Govt's $7 million to BVI airways will end up being a grant - Hon Julian Fraser RA
Writing on his Facebook page yesterday April 24, 2016, Honourable Fraser asked what was the nature of the $7 million given to the airline.
"Is it a grant or a subsidy? It sure isn't an investment, according to the Premier in his answer to my question in the House of Assembly on April 20, 2016," said Honourable Fraser.
Premier Smith responded that the $7M investment in BVI Airways has not and is not intended to provide any share capital.
The Premier said the investment with BVI Airways is intended solely as a subsidy to assist with service to the people of the VI and direct access between the US mainland and the VI, which is important to the tourism sector.
He said Government will recover the investment within three years of the airline operations.
Hon Fraser said, "The Premier refers to it as a subsidy and I have a difficulty as pertaining to his definition of investment. How does a subsidy become an investment? An investment to me is something where someone has invested with the expectation of ownership; is it a revenue guarantee? What kind of subsidy is this?"
In response, Premier Smith said, "A subsidy is a situation where assistance is given to whatever project it is in order to make it successful. In this case, from the view of the BVI, we recognise that air access, especially direct air access from America mainland to BVI is important for the tourism product; hence, the subsidy to this airline, for them to start to provide this service."
NDP 'love affair' with BVI Airways
According to Honourable Fraser, getting a straight answer on what he called a love affair with BVI Airways is not going to happen.
"Our Premier has decided to pump $7 million of tax payers’ money into this once failed airline to start a new route from Miami to the BVI nonstop," Honourable Fraser said.
"This airline once operated in the BVI then went out of business, owing the [BVI] Airports Authority $174,000," he said.
He pointed out that the Premier gave the airline a $500,000 up front payment from the $7 million subsidy, "and so far I am told they paid the Authority $75,000, still owing $$99,000."
Honourable Fraser said Premier Smith kept referring to the $7 million as an investment, "until he was forced to prove it, then he eventually told the true nature of the involvement which is that it is to subsidise the airline."
Honourable Fraser does not believe that there are any guarantees regarding passenger numbers. He is of the view also that the money will end up being a grant as it may not be paid back.
"My question is what happens to our $7 million if the airline goes belly up like it did the last time?" he asked.
There has already been a public outcry about government’s move to subsidise the airline to the tune of $7 million of taxpayers’ dollars and not doing the same for locally owned airlines and ferry services.
While there are speculations as to who locally is involved in the airline’s return, BVI Tourist Board Chairman Russel Harrigan has been the point person with the negotiations, according to a senior NDP source.
Mr Harrigan’s involvement beyond the negotiations remains unknown at this time.
Government said it hopes to recoup the money from BVI Airways within the three-year agreement even though there is no guarantee concerning the number of people who will be travelling on the 86-seater small passenger jet.
BVI Airways also hopes to start services to the United States Eastern Seaboard, however, this is contingent on the lengthening of the runway at the Terrance B. Lettsome International Airport at Beef Island to accommodate larger, longer-range aircraft.
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19 Responses to “Govt's $7 million to BVI airways will end up being a grant - Hon Julian Fraser RA”
Direct flight to BVI is not economical for the airlines.
NDP government 2011-2015
NDP government 2015- present
Are you talking about the former NDP minister?
American Eagle cease operations in 2013, and you really think a national airline stood a chance against America Eagle? You mad...
Stop posting LIES.. American Eagle got no subsidy from VIP Government
People ENJOY the ferry ride as part of their trip.
But just as all the planes come in the ferries shut down.
Dumb and dumber. Money pumped in to their economy from people who don't want to stay there and are sad to be so near and yet so far. Just RUN LATER FERRIES. Let customs take turns a few nights a week. So simple and so neglected for so long.