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BVIAA hires Canadian company to recruit airport investors

The BVI Airports Authority has signed a contract with a Canadian consultancy company called WSP to recruit investors for the Terrence B Lettsome International Airport.

Managing Director for the Airports Authority, Denniston Frazer did not disclose how much government is paying for WSP’s services but noted that the entire process was ‘going well’.

While explaining the deal with the Canadian company, Fraser said: “They are going to be basically inviting bids from three or four persons to operate the airport as a concession.”

“We would have investors turn in bids to finance, to build, and then operate the airport for a number of years. So, all of that needs to be negotiated and worked out once we come up with bidders,” the Airports Authority boss told BVI News.

Local government is seeking to extend the airport’s runway from 4,645 feet to about 7,100 feet.

Other plans include developing the airport’s terminal into a modern facility.

The entire project has an indicative cost of a quarter-billion dollars ($250 million).

The Premier Dr D Orlando Smith said in exchange for their investment, the government may hand over control of the airport for at least 20 years.

Copyright 2018 BVI News, Media Expressions Limited. All Rights Reserved. This material may not be published, broadcast, rewritten or distributed.

41 Comments

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  1. Unbelievable says:

    More secrecy. Who are the principals in this company,what is their prior history and track record and how much is this costing ?

    • Albion says:

      WSP is actually a pretty well known company in this field – they operate in 40 countries, and have around 36,000 employees globally. Just Google the name: https://en.wikipedia.org/wiki/WSP_Global

      It’s not unusual for Governments to use specialist firms to seek investors in niche fields like infrastructure management. Normally they are hired on a commission basis (so if they get investors, they a percentage; if they don’t find any investors, they got nothing).

    • Lodger says:

      Wsp.com big reputable company

    • All Baloney says:

      If we turn over our airport to foreign investors, they will certainly charge higher landing fees and other fees to recoup their investments. Have the ministers conducted a study to see how much additional fees tourists will be willing to pay to arrive and depart? Or, will the landing fees replace the current income we are receiving thus leaving us with no income?

  2. vick says:

    as a taxpayer,i need to know how much this consultancy will cost us.

    • $$$$ says:

      LOL! What taxes do you pay? You people are hilarious!! The bulk of Government’s revenue comes from Financial Services and Tourism via their fees so stop with the foolish buzz words. It’s about time the Government sought professional assistance and move the Airport in the direction of getting investors on board instead of making it another bloated government project that would go nowhere. If they had professionals involved with the BVI Airways BS we wouldn’t have been looking like Clowns of the Caribbean today.

      • voiceofthevoiceless says:

        @ $$$
        “The bulk of Government’s revenue comes from Financial Services and Tourism via their fees so stop with the foolish buzz words”.
        I consider this an affront to all the hardworking men and women who pay payroll taxes, work permit fees, NHI, SS, other governmental fees. How dare you trivialize their contributions? It does not matter if it is 2 cents…Their contribution is still necessary and useful. Right now Tourism and FS revenue is down big time so who do you think is at least keeping this country afloat?

        Ok then…

        • $$$$ says:

          You can get all emotional if you want, but facts are FACTS! The Government brings in around $300 mil annually of which around $260 comes from Financial Services and Tourism directly via fees, not NHI and SS. What ‘other’ Governmental fees you’re talking about? You all see people in other countries that pay real taxes talking about being taxpayers and jump on the bandwagon. Taxpayer this and that, we elect Government to govern and lead and have elections every four years if we are not happy.

          • voiceofthevoiceless says:

            $$$$

            Ok my Bro…Sounds like you are in support of more taxes and fees so guess what they will come and you know why? The revenues are down for tourism and FS but expenditures are increasing so believe me they are coming.Then when we got those loans from the International organizations they would have strict requirements like VAT tax, job cuts etc.

            Tax is the only solution for this Government anyways. So why not.

            Frown on the 40 million un-audited figure which could well be more than than if it was audited. Bottomline a good percentage is our money and we demand accountability but they just want to spend spend spend with zero accountability and zero transparency. That is unacceptable and unsustainable. No wonder we are where we are now. Value the hardwork Bro.

        • @Voice says:

          With Tourism and FS revenues down what is keeping the country afloat? Please tell us.

          I agree with $$$$, people complain too much and we don’t pay s- -t in taxes compared to other places.

          • voiceofthevoiceless says:

            So who do you think work in the Financial services and Tourism industries? Not the same people who pay their fair share in taxes? Or do these industries work by themselves? You think it is easy work doing these subservient tasks?

            Ok you want to pay more taxes so they could have more money to waste…Go right ahead…How about more accountability and transparency first?

  3. NDP will never learn says:

    I have concluded this NDP Government will NEVER EVER LEARN- they take the people to be fools- so elections are the only option to get rid of this government- better stated outfit- with zero vision- zero common sense!

    • WELL says:

      Why the PREMIER do not focus on the recovery first . I think that the AIR PORT can wait. MR PREMIER please stop spending money stupid and spend it on the recovery.

      • @ Well says:

        Let’s keep waiting while the others in the Region continue to eat our lunch and we continue to make everything about politics. Sometimes I wonder which world you guys live in if you cannot see what is happening as a result of people complaining about every single thing the Government proposes. The place is still a muck and we are losing out big time. If we can get reputable investors in to spend the money upgrading the Airport and can move forward why not? If they do not see it feasible to invest then we move on to something else, but we cannot keep saying wait wait wait, wait for what again?

    • BVI says:

      And who would you replace the NDP with? We need more legislators like Mitch Turnbull. We need honesty and integrity and God fearing men. We don’t need men who care only about self interests and special interests.

  4. Waste says:

    You know when you look at the fact that we have to now spend money on a airport that was constructed 15yrs ago.

    I really dont know how people can give the VIP the time of day and ask for knighthood for its former leader.

    These two parties are really something else. And what is there now is not even value for money, no vision.

    I wander how some of these politicians really are able to sleep at night doing these type of Bullsh..t to the country and its people.

  5. 400 year generation Native says:

    It is not common practice for an executive, legislative or judicial branch of government to disclose its daily political and or business transactions to the general public.

    Though all of us would like to know, there are some things we just cannot know.

    That does not mean that our government is non transparent or is not responsible in it dealings with the international world.

    It is known that there is none on the horizon that appears electable today that will do a better job at governing.

    It is said, let those who are charged with the progress of this nation execute the responsibilities of their office to their fullest knowledge and intellectual capacity possible.

    Let it be said from a four hundred year generation native, this government is no worst than previous ones, and none who wishes to be an elected official is actually of and for country and people first, but rather for self and the procurement of economic wealth.

    • voiceofthevoiceless says:

      @400 YEARS

      We are not asking the Government to divulge all the information of the contract but at least tell us how much it will cost us. So far we have spent millions on consultancy and soft costs and that does not include the nearly 8 million to BVI Airways and we are yet to see any evidence of airport expansion.

      Yes we do need to know the costs

  6. Ning says:

    Wow! The spinners are out in full force today. LOL

  7. Sense says:

    Can somebody put some common sense into these men head? Every one can see why they want to borrow the three hundred mil. Pounds. They care nothing about the schools and other ports of entry. Which of those big airlines will come to this country? At times the traffic is so slow for the small planes that they give less flights. St. Thomas and Puerto Rico are so close and with good landing range. Are the premier and his deputy willing to get rid of the cays just for bigger private jets? That is all there is to it. Time for the mother country to have a say in this foolish plan.

  8. Sam the man says:

    Lets pause for a moment….The No Direction Party can’t even repair the countries Fire stations after 7 plus months – fact. It still presides over poor workers in West End ferry terminal operating under a tent – fact. The roads are shambolic, the sewage flows through the streets, the schools still require significant investment, the beaches and much loved tourist destinations still look like war zones, derelict cars still litter the street. But what do they spend money on? ….an un needed airport and runway expansion! I rest my case the BVI has got absolutely no positive future unless someone else leads leads with vision, integrity and with the best wishes of the people in heart not their own self aggrandizement and personal profit….

    • Louis says:

      One doesn’t have to wait for the other. Are you saying Government should focus on one project at a time? So the cruise pier, ferry terminals etc. should wait until ALL schools are fixed? Do you realize how stupid that is? There are priority areas across all Ministries/Subjects and projects can be carried out simultaneously with the proper planning and management. It doesn’t have to be an either/or situation, the Airport works can move forward without impacting the rebuild of schools, roads etc.

      • Reality says:

        “Proper planning and management” come on Louis do you actually live here? Since when did this government ever do this!!! It’s a question of priorities Sam the Man is 100% right so many more important things to be focussing on rather than this “white Elephant”

  9. Diplomat says:

    The upgrade of air and land sides of Terrance B. Lettsome International Airport is really a “Done Deal.” It is like cream; it keeps rising to the top regardless of other priorities. Ok. Apparently, nothing is going to stop this passion for upgrading the airport. Nonetheless, why all the secrecy about the consultant? Are there national security issues? Are there proprietary information concerns? This is a routine procurement so there should be no reason(s) for not releasing the information to the public. The public, some elected officials,…….etc just went through all the secrecy about the Recovery Agency. No lessons were learnt?

    What are the core requirements of the contract? From which airports will direct flights be provided? How long will the build-operate-turnover be for? Will taxpayers have to subsidize airport operations? What return on investment will investors be expecting? How was government going to fund the upgrade before? Did government advertise a contract before having the secure funding to award it? Was government exercising the contracting community? Was not the $7.2M giveaway to BVI Airways intended to provide a 20% return on investment over 3 years? Was this consultant contract awarded by HOA? Did the Opposition know about this?

  10. Bystander says:

    There is not, and will not be, enough traffic to make this a viable project. Sort the ferry connection out to STT, and lease a dock by the airport there. It will cost a fraction of the money. Use what’s saved on infrastructure the BVI actually needs like functional internet, roads and schools and high quality education.

    • @ Bystander says:

      The ferry thing will only work if Government had the cajones to do what is being done in the USVI. Government purchases the ferries, provide oversight and contract out the actual service to a ferry company who has rules to abide by, one slip and you’re gone! That will never happen here so keep dreaming about this ferry nonsense. As long as ferries are owned by the current folks who are far too blind to realize they all cannot profit by competing in the current manner, it will only get worst. I can bet my last dollar that if that Airport is expanded at least 2 ferry companies will fold.

      • Bystander says:

        @Bystander; that’s very interesting; I didn’t know that about USVI. It sounds like that approach might work here too. Where I don’t agree is that the fact the BVI Government can’t manage to supervise a contract properly is a good reason to extend the airport at vast expense, and where I remain of the view there is insufficient traffic.

        The air traffic will only reduce further if the BVI stays in the physical mess its in, with terrible internet, education and roads.

  11. Deh Watcha says:

    If the government is inviting tenderers to finance, build and operate the “airport and expansion?”

    Why are they still budgeting $250mil towards it.

    This sounds like a Design Build and Operate project (DBO), where the successful investor will recover his investment and profits by the operation of the facility over a number of agreed years.

    Or am I reading the article wrong?

    • Google says:

      They had it as a line item in the first draft of their recovery plan, I won’t say it was ‘budgeted’ for. The provision was made for it I guess, but you do raise good points so let’s be sure to keep on top of things as they progress.

  12. voiceofthevoiceless says:

    BTW I think it is a great idea to hire a Private firm that has the requisite expertise to find suitable investors for this very expensive and important project. i must admit that timing is an issue as they are far more pressing concerns to deal with but I must give them credit for admitting that they clearly do not have the requisite time and expertise to seek out investors and negotiate a proper deal.

    What is just as important is that the Government must now heed the advice of those high paid consultants and allow them to do their job.

  13. Changing Paradigms says:

    Foreign Investments are required- timing questionable? Be that as it may.

    As one of our street intellectuals, only one question should be asked about any investor(s) willing to participate in our progress.

    Would you now or in the future be willing to allow your workers to gather and form various “Workers Unions, particularly if they experience unfair treatment by the operation” in their accepted industries?

    Why is this being proposed? Canadians are very conservative. Canadians corporate enterprises are very “respected” for crunching numbers in business, however, “numbers can become very numbing if the human condition is not taking into consideration.”

    Example of this- is how the recent new comer- Canadian enterprise and others, went about treating their employees after the deadly and devastating hurricanes. Deplorable! Their business positions were all about the numbers (Profit/Loss and Opportunity Cost); as a consequence of the human devastation that ravaged our country- keep in mind- this had nothing to do with how we as a people were/are fearing through the unprecedented and deadly devastations of our people and our country.

    The former majority shareholder contribution was/is always welcomed, because he acknowledges his humble beginnings in the Virgin Islands and acknowledges his human-side to his success.

    Corporate responsibility at a time of need should let us know the type of business we have vetted to support and accept to become a part of our community and progress.

    One company, however, (sure there are others) that has been exhibiting their corporate responsibility- that company is Caribbean Cellular Telephone Ltd (CCT Global Communications). This company has (and is) proven that they are willing to contribute for the long haul in our country. (IOO) this goes whether we dislike them or not; they might not get everything right, but the fact that they are trying to correct some of their past transgressions is a testament and welcome step in the right direction.

    Make no mistake about it. Foreign investments are very well needed for our country to move forward. However, “we must look within- before moving outward.”

    We have untapped and relatively “almost still virgin” (secrets- humor) resources of: sun, sand, sea, history, pride, and the untapped human potentials to make it all work for the greater good, progress, and success of our country.

    Footnote: Our contributions are to make us think.” Typos are sometimes made because we do have lives and sometimes we write on the move, but we as Virgin Islanders- Locally and Internationally- can reshape the present and future direction of our country by contributing whatever and wherever each of us see it fit to do so. Positives or Negatives are only degrees on the same pole (Zero point= balance [-1, 0, +1]- THE WHOLE WILL DETERMINE LIFE OR DEATH OF OUR COUNTRY’S PRESENT AND FUTURE COLLECTIVE OUTCOME.

    Mr. Colin O’Neal and Mr. Jerry Ferrara step up for country; don’t ever think your investments are secure without the greater good. We all are at stake. POINT BLANK!

    Respect to Dickson Igwe and Alred Frett on their recent contributions to our online-net outreach.

    There is untapped hope yet. Political Observer (PO), where is your continued contribution to the numerous discussions taking place. Please don’t lose hope with our people; it took over 1200 years to get to where we are today; and although it may not seem like progress, our few years on this earth is but a drop in our progress, so maintain your presence.

    “Let us not blow it with this new start. And it starts with getting OUR POLITICS RIGHT.”

  14. E. Leonard says:

    Public Private Venture (PPV/ Public Private Partnership (PPP) is an option of funding the Terrance B. Lettsome International Airport (TBLIA) runway extension and modernizing the terminal. However, though the third party (investor) may provide the needed cash, there is still an opportunity cost to the territory.

    The territory will have to turnover the airport revenue stream(s), ie, landing fees, departure taxes, security fees, restaurant, retail store rentals, parking lot fees…….etc to the investor so that it can recoup its investment plus profit. Investors require relative safe investments that yield at least a minimum return on investment (ROI).

    From the outside looking in, see at least 2 challenges, ie, funding for TBLIA runway extension and terminal improvement and passenger load factor (PLF). Commercial aviation has to 2 primary revenue streams, ie, passenger and cargo. The question will passenger traffic yield enough revenue to meet investor minimum hurdle rate; typical hurdle rate is 20%.

    Further, in all transportation modes, plane, ferry, bus, train……etc PLF is a critical metric; it is simply capacity utilization of available seats; number of available seat used by paying passengers( the formula is Revenue Passenger Mile/Available Seat Mile). Moreover, the aviation service business is labour, capital, and safety intensive with razor-thin profit margin. With every take off and landing, airlines have a fix cost or Breakeven Passenger Load Factor (BPLF).

    To stay airborne, airlines have to operate above the BPLF; they will not start a route or continue on a route unless it can least operate above BPLF. Is the traffic there to support non-stop flights from say Miami, Atlanta, London, New York, Toronto, Paris…….etc to Beef Island. The PLF is applicable on both legs on flight, ie, Miami-Beef Island-Beef Island-Miami.

    • Manda School Grad says:

      Geez som bred mon! Passenger Load Factor, Passenger Load Factor, Passenger Load Factor……….etc. Meh hed spinning. If the runway is extended, would it not attract major airlines to start direct flights from the US to Beef Island? Would not this make the territory more competitive in the tourism market? Would it not make us less dependent on St. Thomas? If an investor is footing the bill what is the big deal? This would free up $250M to spend on other projects, in tit?

  15. Good Move says:

    While the government is doing this, please ensure that investment is occurring in land sea based activities of places to go and things to do.

  16. H Turkey says:

    Why? This is not a priority.

  17. Reality says:

    Wake up everybody there isn’t a need/requirement for this …it’s a desire/want which will generate so many opportunities for the usual kick backs to NDP members – the fact that it’s over the top doesn’t matter – look at the hospital – far too big for an island this size!!! Much of it isn’t even used….I just wish ministers would focus on the important stuff – schools, utilities, sanitation, beaches, roads, infrastructure, ferry terminals etc etc – but they won’t as its not big enough for them to slice a big percentage for themselves ….

  18. Political Observer (PO) says:

    Visitors and residents alike would like the convenience of hopping aboard a flight (a direct flight) in say New York, Atlanta, Miami……..etc and disembark at Beef Island so why is this not a reality. As E. Leonard notes, it is about passenger load factor. The airline business is in the transportaion business and uses a number of airline economics metrics in its operation; passenger load factor, ratio of paying customers to number of seats (it is measured in %) is a core metric. A hotel puts heads in beds to be successful and so too does an airline needs to put butts in seats to get airborne.

    Further, if it were as simple as scheduling a flight from Miami, Atlanta, New York, London……..etc Delta, United, American Airlines……..etc would have jump on it in a New York minute and like white on rice. It is all about the Benjamins. With much research and feasibility study, routes are started all the time but their continuing is a function of passenger load factor. This passenger load factor thing is applicable to all means and modes of transportation; it applies to our ferry systems. In my view, there are too many ferry seats and too few passengers. But what do I know, for they are still operating and must be making a profit.

    Moreover, extended runway and new terminal aside, the challenge of attracting direct flights is about passenger load factor, ie, sustainable passenger load factor. Tourism, together with financial services, makes up the VI/BVI economic twin pillar. As such airlift is important to the BVI competitiveness in the tourism industry. Nonetheless, the desire for direct flights can’t be force fed. Priorities and the practicalities and realities of airline economics cannot and should not be overlooked. The VI as a small locale with a small population is not alone in the airlift challenges, for most small locales share the same challenges.

    As fellow blogger Eagle and Buffalo always ends his/her blog with: Let’s lead like eagles, not careen off the cliff like buffaloes. Let’s make the VI a must see, top destination and visitors may not mine a scenic and comfortable ferry ride or a connecting flight to get to paradise.

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