THE Leader of the Independent Group, Dr Derek Sikua says he stands by the comments he made in support of the CEO of Solomon Airline’s decision to suspend its operations on Tuesday.
Dr Sikua was responding to the Minister of Finance Synder Rini, terming Dr Sikua’s statement on 8th June as “inaccurate, misleading, downright untrue, false and reflect a lack of knowledge of the issues”.
But Dr Sikua insisted that the standing down of operations by Solomon Airlines was primarily due to the Airline Board and Minister Rini’s refusal to engage in open dialogue with management, and the lack of timely payments to settle the government’s debts with the Airline.
“Minister Rini’s claim that the Government has met all of its financial commitments to the airline is a lie, inaccurate and misleading the public,” Dr Sikua said.
“This is because the Government has not yet paid the $10 million under the 2015 Community Service Obligation (CSO) Agreement to the Airline for servicing uneconomical routes for the whole of last year,” he added.
“For 2016 CSO, a $6million upfront payment has already been made leaving $4million to be settled at the later part of this year.
“Hence, the $4million is still a debt to be settled by the government to the airline.
“So how can Minister Rini say that the Government has settled all its financial commitments to Solomon Airlines?
“Furthermore, my understanding is that under the CSO Agreement between the SIG and Solomon Airlines, such funds should be paid in full at the beginning of each financial year and not mid-year or later part of the year as mentioned by the Minister of Finance.
“This makes sense as the airline would commence servicing uneconomical routes from day one each year at a loss.”
Dr Sikua said he believed the Minister of Finance is also aware that the Government is yet to pay Solomon Airlines $7.8million.
“This is a commitment made by the previous NACRA Government as part payment for the twin otter aircraft now in service.
“Following Cabinet approval for Government to contribute the $7.8million, the airline management proceeded with loan of $16million to pay for the aircraft.
“The $16million loan has now been paid up in full by the airlines from its own resources, and not once has it defaulted.
“In the meantime, the government is still to pay the $7.8million it promised the airline a few years ago.
“In view of the foregoing, it would seem the Government through the Ministry of Finance is yet to pay Solomon Airlines a total of $21.8million,” Dr Sikua said.
He added the sum of $4.2million paid by the Government to the Airline on Tuesday this week as full payment of overseas students’ return airfares has been outstanding since February this year.
“Why the delay until now when the Minister knows fully well that the sold-out tickets for SIG overseas’ students was done on credit basis and hence, affects the day to day income and cash-flow of the Airline.
“I still believe that Minister Rini would not pay the $4.2million to the Airline if it had not suspended its operations early this week.
“Given the Government’s huge debts to the Airline, how can the Minister of Finance expect the CEO and the previous Board to undertake their responsibilities properly?
“He should at least, give them credit for building their own HQ Office Building, purchasing an Airbus A320 Aircraft, Dash-8 Aircraft and a Twin Otter aircraft from their own resources without much financial assistance from the Government over the years.
“The Minister’s concerns about the company owing the Government millions of dollars in taxes is a matter which he has the powers to deal with under the relevant laws.
“I am happy to note that he is discussing this issue with the new Board already.
“I ask the Minister of Finance to treat Solomon Airlines fairly just like any other State Owned Enterprise (SOE).
“To demonstrate its commitment to our flag carrier, the Government must open all airfields around the country that are still closed, tar-seal all airstrips and buy two new aircrafts recommended by the airline new Board and Management for its domestic and international routes in the next five years.
“I still maintain however, that the issues faced by our national airline, dubbed “The Best Small Airline in Pacific” has little to do with the CEO’s financial competence or the former board’s capabilities to address the ongoing financial situation of the company.
“We can argue and talk all day about this but in today’s new corporate world and culture, if we cannot come together and dialogue about the issues and challenges we are faced with in any situation, then nothing will change!
“If the Minister of Finance, the Airline’s Board and Management do not have the discipline to discuss Solomon Airlines issues professionally and approach each other in a decent manner, then the truce struck between the Government and the Airline early this week is an uneasy one and will probably not last!
“As alleged by Minister Rini, what I am saying here might be downright untrue and reflect a serious lack of knowledge of the issues pertaining to Solomon Airlines on my part.
“However, the Minister must be reminded that, as Minister responsible he ought to get back to basics and change his attitude and approach.
“Otherwise, the new Board and CEO will also struggle just like other SOEs and business houses operating in this country.”