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.
It would not have addressed the fundamental problem with the RJs’ purchase- Louis Grech
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.