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Ghana won’t have equity in new national airline

The Republic of Ghana will not take up any equity in the new national airline in the offing, Deputy Minister of Transport, Joyce Bawah-Mogtari has said.

Ghana Airways became Ghana International Airlines in 2004, with the Government of Ghana owning 70% shares, and a U.S. consortium, GIA-USA, owning 30% of the airline. Bitter legal rivalry between the shareholders, since 2006, eventually led to the collapse of the airline. GIA’s problems were worsened by the withdrawal of subventions by the Government of Ghana and the eventual suspension of its operations by the majority shareholder. The airline declared bankruptcy in July 2010.

The Government of Ghana, at the time, said embezzlement of ticket sales by management of the national carrier, was to blame for the suspension of operations. Head of Cost and Accounting at GIA, at the time, John Oduro told the media in mid-July that GIA employees had not been paid since April 2010. “What has really worsened our situation has been the withdrawal of government support for the company on May 7, 2010. We had our last flight on May 7 and since then, the Aircraft has been withdrawn because government could not commit itself to the extension of the work-lift arrangement we had with Astraus Air.”

Mr Oduro revealed that due to the absence of the Aircraft, the company had about 9,000 passengers stranded in Ghana, and several others in London and New York. He said GIA spent close to 120,000 dollars on hotel bills for the stranded passengers in Accra, alone. The airline had to refund monies to all the stranded passengers eventually. Mr Oduro said at the time that it would be a total waste of the taxpayers’ money for a company that owed the nation close to 64 million dollars, at the time, to collapse.

Speaking on Class91.3fm’s Executive Breakfast Show with Ekow Mensah-Shalders on Thursday March 24, Mrs Bawah-Mogtari said: “I would actually want to see a rebirth of the national carrier. I have actually just checked and found out that the consultants we engaged have actually just come up with the next stage of the process. We were furnished with an initial report about prospects for the project, they are just about to indicate how the process should go, and this time round, really, government does not want necessarily to take up any equity in the company.”

She explained that: “It might be a very lose arrangement where we have a private sector person investing in the carrier, and, of course, government will just be lending its name, and, of course, its facilities to that company in return for the corporate taxes we’ll be getting.”

“For our part, all we want to look at is investments that this will bring to our airport. At a time when His Excellency the president is investing huge amounts of money in aviation infrastructure expansion, we must, as a matter of necessity, improve upon our presence, put up a strong brand, because that is what will sell the aviation facilities that we are developing.

“Right now, we have 41 international carriers calling at the Kotoka International Airport – none of which is local. We licensed five domestic airlines, presently, we only have two that are operational. We are investing copious amounts of money into airport infrastructure, we do intend that His Excellency’s vision of making Ghana an aviation hub should come to pass.

“We even have plans to develop a huge aviation cargo centre at the airport. The cutting of sod for terminal three just started and what we intend to do is that we’ll now have a domestic terminal, we’ll have an international terminal, so, we must, by all means, build on a good business brand and I think the best way to do this without paying for it, in any way, would be for us to reintroduce the national carrier,” Bawah-Mogtari added.

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