Minister Patterson has kindly undertaken a review of the lease between the Government of Guyana and Ogle Airport Inc (OAI) which would be instructive.
The National Air Transport Association (NATA) is appreciative of Minister Patterson’s effort after their collective experiences of unjust and unfair treatment by OAI were brought to his attention.
The Government, in good faith, leased 450 acres of state land to OAI to develop and manage “in an equitable and fair manner” but this has not been the case.
Erosion of the governance of the airport by an imbalance in the board of OAI coincided with the manipulations of its chairman who after establishing a board that would endorse his policies, then turned his attention to land use as an anti-competitive tool. A Land Committee comprised of his sibling and two other directors affiliated to his group of companies was set up. Upon learning of this committee and being fully aware of the obvious ramifications on the other domestic Guyanese aircraft operators, I pleaded for representation and was bluntly refused.
With no consultation whatsoever with any of the aircraft operators, not represented on the OAI board, this land committee then drafted the most draconian new land lease.
Some of the untenable recommendations were increased land-lease charges, insurance requirements by leases that also the leasers (OAI), initial payments which in some cases were several tens of millions of dollars to be used “as necessary” by the leasers (OAI), the leaser’s (OAI) right to repossess the lessees facility with no arbitration considerations, etc.
What is instructive is the land committee, whilst penalising new leasees, deliberately turned a blind eye to the rampant land speculation by some companies including subsidiaries of the Correia Group who had leased land at the airport since 2013, with the clear condition to develop within three years. These remain undeveloped in 2016.
The lawyers of the Correia Group of Companies are also the lawyers for OAI and the Aircraft Owners Association of Guyana. That they would approve such predatory conditionalities by the land committee, when they are aware that it was exactly such anti-competitive behaviour that had caused a complaint to be filed against OAI to the Competition and Consumer Affairs Commission(CCAC) in 2013, is shocking.
The lawyers for NATA’s members, upon review of the initial document, advised their clients that if they signed it in its present state they would in effect be “signing their death warrant”. They provided recommendations to the Chairman but seven months later the much needed protection remain outstanding.
The most recent assault by a member of this land committee is an attempt to allocate blame where it does not lie. One of the new leasees was written to and the letter inferred that he was on the OAI board he had in essence approved of the work of the land committee. OAI’s practice has been to create documentation when they need it to defend inappropriate behaviour and to restrict access to it when it is needed to expose same. For example, despite the two independent directors, requesting a copy of the land-lease register since 2013 has not been provided.
When the government leased 450 acres of state land to OAI the investors were committed to the genuine development of this public utility. It was unimaginable that land would ever be used as an anti-competitive tool which has been the case.
OAI’s land-use policy, which should have catered for the contiguous development of the aircraft operators, was singularly myopic as they did exactly the opposite.
With no consideration whatsoever to the logistical and safety considerations to an aircraft operator being forced to manage their operations from several sites at the airport, they used land allocation as an anticompetitive tool.
Companies perceived by the chairman to be a threat to his own aviation interests were made to and continue to suffer the most.
The Correia Mining Company (CMC) has its offices next to the Trans Guyana Airways, the owner of large amounts of undeveloped land directly behind both companies. This mining company was leased all the land directly behind Air Services Limited, on the opposite side of the airport, for its use as a car park and container storage.
Land leased to companies with aircraft, which should have been developed within clear timelines, were allowed to retain their leases, and in some instances OAI has acted as the broker to have the small operators, who cannot afford land, become tenants to the delinquent landlord.
These and many more severe discriminatory actions by OAI resulted in the government writing OAI in 2011 to advise that any land allocation at Ogle Airport received the no-objection of Cabinet.
NATA would be grateful for this government’s attention to this distressing situation as we need to have a levelled playing field.