The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government will require interested bidders on airport upgrades collectively worth near $400m to present their credentials by September’s second week, its top aviation official revealed yesterday.

Algernon Cargill, director of aviation, told Tribune Business that the Government is holding a pre-qualification phase for its Grand Bahama International and Family Island airport private-public partnerships (PPPs) in an effort to separate qualified bidders from those that lack the qualifications and track record to succeed.

“The request for qualification notice will be issued by the second week of September,” he affirmed, “where we pre-qualify the bidders and qualify them for the Request for Proposal (RFP) phase. This project is independent of the election. We are proceeding because this is a government initiative, not a political initiative.”

With a $200m investment likely required for the “comprehensive redevelopment” of a Dorian-ravaged Grand Bahama International Airport (GBIA), and the six Family Island airports selected for the PPP needing a combined $160m-$170m, the combined airport enhancement project could involve a $370m capital injection - making it one of the largest infrastructure projects this nation has ever seen.

The total is not far shy of the $409.5m investment at Lynden Pindling International Airport (LPIA), with the figures confirmed by Mr Cargill. “We’re estimating that Grand Bahama will be $200m, but that is coming through the PPP so we don’t know yet,” he said, pegging the six Family Island airports at between $160m-$170m. The PPPs could last for up to 30 years.

“This is why the PPP is so important,” the aviation chief added. “It’s a cash flow from these airport projects which will service the debt. We want world-class, best-in-class operators to manage these airports efficiently and reduce the cost to the Bahamian taxpayer, with little contribution - minimal - from the Bahamas government.

“This is tied to the Government’s strategy of marketing each island based on its own strengths, which is why it is important to have flagship gateways that work. We’ve had almost 200 inquiries, and we expect to get a lot of interest based on the questions we’ve received and persons who continue to contact us.

“We’re very confident that the process will be successful based on the number of inquiries received in the market briefing, and the inquiries we continue to receive. There’s a lot of interest in this project locally and internationally.”

Mr Cargill said RFP documents will only be issued to groups and bidders that satisfy the pre-qualification process, adding that the former were now being finalised. 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”. Mr Cargill said a recommendation had been supplied to the Cabinet as to the winning contractor for the $15m Deadman’s Cay revamp, and work was expected to start soon.

He also confirmed that four of these airports - Abaco, Exuma, North Eleuthera and Long Island - require the Government to compulsorily acquire land from private owners to facilitate these works and expansion.

“That is in the final stages,” he said of the purchases. “The Acquisition of Land Act clearly allows the Government to do that. That’s already been approved by the Cabinet and that process is continuing.”

The Government is also, Mr Cargill added, “in the negotiating stage” with RF Bank & Trust over the $140m financing line it will provide for the airport upgrades. “We’re finalising all those agreements now,” he said.

Jim Lew, managing director of LeighFisher, the aviation consultants hired by the government to develop the private-public partnership (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 had urged potential bidders to focus on the future and “upside value” that can be unlocked by outsourcing the airport’s management and redevelopment to the private sector.

Acknowledging the massive damage inflicted by Hurricane Dorian, and that all repairs to-date are only temporary, 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.”