The feud at Ogle: A fight for control or a quest for good order?

Except for complaints about the state of the country’s interior airstrips and the absence of navigation aids, the local aviation industry generally avoids the public limelight. It is a small industry comprising a handful of resilient operators, with the older, more experienced ones, having been around for more than half a century, growing gradually and steadily in spite of challenge of an underdeveloped internal aviation infrastructure.

Those challenges apart, however, these would appear to be brighter days for the industry. In recent years, there has been evidence of costly investment in new aircraft by the private operators in response to the national focus on Guyana’s interior, primarily for economic reasons. The push to exploit the lucrative gold and timber industries and to revive manganese mining has swelled the demand for interior air transportation and the aviation sector has been responding. What has also brought the sector much more into the national spotlight is the challenge set for it by the Government of Guyana of the creation of the country’s second international airport at Ogle.

That too has proceeded quietly, with some hiccups but steadily, nonetheless; until what appears to have been a long-simmering internal row boiled over two weeks ago into an incident that made headlines.

Ogle Airport

The spotlight in the current controversy is focused on the two oldest and largest aviation operations in the country. Trans Guyana Airways is part of the well-known Correia Group of Companies that includes the Correia Mining Enterprise, a gold mining company established in the 1950s, the Caribbean Aviation and Maintenance Service Ltd (CAMS), a support company that provides maintenance services for Trans Guyana, and Evergreen Adventure Tours, owner of the Baganara island resort in the Essequibo river. Trans Guyana, according to available information, acquired its first aircraft, a Britten Norman Islander in 1956. The company was also the first to introduce both the Shorts Sky van and Cessna Grand Caravan to the local aviation industry. Apart from its routine interior tours and domestic passenger and cargo flights, Trans Guyana also operates a six-day a week passenger service between Ogle and the Zorg-en-Hoop airport in Suriname. Michael Correia, the founder’s grandson, is Chief Executive Officer of the Correia Group.

Like Trans Guyana, Air Services Ltd. (ASL) is a family-owned company that is part of a wider business operation which has been passed down from one generation to another. ASL was founded in 1957 by Yacoob Ally, owner of one of the country’s leading timber companies, A. Mazaharally & Sons Ltd. ASL was established as a support service for Ally’s bigger interest: timber. In the beginning, he acquired both a Cessna 172 and his pilot’s licence and built airstrips at his interior timber grants. Again, like Trans Guyana, ASL eventually expanded into a commercial service. ASL currently operates Cessna Grand Cara-vans, Islanders, Cessna 206’s and Cessna 172s in a passenger and cargo service that serves all the regions of Guyana. The company also offers overseas charters to the Caribbean and South America and operates the country’s only Flight School as part of its Ogle operations. The company is now run by the owner’s son, Mazhar Ally, himself an aircraft pilot.

Sources that are familiar with the goings-on in the local aviation sector say that the current tensions at Ogle derive from competition between Trans Guyana and ASL. Depending on which side you talk to, you get a different perspective on the nature of the controversy.

From one perspective, the problem is presented as an attempt by one side to use its greater clout on the Board of Ogle Airport Inc. (OAI), the company set up by local Aircraft Owners Association in 2001 under a lease arrangement with the Government of Guyana that commits the OAI to establishing and managing Guyana’s second international airport at Ogle. The other says that its competitor and fellow shareholder in the OAI has been delinquent in its obligations to the collective task of creating a modern airport out of a facility that had become sufficiently run-down to be threatened with a demand by the international aviation authorities for its closure and that in one particular respect it is unmindful of the rules that govern the operations of the airport.

The sheer scale and complexity of the problem leaves one to wonder how it has been kept under wraps for so long and how, moreover, it has not compromised the entire Ogle project.

The incident of two weeks ago, in which a truck laden with fuel forced its way into the Ogle facility by knocking down a locked gate, appears to have been sparked by the refusal by the OAI’s security detail to admit to the airport a truck delivering fuel to ASL. Two nights prior to the gate-crashing incident, an earlier ASL fuel consignment was admitted and subsequently impounded by the Customs Anti Narcotics Unit (CANU). The OAI, it appears, was questioning not only ASL’s authority to bring aviation gas to Ogle but whether or not the fuel had been acquired legitimately. It transpired that ASL had sought and secured official permission to import aviation fuel, a fact which the OAI appeared to be unaware of at the time. The fuel, we are told, has been returned to its rightful owner.

The matter, however, does not end there. As far as the OAI and its Board Chairman Michael Correia are concerned, there is still the issue of ASL not having satisfied airport procedures that would allow it to take fuel to Ogle. The OAI has produced the Ogle Airport Operations Manual, which pronounces on, among other things, procedures relating to the setting up of special facilities for the storage and supply of avgas, the training of operatives, compliance with environmental and safety procedures and other “operational procedures.” ASL, the OAI says, must comply with those procedures before it can bring fuel to Ogle.

There is, however, another twist to the story. The OAI is not itself a designated fuel-handling agent. What it has done is to use its legitimate authority to assign the Correia Group-owned Company CAMS the authority to serve as the sole fuel handling operation at Ogle. The other operators at Ogle purchase their aviation fuel from a company that is owned by a competitor in the sector.

ASL says that it has complied with of the regulations set out by the OAI for taking fuel to Ogle. It says too that its saving of around $400 per gallon can help the company in its quest to push local air transportation costs down and that it is this that concerns its rival, Trans Guyana Airways. ASL says too, that the fuel issue apart, the Board, under the chairmanship of Correia has been acting in a manner that inhibits its interests in other ways, including attempts to block the company’s expansion plans at Ogle.

ASL apart, the view in the sector appears to be that the Correia majority shareholding on the Board is merited if only on account of the Board Chairman’s demonstrable commitment to seeing the project through, and, perhaps more importantly, the fact that the Correia Group has borne most of the financial burden in terms of investment in the project. Whether that constitutes justification for what ASL claims has been the OAI’s attempts to marginalize it, is not an issue on which other players in the sector are inclined to be drawn. Nor has there been much comment on the OAI’s contention that ASL has been delinquent in its own responsibilities as a shareholder in the Ogle Airport project.

By last weekend talk had surfaced about a possible Private Sector Commission (PSC) mediatory intervention. The overarching concern here appears to be that unless the issue is settled quickly, government could use the dispute as an excuse to pursue more direct, arguably even shareholding involvement in the project, which, an aviation source says, would “dilute” what is, in effect, a private sector project and pave the way for state-control of both the project and future running of the Airport.

The difficulty in settling the matter quickly appears to repose an awkward reality, that is, the reality of two rival aviation companies being joined together by an overarching obligation to the full and final completion of the Ogle International Airport. Indeed, the die may have already been cast since ASL has, by calling for state representation on the OAI Board to ensure what its Flight Operations Superintendent Annette Arjoon-Martins calls “a fair and level playing field to conduct our business” now dropped a broad hint that her company is mistrustful of any attempt at a solution that is left solely in the hands of the aviation sector.

It is no secret that the relationship between government and the OAI has, at times, been an uneasy one. Earlier this year the administration was forced to intervene in a matter involving the use of space for expansion by the companies in the sector. Transport Minister Robeson Benn deemed the controversy “distressful” and expressed the government’s concern in the light of what he said was its significant investment in the project. Official figures indicate that the government, in collaboration with the European Union, was spending in excess of $471 million at the airport, particularly on the runway extension.

Still more contentious issues may lie ahead. It appears that both the OAI and CAMS have been caught completely off guard by the discovery that ASL has been granted a license to import aviation fuel. Accordingly, CAMS is now raising the issue of its own November 2010 application to Prime Minister Samuel Hinds to import aviation fuel. CAMS says it has received no response to its application. The application, signed by Michael Correia in his capacity as Chief Executive Officer of CAMS, tenders the company’s credentials as “an approved Texaco distributor,” and the approved distributor of avgas at Ogle. Here, the unspoken inference would appear to be that while ASL claims that it is being discriminated against at the level of the Board of the OAI, both the airport authority and CAMS are evincing an uneasiness over what might be construed as evidence that – at least as far as the importation of aviation fuel is concerned – the government appears to favor ASL.

Amidst the unfolding controversy at Ogle, however, Correia insists that the substantive pursuit of creating a new International Airport, effectively a second and far more convenient link between Georgetown and the other Caribbean capitals than Timehri, continues on schedule. Given the occasional holdups that have delayed completion of the extended airstrip up to this time, that is good news. Correia says that the airstrip is scheduled for completion by year end and that come next year Ogle will be receiving flights from the rest of the Caribbean. We must wait and see whether that is sufficient incentive to bring an end to the feuding at Ogle.

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