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HH the Crown Prince Sheikh Nawaf Al-Ahmad Al-Sabah (center) with Speaker Al-Ghanim and Al-Kharafi during the awards ceremony.
MPs express disquiet over aircraft deals Legislative sessions slated for Dec 10 and 11 moved

 KUWAIT CITY, Dec 4: Several MPs have expressed disappointment over the aircraft deals signed by the Kuwait Airways Corporation (KAC) board of directors with Airbus, while criticizing the formation of the new board. MP Ali Al-Omair pointed out there have been suspi- cions on the actions taken by the KAC board, particu- larly the signing of contracts to lease and purchase air- craft before notifying the Kuwaiti Authority for invest- ment (KIA). He said doubts have also been raised on the forma- tion of the KAC board of directors, indicating there must be a decree in this regard. He added the lawmak- ers have agreed to form committee that will be tasked to look into the issue.

Meanwhile, MP Yousef Al-Zalzalah finds it surpris- ing that the corporation rushed the formation of a new board as if taking revenge on its former chairman — Sami Al-Nisf who was suspended recently. He also stressed the need to take the necessary action against Minister of Communications Essa Al-Kandari, assert- ing the KAC board has no right to carry out a deal on purchasing or leasing aircraft. He clarified the board has right to present proposals, not to implement them and sign deals as these are under the jurisdiction of KIA. In a related development, MP Yakoub Al-Sanei sub- mitted parliamentary queries to Al-Kandari regarding the deals.

He asserted a statement has been issued on KAC’s signing of new contracts with Airbus to pur- chase 25 airplanes and lease 12 — a total of 37 aircraft. He wants to know when the negotiations on leasing and purchasing the aircraft started, if it was a decision taken by the board of directors, the persons involved in the negotiations, and if a feasibility study was conduct- ed. He asked, “Were the deals signed under lease or a memorandum of understanding? Were they offered through public tenders or direct negotiations with Airbus?” 

 If the deals were done on the basis of the contract, the lawmaker wants to know if the Fatwa and Legislation Department prepared and reviewed the contracts. He stressed any group or government agency is not allowed to conclude or sign a contract worth more than one million dollars without the department’s consent. He wants to know if the opinion of the State Audit Bureau was taken in accordance with Article 11 of law number 6/2008 on the transformation of KAC into a stock company. He asked if the KIA board of directors approved the deals according to the Companies Act and Article Four of law number 22/2012. If such approval was not obtained, how were the deals executed and what was the legal basis for this move since KIA is under the Ministry of Finance. He wants to know the value of the deals, if the negotiations were done directly with Airbus or through intermediaries, if there were brokers or agents involved, how much were their commissions and who shouldered such expenses. He inquired about the lease period and if feasibility studies were conducted to determine if the contracts are beneficial to the corporation.

Expenses
He continued to ask: Do the lease and purchase values include expenses for maintenance, delivery and operation, or these expenditures were added to the rental value? What is the maintenance period? Who will bear the costs, including the expenses for painting and changes in the airplanes? Are the planes new or used? If these are used airplanes, he wants to know the manufacturing dates, models, number of previous flights, navigational efficiency, and cleanliness. He also inquired if Airbus provided a guarantee and if it has agreed to hold training sessions for the employees, particularly the pilots. He asked if the deals have penalty clauses or compensation for or against Kuwait. What conditions did KAC set to protect its rights in case the other party fails to comply with the stipulations of the contracts? He demanded for the delivery and payment schedules, including the sources of funds for both deals. On the other hand, MP Faisal Al-Shaye unveiled his plan to present a number of queries on the right of the KAC board of directors to sign purchase and lease contracts. He wants to know if there is an understanding between the board and KIA, asserting a number of questions have been raised and he hopes to hear clear answers. Meanwhile, the legislative sessions slated for Dec 10 and 11 were moved to Thursdays of the regular session weeks in December and January 2014, says Parliament Speaker Marzouk Al- Ghanem. Al-Ghanem revealed the Parliament Office took this decision after receiving information that the government cannot attend the sessions on Dec 10 and 11, which coincide with the GCC Summit. He affirmed the special session for housing issues will push through on Dec 12 and another special session for the Dow Chemical deal was scheduled for Jan 9, 2014. Another request to hold a special session for the Kuwait Airways Corporation (KAC) issue was submitted Wednesday and this will be presented to the Parliament in the next session, while the grilling request against Minister of Social Affairs and Labor Thikra Al-Rashidi will be discussed on Dec 24.


By: Abubakar A. Ibrahim and Ahmed Al-Naqeeb Arab Times Staff

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