Ogle Airport misleads lessees, nation on master lease renegotiation

Feb 13, 2018 News

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Ogle Airport Inc. (OAI) is on record as telling Kaieteur News that its Master Lease is currently being reviewed by the Guyana Lands and Surveys Commission. The intention, OAI says, is to extend the lease.
This is what the company said as it defended its issuance of 50-year leases to companies when the Master Lease only has 10 years remaining. However, the Ministry of Public Infrastructure is not aware of any arrangement to extend the Master Lease.
Yesterday, Minister of Public Infrastructure, David Patterson, said that OAI approached the Commission of Lands and Surveys petitioning for the contract to be extended.
He said that Lands and Surveys then consulted the Ministry which advised against such extension at this time. Patterson said that he was advised that the lease expires in 2028.
“It has 10 years remaining, we have been advised not to start a new lease and further complicate the entire issue.
“OAI never approached us, Lands and Surveys approached us about getting a request and we said to Lands and Surveys exactly what I just told you; that it is not something we are contemplating at the moment. The lease has 10 years to go and is still in effect.”
OAI had also told Kaieteur News that it had asked Minister Patterson to set up an Airport Review Committee to look into matters of concern at the airport. The company said that Patterson instead chose to set up a one-man investigation.
Patterson clarified, “We did not have a one-man investigation. We asked Attorney-at-law Stephen Fraser to look into the matter. He has a firm. We needed clarification on the lease.”
“We contracted the firm; there is a lease between the then Ministry of Public Works and OAI. Several of the clauses were not fulfilled by both the Ministry and OAI, so we needed legal opinion on what was still necessary to be done.
“There were certain obligations on both parties, so I wanted to find out legally what can be done.”
Patterson said that the investigation has since been completed and a report was handed to him. He said that the report was subsequently discussed with OAI.
OAI had admitted that the leases it granted to mining companies for 50 years have not been approved by the Guyana Lands and Surveys Commission.
The company facilitated a meeting with this newspaper at the Eugene F. Correia Airport.
Speaking at that meeting were OAI officials, Anthony Mekdeci, Michael Correia, Nicole Correia and OAI Public Relations Consultant, Kit Nascimento.
The sub-leasing of lands for 50 years, when the company’s master lease only covers a term of 25 years, was addressed.
Jags Aviation (which is a sister company of BK International), Hopkinson Mining and Air Services Limited, have all been offered 50 year leases.
The Correias said that they made such an arrangement in response to companies that wanted greater security for their investments.
Michael Correia presented letters from Jags Aviation and Roraima Airways reflecting a desire by the companies for longer leases.
Correia said that OAI knows about business and knows that businessmen want security. “That is why we put this provision in place.”
Correia also said that when it drafted the lease agreement for the companies, Lands and Surveys noted that it was uncomfortable with the 50-year period. He said that the OAI and its lawyers, along with the lawyers of the respective aviation companies, decided to insert a clause.
That clause states that should the master lease not be renewed, the subleases are then to be considered void.
The clause states, “Provided that if the master lease expires during the said period of 50 years, then this sublease shall thereupon come to an end with no further liability to either party.”
Michael Correia said that the companies were more comfortable with that sort of arrangement.
However, the Lands and Surveys Commission, even according to Correia, was still not comfortable. Hence, those 50-year subleases have not been approved by the Commission. He said that as a result, Lands and Surveys decided to just extend the Master Lease so as to facilitate the 50-year leases.
The 2004 letter from Guyana Lands and Surveys Commission informing OAI that subleasing of lands for longer periods than the master lease is legally insufficient is now irrelevant, according to OAI.
Yesterday, OAI said that it did not have a copy of the letter.
When presented with the letter, the company stated that this letter was dated since 2004, and has little relevance now.
Further, OAI’s Chief Executive Officer, Anthony Mekdeci, said that that letter was sent in the very initial stages and other leases have been made out further to that.
The referenced letter stated, “We have received your proposed sublease to be issued to users of Ogle Airport Property, and have found that it is legally sufficient, except for the following: We have noted that you intend to issue subleases for a term of twenty-five years.
Please be advised that the term of subleases shall not extend beyond the expiration date of the master lease. As you have indicated, the master lease between the Government of Guyana and Ogle Airport Inc. commenced on the 17th July, 2003; it is for a term of twenty-five years, it will therefore, expire on the 16th July 2028. Any ending term of a sublease must therefore be not later than July 15, 2028.”
The master lease states, “In the event of a sublease of any portion of the Airport, such sublease shall contain a provision stating that all covenants, promises, conditions and obligations contained in this Agreement or covenants running with the land shall bind the sub lessee and its respective heirs, legal representatives, successors and assigns to the obligations set out in this agreement.”
One of the obligations is that the lease will last for only 25 years with an option to extend.

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