September 9, 2008

Jamaican Office to Probe Controversial Airline Deal

Text of report by Caribbean Media Corporation news agency website

KINGSTON, Jamaica, CMC - The Office of the Contractor General (OCG) says it will conduct a probe into the controversial airlift guarantee deal between the Jamaica government and American Airlines.

In a statement issued Monday, the OCG said it had written to the Ministry of Tourism requesting the full particulars of the deal with the United States-based carrier.

The OCG said it wanted an executive summary outlining the agreement, the manner in which it was negotiated, as well as how it was procured, and the names and titles of all the persons who were involved in the negotiation and procurement processes. The summary is also expected to include the varying approvals which were received to facilitate the conclusion of the agreement.

The OCG said it also wanted "copies of all Cabinet submissions and decisions regarding the matter; copies of all correspondence between American Airlines and the government regarding the matter; copies of all board meeting minutes and a copy of the alleged contract".

It said all the information requested should be received by September 9.

Meanwhile, local hoteliers have supported the decision of the Bruce Golding administration to pay 4.5 million US dollars to the airline to continue flying to Jamaica.

President of the Jamaica Hotel and Tourist Association (JHTA), Wayne Cummings, said there was nothing wrong with the deal, adding that Jamaica would maintain its position as a preferred destination especially in light of the increased challenges facing the tourism market.

"American Airlines, as a legacy carrier, is very important to our destination and given what is going on around the Caribbean in particular, and around the world, we have to make sure that our seats are protected coming into the country and it's a very separate thing from the issue of Air Jamaica.

"Air Jamaica has its own challenges and that ought to be dealt with separately but, for what we have been able to negotiate, we are currently the envy of all other Caribbean nations," said Cummings.

The multi-million dollar agreement, to be signed between the government of Jamaica and American Airlines, has sparked controversy and triggered protest from the opposition People's National Party (PNP).

The PNP said that the government was embarking on an ill-advised arrangement.

"I think it is opening up some precedence that I don't know how we are going to deal with them," said opposition spokesman on tourism, Wykeham McNeil

"These are scheduled carriers in direct competition with Air Jamaica. How are we going to deal with other partners that fly to Jamaica, especially those that are transatlantic? What are you going to say to Virgin and British Airways that are carrying passengers to Jamaica from Europe and the UK," he added.

The Bustamante Industrial Trade Union (BITU), which represents workers at Air Jamaica, has accused the government of providing incentives to the airline's main competitor.

"Now the question that we are asking is 'is it a situation that you are putting in place an incentive to the competitor to operate on similar routes where Air Jamaica is operating?' Because that to me is a conflict and that is something that the ministry must respond to," said BITU President General Kavon Gayle.

According to government officials, the stance taken is due to plans by American Airlines to cut back on the amount of flights to the Caribbean due to the rising cost of fuel and the downturn in the US economy.

Tourism Minister Edmund Bartlett has defended the position taken by the government. He said that the agreement is critical to the survival of the tourism sector.

"The whole point is that we should not cloud an excellent view which is providing for the country, additional airlift that is badly needed to meet the expanded room counts that we have, and also to provide the earnings that are so important to us both in terms of national revenue flows as well as earnings for our tourism enhancement," he said.

Bartlett added that the American Airlines would only be paid if the country does not meet the targeted seat count.

"At the end of the year when the calculations are done in terms of the total programme, then if we have not made our target, and in all probability we will, then this money will be paid.

"Once we make our target we have nothing to pay. So we have the option of not having to pay one dollar and achieving those very critical improvements in seat count as well as earnings," the Tourism Minister said, adding he was willing to meet with other stakeholders to discuss the issue.

Originally published by Caribbean Media Corporation news agency website, Bridgetown, in English 1750 8 Sep 08.

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