$20M consultancy fees for CAL justified: Lok Jack

The Chairman of Caribbean Airlines Limited (CAL) doesn't think that consultant fees paid to consultant Jean Frederic Mognetti are exceptionally high when compared to international standards.

Arthur Lok Jack made the comment in response to media reports that that CAL paid Mognetti, of the firm JFM&FK Management Services, more than TT$20 million for consultancey service over a four year period up to May 2010.

Read the story: Warner investigating $20M consultancy for CAL

The Guardian said an email from Lok Jack said: "In regards to JFM fees, by international standards these are not necessarily high."

It added, "If we had gone to a major international consulting firm for the job we would have paid significantly more for the quality and expertise brought by Pro Mognetti, with no guarantee of the results that were produced."

Lok Jack said, "Pro Mognetti’s rate has not changed his fee rate since beginning his work with BWIA in 2006. Pro Mognetti receives higher fees from other international clients.

"In fact, the rate charged by Pro Mognetti is similar to the rate charged to another airline client in 2002."

Lok Jack said the airline employed consultants and contractors in its day-to-day management but as of May 31, 2010, "the two consultants who were working with the board to manage the integration of Air Jamaica stopped their work pending the re-appointment of the board."

Lok Jack said Mognetti came with Peter Davies who was hired as CAL chief executive officer in 2006. Both Davies and Mognetti had worked together.

The chairman also revealed that the whole board has resigned but so far the resignations have not been accepted.

"Furthermore, the Minister of Finance has asked the board members to continue serving until the report of the special committee appointed to review CAL completes its report and pending new appointments or confirmation by the Cabinet," he said.