the National Airline runs into more problems and needs more and more money? Like I said this is a foreign top management and when the bottom falls all they have to do is collect their big pay and return to their native country and again the TAX PAYER is left holding the bag. These are facts and should be heeded very seriously. Privatize "Air Malta" and set the TAX PAYER free from these expensive losing ventures. Being proud of your National Airline does not pay the rent anymore, it does not feed the family. Air Malta was profitable when it had a monopoly, now that monopoly is no longer there and the Maltese Tax Payer and the tourist have a choice of airlines to fly on. Air Malta cannot compete with the low cost airlines. It is time for a change and that change must come soon before we squander those millions of euros. Later in time this huge bail out is going to create the same RJ squandering scheme with nobody to answer for it because those in charge will have bailed out with a big grin on their faces and their pockets full.
Mr Anthony Briffa
Aug 12th 2012, 14:53
It looks like everybody had a finger in this pie and people who were involved during and after the enquiry are forgetting what happened at the time. What a farce.
E. Azzopardi
Aug 12th 2012, 14:37
Good and now what?
Michael Sciortino
Aug 12th 2012, 13:20
The question why did the Air Malta take three years to realise that the trip cost guarantee had been omitted from the contract has not been answered.
The cancelled 1997 inquiry is beside the point. When did the Air Malta Board that ordered the RJ-70s realise that the trip cost guarantee had been omitted and did they wait to March 1997 to order an inquiry. In any case ordering an inquiry over a decision that costs millions seems to me rather a weak reaction.
I think that the matter should be pursued. If the omission was due to incompetence, the public has a right to know who. If the omission was deliberate, it would mean that a crime had been committed and the matter should be investigated. I suggest that the Times reporters continue digging to get to the bottom of this. Who omitted the trip cost guarantee? What was the motive for the omission? When did the Air Malta Board know of the omission? if the AM Board took years to realise why did it take so long? Why did they not take stronger actions against the person/s vetting the contract?
N. Bill Camilleri
Aug 12th 2012, 12:38
It is our fault. In Malta we treat politics like it's a football match. It doesn't matter what a government (or opposition) does; steal, cheat or lie - it knows that half the population will blindly defend them. We deserve to pay more taxes and get less in return, and enjoy listening to these idiots argue like kids about issues that are of no consequence to any of us.
J. Scicluna
Aug 12th 2012, 12:29
Who ordered the Inquiry and who aborted it is all hogwash.
The 2 fundamental questions remain:
WHO decided in favour of the AVROs when it was clear that this aircraft was not suitable?
WHO removed the Trip Cost clause from the contract?
Only when these two questions are answered will the whole story be clear to all.
Willie Grech
Aug 12th 2012, 12:11
The British say, "It's no use crying over spilled milk!" In this case, the deed is done. The RJs were bought, a lot of money went down the drain, some people got their bank accounts fatter, Airmalta is being doomed and the taxpayer stands to lose always.
The question is: What's next? Where shall we go from here?
The answer should be only one word: ACCOUNTABILITY through law. If we don't have this word inserted in our Constitution for our public officers, be they politicians or otherwise, then it's useless to write here in this blog and any where else and cry over spilled milk.
LET'S ALL DO OUR PART. LET'S ALL ADVICE OUR POLITICIANS NOW, WHEN WE ARE ON THE EVE OF A GENERAL ELECTION. LET'S ALL TELL THEM THAT THEY EITHER ENTER THIS IN THEIR ELECTORAL MANIFEST OR THEY WON'T GET OUR VOTE. LET'S ALL START FROM THERE AND DO OUR PART!!!!
REMEMBER, "FLIMKIEN KOLLOX POSSIBBLI?" And this goes to both parties!
Colin Camilleri
Aug 12th 2012, 12:01
If airmalta goes bankrupt, it shall not be because the inquiry on the purchase of the rjs was stopped but because the rjs were purchased. The fault of air malta demiss lies only with the board of directors appointed by the PN and the PN.
Victor Vella
Aug 12th 2012, 11:48
I was shocked to read such article. Responsible people paid dearly from the people`s pockets just slip away from their responsibilities In my opinion Louis Grech and Karmenu Vella have no other way but to resign from the LP. In my opinion they are not accountable people. It could be that the LP now wants to dig the RJ70s scandal beneath the ground not to expose their friends of friends who now are trying to be the heroes when they were the culprits that sent Air Malta to bankruptcy. That is why:Last week, The Sunday Times revealed that former Judge Godwin Muscat Azzopardi – who was entrusted to conduct this inquiry – had been told to abort his investigation..
However, Judge Muscat Azzopardi did not recall why, nor who had given the order to stop. If the judge does not know Why we know why because we are not stupids.
I never expect from responsible people such words: controversial ;did not wish to name the non-Maltese company that reported on all the aspects of the Avro purchase.inquiry was stopped as its scope would not have addressed the fundamental problem with the purchase of the RJs;he did not recollect the report by the “non-Maltese company”. And the statement that makes one cries is:“It seemed evident to the new board that it was in fact the former board of directors that had to shoulder the responsibility, particularly those executive directors who were directly responsible and involved in the supervision of the negotiations and signing of the final contract with the manufacturer.”I never expect such a statement from serious people. Yes, Grech and Vella were responsible even AFTER the fray was already done. they have to bear all the responsibility together with those that now are trying to play the role of heroes. That is Why the LP wants to put the scandal and the incompetency that followed after the RJ70s infamous scandal. A last word to show the Maltese taxpayers why and What responsible people do with our monies. Quote: Sources close to Air Malta told this newspaper Mr Grech’s new disclosure is not documented in the company’s board minutes. A very pertinent question is Why and What is minuted in board meetings? How much money the directors are going to take in their pockets? Or just sipping glasses of whisky and ordering some catering to make up for the jolly feast to keep the board lively? This is another manifestation that in this country whoever comes in power only the workers are accountable and they have to atone for their mistakes while those at the top continue to do whatever they like. This is a country of shame run by irresponsible people where nobody is accountable. At Air Malta the workers had to carry the burden and were punished while those at the top run away with the people`s monies and now the LP just changed only its name and emblem as GonziPN is trying to project itself itself as a regime of corruption and incompetency. There is no recovery to this nation if we remain with two big political parties that are trying to think that we are a bunch of stupids and cwiec. And to continue to show their hypocrisy look what the the two parties have done: Former chairman Louis Grech admitted his board stopped the inquiry in 1997 and instead appointed a non-Maltese company specialising in aviation matters to draw up a report on all aspects relating to the selection on purchase of the Avro RJs. This was not a question to continue squandering the cash flow of Air Malta by bringing foreign brains. Grech as an economist could easily take decisions with simple equations. What the PN have done: brought people from abroad just to bury the dirt that they have done in 25 years at Air Malta because the MALTESE CAN REVEAL SOMETHING IF NOT TODAY, TOMORROW. This is a country of SHAME!!!!There is no credible party to choose.
m. borg (slm)
Aug 12th 2012, 11:36
It is useless to have people involved in Avro's scandal pointing fingers, anybody involved has to shoulder the responsability especially as this matter is one of the main problems that has caused AirMalta to take a nose dive.
It is evident that the bulk of the problem lies with the board that initailly approved the purchase with possible continuity in the poblem by the board following that.
Let us not forget that the board that RCC formed part was also responsible for the MEDAVIA debacle which also cost AirMalta in millions of euros down the drain.
This is found on Wikipedia:
"...............Air Malta exercised an option for one more A320, and in 1992, three more Boeing 737–300s were ordered. That year, four Avro RJ70s were ordered for routes to Catania and Palermo and to new destinations such as Tunis and Monastir."
Which shows that the board RCC formed part of did buy the AVROS and no amount of excuses would erase the fact that he was part of the problem.
GEORGE S DARMANIN
Aug 12th 2012, 12:33
the thing is that RCC claimed that he along with the board approved the contract with a specific condition but someone removed that clause without their or at least his knowledge. So yes the inquiry should have been able to identify who did this, but wonder of wonders LP does not want o point fingers, oh except to RCC and other PN persons. Hallina trid.
John de Giorgio
Aug 12th 2012, 10:48
Hypocrisy exposed.
j brincat
Aug 12th 2012, 10:46
@Gianninu Saliba
"If something was not Kosher, then Labour Party element had to be involved... that's obvious"
Kosher and not kosher (salty) the fact remains that the decision to purchase the RJs was taken by a board which was in office PRIOR to Labour coming to power in mid 1996.
Dr Sant's government was short lived and in 1998 the PN was again elected to government and soon hand chose the new chairman and a new board of directors.
What precluded the new board (1998) from continuing the inquiry about the purchase of these cursed RJs and which cost Air Malta a loss of €68 million? (Source: Mr Lino Spiteri on TOM of two Sundays ago)
And have you to say about the setting up of Azzurra Air which again cost Air Malta another €96 million. Was there any enquiry/investigation about this massive loss? Why and how was this loss incurred? What brought it about? Who was responsible for such a bad decision?
So, what's obvious?
(jb)
mark johnson
Aug 12th 2012, 10:42
The next step on from 'I don't remember' is 'I was only obeying orders'.
Angelo Vassallo
Aug 12th 2012, 10:40
Iz-zejt bil-mod il-mod qieghed jitla` f'wicc l-ilma. Fl-ahhar sirna nafu bicca ohra dwar din is-saga kollha. Issa nafu li l-inkjesta ta' l-Imhallef Godwin Muscat Azzopardi twaqqfet mic-Chairman ta' l-Air Malta nnifsu s-Sur Louis Grech, liema Chairman kien politikament appuntat mill-gvern lejburista ta' Alfred Sant.
Forsi xi darba nkunu nafu liema hi l-kumpanija barranija li ghamlet rapport ghas-Sur Grech, u x'kien fih dan ir-rapport. Jekk verament ir-rapport jghid li l-Avro's kienu “a high risk and costly decision”, is-Sur Grech ghandu jara x'jaghmel biex ir-rapport ikun ippubblikat kif ukoll insiru nafu min huwa l-awtur ta' dan ir-rapport.
Willie Grech
Aug 12th 2012, 11:58
@ Angelo Vassallo.
Mhux ahjar titghallem taqra li hemm quddiemek l-ewwel? Jew ma tifhimx bl-Ingliz?
"However, Judge Muscat Azzopardi did not recall why, nor who had given the order to stop."
Wally Vella-Zarb
Aug 12th 2012, 12:12
Iż-żejt ilu f’wiċċ l-ilma għal min għandu għajnejh miftuħin. Iż-żewġ kuntratti ta’ xiri tal-RJs saru minn bord ta’ diretturi politikament maħtur minn u fi żmien gvern nazzjonalista ta' EFA. Edba xiri ta’ RJs ma sar fi żmien il-gvern Laburista ta' Alfred Sant. Kulmin hu onest jafu dan.
Jimmy Magro
Aug 12th 2012, 16:16
Sur Vassallo
Jekk trid tikteb bil-Malti, il-kelma Lejburista ma tezistix. Tkomplix izzeblah il-lingwa Maltija. Lejburista trid tiktibha kif suppost - LABURISTA.
Il-Malti jixraqlu ahjar. Min izeblah il-lingwa Maltija jkun qed izeblah lilu nnifsu.
Toni Borg
Aug 12th 2012, 10:35
In Malta it's always the small fish that are sent to fry!
Others who squander millions from the tax payers money simply get away with murder
with everyone involved scratching each others back to make sure no one is exposed.
G. Bugeja
Aug 12th 2012, 10:30
What really concerns us taxpayers, is who gave instructions to then Chairman of Air Malta Mr A. Tabone. Mr Tabone admitted publicly on a television programme sosme time ago, that he signed the contract because he had instructions from above. Do we have the right to know who is this person from above who gave him the instructions to buy the RJ"S. That is the question; no mnore and no less.
Anthony Agius
Aug 12th 2012, 11:17
What really concerns Airmalta employees (also taxpayers and honest workers) is who is going to feed their families when everything comes tumbling down! RCC? Louis Grech? JN Tabone? Gonzi? Karmenu Vella? PETER DAVIES?
Mario Tabone-Vassallo
Aug 12th 2012, 10:28
Mela, tberbqu flus il-haddiem. Tniedet inkjesta li twaqqfet hadd ma jaf minn min u ghaliex. Minflok, sar rapport hadd ma jaf minn min. Wiehed iwahhal fl-iehor u kolla baqghu hartumhom fix-xghir u l-haddiem b'butu hafna ehfef u l-AirMalta fi krizi finanzjarja li qed tkompli thaffef but il-haddiem u taf teqridha. Hawwadni ha nifhmek
Jimmy Magro
Aug 12th 2012, 10:26
Who and why is all the past. In these cases, in Malta, there is no possibility of anyone being charged criminally or in a civil suit. Here the top brass are protected by politicians.
In Iceland, the Prime Minister was taken to the criminal court for making Iceland and its banks bunkrupt.
In Malta, evryone attends social events, drinks and smiles as if nothing has happened.
The past is the past and it is useless to keep on harping about the RJ's and the AzzuraAir. The money has gone down the drain and some pockets got their due.
The matter that is relevant is whether Air Malta is around in the next ten years. In 1974, a couragous decision was taken to set up Air Malta, which was called the lead planes, and it survived all the tempests and monsoons.
All this happened as there was the political will to survive. Air Malta was the crown jewel of the newly born Republic.
Things have changed since then and that time will never come again. On paper and in interviews we are fed alot of bullshit, but internally everyone knows that the future of Air Malta is blurred, with or without the foreign management team.
Anthony Agius
Aug 12th 2012, 11:22
Nobody wants to listen to Captain Dominic Azzopard president of the pilots' union! That is the real problem!
Evarist Saliba
Aug 12th 2012, 10:26
This finger-pointing exercise has been going on for some time now, and what has become quite obvious is that the accusations against Richard Cachia Caruana were fabricated, while his version of events is being vindicated by various sources.
An enquiry which could have established the truth was aborted during the time that Karmenu Vella was the minister rsponsible for Air Malta, the same person who submitted very weak "evidence" to shore up the claims by Jeffrey Pullicino Orlando against Richard Cachia Caruana.
Convenient amnesia clouds the identity of the person responsible for stopping the enquiry.
Anthony Agius
Aug 12th 2012, 11:23
All the people you mentioned had their fingers in the pie at some time or another! We pay for it with our taxes
Victor Vella
Aug 12th 2012, 13:14
Mr Saliba Why you do not ask your PN to make the inquiry as well? We know your convenient amnesia clouds and other beautiful words . Ask the chairman of that time JNTabone and the board of directors and you find the answer to your beautiful words and bigotry.
Evarist Saliba
Aug 13th 2012, 10:13
@ Victor Vella
As usual, you side step the issue.
The enquiry was aborted when Karmenu Vella was the minister responsible for Air Malta and J.N. Tabone was no longer connected with the airline.
As for enquiries now, I have had experience under Labour administartions (recorded in my memoires) when orders were given orally, but not confirmed in writing, when this was requested. The amnesia being shown now confirms that this was standard practice when convenient.
And just in case your blinkers do not allow you to see the whole picture, I am not defending Air Malta for selecting the RJ70's. I am only saying that no one is contradicting Richard Cachia Caruana's claim that this choice was conditional on a clause in the contract saveguarding Air Malta's interests, a clause which was omitted by unknown subordinates, and attempts to establishwho was responsible for this omission were scuppered under the Labour administration that followed.
Gianninu Saliba
Aug 12th 2012, 10:14
If something was not Kosher, then Labour Party element had to be involved... that's obvious.
Frans Aguis
Aug 12th 2012, 11:43
You do realize that the "labour involvement " in this issue is minimal.And Dr Sant asked the board to drop the inquiry and gave the job to a more objective external entity. The headline is just there so fanatics like you would be more prone to click on it.The timesofmalta know they're clientele well enough.
Paul Cassar
Aug 12th 2012, 10:11
IN THE FINAL ANALYSIS................ WHAT INTERESTS US TAXPAYERS IS NOT THE INQUIRY BUT WHO
SIGNED THE PURCHASE CONTRACT...........................and in so doing doomed Airmalta.
Anthony Agius
Aug 12th 2012, 11:25
If Airmalta goes bankrupt, taxpayers will have more to worry about! Malta will go into recession big time!
Manuel Mangani
Aug 12th 2012, 12:53
Speak for yourself, Mr. Cassar. There are plenty of tax-payers who are interested in getting to know about the whole process which led to the infamous decision.
Charles Micallef
Aug 12th 2012, 09:26
However, Judge Muscat Azzopardi did not recall why, nor who had given the order to stop.... this is the custard pie in the face of the taxpayer!
Anthony Agius
Aug 12th 2012, 11:26
If Judge is suffering from loss of memory, he should be relieved of his duties.....
carmel cassar
Aug 12th 2012, 11:49
An enquiery precided by a judge, and there is no annotation in the enquiry file who has given the order, and reasons for it. Do we have judges too now that they make mistakes in documenting, like what we had with poloce officer, because of whom a charge was dropped lately. ONLY IN MALTA?
Please choose the reason of your report below: