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NAC Denies Corruption Allegations in Garuda Airplane Procurements

February 13, 2021, 10.41 PM

JAKARTA, - Aircraft lessor Nordic Aviation Capital (NAC) has responded to Indonesian flag carrier Garuda Indonesia’s announcement that it is returning six Bombardier CRJ1000 jets to the company, six years before their leases expired in 2027.

In a statement released on Friday, February 12, the Ireland-based company insisted that "there has been no allegation of any wrongdoing on the part of NAC in relation to the procurement of the aircraft."  

"We are not involved in the investigation of kickbacks related to the procurement of the 12 CRJ1000 planes.”

NAC's statement was a rebuttal of Indonesian State Owned Enterprises [BUMN] Minister Erick Thohir's assertion that NAC bribed then Garuda Indonesia President Director Emirsyah Satar in 2011 to be awarded the pro the airline was procuring aircraft.

NAC admitted that last year the company was holding talks with Garuda to ease the airline's financial burden due to the Covid-19 pandemic.

Also read: Garuda Indonesia Returns 12 CRJ1000 Jets to Their Leasing Company

The NAC maintained that the two parties have yet to reach an agreement "as the [NAC] have  not received any notification [from Garuda] about its plan to terminate the contract. 

As such, the company said, "The lease agreements is still in effect, so NAC expects Garuda to continue honouring its contractual obligations." Under the contract, Garuda was supposed to operate the aircraft until 2027.

But a months-long investigations by the Indonesian Corruption Eradication Commission (KPK) and its British counterpart the Serious Fraud Office (SFO), revealed the procurement of the Bombardier CJR1000 in 2011 was marked by bribery and corruption.

A file photo of national flag carrier Garuda Indonesia. SHUTTERSTOCK/LEONY EKA PRAKASA A file photo of national flag carrier Garuda Indonesia.

Also read: Passenger Numbers on Garuda Indonesia Increase Towards End of 2020

Garuda Indonesia President-Director Irfan Setiaputra noted that the procurement of the CRJ1000 was also costly for the airline. 

“We estimate that Garuda can save more than $220 million in expenses that we would have incurred if we used the CRJ1000 until the end of their contract in 2027,” he said.

Irfan added that the need to cut costs due to the Covid-19 pandemic prompted Garuda to stop using the planes.

Garuda is also negotiating with Export Development Canada on an early settlement for the lease of six other Bombardier planes, whose contract will end in 2024.

As with NAC, Garuda cited the ongoing bribery probe against Bombadier Inc. and efficiency measures during the pandemic as reasons for terminating the deal.

(Writer: Rully R. Ramli, Akhdi Martin Pratamai | Editor: Erlangga Djumena, Bambang P. Jatmiko)



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