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Govt's $7 million to BVI airways will end up being a grant - Hon Julian Fraser RA

- said there is no guarantee of a return on the investment
Leader of the Opposition Honourable Julian Fraser RA is again questioning the wisdom of the National Democratic Party's (NDP) 'investment' into BVI Airways, a foreign owned airline. Photo: VINO/File
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. Photo: VINO/File
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. Photo: VINO/File
ROAD TOWN, Tortola, VI- Leader of the Opposition Honourable Julian Fraser RA is again questioning the wisdom of the National Democratic Party's (NDP) 'investment' into BVI Airways, a foreign owned airline.

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.

19 Responses to “Govt's $7 million to BVI airways will end up being a grant - Hon Julian Fraser RA”

  • The Reaper (25/04/2016, 07:54) Like (4) Dislike (13) Reply
    Come on now !! When u were the government.U had the chance too do for the people and the country....U fail,,U are Out and about talk piss...Shame on U Mr Hon F
  • say what (25/04/2016, 08:22) Like (19) Dislike (0) Reply
    Is it piss when we elect you arses and you turn around and does worst that the previous govt!
  • ayo blind? (25/04/2016, 09:43) Like (30) Dislike (0) Reply
    The NDP only interested in helping their rich white friends.
  • ok (25/04/2016, 09:56) Like (1) Dislike (9) Reply
    Fair but what is Fraser's answer to the airlift issue plaguing the BVI currently? If we do not address this it will cripple our Tourism offering and we cannot afford that. While the Govt's deal with BVI Airways needs a closer look, is this really the approach? Offer solutions and not just arguments. Fraser was responsible for ports at the time AA/AE were about to leave and what was done? NOTHING! He was responsible for ports when the cruise lines asked for an extended pier and developed land side, what was done? NOTHING! This guy needs to offer solutions as a representative and Leader of the Opposition and stop all the foolish ranting all the time. Further, Fraser of all people know that every island in the Region has to pay subsidies to AA, Jet Blue, Delta and others that fly from the US and they pay far more than $7 mil for it. There is no free lunch as a small Territory and until we realize that we will continue arguing over political nonsense and lose sight of what really matters. No airline will fly here for FREE, there's always subsidies and seat guarantees.
    • Catch All (25/04/2016, 12:34) Like (1) Dislike (0) Reply
      You don't know anything about Fraser. Nothing you say is true.. Check the records and you will see that during Fraser time as minister responsible for ports, a contract was awarded to extend the Cruise Ship Pier. Also if you check the records, you will see that America Eagle left the territory 2 years after Fraser left office.
  • Liat 521 (25/04/2016, 10:55) Like (1) Dislike (0) Reply
    more money where is the governor? AWAL still
  • dog (25/04/2016, 11:51) Like (8) Dislike (0) Reply
    regardless of where you come from there are always at least 2 connections in most Caribbean connections. Smaller planes are needed. Switch in Miami, San Juan, NY -- there are always connections. travelers are used to it. That is why Jet Blue direct is so important to St Thomas. The the ferry ride is part of the fun and allows a traveler to relax. The FERRIES are the KEY to more visitors. ONLY if they meet the airlines with later schedules. BVI missing the boat.
    Direct flight to BVI is not economical for the airlines.
  • wize up (25/04/2016, 12:42) Like (1) Dislike (0) Reply
    the former minister for communications had the opportunity to create a national airline for this territory while in office under his virgin islands party and as usual did nothing BUT now he has all the answers...... Had the former commication minister created a national airline , NDP would not have to fighting to create an airline for our people in 2016...look how long ago Air BVI went out of business and how long the VIP been ruling this territory

    • Look back (25/04/2016, 15:14) Like (1) Dislike (0) Reply
      NDP government 2003-2007
      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...
      • wize up (25/04/2016, 16:05) Like (2) Dislike (0) Reply
        @ look back: you just born because you only going back til 2003...(FYI) the blog did say the former communication Minister under his Virgin Islands Party.....ask the old folks; VIP ran things here for almost 50 years....so talking from 2003 is joke talk!!!!!....but depending on which side of the fence you sit on; one will have a perspective (it's all good)
      • wize up (26/04/2016, 04:41) Like (2) Dislike (0) Reply
        @ look back;just for you upliftment, there is a very thin line between fact & fiction..... The government of these Virgin Islands subsidize the operations of amercia eagle over the year amercia eagle operated here; those funds could have gone into a national airline because when amercia had enough amercia pulled out of our territory leaving the BVI with lack of airlift: you tell me who is mad( the BVI paid amercia eagle to come here, with a national airline there would have been no need of amercia eagle to operate in this territory).... let me repeat; the BVI government paid for the services of amercia eagle and you here blogging about a national airline had no chance against amercia eagle!!!!
        • Dumb dumb (30/04/2016, 08:10) Like (0) Dislike (0) Reply
          No No No.. The biggest lie.. No VI Government ever paid American Eagle a dime in subsidies to fly to the Virgin Islands. If this ever happened it must have been under your NDP from 2011.
          Stop posting LIES.. American Eagle got no subsidy from VIP Government
  • reminist (25/04/2016, 13:58) Like (1) Dislike (0) Reply
    This government has given second term a bad name...No more second term...Second term is only for politicians to get rich..
    • wize up (25/04/2016, 16:43) Like (2) Dislike (0) Reply
      @ reminist: I agree with you 1000000%...this true and very true and a great way of looking at it(for real, that second term in political office is the get rich term)
  • Street reporter (25/04/2016, 14:05) Like (0) Dislike (0) Reply
    VIP did worst than NDP. Just that NDP don't care. They give no explanation. NDP act like the Treasury belong to them...We are happy that VIP can show light on NDP wrongs...
  • watching (25/04/2016, 16:07) Like (1) Dislike (0) Reply
    Anyone with even a FRACTION of airline knowledge knows that a longer runway will accomplish nothing except make the thieves richer . No major airline will fly here ...period . They have SJU , STT , and SXM . Wake up people . Hundreds of millions for what ?
  • Pilot (25/04/2016, 22:21) Like (0) Dislike (0) Reply
    Before the election Dr. Smith said nothing a bout lengthening the run way. Immediately following the election, he reversed his position and called for swift action to have the run way extended. Just who can one liken this man to.
  • Madethattrip (26/04/2016, 08:22) Like (0) Dislike (0) Reply
    The FERRIES are the key. Plenty of flights in to STT.
    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.


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