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TB Lettsome Airport will be placed in hands of private investors- Premier Smith

- said $95M increase in proposed cost of project was due to the inclusion of the development of the airport terminal
The inclusion of the development of the terminal at Terrance B. Lettsome International Airport was the reason for the cost of the airport project rising by over $95M- from $153M to $250M. Photo: VINO/File
Premier and Minister of Finance Dr The Honourable D. Orlando Smith (AL) speaking with journalists at a ‘One on One Meeting with the Premier’ yesterday, January 18, 2018 at Premier’s Office. Photo: VINO
Premier and Minister of Finance Dr The Honourable D. Orlando Smith (AL) speaking with journalists at a ‘One on One Meeting with the Premier’ yesterday, January 18, 2018 at Premier’s Office. Photo: VINO
ROAD TOWN, Tortola, VI – The Terrance B. Lettsome International Airport at Beef Island could be placed in the hands of private investors as the National Democratic Party (NDP) seeks to forge ahead with the controversial project despite challenges to it.

Premier and Minister of Finance Dr The Honourable D. Orlando Smith (AL) told journalists at a ‘One on One Meeting with the Premier’ yesterday, January 18, 2018 that the phase of negotiating with China Communications Construction Company (CCCC) and IDL Group, who merged with Sir Robert McAlpine Holdings and local partner ADC of the Virgin Islands, has ended and his government is now looking at what he called a Private Public Partnership (PPP) arrangement for the development of the airport.

"Where someone may build and design for a certain time and then hand it back over to government after they would have recouped their investment, so that is the model we expect to follow," Premier Smith said.

20 years

The leader of Government business also said the airport is likely to remain in private investors' hands for about 20 years. “That’s the way many airports around the world operate – London, New York. Many operate in that way.”

Premier Smith said Government took another look at the proposed project and found that the PPP was the best direction to go, rather than have Government invest in it.

He further clarified that with the initial arrangement, where they had the Chinese company CCCC as a preferred bidder, it was only for the expansion of the airport runway but there has been an addition to the project. "What we are envisioning now is the expansion of the airstrip and also improvement in the terminal building."

This was given as the reason why the proposed cost of the airport project rose from $153M to $250M.

In this new quest, Premier Smith said previous bidders, including CCCC, would be free to submit proposals. He; however, said they have had no talks yet with possible companies for the concession model.

Premier Smith and his ministers are expected to have public meetings across the territory, starting next week and this is expected to run for possibly two weeks at the end of which the NDP government is expecting to have a finalised recovery and development plan for the territory.

44 Responses to “TB Lettsome Airport will be placed in hands of private investors- Premier Smith”

  • are you kidding (19/01/2018, 12:30) Like (24) Dislike (5) Reply
    First they give millions to an imaginary airline, now they want to give away the airport!
    Good Lord, I may have to run for office. I cant do any worse than these fools.
    • no kidding (19/01/2018, 14:55) Like (8) Dislike (13) Reply
      I have a quiz for smart as#es like you. What is 100% of zero? You prefer to fully own a trashy and mismanaged airport than collect 20 years of revenue and increased tourism from an updated and professionally managed airport. To get elected, our elected government needs to cater to people like you, that's why we are in such bad shape.
      • Trust Me (20/01/2018, 20:45) Like (1) Dislike (0) Reply
        Trust me no kidding is correct. Our airport is in a horrible state of affairs, even the word mismanaged may be somewhat of an understatement.
  • rattie (19/01/2018, 12:44) Like (3) Dislike (0) Reply
    More in the mota
  • Nice (19/01/2018, 12:51) Like (15) Dislike (13) Reply
    This is good news. Government should not be involved in dealing with a project of this magnitude. Get qualified bidders in, proper bonds in place and let's get it moving.
  • wize up (19/01/2018, 12:52) Like (2) Dislike (2) Reply
    More coming
  • just asking.... (19/01/2018, 12:56) Like (19) Dislike (2) Reply
    Who got consultant fees?
    • Answers please (23/01/2018, 03:18) Like (0) Dislike (0) Reply
      Well Gov? Are you listening? Most of the ministers have spent their entire adult life working for the govt. How come they need a new runway for their private jets? Where all der money come from anyways? The ministers gots more offshore companies than I gots shoes. Who gots their eye on the peaples money?
  • Private.. (19/01/2018, 13:14) Like (10) Dislike (1) Reply
    Not a bad idea. Once we have an over seeing Team insuring Transparency and Value for dollar..
  • coconut (19/01/2018, 13:20) Like (15) Dislike (1) Reply
    Saw this coming due to the glaring fact that this current Government can’t even manage their way out of a paper bag! Alas; just like the UK outfit was touted to be investing in Prospect Reef (now in another’s hand with local vipers attached); will this suffer the same fate? This BOOT (build-own-operate-transfer) theoretically sounds good but is it viable or sustainable for an investor who would want a higher ROI than is plausible with our economy of scale comparable to other potential investments opportunities around the region/globally? Appears that grasping at straws has become the new norm of the day for these tossers!
    • @Coconut (19/01/2018, 13:47) Like (8) Dislike (1) Reply
      The Governor cannot go blameless. He is the Head... Dont worry this Governor is onto them..
    • @Coconut (19/01/2018, 14:15) Like (4) Dislike (9) Reply

      Why are the locals considered vipers and the UK/Foreign ones considered something else? Why can't business people locally partner with outsiders with access to more capital and make things happen? Why is it that we always hating on the locals? Was it locals who took our $7 mil and haven't made one trip to Miami in OUR PLANES? God bless OUR OWN LOCAL VI AIRLINK after Irma. If they gave the Brathwaites $7mil I'm sure we would be better off now. It seems that any local person or business trying to step out of the 'let me work a 9-5 all my life' box and do something for themselves they're considered greedy, because they dare to reach for the moon instead of the coconut branch. You all are some sick #$%&@ people!

  • Hmmm (19/01/2018, 13:55) Like (5) Dislike (6) Reply
    Can the government privatize the airport? Who will pay Customs and Immigration? How will we be able to ensure the laws are being enforced correctly?
    • dog (19/01/2018, 23:43) Like (1) Dislike (0) Reply
      plus charges, fees, taxes, revenue going off island to mother company. Over building Beef Island with Hotel, stores, market, and a terminal which is empty when no flights are in. Bye Bye Trellis Bay. and who really benefits? Private planes for VG owners.
  • liberal (19/01/2018, 14:43) Like (9) Dislike (2) Reply
    It was always stated on the streets that Government would privatize the Airport.. Hey, Hey, Hospital next and wait to see the merge of Water and Sewage and Electricity Department.. These guys are throwing the people under the bus for the own good.. You can now see it clear that the Premier is not a leader in this century to handle any responsibilities to run the country nor his ministers.. This should have been consulted with the people but the government is on a direction of who knows where and how the people will survive in this country we call home.
  • island man (19/01/2018, 14:46) Like (10) Dislike (3) Reply
    We are a small island nation, I just don't know why we always compere ourselves with develop counties like the USA London etc.
    The are not to compere; we have to look at islands within our bracket like Turks, Cayman,Bermuda and Barbados etc. These countries has state owned airport and they are doing well.
    Why suddenly you decide to privatise our assets?
    It is not true to say most enveloping islands have their airport privatise.
    Just take a look at the Caribbean instead of talking about develop countries.
    You are a lazy man and so are your parliament representative.
  • liberal (19/01/2018, 14:49) Like (5) Dislike (0) Reply
    I do hope you guys know that when Government privatize the airport it's an income for them to mess with..
  • Bandit (19/01/2018, 14:58) Like (5) Dislike (0) Reply
    Not NY airports meh boy. Those airports are operated by the new York new jersey port authority.
    • @Bandit (19/01/2018, 15:37) Like (1) Dislike (0) Reply
      The BVI authorities will still be involved with the airport, that doesn't change. The commercial operations, i.e. the fee earning side of the Airport isn't owned by the State, it's private, which is what will happen here. Customs, Immigration, Regulators and other authorities will remain as is.
  • what (19/01/2018, 15:52) Like (1) Dislike (2) Reply
    that is a sell out.Unless it is only until we get back on our feet.
  • How soon. (19/01/2018, 17:09) Like (2) Dislike (1) Reply
    I need a Job. How soon will the project start. Where do I have to to get registered for a Job.
  • E. Leonard (19/01/2018, 18:14) Like (10) Dislike (0) Reply
    Outsourcing is a means for resource-starved countries, cities, territories………..etc to deliver services to its customers to maintain and sustain quality of life and standard of living and to promote growth and development. Outsourcing has some benefits but it is not without risks, particularly failure. This proposal seems like a public private venture (PPV). The BVI will yield operational control of the land and air side facilities to the investor for 20 years; investor agree to invest approx $250M to extend the runway and improve the air side facilities.

    This sounds like a win-win for both residents and investor with the investor recouping its investment and making a profit and BVI residents getting improve air transportation services. But not so fast. The challenge will be finding an investor to invest $250M on a small airport in a small territory with a small population.

    Investors normally shop around for relatively safe investment opportunities. Typically, they gravitate towards investments that are generally relatively safe and that can hurdle its minimum hurdle rate, minimum rate of return on investment, ie, 15%, 20%, 25%………..etc. $250M is large sum of money and any investor must have a high level of confidence that it is an investment opportunity that satisfies and meet its investment target. Given the VI small size, and limited revenue streams this could be a challenge.

    Potential revenue streams include departure taxes, space rental to airlines, parking fees, landing fees, retail shops, fuel sales…….etc. Proceeds from these revenue streams must be adequate to interest an investor. The primary revenue stream may come from putting paying butts in seats.

    Moreover, an extended runway and an improved terminal building is no guarantee that airlines will fly into TBLIA. A key airline economics metric is the passenger load factor, ratio of passengers to seat capacity. For example, if an airline has 160 seats and a 120 passenger load, this equivates to a 75% passenger load factor; passenger load factor will be different for each airline. The International Air Transport Association (IATA) mean overall passenger load factor is about 79%.

    Further, the airline business is a labour and capital intensive, and razor-thin profit margin business. There is a fix cost with every take off and landing. Airlines operations have to at least break even but breaking even is not good enough, for the airline business is a service business and needs to turn a profit.

    Consequently, no airline will start or continue a route if it cannot consistently meet its minimum passenger load factor with paying passengers. Finally, the PPV is a build-operate-turnover agreement. As such, the agreement should specify that at the end of the term that both the land and air sides are turned over in a certain/specific condition. Further, during the period of investor operational control of airport operations, taxpayers should be held harmless from any liabilities.
    • concern (19/01/2018, 19:46) Like (8) Dislike (8) Reply
      Sir, why you always have to write an essay to make a simple point? Can you just shorten it a bit. I know you are an intelligent person;
      • pete (20/01/2018, 00:17) Like (8) Dislike (0) Reply
        EL- keep writing. I find your arguments very enlightening. There is also the labour issue. If Chinese come over for a period of time, they have to have "temporary" housing. They may support stores, but also use health system and infrastructure and utilities. If they have families, their children enter the school system, medical check ups, more traffic and consolidated community. Where is labour housing going to go? And if families arrive or are started, where are they going to live other than "temporary" housing. So thus begins the new ghetto and projects. This is bigger than just a longer runway for the benefit of a few. It is not cost effective for an airline to make the trip from mainland. Fix the ferries, get them efficient, get smaller planes between islands. We still get people here don't we? We still get awards. don't we? We are still written up in magazines, aren't we? We now have the cruise ships unfortunately. For every up there are two downs.
        • E. Leonard (20/01/2018, 09:44) Like (5) Dislike (1) Reply
          The Chinese are establishing an emerging presence in the Caribbean, Central America and Africa. Its emerging presence may be due to declining interest by other developed countries/super power. These locales need economic assistance and investment to fuel growth and stabilize their faltering economies. To meet the need, the Chinese offer no interest or low interest loans or grants. Further, for the assistance, these areas must commit to using Chinese workers, equipment and material. It is also expected that Labour and Immigration rules are relaxed for its citizens. Moreover, at the UN and other world bodies, Chinese support on issues is anticipated. The Chinese is just leveraging its position and support. During the Cold War era, countries could play the USSR vs US and other countries.
          • Diplomat (21/01/2018, 12:18) Like (0) Dislike (0) Reply
            True dat. The American, Brit,.......etc left a vacuum that is being filled by the Chinese. The Chinese is seizing the opportunity, filling the vacuum. Consequently, we must get engaged to ensure win-win situations are put in place. We are in the pool with the temperature being raised so we must take heed to avoid being both boiled to death, and debt. Most politicians focus on short-term solutions, focusing very little on long-term planning. They do as much to get elected or re-elected.
          • God willing and the creek don’t rise (23/01/2018, 03:05) Like (0) Dislike (0) Reply
            Does the BVI vote in the UN?
        • Observer (24/01/2018, 15:33) Like (0) Dislike (0) Reply
          No the Chinese are completely self sufficient when they send builders in on large projects . They even bring their own rice , so no benefit to local economy already damaged by lack of work opportunities on the contract . You only have to see how they built Antigua airport or the new highway in Jamaica to see how insular they are
      • Disinterested (20/01/2018, 12:03) Like (4) Dislike (0) Reply
        @Concern, are you a Trump disciple? Just leave the man alone. Some of us take the time to all real and blogs, regards of length. One of my professors all always stressed that clarity should not be slaughtered at the altar of brevity. Turn the page or go on to the next blog if you not want to read the man’s blog. You have the right to criticise just as the man has a right to write. Virgin Islanders take a fast food approach to every thing, killing proper planning, growth and development. We treat reading like it is the province of others. Readers are leaders. Keep writing bro man. Y’all make dog sick. Strupes!!!
  • I Confuse (19/01/2018, 18:16) Like (0) Dislike (3) Reply
    It seems to me that the good Doc is confused. One day he is saying one thing and the next day he is saying something else. I would like to be a fly on the wall when Docs' Advisor/Advisors start the dialogue. Please people, ya'll need to give the good doc a break and allow him to seek advice from who have him there, the Almighty. Doc is not a bad man, But he is a good man taking bad advice. I am not criticizing, but I am saying Doc needs to do more thinking for himself before he comes with these changing stories. Today is one article, then next day same article but different spin. So what is it really?
  • Hue (19/01/2018, 20:22) Like (5) Dislike (1) Reply
    Will someone talk some sense to this man before he sells out this territory to satisfy his ego.Something is definitely wrong. Hope Britain say this is not allowed at this time. We are in trouble. Get a new person for finance.
  • usa (19/01/2018, 20:24) Like (2) Dislike (0) Reply
    You all need to fact check Dr Smith
  • tola (19/01/2018, 21:49) Like (9) Dislike (0) Reply
    Ayo kidding me WHATS the rush in this airport project DOC WE ..have our hands them full why ayo rushing this airport so I smell a RAT ...
    NDP look like them really ready to let these Chinese's take over our country
  • qc (19/01/2018, 22:11) Like (0) Dislike (0) Reply
    the Government and the BVIAA are taking a big risk in this.
  • i from here (19/01/2018, 22:20) Like (0) Dislike (1) Reply
    As a BVIslander, I am dismayed that the NDP would deprive the people of there airport
  • 911 (19/01/2018, 22:40) Like (0) Dislike (1) Reply
    VINO loves to criticize the NDP government, which is fine. But it never seems to recognize the benefits of Communist rule.
  • Brace up (20/01/2018, 00:03) Like (7) Dislike (0) Reply
    We are brokes. The PS already told us this was happening. If this is a must do there is no other way. People please be prepared to pay up the you know what for everything. You think paying for parking at the airport is ridiculous now? They will charge you for taking a piss in the terminal bathroom. The cost of progress.
  • F f f f f f (20/01/2018, 00:51) Like (0) Dislike (0) Reply
    Url doing . it going cost us more to leave than fly
  • spirit (20/01/2018, 04:49) Like (1) Dislike (0) Reply
    Check out where the man for Tourismlives. The Bahamas with his family. He surfaces whenever these money deals come up. I smell a rat. What use is he to us in the Bahamas. Is BVI the cash cow? We want people living in this territory to represent our best interest. Time for locals living in the territory be given the opportunity to serve.
  • wow (20/01/2018, 07:52) Like (2) Dislike (0) Reply
  • private parts (20/01/2018, 13:31) Like (0) Dislike (0) Reply
    does this mean that the airport will be able to refuse service to anyone?
  • Tafari Zharr (22/01/2018, 11:17) Like (0) Dislike (0) Reply
    Players no that there’s always a price to pay for playing.; someone wins and someone loses; the question is what are we willing to lose; and what we win is it worth fighting for if we lose more than we gain overtime; so timing is of the essence and being able to bargain - who ultimately will hold the power to negotiate and whose leadership will prevail is also what will matter for the future of BVI and preservation of/for our children; what BVI do you want to hand over to your children versus what and who they will battle to make it right if too much go wrong? Twenty years is not forever but forevermore and waiting for a contract to end may become just that! Examining airport hubs and who has ran them and leased them out: and impact on small economies that had old 50 year leases.

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