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Beal Enters Into Agreement To Develop Spaceport Guyana

More Information:

Beal Guyana Launch Services, LLC (a subsidiary of Beal Aerospace), signed a 99-year agreement with the government of Guyana to develop Spaceport Guyana in Essequibo County. The ‘primary site’ of the launch facility comprises 10,120 hectares (25,000 acres) located between the Waini River and the Atlantic Ocean. This area is surrounded by a buffer zone encircling the ‘primary site’ of approximately 30,360 hectares (75,000 acres). The agreement includes a ‘remote site’ of approximately 4.5 hectares (10 acres) about 40 km (25 miles) southeast of the primary site where a radar and tracking station will be established. Venezuela is protesting against the deal since Essequibo County is part of a contested area between Venezuela and Guyana.

The ‘primary site’ and ‘remote site’ in Guyana have been sold to Beal for US$3 per acre and are to be surveyed prior to payment for the land. It is estimated that Beal will pay US$75,030 to Guyana. This amount will be paid within 30 days of the signing of the agreement adjusted approximately when the survey is completed. The buffer area will be leased to Beal for US$1 per acre paid annually; that is estimated to be US$75,000 per annum. Current acreage fees in the region for Timber Sales Agreements average between US$0.08 - US$0.15. The buffer zone area will be accessible to residents within its environs for the purpose of fishing and other activities. Beal is not permitted to engage in mining, forestry or any other commercial activity in any of the land sold or leased to it which is not directly related to the launching operation without the specific approval of Guyana.

If Beal has no more than six successful launches in a calendar year it will pay the government - US$25,000. If it does more than six but no more than 12 successful launches in a calendar year, it will pay US$50,000 per successful launch. If it does more than 12, but no more than 18 successful launches in a calendar year, it will pay the government US$75,000 per successful launch. If 19 or more successful launches are done in a calendar year, the company will have to pay a fee of US$100,000 per successful launch. However, Beal's obligation to pay Guyana for a successful launch shall not exceed 1 per cent of the contract amount between Beal and its customer for any such launch. Beal will also pay Guyana US$100,000 per year for consideration of all administrative expenses and fees incurred or chargeable by the Government in connection with the project, but not limited to the cost of stationing and housing customers and administrative officers at the facility. As part of the agreement Beal will get a 99-year reprieve on taxes.

Beal is expected to hire 500 Guyana residents during the construction phase of the spaceport, which will take three to five years to build, and hire 200 Guyana residents once it opens.

The launch facility will be designated as a port of entry, both by air and sea and Beal will operate docks on the Waini River for access to the ‘primary’ and ‘remote sites’ and will be licensed under the Agreement to do so and may, with the Government's approval, establish docks outside of these sites.

The deal with Beal will not be considered closed until the Guyana Environmental Protection Agency issues an environmental permit for the operation. Beal has retained ICF Consulting to do an environmental impact assessment, and the results from this are expected in a year to 18 months. ICF was the company which did the assessment for Sombrero. Beal is applying for an interim permit to drain and clear the area on the coast between the Waini River and the Atlantic Ocean.

Guyana's recurring revenue from the deal once Beal starts to successfully launch satellites is expected to be US$775,000. However, in the initial period, this sum is expected to be in the vicinity of US$175,000 per year. It will receive US$75,000 for the sale of the land now. Beal will pay up to US$400,000 in relocation expenses for some 50 families currently living too close to the space port site. The agreement Beal had with Sombrero Island (Anguilla) was to pay a flat lease of US$280,000 per year. There were no launch fees in the agreement.

The first launch of Beal's BA-2 from Guyana is expected, at the earliest, to be in 2003. Beal is continuing talks to refurbish a launch pad at Cape Canaveral Air Force Station, which would be the site of the company's debut launch, scheduled in about three years. Florida officials still hope to persuade Beal to build a rocket-manufacturing plant and bring all its launch business to the Cape Canaveral area. Late last year, Florida offered Beal a US$10 million package of tax breaks, training funds and grants to entice the company to build manufacturing and launch facilities there.


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May 29, 2000

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