Photo Credit: Clifton Skelton/BVI Platinum News
The ability of the National Democratic Party (NDP) administration to raise loan funding to finance the multi-million dollar works to expand the Terrance B. Lettsome International Airport is being questioned.
Premier and Minister for Finance, Hon. Dr. D. Orlando Smith has indicated that Government will finance the project through a loan, but not all Legislators are confident that acquiring the financing will be easily achieved, especially in light of the recently signed Protocols for Effective Financial Management.
Third District Representative, Hon. Julian Fraser is not buying into the loan funding proposal. While debating the amendments to the Public Finance Management Act, which is required under the protocols, Hon. Fraser pointed out that the United Kingdom has taken away the Territory's access to capital.
"I have absolutely no problem when it comes to the provisions that deal with good governance, fiscal prudence and what have you," stated Hon. Fraser during the October 9 debate.
"What I have a problem with is when the United Kingdom Government is going to look at us and decide; remember we don't print money, we don't have any industries like industrial where we manufacture and export goods. Every country in the world including the United Kingdom has access to capital, but they are going to look at us and tell us we can't have access to capital. That is literally what they are telling us. I heard the Premier this morning [October 9] telling me that he is going to finance a major project by loans. I have learned a long time ago that you must never second guess a man; he always has something up his sleeve; a trump card you call it and he plays it sometimes. So from where I sit I don't see how he is going to be able to do it. I don't see how he can do it; not in this term that he is sitting in," Hon. Fraser pointed out.
The Third District Representative also pointed out that public/private partnerships are creative ways for Government to raise money, but because the BVI is doing it, the United Kingdom Government has a problem with those partnerships.
Pointing to the financial constraints as it relates to the protocols, Hon. Fraser pointed out that if the Territory wants to get compliant with the protocols from a liquid assets point of view, only some $65 million is needed to be saved.
"The way spending is escalating because that liquid asset is a function of the recurrent expenditure; if we curtail our recurrent expenditure to a point where that $65M becomes $50M, maybe its manageable, but I only see the recurrent expenditure growing. I don't see it reducing. We just talked about this Bill [Public Finance Management Act] and about hiring more people and if we do that, it means recurrent expenditure is going up and that means that liquid assets will no longer be $65M; it might be $70M. That is why I said it is unfair, onerous, the conditions that the British Government is imposing upon us, and it requires further negotiations," Hon. Fraser stated.
During the only community meeting to date, Minister for Natural Resources and Labour, and Deputy Premier, Hon. Dr. Kedrick Pickering was asked directly about the funding for the project. At the meeting held on March 27, 2012, Minister Pickering said that Government expects that the airport will be able to pay for its own development over time.
"Based on revenue projections, we expect that the airport would be able to pay for its own development...initial capitalization for consultancies of course will be borne by Government, but we don't expect that we will be taking monies from the consolidated fund...there is no shortage of interest in financing this project. Almost on a daily basis we get calls from interested parties. Every week I have a meeting scheduled for some party who wants to register their interest in the possibility of financing the development. They see the BVI as a great investment...there is no shortage of interest in terms of the financing and financing availability. Where we go is still a work in progress," Minister Pickering stated at the meeting.
In a statement to the House of Assembly on September 3, Minister Pickering listed five companies that have met the prequalifying conditions to undertake construction works to expand the airport.
The companies are Sir Robert McAlpine (Holdings) Limited (Grand Cayman), China Communication Construction Company Limited (China), IDL Group (Canada) in consortium with ADC Company (BVI), GLF Construction Corporation (USA) and the Walsh Group (USA).
The companies were expected to submit proposals which Government had hoped to have completed the review process by the end of September 2012.
According to Minister Pickering, Government is hoping by the end of October 2012 to complete all of the negotiations, including presentations to Caucus and Cabinet, after which decisions can be made to appoint a lead contractor or consortium leader and then move to the construction stage in January 2013.