US law bars sale of satellite business - Beal official By Gitanjali Singh Stabroek News December 14, 1999 Beal Aerospace Technologies will be barred by the US Government from offering shares in its business to foreign (non-US) companies given the sensitive nature of the transfer of satellite technology, spokesman, Wade Gates said yesterday. Gates, who flew in over the weekend to correct misunderstandings about the proposed transaction, also sought to assure that a deal had not been reached with the Guyana Government as yet. He said that the securities law of the US was so tight that to sell even five percent of a satellite business would require publication of a host of notices and all sorts of appeals. "There is no way they [the US Government] would allow that to happen... they would certainly block it," Gates told Stabroek News. Concerns have been mounted about the proposed sale of 26,010 acres of land to Beal Aerospace Technologies to set up a satellite space port in Guyana. One major concern was whether a Venezuelan company could buy into the operations of Beal and allow for the Venezuelans to have a foothold in territory, which that country has laid claim to. Gates, who met the Guyana Forum last night and is to meet the PNC and a number of business organisations, during his week and a half stay, said he was here to "correct a lot of misunderstandings" about the proposed transaction. He said the first misconception was the size of the project and pointed out that all the buildings combined will only cover 100 acres, which will be surrounded by a five-mile safety buffer. This buffer, he said, was to prevent communities growing up around the fringes of the space port in the interest of public safety. "The area can be still used for fishing, hunting and agriculture. The buffer is just for public safety." As to why the company wanted to buy land in Guyana as averse to a lease as it would have been contented with at Sombrero Island, Gates said he was not a part of those negotiations but the reason might lie in the fact that there was a British Lighthouse on the Sombrero Island. In the case of Guyana, he stressed that the government would still own 75% of the land to be accessed by the company and the sale ensured Beal's commitment to the project. "Everyone [in the negotiations] recognised that selling the land was good to cement that relationship [investment]," Gates said. He noted that there were conditions attached to the sale which would ensure that the land was used by Beal for the purposes for which it was obtained and if the company decided to sell, the government had to approve the person, or had the option to buy. And pressed later in the evening at a meeting with Guyana Forum as to the need to buy 26,010 acres when all of this land might not be needed for an adequate safety zone, Gates insisted that the firm did not plan on compromising on safety. Gates was not in a position to disclose what price determination mechanism was to be used in the sale of the land, saying Beal had made a conscious decision not to negotiate the deal through the newspapers. As regards the tangible benefits the project will afford Guyana, Gates stated that this was the first space port to be built without taxpayers money and it would create 500 jobs in the short run for Guyanese and 200 long-term jobs which will include engineers, and managers. Gates said he had received a huge amount of resumes from Guyanese living in the US, including engineers, who were keen on returning to Guyana to work on the satellite project. Additionally, Gates, Beal's corporate affairs director, pointed out that this investment will be building infrastructure in Guyana and not depleting its resources, will increase business travel, enhance potential for tourism and bring to Guyana worldwide notoriety. He refused to disclose the quantum or percent of the administration or launch fees which would accrue to the government. However, in the worst case scenario that there was a spill, Gates noted the environmental benefits of hydrogen peroxide and said studies had shown that even a kerosene spill could be contained and dissipated within 24 hours. Questioned on the technical aspects of the satellites, given that no Guyanese experts were available to verify the soundness of the machines being manufactured, Gates pointed out that satellite customers will not turn over US$100 million to US$300 million if they did not believe the satellites would work. Additionally, he said, the insurance companies would not provide policies if their satellite experts were not satisfied that the project would be successful. Gates also assured that Guyana's laws would govern the company and said that the tributary of the Waini was not covered by the buffer area. The site being looked at is next to the third lagoon. Gates assured the Guyana Forum grouping that Beal has had initial discussions with the Guyana Defence Force and will be working out arrangements with it for security of the area. The Beal spokesman also indicated that the firm will consider putting in writing, commitments such as investment in education (Maths and Science) in Guyana. A © page from: Guyana: Land of Six Peoples