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by pltm
(PLTM) - The initial $7M figure given by government for its investment in BVI Airways was not the overall cost to facilitate the agreement, as a total of $7,207,000.00 has been expended by government, to allow for the payment and it's transfer.
BVI Airways is scheduled to conduct direct flights between Miami International Airport and the TB Lettsome International Airport at Beef Island.
In response to questions in the House of Assembly recently, Premier and Finance Minister, Hon. Dr. D. Orlando Smith confirmed that government has paid in full, the $7M to BVI Airways, and an additional $207,000 was needed to conduct the transaction.
Government started the pay out to BVI Airways in January 2016 and made final payments in August 2016. All payments were made to BVI Airways Ltd.
"The additional $207,000 is in relation to costs associated with the establishment of the required escrow account," Premier Smith said.
Opposition Leader, Hon. Andrew Fahie then asked the Premier why the BVI government was responsible to pay the additional $207,000, when BVI Airways was already paid $7M by the government.
"It was a shared cost," Premier Smith responded.
Hon. Fahie then asked, "So they also paid $207,000?" Premier Smith answered in the affirmative.
BVI Airways two weeks ago told the media that they will be commencing direct flights in June. This update came after several delays. However, Premier Smith said that his government cannot say for sure when the flights will start.
"...As I have indicated before, approvals from ASSI were received in December of last year. Commencement of flights is now dependent on when final approvals are received from the various authorities in the United States, such as the Department of Transportation, Federal Aviation Authority and Transportation Security Administration," Premier Smith said.
He added, "I am aware that BVI Airways recently announced publicly that it hopes to commence flights in June 2017, but as this matter is out of my government’s hands, I am not at liberty to say definitively when this would occur."
Hon. Fahie asked the Premier if he is stating that BVI Airways is speaking for itself, and the Premier said yes.
The Opposition Leader also questioned if BVI Airways has requested any more funding from the Government of the Virgin Islands; however; Premier Smith said no.
"BVI Airways has not requested any further funding from the Government of the Virgin Islands."
Prejudicial
Meanwhile, some other information requested by the Opposition was not forthcoming, with the Premier citing that it would be prejudicial to BVI Airways.
Premier Smith said that there is an amendment to the original agreement with BVI Airways that was necessitated due to difficulties in securing a line of credit, as required in the original agreement. He explained that the amendment to this agreement essentially allows for an escrow arrangement for the transfer of funds, and a sharing of the costs associated with the setting up of the escrow account. Hon. Fahie asked the Finance Minister to provide a copy and explain in detail how the development of this project satisfied the tenets of the Protocols for Effective Financial Management.
However, Premier Smith said that because BVI Airways is in negotiations with various entities at this time, it should be appreciated that it would be prejudicial to the operation to make this information public at this time. However, he said the agreement and addendum reflects government's obligations in respect to risk management in the Protocols for Effective Financial Management, as indicated previously.
Premier Smith emphasized that it is an addendum to the original agreement, and all facets of the agreement and the addendum must be adhered to. He was further asked if any more funding, equity or investment of any kind is presently being considered to be given to BVI Airways, separate to the initial investment of $7M.
Premier Smith said that BVI Airways is at this time engaged with various entities in relation to investment in the project and it would be prejudicial to further discuss these arrangements at this time.
"As previously stated, BVI Airways are at this time engaged with various entities in relation to investment in the project and it would, therefore, be prejudicial to further discuss these arrangements at this time," Premier Smith stated.
