Apr 14, 2019 News
The developing oil and gas sector has placed a premium on land for its support services whether marine, housing or aviation.
Whilst outright ownership or access through leased lands gives an advantage to Guyanese landowners or leaseholders, there are some emerging conflicts, which need to be addressed.
In the case of access to state lands, which were leased for the development of the aviation sector, there is a developing conflict between Guyanese aircraft operators who have contributed to hinterland development for decades, and oil and gas companies who are now setting up operations.
In what has been described as a sweetheart deal, the Government of Guyana leased 407 acres of state land to Ogle Airport Inc. (OAI), a consortium of four Guyanese aircraft operators in 2003 for a period of 25 years, for the equitable development of the Ogle airport, a public utility.
The original development plan in 2003 was clear in demarcating the areas for domestic and international operations.
Even though an area opposite the runway was identified for international operations not too long after securing tenure, OAI according to sources, deviated from its own development plan.
The needs of an international aircraft carrier were prioritized over that of the domestic aircraft operators.
This non-compliance to its own development plan was the genesis of user conflict at the airport. At present, this is expanding into equitable access to lands by Guyanese aviation operators and oil and gas companies.
Adding to the mix, is land speculation where large tracts of non-airside lands, leased since 2006 and 2010 with the condition to be developed within four years, remain undeveloped to date.
The airport lands leased since 2007 with the condition to be developed within two years remain undeveloped to date.
A small Guyanese aircraft operator, Hinterland Aviation, endured a process from 2012 to 2017 that yielded nothing.
Hinterland Aviation application for a 100 ft x 100 ft plot of airside land since 2012 to build their small hangar speaks volumes.
OAI acknowledged their application two years later in 2014 and provided the company with land application forms, which were completed and submitted.
Two years later, the Ogle Land Committee advised Hinterland Aviation that that they did not meet the financial requirements to be granted access to land.
Upon following up when financial requirements set by the land committee were met, Hinterland Aviation was told in October 2017 by OAI that the company had to stand in line as there were 40 other applications ahead of the company.
However, this would fly in the face of disclosures last week that ExxonMobil is building an office headquarters at the airport and this would add significantly to the prestige and reputation of the airport’s operations and provides an important source of revenue for the airport’s operations and development.
According to at least one stakeholder, what was omitted was that the few Guyanese domestic aircraft operators who were granted subleases were made to jump through hoops over several years.
ExxonMobil, a foreign company, upon signing a Memorandum of Understanding with OAI in July 2019, was given permission to start construction.
Their request for security of tenure was met by OAI in under six months and the master lease was extended to 2068.
According to the stakeholders, whilst OAI stated that “Exxon headquarters are being built on non airside land leased commercially in accordance with the airport’s Lease Agreement with the government for the Management and Development of the Airport”, it omitted the fact that the charges for non airside land to Exxon is US$2,000 less per acre than what is being charged to a Guyanese aircraft operator who has leased non airside land.
Meanwhile, OAI has sent out letters for expressions of interest dated 5thApril, 2019 to current and potential airside operators.
However, according to stakeholders, there was no effort to indicate to the recipients of the letters where the available lands exist or under what conditions.
Stakeholders said that whilst 407 acres of state land was leased at peppercorn rates of US$6 per acre, it is being subleased by Ogle Airport Inc. for US$6,800 per acre providing substantial revenue to the airport.
“Whilst Ogle Airport Inc. boasts that the airport is the busiest airport in the Caribbean, its investors did not see any return on their investments until recently when they received a small dividend.
“The Government which is entitled to a percentage of the revenues from the airports operations should be concerned that they are receiving their fair share,” one of the stakeholder disclosed.
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