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Two financed, one a gift from People’s Republic

PORT VILA, Vanuatu (Vanuatu Daily Post, September 10, 2009) – The Y12 aircraft manufactured in China has a track record for safety and has good strong engines but while the three aircrafts currently used by Air Vanuatu have been specifically designed to suit Vanuatu conditions, they can only land on tar-sealed airstrips.

This means the three Y12 aircrafts cannot land on airstrips that do not have a firm surface or those that have grass on them, unlike the twin-otter aircrafts.

Molisa says the new ATR 72 aircraft, which arrives next month will reinforce the Air Vanuatu fleet

This was revealed in parliament this week when issues of safety of the aircraft were raised during the tabling of the Bill for the concessional loan agreement between the Vanuatu Government and the Export-Import Bank of China for the purchase of Y12 aircrafts (Ratification) Act.

The concessional loan agreement is for two of the three aircrafts while the third aircraft has been given as a gift by the Peoples Republic of China.

When tabling the Bill, Finance Minister Sela Molisa said the amount owed under the loan is 68 million Yuan Renminbi, which is equivalent to over Vt800 million [US$8 million] .

The loan is over a 20-year-period and the lender is the Concessional Loan Department of the Export-Import Bank of China while the borrower is the Government of Vanuatu represented by the Ministry of Finance.

Under the terms of this agreement, there is a grace period of five years of which the minister revealed that only the interest of the loan will be paid of around Vt16 million [US$162, 000] per year before the loan proper amount of Vt42.2 million will be paid annually to repay the Vt845 million concessional loan.

However, one of the questions raised by Opposition MP Moana Carcassses was whether the planes would last for the 20-year period of the loan or the planes would need to be replaced in 10 years time and while they are no longer providing service the government would still be obliged to pay for the loan.

MP Carcasses said he raised the issue because many of the current MPs will no longer be members of parliament when the term of the loan ends.

Another concern raised by the Leader of Opposition, Sato Kilman, was the fact that if the national airline no longer operates before the term of the loan expires, who would be responsible for the repayment.

But Minister of Finance said the while the Government of Vanuatu is the borrower, the repayment will be done by the national airline, Air Vanuatu, who will make the payment through the national bursary at the Ministry of Finance and the ministry then pays the lender.

The minister reiterated that the Y12 has a good track record of safety and it has a strong engine.

He said the national airline will bring in the new ATR 72 aircraft next month to reinforce its fleet.

This will mean that Air Vanuatu will now have the youngest fleet in the Pacific if the ATR 72 arrives to complement the new Boeing aircraft as well as the three new Y12 aircrafts.

The Finance Minister also revealed the government’s intention to bring in a partner for the national airline.

Another point that was raised by Lands Minister Harry Iauko was that the neighboring country of Fiji has been using Y12 aircrafts for a long time and they have proved reliable as their engines were manufactured in the United States of America.

While the concessional loan agreement has only been ratified now by parliament, the document itself has already been signed by the former Finance Minister Willie Jimmy on behalf of the Government of Vanuatu and Mr. Zhu Hongjie, who is Vice President of the Export-Import Bank of China.

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