Capital Replacement Reserve Fund is a valid issue for OAI
Dear Editor,
Mr. Anthony Mekdeci, in his letter published on the 23rd of September in SN `Investment by Exxon in Airport’s development and their substantial aviation operations adds significant value to OAI’ sought to address some key issues which I highlighted in my letter of September 23rd. However, the CEO failed in doing so as he resorted to the usual diversionary tactics in drawing the public’s attention away from the real issues, and then attacked my credibility.
Let’s briefly look at the facts. The shareholdings of one of my companies in OAI, listed in the 2019 Directors’ Annual Report, is stated as a substantial shareholder, meaning that my company holds by itself more than 10% voting rights – a fact that is well-established.
Further, I would like to point out that the Capital Replacement Reserve Fund, which the CEO refers to as “sheer nonsense” was stated correctly as it is so in OAI’s 2019 Audited Financial Statements. This Fund was flagged in the Report for being noncompliant with the obligations between OAI and the Government of Guyana as it was never established; and although OAI had written to the Government in 2014 requesting a waiver, OAI continues to disregard this requirement, which potentially can attract hefty penalties. The other major concern is: by not having this fund, which would have been bearing interests, creates a void in need of funds to undertake capital improvement projects such as, taxiways, runway repairs, roads, terminal facilities, etc.. Despite claims that the fund had long since ceased to be necessary, having it in operation would prevent revenue depletion – so why is this not a valid issue?
Then the CEO stated that there are only two Small Air Operators at the Airport who are adequately serviced by the Light Aircraft Park, and because of this, there is no need for the Airport to construct a hangar facility to service their operations. The other half of the truth is that five years ago the Chairman at a press conference, in addressing the lack of adequate facilities at the Airport to service a growing number of independent Small Air Operators promised that upon board consideration “…the Airport will construct an independent cargo terminal and rent space to Small Operators, and that the Airport considers a loan arrangement that makes it easier for small operators who are desirous to own their own hangar”. Unfortunately, neither consideration ever materialized; this created an uneven playing field which stymied the growth of a variety of aviation activities at the Airport.
The CEO had the audacity to imply that I am averse to investments at the Airport and I should “understand and appreciate” the investment made by ExxonMobil. It is important that all investments that yield benefits be appreciated; their dealings must be fair and transparent so as to allow for equitable development of the Airport.
The CEO listed the Directors only to confirm what I asserted, that the board is gender and diversity imbalanced; and even though he stated that four (4) of the seven (7) represent minority shareholders. It is a travesty that the board is reluctant to rotate the External Auditor every five years, as was recommended by best accounting practices and financial experts. The auditor continues after nearly twenty years.
It is easy to forget what brought us to this state just five years ago. The manipulation of the board’s composition in re-naming the Airport, a Public Utility, in favour of the Correia family, an act that was heavily criticized by Air Operators, NATA and even garnered the condemnation from across the political divide.
The ridding of independent Directors from OAI’s board who dared challenged and rejected the proposed onerous Air Operators’ Agreement which OAI intended to enforce in 2015 upon all domestic Air Operators.
The lobbying by OAI of the last Government to not bring into effect the Airport Review Panel, much in the same way as it has done with the Capital Reserve Replacement Fund.
Yours faithfully,
Capt. A Mazahar Ally Substantial Shareholder of OAI for ASL, AMSL & GRSI