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BVI Airways Agreement 'guarantees' money will be repaid- Premier Smith

- said it is not a wasted investment
Premier and Minister of Finance Dr The Honourable D. Orlando Smith yesterday, April 25, 2016 reiterated that the money being made available to BVI Airways is not a grant and that it will be repaid. Photo: Internet Source
Asked by Leader of the Opposition Hon Julian Fraser RA (R3) whether the $7M reported for BVI Airways as an investment has derived any share capital in the airline and how much, Premier and Minister of Finance Dr The Hon D Orlando Smith said the money has not and was not intended to provide any share capital. Photo: VINO/File
Asked by Leader of the Opposition Hon Julian Fraser RA (R3) whether the $7M reported for BVI Airways as an investment has derived any share capital in the airline and how much, Premier and Minister of Finance Dr The Hon D Orlando Smith said the money has not and was not intended to provide any share capital. Photo: VINO/File
ROAD TOWN, Tortola, VI- Premier and Minister of Finance Dr The Honourable D. Orlando Smith yesterday, April 25, 2016 reiterated that the money being made available to BVI Airways is not a grant and that it will be repaid.

This comes a day after we reported that Leader of the Opposition Honourable Julian Fraser RA (R3) was adamant that the money would eventually be written off as a grant not to be paid back.

Honourable Fraser gleaned from the responses that the Premier provided during the Eighth Sitting of the First Session of the Third House of Assembly on April 18, 2016 that the money was a subsidy to help the airline get off the ground.

Asked by Hon Fraser whether the $7M reported for BVI Airways as an investment has derived any share capital in the airline and how much, Premier Smith said the money has not and was not intended to provide any share capital.

“This investment into BVI Airways is intended solely as a subsidy to assist in defraying the costs associated with the airline’s ability to provided a service for the people of the BVI...It is expected, however, Madam Speaker, that the BVI will recover this investment within the first three years of the airline’s operation,” Premier Smith had stated in the HoA.

‘Subsidy or Investment money will be recouped’- Premier Smith

When we approached the Premier for a response to Honourable Fraser's assertions yesterday April 25, 2016 Premier Smith said that it is enshrined in the agreement between the airline and the government that the money would be repaid through a profit sharing arrangement over a period of three years.

"As I explained in my answer to the Honourable Leader of the Opposition Honourable Julian Fraser RA, whether you call it a subsidy or investment, the point is we get our return of our money," said Premier Smith.

Asked what guarantees are there to ensure that the Treasury's monies are repaid, he said, the guarantees are there in the agreement."

Asked about the specifics of the guarantee and whether it had to do with number of persons using the service, he said that it was not that kind of guarantee.

"I can't remember what clause it is in the agreement but it is in the agreement," he stressed.

"It is a profit sharing arrangement in which we will get our money back...this is not a wasted investment."

Premier Smith further said there will be no repayment until the airline actually starts flying. This he estimates to be in October 2016.

At a forum earlier this year, Premier Smith said he was assured by persons in the hospitality sector that they have already booked up flights on the airline which is yet to take off, “literally and figuratively.”

Critics have called down the National Democratic Party government for making this financial outlay in the face of persons who cannot be paid for services rendered to government since 2015 and for a government which said it has to be prudent with spending as things are tight.

Further, critics from all quarters blasted the government for not extending similar courtesies to the ferry services that ply the sister islands and the United States Virgin Islands.

19 Responses to “BVI Airways Agreement 'guarantees' money will be repaid- Premier Smith”

  • OMG (26/04/2016, 08:52) Like (14) Dislike (9) Reply
    more lies from Dr. Smith
  • Mouth Stach (26/04/2016, 08:52) Like (15) Dislike (36) Reply
    When Fraiser subsidise LIAT we got nothing more than
    bad service, wasnt that a problem then. I didnt hear
    the dogs barking. Now you got a real investment and making
    noise.

    • @ mouth stach (26/04/2016, 10:16) Like (9) Dislike (8) Reply
      Ok funny man we hear u
    • fool (26/04/2016, 18:37) Like (2) Dislike (2) Reply
      Fraser did not lie like This Premier by telling people he invested, what he did was open. It was a revenue guarantee, I guess you wanted him to let the people walk to Puerto Rico. Besides, LIAT is a Caribbean Airline. Boooo.
  • 7 million to a bankrupted airline (26/04/2016, 10:16) Like (10) Dislike (0) Reply
    Is this the reason why that 25 million is being borrowed?
  • lily (26/04/2016, 10:17) Like (5) Dislike (12) Reply
    FRASER THE LIBERATOR IS CORRECT AGAIN
  • Alright (26/04/2016, 10:21) Like (5) Dislike (13) Reply
    More NDP corruption
  • Hmmm. (26/04/2016, 11:18) Like (7) Dislike (9) Reply
    Money could have better spent or Invested.. How would they pay it back? They would find ways to rob it for their personal use..
  • wize up (26/04/2016, 11:32) Like (11) Dislike (11) Reply
    the most F&F does during each sitting of House of Assembly is find fault of everything; as an example Fraser had all manner of things to say about the 25 million overdraft the NDP adminstation is putting place; but fraser somehow does not realize should Virgin Islands Party regain the government his administration will have access to those same funds...just saying!!!
  • The watchman (26/04/2016, 11:50) Like (6) Dislike (0) Reply
    Awwwww I don't see an out clause nor garuntee.

    https://issuu.com/bvibeacon/docs/bvi_airways_agreement

  • Scary Mary (26/04/2016, 14:27) Like (8) Dislike (0) Reply
    And if one or both of the Limited Liability Companies that owns BVI Airways goes bankrupt or file for chapter 11 in the U.S., what happens to our monies then?
  • Political Observer (26/04/2016, 23:05) Like (7) Dislike (0) Reply
    Still not sure of the structure of dishing out $7M of scarce taxpayers dollars to BVI Airways. Why is the Premier so coy about what is in the agreement. Do not expect him to recite every word in the agreement but should he not be more sure footed of the core issues? Is the $7M a loan, a subsidy, a partnership, an air lift economic incentive.......etc. Are there any performance guarantees in the contract, i.e., in order for BVI Airways to collect taxpayers they have to meet some performance metrics, eg, bringing a minimum number of passengers? What performance metrics are in place assess plan against actual? The big question is the best use of payer dollars? With limited resources, is this expenditure one of the top priorities?
  • reality (27/04/2016, 03:08) Like (5) Dislike (0) Reply
    this deal is a sell out wolf in sheep clothing
  • wize up (27/04/2016, 04:50) Like (0) Dislike (3) Reply
    VIP; should have done this year's ago now here criticizing everything
  • W*F (27/04/2016, 08:19) Like (2) Dislike (0) Reply
    When are the planes going to fly? Until this question is answered, Doc please shut up about reimbursement. You are grasping at straws.


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