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‘Sometimes projects fail; airport expansion killed airline’—Premier

-says Govt. knew risks ahead of BVI Airways deal
Sometimes projects fail; airport expansion killed airlines—Premier
Minister of Finance, Premier, Dr the Honourable D. Orlando Smith (AL), has finally attempted to come clean on the BI Airways fiasco which cost the Virgin Islands, some $7.2M—money still to be recovered—and has said, it was the expansion of the runway at Beef Island, which caused the company to begin to fold. Photo: VINO/File
Minister of Finance, Premier, Dr the Honourable D. Orlando Smith (AL), has finally attempted to come clean on the BI Airways fiasco which cost the Virgin Islands, some $7.2M—money still to be recovered—and has said, it was the expansion of the runway at Beef Island, which caused the company to begin to fold. Photo: VINO/File
In 2016, BVI Airways submitted a complaint to “Government, regarding our plans to expand the runway at the airport.” Photo: VINO/File
In 2016, BVI Airways submitted a complaint to “Government, regarding our plans to expand the runway at the airport.” Photo: VINO/File
ROAD TOWN, Tortola, VI – Minister of Finance, Premier, Dr the Honourable D. Orlando Smith (AL), has finally attempted to come clean on the BVI Airways fiasco which cost the Virgin Islands (VI), some $7.2M—money still to be recovered—and has said, it was the expansion of the runway at Beef Island, which caused the company to begin to fold.

Offering no apologies, Dr Smith today, January 15, 2019, told lawmakers in the House of Assembly (HoA) government entered into the Agreement with Castleton Holdings to bring about a BVI Airways, in order to boost the tourism industry.

Airport Expansion

Finally providing a ‘comprehensive report’ on what transpired that led to the loss of the $7.2M dollars from the coffers, Dr Smith said in 2016, BVI Airways submitted a complaint to “Government, regarding our plans to expand the runway at the airport.”

According to the complaint, “our runway expansion plans undermined BVI Airways ability to raise capital from investors because a longer runway would mean competition from legacy carriers…BVI Airways claimed many of its potential investors were no longer interested in the venture if they had to compete with these larger airlines… From this point forward, the project began to slowly unravel.”

Smith told Legislators in the HoA, “BVI Airways still had to pay for flight and ground crews, service their debt and pay for other expenses – but had no revenue and no access to new investors… Put simply, the company was running out of money….BVI Airways came to Government asking for additional money from us.”

No Path Forward

According to the Finance Minister, “Government could see no path toward responsibly increasing our commitment.”

As such, “…the best we could do, was bring forward to payment schedule of the 7 million dollars we had committed to provide… We did so in the belief that it would be sufficient to get BVI Airways up and running, at which time we hoped that revenue from ticket sales combined with renewed investor interest would make the company viable….As it turned out, that goal was never reached.”

Dr Smith was adamant, the money was not put into any person’s pockets, “Nobody got rich off this project.”

Paid Pilots, etc

Dr Smith insists, the $7M paid over to BVI Airway was in fact spent, paying salaries to pilots, flight attendants and ground crews. 

“It was spent with consultants and lawyers to secure the complex regulatory approvals required to begin operations… It was spent paying off debts to banks that provided the financing to acquire the two aircrafts.”

He said,  “that is not to say that there is not blame to go around…There is, after all, one great unanswered question about this whole saga, which why BVI Airways began this project when they had to know that we intended to expand the runway, which would eventually mean competition from larger carriers.”

Knew Risks

An unapologetic Premier said however, “what I can tell you, the people of the BVI is simply this - your Government entered into this project with full knowledge of the risks, but also a sincere belief that those risks were worth taking…No Government can effectively serve the people of the BVI if it is not willing to take risks.”

According to Dr Smith, “when we built the new cruise ship pier – it was a huge risk….When we built the new hospital – it was a huge risk,” and spoke too of the establishment of the community college.

He conceded however “not all the risks Government taken on have worked out, sometimes projects fail.  Certainly, that appears to be the case with BVI Airways.”

Dr Smith said the project had come with a promise of doubling the amount of persons landing in the Territory.

He told members of the House that in September of 2014, the VI Government was presented with a Feasibility Report in September of 2014, which predicted that over a three year term the venture would result in net cash flow of some $2.6M and over a longer five year term, produce a net cash flow of approximately $10.5M.

He said “In other words, this study found that if Government was willing to provide initial financial support to BVI Airways to get up and running, then within a few short years the company would become profitable and could operate without further taxpayer funding.”

Dr Smith insists too that “most importantly, the report, which was conducted by a highly respected industry expert, projected an increase of roughly 450 thousand air passengers per year to the BVI – more than double the existing air passenger volume at the time.”

22 Responses to “‘Sometimes projects fail; airport expansion killed airline’—Premier ”

  • where is the governor (15/01/2019, 17:39) Like (16) Dislike (2) Reply
    Not a man gone jail
  • Hmmmm. (15/01/2019, 17:51) Like (23) Dislike (3) Reply
    This man is an embarrassment.
  • Damon (15/01/2019, 18:11) Like (27) Dislike (1) Reply
    This whole article just makes me sick.. excuses and more excuses.. hmm.. so guess with this lame pathetic explanation Dr smith expects us as a people to just accept that our hard earned monies are gone and that’s ok.. hmm.. smh.. this whole explanation have me PISSED..
  • So.... (15/01/2019, 18:44) Like (35) Dislike (0) Reply
    So Dr. Smith is basically saying: We gambled, we lost, suck it up folks...Noted.
  • Political Observer (PO) (15/01/2019, 19:18) Like (17) Dislike (0) Reply
    Premier Smith then blamed the botched airline deal on the BVI Airways who had claimed that the impending extension of the runway at TB Lettsome International Airport posed a ‘serious threat’ to its viability.” Look as if the Premier is blaming BVI Airways, a bruk and defunct airline. However, the blame is squarely on the shoulders of the NDP government. It appears as if little to no due diligence was done; a 3rd form student googling BVI Airways would have hit the pause button based on his/her findings. So many questions?

    Why was the $7.2M payment front loaded instead of payments made in 6 installments as outlined in the agreement? If the payments were to be performance-based, why were payments made if the targets were not met? Since taxpayers paid for two planes, where are the planes and when will the BVI be taking custody of them? Did BVI Airways see the NDP government as an easy prey and rolled it for $7.2M? Did the opposition ringing the alarm bell stop the BVI Airways from picking the taxpayers pocket for more cold cash? Should the negotiators on this fiasco be banned from negotiating on behalf of the taxpayers? Who was on the negotiating team? Do they need to be cat-o-nine tailed? What was the role and responsibility of the HOA, if any, in this broad daylight fleecing? In the history of bad deals, where does this one ranks? 1st. What action is being taken to retrieve the taxpayers $7.2M and if so what is the prospect of retrieving the money?
  • ... (15/01/2019, 19:22) Like (32) Dislike (7) Reply
    Any now we must vote for myron and mark hell no!
  • Say What? (15/01/2019, 20:43) Like (11) Dislike (0) Reply
    I didn't hear the live house of assembly but if what is reported here is accurate, I hang my head in shame and disgust. The contract as far as I know was never brought to the people and we don't know what the hell it says and what Smith signed us off for.

    So am I to understand that the contract promised an extended runway and to pay for the airline expenses and marketing. I respect Dr Smith but he needs to be held fully accountable for this. It's an embarrassment to any democracy and the governor need to have him charged the minute he dissolves house of assembly. My lord
  • Tadow (15/01/2019, 21:38) Like (5) Dislike (1) Reply
    Lockup those MF
  • Lamblike Beast (15/01/2019, 23:23) Like (11) Dislike (2) Reply
    This is very weak.
    That money was not Dr. Smith own but he behaving so much so. I cannot vote for this NDP government. They all need to be good gone.
  • Sometimes (16/01/2019, 03:07) Like (5) Dislike (1) Reply
    Leaders fail. You sir have been a great disappointment.
  • @ Political Observer (16/01/2019, 04:09) Like (10) Dislike (0) Reply
    When each plane cost approximately $371M (Google search), How could BVI taxpayers purchase two planes, lease a third, with $7.2M? Just asking.
    • The Hooded Claw (16/01/2019, 09:45) Like (4) Dislike (1) Reply
      You're a thinking person P.O, but I've yet to hear hear you ask what was Mr. Neil Smith's involvement in this fiasco. Hon Orlando Smith trusted these folks around him to do their jobs now he has to face the music for their ineptitude. Dr Smith is afraid to throw these cowards under the bus, you are indeed a brave man sire!
  • Diaspora (16/01/2019, 04:48) Like (4) Dislike (0) Reply
    Whiskey Tango Foxtrot? The NDP wasted/squandered not $7.20 or $720.00 or $7200.00 or $720,000,00 but $7.20M on a flight by night airline, BVI Airways, and all taxpayers are getting is some Bret Anansi, Humpty Dumpty Sit on a Wall tory. The NDP was paying loose and fast with the taxpayers money. Clearly, there was a lack of effective stewardship of taxpayers money, $7.2M big ones. The taxpayers are being insulted with the nonchalant explanation of how and why the $7.2M fly away. It look as if the taxpayers will quicker see a Unicorn than a real explanation of the reckless expenditure. The taxpayers deserve better than projects sometimes fail. True, but agencies exert due diligence to minimize or prevent the failures. There must be consequences for the $7.2M and merely exiting the scene stage left is not the answer. The NDP government must be held accountable. Based on its performance should it be trusted with managing the territory’s meagre financial assets? The NDP must be saddled with and owned its performance both negative and positive. At this stage, the equation is not an equation. The government hired consultant could not even put a positive spin on their findings; a commission of inquiry is needed. It may find that none of the $7.2M fly into any local pocket but unearthed gross negligence and poor stewardship.
  • Jaigon Jumbie (16/01/2019, 05:10) Like (14) Dislike (1) Reply
    Paid Pilots, etc

    Dr Smith insists, the $7M paid over to BVI Airway was in fact spent, paying salaries to pilots, flight attendants and ground crews. Can this statement really be true. Pilots, flight attendants and ground crew to where, to my recollection one of the planes took some athletes to some place in the Caribbean, cannot even remember where. Otherwise than that to the best of my recollection these planes never fly so why were these people paid? Interestingly, no one get rich off of the 7.2 million, Really? Well then the money was tied in a bag and thrown into the incinerator. As I always say, these big brain politicians always think we the people of the BVI are fools.
  • Wait (16/01/2019, 06:17) Like (22) Dislike (2) Reply
    I thought last year the premier said is Fahie who cause the plane not to fly.....now it's the expansion of the airport.....premier really
  • QTNA (16/01/2019, 07:27) Like (4) Dislike (0) Reply
    So exactly how does the Premier and the then FS (Neil Smith) plan to get this money back? I notice he has been very quiet and making his money at the RDA while OUR $7.2 million (if not more) quietly getting swept under the rug....who is gonna be held accountable for this? We will vote his party OUT come next election but WHO IS GOING TO PAY BACK OUR $7 MILLION DOLLARS?? WHO???!!!
  • Oh My (16/01/2019, 07:31) Like (1) Dislike (0) Reply
    Really don't understand what Doc trying to say . Is he blaming the deputy who is pushing the Airport expansion or the People taking our 7 millions had no knowledge of the expansion so they can't be blame .
  • risk (16/01/2019, 08:51) Like (2) Dislike (4) Reply
    The premier never blame a sole it was a investment risk that went bad. If the plane had arrive it would of been a benefit.
    • @risk (17/01/2019, 05:57) Like (0) Dislike (0) Reply
      Of course he did he threw the blame on Harrigan for the tourist board and his financial secretary N. Smith. He couldn't stomach all the blame on his own that's why secretary took that long leave never to return to your ministry.
  • Dee (16/01/2019, 09:31) Like (4) Dislike (1) Reply
    Premier you are on your way out. Stop lying to the people. Just make sure taxpayers money is retrieved and place in the treasury. Your government was the worst ever. No accountability, no imput from the people, money squandered and nothing to show, no value for money, no democracy shown by your government. Your government acted like a totalitarian government.The people need better.
  • thief (16/01/2019, 12:03) Like (1) Dislike (0) Reply
    Mayson try and get back our 7.2 million$$$$ before we lock you up
  • Windy (19/01/2019, 11:16) Like (0) Dislike (0) Reply
    All he,saying is s..t happens. Oh well it was just tax payers monies. ... lock him up


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