EZjet debacle
Posted By Stabroek staff On November 12, 2012 In Editorial
It is indisputable that PPP/C governments, the Jagdeo administration in particular, developed the reputation for attracting investors who never intended to succeed at the investment they undertook, were not fit and proper or didn’t have the wherewithal and therefore failed miserably.
Much of the blame for this is attributable to the lack of adequate screening. There is no proper due diligence to determine whether the investor is a person of straw or one of outstanding repute with the resources to match. Those in government honest enough to address this matter will admit that Guyana is far from being an investment paradise. With poor utility service, red tape, crumbling infrastructure, unskilled workers and corruption, the well-heeled, savvy investors look at other arenas to invest their dollars. The end result is that the investors that set their eyes on Guyana are usually the ones less capable and less endowed. Some of them are corruptly squired through the process by empowered officials. That is the only way they can even register on the radar.
Sometimes, a lot depends on the type of scrutiny and leadership at the top. For the purposes of the PPP/C two examples are instructive, one under President Janet Jagan and the other under President Jagdeo. Mrs Jagan became aware during her short presidency that a certain drug accused had made an investment in fish farming ostensibly to continue his narcotics trade. The man in question constructed a lavish, ranch-style house on the East Bank with a driveway lined with coconut trees. When it was discovered that there were outstanding warrants for the man on drug-related charges, the Jagan administration facilitated his swift and unceremonious extradition. He may have eventually been able to make his way back to Guyana but he never enjoyed the luxury of his palatial home which has now fallen into ruin.
By sharp contrast, President Jagdeo’s tenure saw the meteoric rise of drug lord Roger Khan. Here was a man who was a fugitive from American justice who should not have been able to access public works contracts. Yet he benefited, acquiring land for a housing scheme all the while developing his drug trade and a private army in full view of the Jagdeo administration and its senior officials. Moreover, he came within a whisker of acquiring a logging concession in the south of Guyana for the continuation of the narcotics trade. Were it not for his exposure in the annual US State Department report on narcotics trafficking and reportage in this newspaper about the status of his application at the Guyana Forestry Commission he would have succeeded in nailing down the concession.
Though not by any means an investor, another one of President Jagdeo’s notorious choices was the now imprisoned, former New York Police Chief Bernard Kerik who Mr Jagdeo had been adamant would be retained to advise on police reforms. When Mr Kerik was slapped with a federal indictment, President Jagdeo had no choice but to back down.
Why Mr Fip Motilal was entertained by the Jagdeo administration for so long and was eventually given a huge contract for the Amaila access road without presenting any evidence of prior road building in similar terrain will be one of the biggest mysteries of the period. His contract was terminated very early in the administration of President Ramotar in what was an initial, hopeful sign of diversion from the legacy of the previous administration.
Now President Ramotar has another debacle on his hand – EZjet which began its operations here days into his administration but which had been given clearance under the Jagdeo administration. Given all that has since been reported about the lead investor in this venture had there been rigorous due diligence, EZjet would not have been allowed to start up a scheduled service and leave a large number of passengers in turmoil this Christmas season. Running a charter or scheduled service between Guyana and North American destinations should not be approved for persons without experience of the business and demonstrable resources at their disposal. Of course, EZjet has followed in the vapour trails of a long line of spectacular, Guyanese-connected failures, Universal Airlines being prominent among them. Even then there was some unscrupulous Jagdeo administration official who was lobbying on behalf of Universal for the return of the airline’s deposit just shortly before they ceased operations. That official should have been sanctioned as it is clear that the airline was planning to withdraw with deposit and all, leaving the government to foot the bill for inconvenienced passengers. The very short-lived Sky Service operation between Guyana and Canada is another example of a charter that wasn’t ready for prime time.
No operator must be granted a licence by the Guyana Civil Aviation Authority (GCAA) unless it is clear that the investor has the means and is knowledgeable about the industry. There have been too many people aspiring to deliver service but without the slightest clue. The GCAA and the Ministry of Works should set out exactly what steps they took to determine whether EZjet was capable of discharging its commitments. The country is less interested in why the US Department of Transportation gave the green light.
Coming on the heels of the REDjet fiasco, there is a further risk to the taxpayers’ pocket as the statutory deposits may not cover the outstanding monies. Airlift into Guyana is an enormous challenge especially for an economy that is not booming and is catering mainly for seasonal high traffic and mostly for returning Guyanese. Nevertheless, the process for screening potential investors must be exhaustive and free of political interference. The problems experienced by EZjet and the challenge of ensuring adequate airlift into Timehri are tailor made for consideration by the Economic Services Committee of Parliament if it ever gets going.
