Costly "Bad" Decisions by Public Officials

The Government of Guatemala had to pay $600K for canceling a loan granted by the BNDES in Brazil to buy aircraft from Embraer, another Brazilian company.

Monday, March 17, 2014 reports that "The government paid $595,461.22 on 19 February because it did not confirm the adquistion of a $133 million loan from the National Bank for Economic and Social Development (BNDES) for the purchase of six A-29 Super Tucano aircraft."

The loan had been negotiated and granted in 2009 during the administration of President Alvaro Colom and authorized by the Guatemalan Congress in 2012. In 2013 the purchase was canceled when "problems with overruns" were detected regarding the prices of the Brazilian fighter planes.

Days ago the Government of Costa Rica completed the payment of nearly $40 million to the OAS- another Brazilian construction company- by way of settlement of the concession of a road, whose excesses in the planned cost for the tolls were objected to by local activists.

More on this topic

Guatemala Cancels Brazilian Aircraft Purchase

August 2013

The suspension has been ordered of a $133 million disbursement for the purchase of six Super Tucano airplanes which were to be used to control of the country's airspace.

From a press release published in Diario de Centro América:

"We have doubts about whether the six Super Tucanos are overvalued.

Guatemala Negotiates Aircraft Purchase

January 2011

The country is negotiating the purchase of 10 EMB-312F Tucano aircraft used by the French Air Force.

Before, the Guatemalan Air Force had negotiated the purchase of new EMB-314 Super Tucano aircraft from Brazilian company Embraer, negotiations which were unsuccessful.

"The Tucanos will be stationed at the Air Training School located in Provenza, near Marseille, where they will serve in missions to train fighter pilots," the article in stated.

El Salvador Negotiates Fighter Jets

November 2010

The Government is negotiating with Brazilian manufacturer Embraer a $ 100 million aircraft purchase.

While there is no exact number, an estimated 10 EMB-314 Super Tucano would be purchased.

Asked by El Mundo, Walter Guzman, president of the Legislative Defense Committee, stated "It is a fact that we are going to purchase."

Combat Aircraft and Radars for $99 Million

June 2009

Brazil gave Guatemala a 12-year loan for the purchase of six Super Tucano Embraer aircraft and radars from Taiwan.

The Brazilian Export Bank confirmed the loan during the Brazilian President’s visit to Guatemala.

The credit will be applied toward the purchase of an aerial surveillance system and aerial interception in which the fighters are linked to a radar and satellite information system to help combat drug trafficking.

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