Over the past few weeks, some valid questions have been raised in the media and elsewhere, about the Ogle International Airport (OAI), a public utility and a National asset. Some valid points have also been made about economic interests not necessarily being the same or even remotely converging with the public interests.
With the public interest in mind, I wish to recap the sequence of events which led to the development of this national asset which is comprised of 450 acres of state land, located in a highly-commercial area, where using present land prices would give it an approximate value of US$90 million.
The assets of the Ogle control tower, also the property of the state, is approximately US$0.5 million. In effect the total value of the national assets at this airport is US$90.5 million.
One also has to remember that the Government of Guyana permitted the use of US$2 million European Development Fund (EDF) to be converted into a soft loan with extremely generous repayment terms. The government apart from owning this national asset is also the largest shareholder.
Contrary to what is being placed in the public domain by OAI, the development of this public utility was not done by private funds alone, nor was it ever transferred to private ownership. It was made possible through a Public/Private Partnership when the owners of five aircraft companies, although they were competitors, approached the government with a proposal to develop the airport.
They registered Ogle Airport Inc, a private company, in 2000 with its explicit purpose being to develop and manage this public utility for a period of 25 years. This partnership was well-intentioned, and the government took for granted their pledge to ensure fairness and equity not only in their development approaches but equally in their governance and management of this public facility.
Unfortunately, that honourable intention of high standards of their stewardship, good governance, and management of this public facility was short-lived.
OAI, which started out as a five-person, collegially run operation in 2000, ended up being managed as the private property of the Correia Group of Companies. This was never the intention of the five founding shareholders or the government and I would imagine the European Union whose taxpayers’ funds were involved.
The governance deficiencies that enabled this, has at its core the imbalance of the board of OAI. Of the five original shareholders/directors only two were allowed to remain.
Through the manipulation of shares in the company, including “gifting” shares to two of the present directors, the inclusion of family and associates of the Correia Group, the Chairman Michael Correia ensured that five of the seven directors were affiliated to his Correia Group of Companies.
This can be easily substantiated by a review of the AGM minutes where the usual suspects would nominate and second who they had already decided should be on the board.
This manipulation over the years enabled the Correia Group, which owns 10% of the aircraft operating out of Ogle and which only contributes 15% to airport revenues, to now control the entire operations at the airport. The remaining nine domestic commercial Guyanese aircraft operators who own the majority of the aircraft operating out of the airport and whose collective contribution to the airport revenues has also enabled its development have no say.
The two independent directors on the 7-member board, despite being members of NATA are a minority.
There are important lessons to be absorbed here. There should be fundamental attention paid to (a) how private/public partnerships are structured and (b) how oversight safeguards, in this case the Airport Review Panel which was catered for in the lease should have been implemented to ensure compliance from day one.
This is not to say that good corporate governance in the highly visible OAI should have been deficient because oversight was lacking. OAI should also have never been permitted to carry out the functions of a regulator. There should have been a clear segregation between OAI and the separate interests of its Chairman/Secretary/Directors/Shareholders to avoid the several cases of conflicts of interest which have arisen in the governance of the airport which also facilitated an anticompetitive and oppressive environment.
Conflict of interest arose when services such as ground handling were required and the other nine aircraft operators, some of whom have decades of ground-handling experience at Cheddi Jagan International Airport, were denied an opportunity to tender for those services. The Correia Group of Companies lists airport management on the home page of their website. They enabled their subsidiary Trans Guyana Airways to be listed at the top of the Ogle International Airport website under services, when this is normally done in alphabetical order. They have always been and remain the sole beneficiaries of all business coming into the airport.
The absence of the Airport Review Panel, an important oversight body, in addition to poor governance by OAI, and capriciousness of the directors/shareholders with vested interests has compromised the management of the airport. Both domestic and foreign investors should be seriously concerned about the poor level of corporate governance that exists in this company.
OAI’s articles of association and bylaws should be amended to not only address the present shortcomings but most importantly to ensure good corporate governance, transparency and accountability in company. This is crucial to protecting the integrity of this public utility and national asset.