The state must ensure that Ogle Airport Inc stays faithful to the agreement with it

Dear Editor,

It is with some interest that I am following the saga involving the Ogle Airport Inc and the monopoly position that is occupied by one family.

My understanding of the evolution of OAI, revolves around what I described as one of the progressive experiments in public-private partnerships.  Five operators who benefited from the generosity of the state, through the use of the Ogle aerodrome, would form themselves into a company and that company would have the facility and develop it for the benefit of these operators and the industry as a whole.

The state provided the land through a lease at peppercorn rent and the state also on-lent a two million euro EU facility to the OAI interest free.  In addition, the state invested millions of dollars in equipment necessary for the proper operation of the airport.

How one family has dominated the business activities and grown to have virtually total control of the Ogle Airport is a matter for the partners who were all outmanoeuvred.  Government trusted that the spirit of the initial pact would be honoured.  I also feel that the original partners operated with a great amount of trust among themselves.

Warning signals went unheeded, the challenges of one of the largest operators and its public spat with OAI is well documented in the media. The concerns of emerging operators who cannot have accommodation have also been made public. In all of this, the state has a responsibility to ensure that OAI stays faithful to the spirit and letter of its agreement with the state.

When the state makes concessions to allow businesses to grow and to power larger economic growth, it does so because it does not want to burden Guyanese businesses with huge unaffordable initial capital outlays.  To acquire that amount of land and the investment in buildings and instruments would have cost OAI more than US$50 million. These peppercorn leases were never intended to allow the lessee  to extort huge supernormal profits by onleasing at astronomical rents to others.  Thus, the state has a provision that the lessee must have the state’s approval to sublet to others.  If a citizen gets a house lot and wants to sell it before x amount of years, the house lot owner/buyer has to pay a penalty to the state. I know that an element of market value is applied in calculating this penalty.

I want to advance a formula to the Lands and Surveys Commission/ Ministry of Public Infrastructure where subletting at Ogle is concerned.  Let OAI pay an annual processing fee for the sublet portions. The annual processing fee would equal –

Proposed subletting rent per acre less (-) annual lease rental.

This way any exorbitant rental fee would come to the state.

In addition, the state has to be concerned with maintaining a competitive market economy and guard against monopolies. We have to ensure that the smaller firms in any industry are not challenged with predatory practices. While we still have a long to go to set and police general principles, we must deal condignly with the specific cases that emerge. Moral suasion while not a panacea could be a mechanism to start with.

Yours faithfully,

Manzoor Nadir

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