Government and the group of private aviators comprising Ogle Airport Inc. the company holding the lease for the development of the Ogle Aerodrome into a municipal regional airport may be moving closer to an agreement that could end the controversy over the release by the Ministry of Finance of the 1.5 million euro European Union (EU) grant for the development of the second phase of the airport upgrading project.
Late last year Transport Minister Robeson Benn had said that the EU grant which was officially assigned to Guyana late last year and is being administered by the Ministry of Finance would have to be restructured to facilitate government’s involvement in the “ownership of the holding company.”
Government’s demand that it become directly involved in the project, which came only after the grant was negotiated and secured, has resulted in delays in the advertising of tenders for the building of a further 2,500 feet of runway at Ogle, the specific purpose for which the funds were sought.
Stabroek Business has learnt that Ogle Airport Inc. is now seeking a response from the government to a fresh proposal for settling the issue. It is not clear whether the OAI proposal envisages the inclusion or exclusion of government from partnership in the consortium.
In 2003 the consortium signed a 75-year lease agreement with the Government of Guyana for the development of the Ogle Aerodrome, which has been operating for around fifty years, and had come under threat of closure for failing to meet International Civil Aviation (ICAO) standards.
A consultancy team had visited Guyana to undertake a feasibility study into the upgrading of the facility to meet ICAO standards and to assess its potential as a commercially viable airport. The study determined that Ogle could be economically viable as a regional municipal airport if, among other things, revenue accruing from the departure taxes levied at the airport were ploughed back into supporting the maintenance of the facility. Stabroek Business understands that this aspect of the consultancy’s findings did not find favour with government.
Following the signing of the lease agreement OAI embarked on the multi-million dollar first phase, the upgrading exercise including the refurbishing of the facility, rehabilitation and resiting of hangars, erecting of security fences, removal of the air traffic control tower and constructing a new runway and taxiway at Ogle.
Initially OAI sought financing for the second phase of the project from the commercial banking system, However, faced with high financing costs the consortium won government and Caribbean Community (CARICOM) backing for the EU-funded 1.5m euro grant for phase two of the project under the Cariforum facility.
Late last year following the release of the EU grant to the Ministry of Finance, government indicated to the consortium that it was seeking a restructuring of the arrangement to enable its own inclusion as a shareholder in the project.
Stabroek Business understands that the partners in the consortium have been reticent about the government’s belated involvement in what, under the original terms of the lease agreement, was envisaged as a private sector project. Since late last year the two sides have been engaged in discussions aimed at breaking the logam. While the delay in the disbursement of the EI grant has not compromised the time frame for the completion of the second phase of the project, OAI officials have been unable to say when the Ministries of Finance and Transport will put arrangements in train for the start of the EU-funded second phase.
While investors in OAI has declined to provide details of the discourses that have been in train with government in an effort to end the impasse, this newspaper understands, however, that the most recent proposal for addressing the stalemate is contained in a letter dispatched to President Bharrat Jagdeo recently.
Stabroek Business understands that the Ogle Airport project is the single largest private sector infrastructural public utility project in the region.
