ONE hundred and seventy-five million United States Dollars is the amount the government has earmarked for the redevelopment of the Hewanorra International Airport (HIA).
Prime Minister Allen Chastanet made this disclosure at a press briefing on Monday adding that the money is coming out of a loan facility.
Although time was not allotted for an intensive question and answer session with the prime minister on the airport redevelopment project, he did reveal that the loan would be funded by an airport tax and therefore does not narrow government’s fiscal borrowing space.
Chastanet explained that the loan, which actually is being taken by the Saint Lucia Air and Sea Ports Authority (SLASPA), will not be a burden on taxpayers and has nothing to do with government’s recurrent expenditure.
“We went to parliament and approved the allocation of $35 to SLASPA in order to be able to fund the loan. What government did was to provide government guarantee on the loan so there is no financial implication to the recurrent expenditure,” Chastanet said.
The opposition Saint Lucia Labour Party is not in favour of the approach government has taken to finance the airport project claiming that this was an unnecessary financial burden Saint Lucians would have to carry for generations.
The opposition is in favour of a Public Private Partnership operation in which a private entity will build and manage the airport for 30 years with the Government of Saint Lucia not having to carry any costs associated with its construction and maintenance over that amount of years.
The opposition believes this is the best option for the country which is trying to cope with a mounting national debt. Further, several countries, example Jamaica with a first-class airport, went in that direction and now does not have to worry about the facility’s expenditure for a number of years.
The government on the other hand believes the country would be putting millions of dollars in the hands of a private entity by way of profit if it is to go the way of the opposition. Although government has yet to show a detailed financial analysis for the Hewanorra Airport Redevelopment Project, it predicts that the airport would be profitable, opining that the country will take its chances with the airport rather than put the entity in the hands of a private developer.
The UWP government is confident that the airport tax is sufficient to finance the loan for the redevelopment project. It is unclear whether government has taken into consideration situations that could force a reduction in air travel to or out of the island. Also unclear is whether government has a contingency plan in place should such situations arise.
As government continues to speak about the airport tax as the source of funds for the airport’s loan repayment, it has remained quiet on its plans, if any, for maintaining a facility costing US$175 million or EC$472.5 million.
Infrastructure Minister Stephenson King admitted at a press briefing this week that such a facility would require a high level of maintenance irrespective of how well built it may be.
Although he did not outline a maintenance plan or amount per annum for the facility, King said he believes the maintenance aspect must have been factored into the project.
“I do not believe we can sit back and say we cannot maintain our assets and do nothing. I believe when we improve our assets, we must put in place the necessary reserves to enable (us) to maintain those assets. At the HIA the intention is that the government will continue not only to improve the airport but to maintain the airport over time. It is likely when the time comes that the airport service charge will be maintained to allow for maintenance of the airport because you must maintain your assets,” was King’s response to a question about whether government had factored in the airport’s maintenance over the years and not just the loan repayment.
King, thinking quickly, implied that the airport’s redevelopment would not have taken place if the maintenance aspect of it was not factored into the overall project.
“You cannot build anything and turn your back on it and believe it will give you 75 years…” King said, underscoring his point by claiming that even the country’s roads are built with a sustained maintenance component attached to the construction.