Business sector backs Beal deal
The Private Sector Commission (PSC) and the Georgetown Chamber of Commerce and Industry (GCCI) have expressed support for the deal struck by the Government of Guyana with Beal Aerospace Technologies. George Jardim, chairman of the PSC yesterday proclaimed the deal to set up a spaceport here as being in the best interest of Guyana. Breaking his silence on the issue in a press statement following two meetings between the government and the PSC, Jardim stated that the financial arrangements of the deal were "in all probability" the best Guyana was likely to obtain from an industry which was highly competitive and dynamic. "The commission believes that though the direct financial benefits of the spaceport may not be substantial or immediate, the greater benefit of the agreement will be to demonstrate internationally Guyana's maturity and stability as a country where investment is welcomed, and that Guyana is a nation ready for the twenty-first century," Jardim said. The manufacturer said the commission recognised that it did not have at its disposal the advantage of specialist knowledge of the aerospace industry and was not originally privy to the negotiations leading to the agreement. However, he said the commission was able to bring to bear its collective business judgement in reviewing the agreement and was satisfied that it was the best the government could possibly have received. "After having given very careful and deliberate consideration to the intent and import of the agreement, the commission strongly believes that it is in the best interest of Guyana and is satisfied that it will be to the overall benefit of the country," Jardim said. PSC executives met Prime Minister Sam Hinds last week and President Bharrat Jagdeo on Wednesday to discuss the agreement. The statement from Jardim said that the commission was afforded the opportunity to examine in some detail the agreement between the government and Beal. Jardim said the commission was reassured to learn for instance that the Factories Act and the labour laws had not in any way been compromised. And in a separate statement, President of the GCCI, Manniram Prashad, said his organisation was gratified to know that the government had not succumbed to the "inflammatory rhetoric" of Venezuela as it related to the deal with Beal. "Certainly the [proposed] investment of US$100 million in the Essequibo sends strong signals that Guyana is preparing to leap- frog its economic progress and is not going to concede a single centimetre of its territory," Prashad stated. He said that had the country vacillated on signing, Venezuela might well have interpreted this to mean Guyana was lending credibility to its ridiculous claim to the Essequibo. "Guyana will achieve the kind of international prominence that would do wonders for its budding tourism sector. This investment will also serve to dispel many of the fears other potential investors may be harbouring about investing in Guyana," said Prashad. And a press release from the government yesterday attempted to deal with concerns raised by the public including the sale of land. The statement said that an investment in the magnitude of US$100 million to US$300 million "entitles the investor to reasonable tenure and security." Noting that Beal could not dispose of the 25,010 acres being sold to it without the government's permission, the release said that there was nothing in the Laws of Guyana to preclude the sale of land to a major investor, foreign or local. And because of the competitive nature of the satellite industry which has seen some launch companies declaring losses and others receiving a marginal return on their investment, the government said tying Guyana's income stream from the investment to launch value or profitability would put the country at serious risk. The government asserted that a launch fee on a sliding scale guaranteed Guyana a fixed annual income regardless of profitability of the spaceport. And the government emphasised that Beal was receiving a waiver and not a tax holiday over the 99 years of the agreement and the launch fee will guarantee a possible direct revenue of up to US$2 million per annum. The spaceport, the release said, was completely subject to Guyana's laws and the authorities of the police force and army were applicable to the launch facility. And touching on the need for a due diligence of Beal, the government release said that Andrew Beal, the owner of the company, was the owner of Beal Bank, the largest private bank in Dallas, Texas and this was publicly documented. As to the need for a business plan, the statement said Beal was the sole investor, owner and operator and revenue to Guyana was unrelated to and independent of the success or failure of the launch facility. In this context, the government said, it felt that the presentation of a business plan by Beal would be meaningless. However, the only revenue to the government which does not hinge on the success or failure of the launch facility will be administrative expenditure once the operation starts up. The sliding scale launch fee is based on successful launches. As to the need to employ costly specialist expertise in the space launching industry for the negotiations, the government said this would have only been justifiable if Guyana was involved as an investment risk partner.
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