The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Cabinet minister yesterday revealed that the Inter-American Development Bank (IDB) has branded $35m provided to The Bahamas as its “worst performing loan in the region”.

Alfred Sears QC, minister of works and public utilities, made the revelation in the House of Assembly as he revealed internal discussions are ongoing within the Government as to whether to include Grand Bahama International Airport (GBIA) among the proposed private public partnership (PPP) airport upgrades.

He was responding to Kwasi Thompson, ex-minister of state for finance, who questioned how the Government was planning to proceed with repairs to the Dorian-devastated airport and the status of the tender inviting companies to bid on taking over its management, operations and financing capital improvements.

Mr Sears, who is acting minister of tourism, investments and aviation during deputy prime minister, Chester Cooper’s, absence from the country, said he had met with the IDB’s Bahamas country representative, Daniela Carrera-Marquis, to discuss the issue of funding previously provided by the institution.

He added that of the $35m in financing provided by the IDB for airport upgrades in 2017, only 3 percent had been disbursed, and “what she told me is this 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 there would have been a number of changes to this project,” Mr Sears said. He explained that monies had been taken out of the IDB loan facility and placed in the airport PPP projects, with a portion helping to finance redevelopment of Exuma’s international airport.

“That’s part of what’s happening now,” Mr Sears said. “The Cabinet will have been given a presentation by the Airport Authority and Ministry of Tourism. The question is being determined whether 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 that discussion is taking place as to whether to the PPPs should incorporate the airport in Freeport.”

Mr Thompson, in reply, said Mr Sears was correct about “two tracks” and that Grand Bahama International Airport had not been part of the IDB airport infrastructure project. However, subsequent to its acquisition by the Government, it was included in the PPP process along with six other Family Island airports.

“When we left office the Ministry of Tourism and Aviation had intended for private sector persons to put forward tenders,” he added. “The question I was asking, and the question I believe the people in Grand Bahama are looking at now, is what has happened to that process?”

Tribune Business revealed in early October 2021 that some $400m worth of airport upgrades are under review to determine if the process as designed aligns with the Davis administration’s strategy.

Algernon Cargill, director of aviation, said then he and his officials “will have an answer soon” from Chester Cooper, deputy prime minister, and his team on whether the Grand Bahama and six Family Island airport public-private partnership (PPP) bidding processes will launch as envisaged by the former administration.

Describing this review as a normal procedure any prudent incoming administration would initiate, given the sums of money involved and importance to Bahamian infrastructure and tourism, Mr Cargill said it was “not on the backburner” and officials will “determine the exact course very soon”.

While the pre-qualification phase for the Grand Bahama International and Family Island airport PPPs is “ready to go” as soon as the review is completed, and go-ahead given, the aviation chief told this newspaper he was unable to comment yet on how exactly that will happen.

Under the current structure, RFP documents will only be issued to groups and bidders that satisfy the pre-qualification 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 Harbour Cay.

Construction work on Exuma’s $65m transformation has already begun, while the $15m worth of upgrades to Great Harbour Cay are almost finished. A recommendation had been supplied to the Minnis Cabinet as to the winning contractor for the $15m Deadman’s Cay revamp.

And the Government was said to have been “in the negotiating stage” with RF Bank & Trust over the $140m financing line it will provide for the airport upgrades.

Jim Lew, managing director of LeighFisher, the aviation consultants hired by the Government to develop the PPP process for outsourcing the airports to private developers/managers, previously said the financing for the six Family Island airports will be separate from that for Grand Bahama International Airport.

With the North Eleuthera and Exuma airport revamps estimated to involve $65m each, the $10m price tags for San Salvador and Abaco, as well as $18m for Long Island and $15m for Great Harbour Cay, take total projected capital investment costs to $183m - well above the $140m-$150m to be raised by RF Bank & Trust.

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

He added that “around $200m” is needed to “replace the facilities and ground infrastructure to capture the growth sorely needed at this site”. This was reiterated in the accompanying project information memorandum, which added: “The airport suffered extensive damage during Hurricane Dorian in 2019.

“An FBO (fixed base operation) building was repurposed as a temporary terminal. A comprehensive site-wide redevelopment solution (around $200m) is required to replace damaged facilities, unlock commercial potential, and operate the airport as a profit centre.”