The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Taxpayers will have spent an extra $50m to bail-out the Government's state-owned aviation entities by mid-June, a Cabinet minister revealed yesterday.

Dionisio D'Aguilar, minister of tourism and aviation, used the mid-year Budget debate to reveal the full extent of the COVID-19 devastation inflicted on Bahamasair and other aviation-related state-owned enterprises (SOEs) with more than $75m likely required to keep them afloat by the time the 2020-2021 fiscal year closes.

He revealed that this collective outlay was more than three times' the subsidy allocated to the national flag carrier, the Airport Authority and Nassau Flight Services back in May 2020, which will require an increasingly-squeezed taxpayer to pick up the bill for the unbudgeted $50m.

With the three SOEs collecting little to no revenue due to COVID-19 lockdowns and associated restrictions, and minimal travel and tourism since The Bahamas re-opened in November 2020, the $19m originally allocated to Bahamasair, plus the $5m for the Airport Authority and $1.5m for Nassau Flight Services, have simply been woefully inadequate to cover their costs.

To-date, Mr D'Aguilar said Bahamasair has required $49m in taxpayer subsidies to keep it in the air, with the Airport Authority consuming $8m and Nassau Flight Services a further $4.5m. This, he added, totals some $61.5m compared to the original collective full-year subsidy of $25.5m.

"Mr Speaker, the level of taxpayer support for these entities is already 2.4 times greater than what was budgeted and we still have three-and-a-half months to go until the end of the budget year," Mr D'Aguilar revealed.

"I estimate, Mr Speaker, that by year-end, these entities will have cost the taxpayer over $75m, which is three times more than what was budgeted. We budgeted $25m but will probably spend $75m - an extra $50m that the taxpayer has had to borrow to keep these companies afloat and everyone receiving their full pay.

"Mr Speaker, as you can see, these entities are costing the taxpayer a fortune so I respectively ask the employees of these companies to understand and appreciate the difficulties that the Treasury sometimes experiences when trying to fund these unbudgeted expenses."

Mr D'Aguilar then disclosed that upgrading all Family Island airports will cost $250m. The first four selected - Exuma, North Eleuthera, Abaco and Long Island - will account for $175m of this figure, with some $143m to be raised by RF Holdings (the former Royal Fidelity Merchant Bank & Trust). The $32m balance will come from an Inter-American Development Bank (IDB) loan.

As for Grand Bahama International Airport, Mr D'Aguilar said the Government was "on the cusp of acquiring" the Dorian-ravaged facility from Hutchison Whampoa and the Grand Bahama Port Authority (GBPA).

"The Government will purchase the property for a nominal price and establish a legal construct where they are not obligated to pay any amount to the Port Authority in fees," he added. "The Government will then hire a consultant to advise it on how best to redevelop that airport given the high probability of another weather event impacting that airport....

"Upon acquisition, the Government of The Bahamas plans to invest approximately $1.5m in capital improvements to the airport facility in the short-term, and then, after receiving a report from the consultants on the way forward, enter into a public-private partnership (PPP) to redevelop this airport."