Competitive bidding process was done for $100M loan- Premier Wheatley
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The House of Assembly (HoA) passed a resolution giving the government leave to take this loan on Thursday, September 26, 2024.
In a press conference today, September 30, 2024, it was revealed that though not required, a competitive bidding process was entered into to ensure that the best terms and conditions were secured at this time. “The team did excellent work,” the Premier said.
The loan from CIBC will be taken with an interest rate of 6.5% and the VI will have 18 years to repay.
In a first for the Virgin Islands (VI), a Debt Management Strategy was also approved in Cabinet and brought before the HoA. This Premier Wheatley said was done “ensuring that we had a strategy to support the sustainable management of our debt”.
Over $50M for roads, water & sewerage
More than half of the loan amount, close to 54 million dollars, will go towards improving the roads, water and sewerage issues in the VI.
Water has been allocated 8 million dollars, while 3.9 million dollars and over 7 million for sewerage infrastructure in Cane Garden Bay and East End/Long Look respectively. A total of 34.8 million dollars will be allocated for road infrastructure.
Over 31 million dollars will go towards building and improving facilities such as the R.T O’Neal Administration Complex, a homeless residential facility in Long Look, airport and Health Services Authority developmental projects, a national detention centre and technical facilities for the Virgin Islands School of Technical Studies.
Road Town will also be provided with improvement support and a programme encouraging home ownership valued at 6.5 million dollars.
The Premier also reminded that the loan is in addition to the yearly budget which will also fund various projects across the Territory.
Premier Wheatley added, “We look forward to the successful execution of these projects over the course of the next four years.”
Loan not guaranteed by UK
When asked, the Premier said this loan has not been guaranteed by the United Kingdom.
He explained; however, that the VI is a contingent liability for the UK.
“So, if we cannot repay, they have to repay and that’s why they put such strong measures in place to ensure that we can repay our debt because ultimately it is a contingent liability on the UK,” Premier Wheatley added.
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20 Responses to “Competitive bidding process was done for $100M loan- Premier Wheatley”
Whichever way we cut it, an interest rate of 6.5% is high rate ...the total cost of the loan will be $169,897,238 i.e. almost 70 million in interest! Could we not secure a better rate than that????? Asking for a friend.
THE WANNABE ARISTOCRATS PLAYED THEIR GAME AFTER IT WAS EXPOSED IN THE COI SAGA / THIS TIME EVERYTHING WILL BE UNDER THEIR RADAR , BALO MIGHT GETTING SOME HIHMGH RANKING OFFICIALS COMPANY ( HOPEFULLY ANOTHERHIGH WMRANKING OFFICIAL AT BALO ( AKA ) mr PUMKIN , WILL BE THEIR HOST
Let me repeat this.
When the UK offered the 400 MILLION dollar loan it was expected to be charged around 2.5% Per Year.
On $100 Million in borrowing that would be a difference of $5 million dollars per year in interest charged!
$5 million dollars per year which the BVI is missing out on that could go to schools, roads, hospital etc.
On $400 Million in borrowing that would be $20 million dollars PER YEAR we are losing.
Incidentally, this is the amount that was needed for the salary increases....
Think about that!
It was a problem having future generations repay the $400 million guarantee and lower interest rates but it is ok for them to do so at the higher interest rates while borrowing $100m which is much less.
For example, you take out a mortgage to build your house. You should not borrow to paint your house (basic maintenance).
It would be one thing to borrow to build a school; it is quite another to borrow to resurface roads or repair the water distribution system. That should have been an expense in the annual budget.
Instead, fake farmers and fisherman got big grants and friends and family had their credit card bills and kids' college fees paid.