By EDDIE OSIFELO
AVIATION minister Peter Shanel has defended a Memorandum of Understanding (MOU) he signed with Chinese state-owned company AVIC Commercial Aircraft in 2019.
Australia Broadcasting Corporation (ABC) run a story on the issue last week after a copy of the MOU was leaked to them.
Under the MO, AVIC, one of China’s largest defence and aerospace companies, promised to upgrade almost three dozen airstrips in Solomon Islands as part of an ambitious plan to transform the country into an “aeronautical hub” for the region.
In return, the Solomon Islands said it would purchase six aircraft from AVIC Commercial Aircraft, a subsidiary of the Chinese state-owned defence behemoth, which has built small and medium-sized aeroplanes to be sold to developing countries.
The MOU has raised eyebrows, but Shanel told parliament yesterday it was a non-binding agreement that states what is the intention of both parties, take actions, to conduct business transactions or to form a new partnership.
He said this type of agreement like MOU can also be referred to as a letter to intent or a memorandum of agreement.
“There is nothing sinister about the MOU I signed with AVIC.
“The problem with AVIC, their strength is not in infrastructure but hub, builds aeroplanes, cabins and airstrip infrastructures,” he said.
Furthermore, Shanel said the MOU is on hold because of Covid-19.
He said the MOU does not commit Solomon Airlines but backs Government to provide service to the people of this country.
Solomon Airlines currently operates only one international aircraft — an Airbus A320 — and has not moved to buy any new planes from the Chinese firm.
It runs three smaller Twin Otter and one Dash 8 aircraft for domestic routes.
When the ABC contacted the CEO of Solomon Airlines, Brett Gebers last week, he said he was unaware of the agreement.
“I discussed this MOU with the board and, as it has not yet been presented to the board, the chairman said that he will contact the MCA [Ministry of Communication and Aviation] to find out more about it,” he told the ABC.
“I was half-heartedly invited to accompany a group of MPs to China around this time in 2019 but nothing ever came of it. There was mention of looking at aeroplanes.”
That stands in stark contrast to the sweeping vision laid out in the MOU, which declares:
“Solomon [Islands] wishes to be part of the regional airline concept where Honiara would receive direct flights from China and become a regional hub.”
“For this vision, Solomon [Islands] needs to acquire new planes, such as MA600/MA700 and Y-12 aircraft and refurbish airfields,” it says.
The MA600 is a relatively new turboprop plane which AVIC Commercial Aircraft has already sold to a number of countries, including Laos and Benin.
The MOU says the sale would “depend on the further negotiations on price and concessional terms” and would require “ultimate approval of the board of Solomon Islands and the government of Solomon Islands”.
The MOU also lays out an ambition to upgrade almost three dozen airstrips across Solomon Islands, saying the purchase of planes is “in combination and is linked to facilitating the upgrade of Solomon Islands domestic airfields in 2 phases.
For Phase 1, up to 15 airfields; for Phase 2, the remaining 20 airfields”.
But again, there is no evidence that any of this work has begun.
The MOU was one of six agreements signed by Solomon Islands and China in the aftermath of Honiara’s decision to abandon its relationship with Taiwan and establish diplomatic ties with Beijing.