Mar 27, 2016 News
-US$150M expansion would not make a difference
An Inter-American Development Bank (IDB) report entitled ‘Constraints to Regional Air Connectivity between Countries of the Guyana Shield and South America’ has debunked the reasons given by the previous administration for the US$150M Cheddi Jagan International Airport (CJIA) expansion project.
The report, which was done by air transport specialist, Andy Ricover, and released last November, states that based on the lack of infrastructure and scarcity of origin and destination (O&D) traffic at CJIA compared to Guyana’s larger and more connected neighbours like Brazil and Venezuela, it would be unrealistic to think of CJIA developing into a regional hub, notwithstanding the political will.
This is contrary to what the previous Government had stated. The report also noted that the airport capacity is not determined by the size or the existing conditions at airports’ passenger terminal, but by the physical features of its airside (runway and taxiways). It states that the number of connections and timely service are also a factor for a hub.
It points out that both Guyana and Suriname have limited options to develop non-stop services to most destinations in South America and Europe. In the report, it was explained that there are two kinds of hubs. One works as an entry gateway to the country, distributing passengers to other local destinations. There are also those that work as a connection between two or more international flights, passing by a connecting hub.
The report observes that in these hubs, airlines use sixth freedom rights to transport passengers between two countries that are not on the route of the airline. This commercial aviation right allows an airline to fly from a foreign country to another while stopping in one’s own country for non-technical reasons.
“A hub must be geographically located in a way that allows passengers to connect to other destinations without implying an important delay in the main route,” the report stated. “Hubs should be evaluated in both qualitative
and quantitative terms.”
“In quantitative terms, the important driver is the number of available connections, while in qualitative terms the most important variables are the total time to connect between flights and the simplicity of the process.”
“A fundamental characteristic inherent to hub airports is the need to have a (high) volume of O&D traffic,” the report said. “Even when Paramaribo and Georgetown airports could in the future develop the necessary infrastructure to become hub airports (which they currently don’t have), they would still need to have a large O&D traffic volume so as to attract an airline to develop a hub in one of these airports.”
“Given that O&D traffic demand in these countries is scarce (and will probably continue to be scarce in the next 15 to 20 years compared to other regional hubs), it is unrealistic to think that an important airline will select either as a regional hub in the near future.”
It points out that Brazil has the broadest connectivity level on The Guiana shield, with its 15 airports which currently offer non-stop services to 63 international destinations in seven different regions, some as far as Asia, Africa and the Middle East “being a member of the G-20 Group and South America’s largest economy,” the report stated. “Brazil currently has connectivity levels larger than many developed economies in the world.”
The report observed that even Venezuela had a significant connectivity level, with 11 international airports providing service to 35 markets in five different regions (including eight markets located in Western Europe). All this is in contrast with Guyana, which has two airports-, the CJIA and the Ogle International Airport.
“Given the limited options for Guyana and Suriname to develop non-stop services to most destinations in South America and Europe, the connectivity of both countries will depend on how well connected CJIA and Paramaribo’s Johan Adolf Pengel International Airport (Suriname) are to close regional hubs.”
It was noted that through establishing additional services to regional hubs, both countries would increase their connectivity, allowing departing passengers from CJIA to reach multiple destinations in South America and using these hubs as gateways to the rest of the continent.
The report made it plain that despite needed investments to accommodate the rising level of passenger traffic, especially at CJIA, the current infrastructure of the airports would not have restricted the air transport sector’s development or increased their connectivity for the foreseeable future.
“Despite needed investments to accommodate an increasing level of passenger traffic,
the capacity of the airport is not determined by the size or the existing conditions at airports’ passenger terminal, but by the physical features of its airside (runway and taxiways).”
The IDB report also called for Guyana and Suriname to renegotiate restrictive bilateral air agreements currently in place with Brazil and Colombia, and to conclude more air services agreements with their South American neighbours.
According to the report, Guyana has no air services agreement with Peru, Bolivia, Argentina, Paraguay, Uruguay or Ecuador, while Suriname has no air services agreement with Argentina, Uruguay, Chile, Ecuador, Peru, Bolivia and Paraguay.
In justifying the expansion project, the previous administration had pointed to the current space constraints and “growing tourism” as the reasons. Guyana’s geographic position at the northern tip of the South American continent had also been touted as ideal as a hub and a link to Asia and Africa.
However, the expansion project cost generated numerous controversies. The initial contract with China Harbour Engineering Company (CHEC) had excluded the company from taxes, duties, royalties and fees of all kinds normally imposed by Guyana.
The contract was heavily criticized for its numerous concessions to the Chinese Contractor and was inked on November 10, 2011, days before the then president, Bharrat Jagdeo demitted Office.
Last year, Minister of Finance, Winston Jordan, had revealed that more than 70 percent of the money for the project had already been handed over to the contractor and expended. However, CHEC was at the time woefully behind schedule. Steps have, however, since been taken to amend the terms of the contract.
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