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by pltm
(PLTM) - The BVI can at this time afford the TB Lettsome International Airport expansion by borrowing the $153.5M to carry out the project, according to Financial Secretary, Mr Neil Smith.
"When you look at the Medium Term Fiscal Plan, obviously we can afford it if we borrow for it. And there is also another model where you can have somebody build it for you and after a number of years, maybe 50 years, you get it back," he said yesterday, January 16.
"But we have gone through the numbers, it's doable, it's very doable, but we have to maintain the discipline when we're actually building the runway to make sure we don't go over budget."
Smith indicated that the government is already in talks with major banks, who are willing to loan government the money to fund the project.
Government has chosen China Communications Construction Company (CCCC) as the preferred bidder, but has reiterated that negotiations are ongoing in order to arrive at an agreement.
"There are big banks we have been speaking to who can do it very easily, but we haven't done anything because we needed to get a decision from Cabinet to proceed with the project, to negotiate. But we haven't started negotiations (with CCCC)," Smith said.
The Financial Secretary, who said that there will be no bright future without air access, also sought to shut down fears about the "Chinese coming to take over."
He said that in the initial bid documents submitted by the two firms, there had to be an obligation that locals be involved. Smith said they have to ensure that whatever work can be done by a BVI company be done here. "So the only expectation of foreign people or equipment is specialized, that we don't have it here."
In relation to the socio-economic impact, he said, "This is the BVI; I don't know if the people of this country expect the Cabinet or the government of this country to sit down and allow a foreign investor or firm to come in here and take over the place. They will not allow that to happen."
Validate/$500M Injection Into Economy
Meanwhile, Premier and Finance Minister, Hon. Dr. D. Orlando Smith in his budget address, said like with the dual carriageway, hospital and college projects, and also social security, the airport project will be validated with time.
He noted that it is a bold step that the government must take to secure the economic future of the Territory, as air access is linked to the growth of the financial services and tourism sectors.
"That expansion is a costly undertaking and even among my colleagues there is a concern that this project will not always allow them to have discretionary funds for other simultaneous spending, which is extremely important and entirely necessary," he said.
The Premier added, "However, the airport expansion is a must for our own economic survival because it opens the door to other industries and other revenue streams. The airport is a catalyst for growth, but more importantly, it is one of the most important steps that we can make to maintaining a competitive advantage in tourism and financial services."
He said the business plan and economic study show that within the first year of the construction of the airport, the BVI should directly realize in excess of five percent increase in Gross Domestic Product (GDP), over what they wouldn't realize if they do not embark on the project.
"Within three years of commencement of the project, projection shows a difference in excess of 20 percent improvement in GDP with the airport expansion, as opposed to negative growth without it. This is a reality that we cannot ignore, an added injection into our economy within a five-year period of almost $500M," Premier Smith said.
"Careful economic and analysis projections have been done to determine the stability of this project, which is estimated at $153.5M. The impact analysis demonstrated minimum negative impact on our liquidity in the short term and substantial improvement to the fiscal position of central government in the medium to long term," he said.
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