Temporary working capital

Bahamian airport funds worst IDB loan for $ 35 million


Editor-in-chief of the Tribune

[email protected]

A cabinet minister revealed yesterday that the Inter-American Development Bank (IDB) called the $ 35 million provided to the Bahamas “the worst performing loan in the region.”

Alfred Sears QC, Minister of Public Works and Public Services, made the revelation to the House of Assembly as he revealed that internal discussions were underway within the government over whether to include the international airport of Grand Bahama (GBIA) among the proposed public-private partnership (PPP). airport upgrades.

He was responding to Kwasi Thompson, former Minister of State for Finance, who asked how the government plans to proceed with repairs to the devastated Dorian airport and the status of the tender inviting companies to bid to resume its management, operations and financing of capital improvements.

Sears, who is acting tourism, investment and aviation minister during the absence of Deputy Prime Minister Chester Cooper, said he had met with IDB Bahamas representative Daniela Carrera- Marquis, to discuss the issue of previously provided funding. by the establishment.

He added that of the $ 35 million in funding provided by the IDB for airport modernization in 2017, only 3% had been disbursed, and “what she told me was that it was is the worst performing loan in the region.

“What is happening here, and this is why we are working so closely with the IDB, is that there would have been a number of changes in this project,” Sears said. He explained that the money had been withdrawn from the IDB loan facility and placed in the airport’s PPP projects, part of which was helping to finance the redevelopment of Exuma International Airport.

“It’s part of what’s going on now,” Mr. Sears said. “The Cabinet will have received a presentation from the Airport Authority and the Ministry of Tourism. The question arises as to whether the Freeport airport should be part of these PPPs.

“You have these two parallel tracks. There have been a number of changes from the original design, and this discussion is ongoing as to whether PPPs should integrate the airport with Freeport.

Mr. Thompson, in response, said Mr. Sears was right about the “two runways” and that Grand Bahama International Airport was not part of the IDB’s airport infrastructure project. However, after its acquisition by the government, it was included in the PPP process along with six other Family Island airports.

“When we left our functions, the Ministry of Tourism and Aviation had expected people from the private sector to submit bids,” he added. “The question I was asking, and the question I think the people of Grand Bahama are looking into now, is what happened to this process?”

Tribune Business revealed in early October 2021 that some $ 400 million in airport upgrades are being reviewed to determine whether the process as designed aligns with the Davis administration’s strategy. .

Algernon Cargill, director of aviation, said he and his officials “will have an answer soon” from Deputy Prime Minister Chester Cooper and his team on public-private partnership tendering processes (PPP) of Grand Bahama Airport and Six Family Islands. will be launched as envisioned by the old administration.

Describing this review as a normal procedure any cautious incoming administration would undertake, given the sums of money involved and the importance to Bahamian infrastructure and tourism, Mr.

While the prequalification phase for Grand Bahama International and Family Island airports PPPs is “ready to go” as soon as the review is complete and the green light is given, the aviation chief told this log that he was not yet able to comment on how exactly is what will happen.

Under the current structure, tender documents will only be issued to groups and bidders who pass the prequalification process. Besides Grand Bahama, the six Family Island airports included in their own separate package are Exuma, North Eleuthera, Abaco, Long Island, San Salvador, and Great Harbor Cay.

Construction work on Exuma’s $ 65 million transformation has already started, while Great Harbor Cay’s $ 15 million upgrades are nearing completion. A recommendation had been provided to Cabinet Minnis as to the contractor retained for the $ 15 million renovation of Deadman’s Cay.

And the government has reportedly been “in negotiation” with RF Bank & Trust over the $ 140 million line of funding it will provide for airport upgrades.

Jim Lew, Managing Director of LeighFisher, the aviation consultants hired by the government to develop the PPP process of outsourcing airports to private developers / managers, previously said funding for the six Family Island airports would be separate from that of Grand Bahama International Airport. .

With North Eleuthera and Exuma airport redevelopments estimated at $ 65 million each, prices of $ 10 million for San Salvador and Abaco, as well as $ 18 million for Long Island and $ 15 million for Great Harbor. Cay, bring the total projected capital costs to $ 183. m – well above the $ 140-150 million to be raised by RF Bank & Trust.

As for Grand Bahama, Lew said a “significant investment” is required by the successful bidder “on the ground and on the air side” to not only rebuild the Grand Bahama International Airport, but to make it strong enough to withstand. to future natural disasters.

He added that “about $ 200 million” is needed to “replace the facilities and infrastructure on the ground in order to capture the growth this site badly needs.” This was reiterated in the accompanying project information memorandum, which added: “The airport suffered significant damage during Hurricane Dorian in 2019.

“An FBO (fixed base operation) building has been converted into a temporary terminal. A complete site-wide redevelopment solution (approximately $ 200 million) is required to replace damaged facilities, unlock business potential and operate the airport as a profit center.