Dispute rages over rules for ASL’s fuel farm

Last Updated on Saturday, 26 December 2015, 21:00 by GxMedia

Ogle Airport Inc. (OAI) and Air Services Limited (ASL) are locked in a bitter dispute over the requirements for the start-up of the carrier’s US$1 million fuel farm that has been lying idle for almost one year now.

ASL has accused OAI of deliberately creating conditions to ensure that its fuel would not be cheaper and would be forced to continue buying fuel stored at a fuel farm being operated by Caribbean Aviation Maintenance Services (CAMS). “My understanding is that they are trying to make this insurance so uneconomical that it would end up costing us more to even supply our own selves with fuel,” said ASL General Manager Annette Arjoon-Martins.

CAMS, OAI and Trans Guyana share senior personnel.

Meanwhile, Rubis on Tuesday resumed selling aviation fuel to CAMS after clearing the integrity fuel stored in the tanks as a result of commingling of supplies from Rubis and GuyOil.

Demerara Waves Online News (www.demwaves.com) has seen a copy of the minutes a September 2 meeting chaired by Prime Minister Samuel Hinds in which it was agreed that ASL would obtain a non-commercial fuel farm license for a six-month operation. After then, OAI’s board is expected to consider granting a commercial license once ASL has proven that it has the capacity to operate the farm.

The cost of the non-commercial license is GUY$1 million and the commercial license GUY$2.5 million.

Annette Arjoon-Martins however, contended that the requirements that OAI has been asking her carrier to comply with are not part of their Operations Manual that has been approved by the Guyana Civil Aviation Authority (GCAA).

Arjoon-Martins said that while the fuel farm was being constructed from late 2011 to December 2012, ASL was told about the need for a fuel farm insurance in March 2013. “We were given several various documents over a period of three months- undated, unsigned- with varying amounts for insurance,” she said.

Journalists were shown versions of fuel farm licenses with different amounts for insurance. Based on CAMS’ commercial license obtained through the Fair Trading Commission, she said her company sought legal advice on the non-commercial license that OAI has proposed to ASL. That advice, she said, has revealed that ASL would have been at a significant disadvantage. “When (the lawyer) compared it, he said the commercial license which should be stringent and punitive because you are supplying LIAT and international airports was generous and forgiving and the non-commercial license that we were going to start with was punitive and he said if you sign it , you will be signing your death warrant,” he said.

The ASL Manager also charged that OAI deliberately sought to mislead her carrier by stating that CAMS was insured by Diamond Fire and General Insurance Company when she had requested specific advice on which company had insured the operable fuel farm. She said OAI was now claiming that the insurance was group coverage.

OAI’s Chief Executive Officer, Anthony Mekdeci said the airport’s management has provided ASL with the land and expertise for its fuel farm to be certified. He accused the airline of being bent on refusing to pay the insurance. “Imagine if a fuel truck hits a twenty-five million dollar Dash-8. Then what? The liability is the issue….The liability for operating fuel on airside is huge,” he said. Spokesman for OAI, Kit Nascimento claimed that ASL appeared to be experiencing difficulty in acquiring the insurance.