Wednesday, February 26, 2020

Opposition Leader Raises Questions About HIA Redevelopment

Saint Lucia’s opposition leader, while supporting the redevelopment of the Hewanorra International Airport (HIA), has raised questions in relation to the current project.

Mr. Philip J. Pierre did so in a letter to the Acting General Manager of the Saint Lucia Air and Seaports Authority (SLASPA), Daren Cenac.

Pierre read the letter, which is reproduced below, at a news conference Wednesday:

26 th February, 2019

Mr Daren Cenac

General Manager (Ag.)

Saint Lucia Air and Sea Ports Authority

Manoel Street

P.O. Box 651 CASTRIES

Dear Sir,

I write in my capacity as Leader of the Opposition and Political Leader of the Saint Lucia Labour Party.

The Saint Lucia Labour Party supports the redevelopment of the Hewanorra International Airport and when in government between 2011 and 2016 took positive verifiable steps to achieve that objective.

In this regard the government in 2013 engaged the expertise of the International Finance Cooperation (IFC) an affiliate of the World Bank to oversee and manage the project. On December 24th , 2013 SLASPA signed an advisory agreement with the IFC as the lead advisor in conducting a transparent and competitive international tender process to attract an experienced, international, private investor to conduct the design, construction, financing, operation and maintenance of Hewanorra International Airport (HIA).

It must be noted that the Government of Saint Lucia had spent $250,000 US for the project. In addition the Canadian Government through Global Affairs Canada (GAC) provided funding of $ 1.8M US to cover transactions costs on behalf of the Government of Saint Lucia for the team of specialized consultants implementing the project.

The Saint Lucia Labour Party chose the Private Public Partnership to avoid borrowing for the project and thereby preserve the fiscal space for other pressing priorities such as projects in education, housing or other sectors.

We note that the tax paying public have not been told the exact total cost of the project. However in the case of the PPP arrangement the investment programme for 30 years was estimated at US $118 M in new capital investment and US $90M in maintenance investment totalling US $208M.

The concession contract also required the private investor to post a completion bond to compensate the government of Saint Lucia for any delays or violations of performance requirements.

The PPP transaction was structured as a 30 year concession under which SLASPA and the GOSL retain ownership and regulatory control of HIA and are re-numerated through concession fee revenue and corporate income taxes paid by the private investor estimated at EC $1 Billion and EC $580 M (undiscounted) over the entire concession period. For the life of the concession, the private investor would be responsible for the entire airport business and will design, construct and finance any improvements necessary for the facilities, new terminal building, runway, taxiways, apron expansion, improved power station as well as operate and maintain all these facilities according to detailed performance criteria and international civil aviation standards.

We note that based on the time table at the time the financial closing would have been May 2017 and construction would commence soon after.

The government at the time was sensitive to the possible problems of procurement and increased debt that could arise in the development of the airport.

In the current process there have been no public procurement procedures. Many pertinent questions remain unanswered. How was the main contractor chosen? Was it by international tender or direct award? If so was that the most economical option?

How was the cost of construction determined? Was the chosen contractor the most competitive?

What is the total financial outlay required for the redevelopment, has all the financing been secured?

The Saint Lucia Labour Party is very concerned about the lack of transparency in the current arrangement. With the PPP procurement model the tender process was launched on July 7 th , 2015 through the issuance of a Request for Qualifications (RFQ) which sets out the timetable for the bidding process and the pre-qualification criteria for screening investors. The RFQ was advertised in local and international newspapers to attract broad interest. As a consequence of the screening process three prequalification applications were submitted. Consistent with the HIA Act an evaluation team was established to assess the applications. The evaluation team pre-qualified three investors. Only the three were allowed to receive bid documents and submit a bid. The three pre-qualified bidders were Vinci, Cedicor and Asur/Highway. All experienced global airport operators and contractors.

To the best of my knowledge no information has been revealed to indicate that such arrangements have been made with the existing process.

The fact is that all of the available evidence supports the view that the PPP model is best suited to our current situation and is a model which has been embraced by both Jamaica and Barbados. The PPP model would have seen the expansion works undertaken at no cost to the tax payer.

Let me remind you that the Saint Lucia Air and Sea Ports Authority as a statutory body has a responsibility to the people of Saint Lucia to always act prudently and in their best interest. It is the opinion of the Saint Lucia Labour Party that the decision to proceed with this project in its current form is neither prudent nor in the country’s best interests.
In the view of the Saint Lucia Labour Party (SLP) and that of many citizens, that officials of SLASPA should be mindful of their professional reputation. We advise that SLASPA demonstrates that it takes its responsibility to the people of this country seriously and immediately make public all relevant information relating to the project, including the procurement procedures which have been undertaken.

SLASPA’s failure to open the Hewanorra Airport Redevelopment Project to adequate public scrutiny may necessitate that a future SLP government undertakes a thorough examination of the project, including a forensic audit if considered necessary, to ensure that acceptable standards of public accountability were observed.

Unless SLASPA demonstrates the level of transparency expected in the procurement and other procedures in undertaking a project of that magnitude the Saint Lucia Labour Party will neither support nor be a party to the project in its current form.

The Saint Lucia Labour Party remains convinced that the best option for the redevelopment of the HIA is the Public Private Partnership arrangement as envisaged by the Saint Lucia Labour Party and now being pursued by the governments of Jamaica and Barbados.

We trust that you will view the concerns expressed as part of our civic responsibility being exercised in the public interest.

Yours truly,

Philip J Pierre

Leader of the Opposition

Cc: Ms Cointha Thomas

Chairperson of SLASPA

17 COMMENTS

  1. What is Guy Joseph’s position in this project? Every St Knows he has 10 fingers on each hand, we have to ensure he is not part of it.

  2. Excellent letter it highlights the key advantages of the old pan compare to the current plan of borrowing 170 Million US to build the airport

  3. The leader of the opposition and his team are doing a great job . They’re in the right position. Opposition

  4. Why should a government go into a PPP agreement and the private partner not paying a cent toward the loan? The SLP government would have reintroduced the Re-Development tax as funds to repay that loan. Why didn’t the leader of the opposition indicate the reason for allowing a foreign private entity to run the airport instead of SLASPA? I believe that PPP agreement was a scam just like Grysnberg, the New York building etc.

  5. Mr. Pierre, I note your concerns however you haven’t told the entire story. Wasn’t the Private individual bringing in all his staff? Weren’t the duty free shops and canteens also going to be operated by persons chosen by the private individual as well? Why should the Government introduce a tax yet a private individual or entity benefit from the use of tax payers money and government only get a percentage. Does this make any sense to you? From my calculations the Private Entity would have earned over $780 Million USD over the 30 years for an airport you say would cost $200 Million USD. So basically a deal where Saint Lucians had no job opportunities and over $1 Billion EC would be earned by the Private entity. Continue to oppose my friend..smh

    • Where did you get your $780 Million USD number from exactly ? And the article never mentioned a tax implemented from the investor. It says *”re-numerated through concession fee revenue and corporate income taxes paid by the private investor estimated at EC $1 Billion and EC $580 M (undiscounted) over the entire concession period”* Also i dont know where you get the idea that the private investor would only hire foreigners that makes no feasible sense whatsoever

    • Isn’t that the deal Chas is making with the Hospital. No wait. The Health City guys get everything and we get nothing. No revenue nothing. Let’s not even talk about DSH.

  6. Great lay out Pierre facts are the facts so they can’t deny it because they cant deny it they cant debate it. Every government in the region running for owing the their airports flat out opting instead to lease because it’s too much of a burden on the backs of their tax payers not this present government. You see if an outside company was funding the airport project it would be difficult for all party involved to dip their hand in the cookie jar but if they got the money themselves they can do what ever bubbul they like

  7. Public or private. Why take sides on who did what. Or in this case, who does nothing. This project is going down the same runway as the St. Jude Hospital. Each election, the party not in power blames the party in power for not doing anything! Look at the runway! It goes no where! But it also goes to the world! Do not let parties on either side keep this project from taking off. Who needs a horse race track? Build something that we need, AND can profit from. If you build it THEY will come. If you do not, it will stay as it was 40 years ago. JUST DO IT.

  8. Hello every one.I saw comments from people who already got their loans from pure heart loans and then I decided to apply under there recommendations and just few hours ago I confirmed in my own personal bank account a total amount of $40,000 which I requested for. this is real a great news i am advising every one who needs real loan to apply true their via mail ([email protected] com) I am happy now that I have gotten the loan I requested for.

Comments are closed.

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