Department of Defence defends decision to sell Government jet

Gulfstream IV and spare parts sold to US company for total of €471,000

 The resale value of the 14-seater aircraft, which went into service in 1992, had been estimated at no more than €750,000

The resale value of the 14-seater aircraft, which went into service in 1992, had been estimated at no more than €750,000

 

The Department of Defence has defended its decision to sell the Government’s Gulfstream IV jet and spare parts at a cost of €418,000 and €53,000 respectively.

The resale value of the 14-seater aircraft, which went into service in 1992, had been estimated at no more than €750,000 while the 87 spare parts were worth an estimated €405,000, the Comptroller and Auditor General said (C&AG).

Appearing before the Oireachtas Public Accounts Committee, defence secretary general Maurice Quinn said the jet was in the Gulfstream facility in the US at the time of the sale, and that the exchequer could have incurred significant costs if the sale had not proceeded quickly. However, the C&AG said it was difficult to determine whether value was achieved.

In July 2014 the jet was sent to the Gulfstream facility in Savannah, Georgia, for its annual inspection and service. While there, issues were identified and the department was told the full repair would come to €1.34 million.

Furthermore, a scheduled engine overhaul in 2018/2019 was due to cost €2.5 million, shortly after which the jet would have to be grounded because of age.

In 2010, the minister for defence had decided that if any costly non-routine maintenance or major structural repair was required the jet should be grounded and the government would decide on its future.

Offer

A total maintenance cost of €400,000 in any year was deemed by the department to represent the upper limit that should be incurred.

Following discussion with the Taoiseach, the then minister for defence Simon Coveney directed in August 2014 that all work on the aircraft should cease and that it should be sold.

However, the department was told that it would cost €1.8 million to get the jet to the point where it could be put on the US market.

Mr Quinn told the committee that salvage appeared to be the best option because significant costs would arise the longer the stripped-down aircraft remained on the Gulfstream facility floor.

Following the decision to sell the jet, Gulfstream advertised the aircraft and an offer of €418,000 from a single US company, Journey Aviation, was received in December 2014. The offer was accepted the following January and in February the spare parts were sold to Journey Aviation for €53,000. The company has since invested further in the jet and returned it to use.

‘Only one course of action’

“There was only one course of action available rather than a set of options,” Mr Quinn said, adding that he was satisfied with the value achieved from the sale “given the considerable circumstances involved”. He told the committee that the costs to the exchequer could have been higher.

He told the committee that without the jet, the spare parts were “now redundant”. They were “only valuable to us if they are in the aircraft and flying”, he said adding that there was no certification for them and there was no guarantee of any market for them.

However, the C&AG said “in the absence of a competitive sales process for the Gulfstream jet, and the spare parts, it is difficult to conclude on whether best value was obtained by the department.”