Misinformation on MIG deal may disrupt diplomatic relations

COLOMBO: The Government yesterday vehemently demised any inconsistency in the 2006 MIG 27 ground attack aircraft deal with Ukrinmash, Ukraine.

Misleading information on the MiG 27 government to government deal with Ukrinmash of Ukraine may hinder the humanitarian operations in the East and also disrupt diplomatic relations between the Government and friendly States, a release said yesterday.

Fabricated and misleading information on the deal has brought the matter under unwarranted publicity which would only help the LTTE to assess the vital characteristics of the air assets of the Air Force.

The MIG 27 deal being under the media spotlight will also help the LTTE to analyse the military strategy behind the purchase of MIG 27 aircraft, it said.

The release added: “In an effort to block military assistance to Sri Lanka, the LTTE, citing human rights violations, is working towards isolating the Government internationally.

False information on the MIG deal can harm diplomatic relations with friendly countries and the goodwill of suppliers.

Excessive publicity alleging irregularities in deals involving these suppliers may also have a negative impact on their business dealings.

Misinformation on the deal even after a clarification by the Air Force and the Government has placed the Technical Evaluation Committee in an embarrassing position.

Members of the committee may be reluctant to take independent decisions based on the requirement of the Air Force due to the inconvenience caused by prolonged inquiries.

The Government suspects that these charges of alleged irregularities in the MIG deal is aimed at disrupting the popular support and blessing of the public towards government efforts of liberating the East from the clutches of the LTTE.

MIG 27 ground attack craft played a key role in neutralising LTTE artillery and mortar positions during the recent battles of Mavil Aru and Vakarai. Precise air raids by MIG 27 jets pinned down the LTTE along their forward defence lines saving the lives of hundreds of soldiers.

The mere sound of Kfir and MIG 27 jets is said to boost the morale of the ground troops. Propaganda aimed at discrediting the Government and breaking the support of the public can affect the morale of the Security Forces engaged in humanitarian operations to liberate thousands of innocent civilians from the clutches of the LTTE in the East.

A clarification on this is provided in this document in detail.

In 2000, when the North-East conflict was at its peak, the Government purchased four MIG 27M fighter aircraft at a unit cost of $ 1,882,500 from Ukraine.

According to specifications, these MIG aircraft had only two years remaining lifetime prior to the next overhaul.

In addition, another three MIG 27M aircraft and one MIG 23UB trainer aircraft were purchased in October 2000 at a unit cost of $ 705,500 and 1,005,000 respectively. These too had only two years remaining lifetime prior to next overhaul.

Since these ground attack aircraft had only two years remaining life time, the Government following an agreement with DS Alliance extended the lifetime of these aircraft for another two years by paying US $ 155,000 per aircraft, so that they could be operated for a maximum period of four years before overhaul.

Out of the seven aircraft purchased in 2000, CF 732 was destroyed on July 23 2000 during the LTTE attack on the Katunayake Airport. CF 736 and CF 734 crashed respectively on December 27, 2001 and on January 9, 2004.

The remaining three MIG 27M and one MIG 23UB aircraft were grounded for overhaul in July 2004.

In 2004, the SLAF called tenders for the overhaul of the above aircraft since they were needed for operations. Three sources responded.

The Technical Evaluation Committee recommended to overhaul the aircraft through DS Alliance Pvt Ltd. a Singapore based company, acting as an agent of Ukrinmarsh, DS Alliance offered to overhaul the two MIG 27M aircraft (CF 731 and CF 735 at the rate of US $ 1,133,445 and the other MIG 27M (CF 737) at US $ 983,445. DS Alliance also offered to overhaul the MiG 23UB Trainer Aircraft (CTF 730) at a cost of US $ 1,299,015. The prices quoted varied due to different work scopes.

In 2006, the Government considered another flexible offer by Ukrinmash a subsidiary of the State company Ukrspetsexport of the Government of Ukraine to overhaul the fleet of SLAF MIG 23/27 aircraft and to provide another four MIG 27M aircraft manufactured in 1980, 1981 and 1983, at an unit cost of US $ 2,577,000.

Further the price offered by the Ukrinmash on a government to government basis is lesser than the price offered by the bidder.

Seemingly the price offered by the Ukrinmash seems higher compared to the MIGs purchased in 2000.

However when the work scope of the MIG aircraft purchased in 2000 and the work scope of the four aircraft to be purchased on a government to government basis are considered the 2006 deal is economically viable as there is no need for the SLAF to overhaul the aircraft for next eight years.

Further, unlike in the previous offer in which the SLAF purchased seven MIGs with only two years remaining life time at a cost of US $ 1,882,500, the SLAF this time is purchasing the four MIG 27 aircraft, which have been fully overhauled with eight years lifetime at a cost of US $ 2,577,000.

To get a clearer picture, the cost of the overhaul of the MIGs should be added to the original value. One can realised that this amount is much higher than the cost of a MIG aircraft after the overhauling at the rates offered by the DS Alliance (Pvt) Ltd.

In this backdrop, it is unrealistic to come to a conclusion about the prices of the MIG 27 aircraft based only on the original value without considering the condition and remaining lifespan of the aircraft.

The SLAF has also found it fit to purchase these four MIG aircraft from Ukrinmash (government to government deal) offer since it reduces the freight cost since they can transport the MIG 27M aircraft and the MIG 23 UB trainer aircraft to the LVIV State Aircraft Repair Plant in Ukraine after they hand over the four overhauled MIGs to Sri Lanka.

The latest purchase of four MIGs is on a government to government basis with a lifespan of eight years at a cost of 2,577,000 with deferred payments of only 25 per cent to be paid on acceptance in Ukraine, 25% on acceptance in Sri Lanka, 25 per cent end of first year and 25 per cent end of the second year. The financier of the deal was the choice of the Ukrinmash.

The Government of Sri Lanka had no control over the selection of the financier.”