A single group of investors saved the Ogle Airport project but does not control the facility

Dear Editor,

As a former Minister of government, we would have thought that Mr. Manzoor Nadir would have first endeavoured to properly inform himself of the facts before essaying to comment, in his letter to Stabroek News of 16th February, 2018, headlined `The state must ensure that Ogle Airport Inc stays faithful to the agreement with it’, on the development of the Eugene F. Correia International Airport (EFCIA) by Ogle Airport Inc. (OAI).

Mr. Nadir begins his letter by making the unfounded accusation that a “monopoly position…is  occupied by one family” at the EFCIA. What is the truth?

In March 2000, OAI was, in fact, incorporated with equal shareholders held by five operators. Trans Guyana Airways, Air Services Limited, Roraima Airways Limited, Kayman Sankar Aviation and Hinterland Tours Inc.

On the 5th November, 2001, the government entered into a Lease Agreement with OAI conditioned by mandatory obligations under a two-phased project requiring the construction of an 800 meter runway to meet International Civil Aviation Organization (ICAO) specifications, associated taxiways, aprons and ramps and terminal facilities, including a state-of-the-art control tower demanding an initial investment of approximately US$3M in order to qualify the Airport as an international port of entry.

On 17th July, 2003, the Lands & Surveys department, concomitant with the conditions set out in the Lease Agreement, granted a 441 acre lease of land (Master Lease) for 25 years, extendable for two further periods of 25 years. Phase I of the development under the Lease Agreement was successfully completed in 2009, when scheduled passenger operations commenced. Not a penny of state money was invested.

In his letter, Mr. Nadir describes the rates which his former Government leased the land to OAI as “peppercorn lease rates” and accuses the Airport of sub-leasing land at “astronomical rents to others” but he conveniently ignores three (3) essential facts:

  1. OAI’s rates for land sub-leased to all Operators are founded on the substantial development of this land with roads, taxiways and other infrastructure supporting the sub-leased lands.
  2. The sub-lease rates are tied to a fixed percentage of the Airport lease costs and, therefore, increase as the Airport lease costs increase.
  3. These rates were approved at Board level by the same people who are now complaining to Mr. Nadir for their own selfish interest.

Mr. Nadir asserts in his letter that “one family has dominated the business activities of the airport and grown to have virtually total control of the Ogle Airport”.  This is patent nonsense and unsupported by the facts.

As cash flow was required from the private investors to meet the mandatory capital investment under the Lease Agreement, calls on funds was equally made from each shareholder when the Airport’s income was insufficient to meet the demand. However, a number of the shareholders reneged on their commitments to the project’s development, choosing, at the time, to invest in the development of their own airline operations and business interest. Unless, therefore, OAI could meet its obligations to develop the Airport, mandated under the Lease Agreement, the project would have collapsed, the Airport closed and the Operators required to move their operations to the Timehri Airport or close down.

In order to save the project to build and develop the Airport, the Correia Group of Companies, along with Air Services Ltd, to a lesser extent, responded to the demand for funds. This  decision was made with the unanimous agreement of the shareholders and in accord with an agreement between the shareholders established in 1999 that should any investor be unable to invest, the remaining shareholders would have the first right to refusal. Mr. Nadir inexplicably comes to the conclusion that the other investors were “all out-manoeuvered”.

Yes, a single group of investors saved the Airport project by investing the majority of the funds for its development and now hold some sixty percent (60%) of the shares, but, that group does not and cannot exercise control of the Airport.

There are, at present, nine domestic independent operators that use EF Correia International Airport and three foreign operators. There are four approved maintenance organizations, two commercial fuel supply operations. There are five approved domestic cargo terminals, one main airport terminal for international and domestic operations and five companies capable of providing ground handling services, all in open competition providing the main essential services of the Airport.

The Airport functions as a public aviation facility subject to the Civil Aviation laws of Guyana and civil aviation international agreements. The obligations of the Airport operators are comprehensively defined in the Lease Agreement. The Airport is regulated and licenced by the Guyana Civil Aviation Authority (GCAA) and governed through its Airport Operations Manual approved by the GCAA. The Airport’s licence is exercised under OAI’s current Aerodrome Certificate issued by the GCAA.

The fact is, therefore, that the Airport is jointly managed between government controlled agencies on a day to day basis such as Customs, Immigration, CANU, Port Health, Air Traffic Control and the Private Sector Company, OAI. There is no room, and never was, for the owners of OAI to do as they please in the management of the Airport.

Mr. Nadir writes that “the state invested millions of dollars in equipment necessary for the proper operation of the airport” and “the state also on-lent a two million Euro EU facility to the OAI, interest-free”.  Mr. Nadir is either misinformed or is deliberately misleading.

In fact, in 2007, a CARICOM-initiated and led European Union-funded Grant of 1.5M Euro was offered to the government for the Phase II development of the Airport for the extension of the runway to 4,000 X 100 feet, qualifying the Airport as an ICAO Code 2C operation to accommodate carriers such as LIAT and CAL complete with night lighting. The PPP/C government, however, improperly converted the Grant to a repayable loan by the OAI. To complete the Phase II development, OAI shareholders invested a further US$1M on the terminal, taxiways and aprons. Again, not a penny of taxpayers’ money has been invested in the EF Correia International Airport.

Today, OAI has over 500 employees, provides a 24/7 international air service, is poised for future expansion to meet the advent of our oil and gas industry and has delivered to the government and people of Guyana an international regional airport, second to none in the Caribbean and beyond. Mr Nadir is welcome, at any time that he wishes, to visit and be our guest at the Airport and see and learn for himself.

Yours faithfully,

Kit Nascimento

Public Communications Consultant

Ogle Airport Inc.  

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