Servisair SAS and the Airports Authority have formed a joint venture company, Servisair PLS, to provide these additional ground handling services. The respective share holdings of Servisair SAS and the Airports Authority are seventy percent and thirty percent. The motivation for the Airports Authority entering into this joint venture was to generate a revenue stream for the Authority.
The board of directors of the joint venture company, Servisair PLS, consists of three members, two of which are nominated by Servisair SAS and the other by the Airports Authority. The member nominated by the Authority is the present Chairman of the Authority’s board of directors. Servisair PLS is managed and operated by its own chief executive officer and staff and independently of the management of Airports Authority.The Airports Authority is a statutory company established by the Airports Authority Ordinance. It operates under that Ordinance. Several public statements were made recently alleging that the Airports Authority is not authorized by its Ordinance to enter into the agreement with Servisair SAS. Listed below are the statements concerning the legality of the agreement and the Authority’s response to those statements.
1. The Airports Authority is not authorized to enter into a joint venture agreement.
The Airports Authority Ordinance establishes the Authority as a body corporate having the power to enter into contracts and to do all things necessary or desirable for the purposes of its functions. Its functions are to manage airports and provide and maintain such services and facilities as are in its opinion necessary or desirable to meet the requirements of the traveling public, service providers and other persons at the airports.
The Authority may grant as it thinks fit, authority to carry on any trade or business at airports.
2. The Airports Authority is the regulator of services and facilities provided at the airports and may not itself engage in the provision of services and facilities.
The Ordinance specifically states that in the management of airports the Authority may provide and maintain such services and facilities as it thinks necessary or desirable to meet the requirements of the traveling public and service providers.
3. The joint venture agreement required the approval of the Governor, the Turks and Caicos Islands Government Chief Executive Officer and the Attorney General.
There is no such requirement in the Ordinance or anywhere else. Under the Ordinance the Airports Authority performs its functions through its Chief Executive Officer under the supervision and direction of the Authority’s Board of Directors.
4. The decision of the Airports Authority’s Board of Directors approving negotiations with Servisair SAS to enter into a joint venture agreement needed to be published in the Gazette or a newspaper before the Authority could lawfully enter into the agreement.
There is no such requirement in the Ordinance. In ordinary commercial practice negotiations with a contractor are conducted in confidence until an agreement is finalized.
5. The Airports Authority’s Board of Directors did not approve the joint venture agreement with Servisair SAS.
The full Board of Directors of the Airports Authority reviewed the progress of the joint venture agreement since the inception of negotiations with Servisair SAS and approved the entry into the agreement in October 2011.
Any interested person may view the documentation pertaining to the joint venture agreement between the Airports Authority and Servisair SAS by making an appointment with the office of the Authority’s Chief Executive Officer.