The Office of the Auditor General’s recent report about the controversial BVI Airways deal has uncovered that global financial accounts company, BDO, had warned the former National Democratic Party (NDP) government against entering into the $7.2 million agreement with the airline.
But, according to the Auditor General’s January 2020 report, the document containing BDO’s advice was not even presented to Cabinet when they decided whether to enter into business with the airline.
Government had commissioned BDO back in January 2015 to assess the merits of BVI Airways’ proposal for the NDP government to fund the venture to commence commercial flights between the BVI and Miami in the United States.
BDO concluded that the proposal required governemnt to assume the financial risks while ‘guaranteeing BVI Airways significant returns’.
The accounting company said government would be taking on a “significant liability risk by signing a revenue guarantee contract with the parties that apparently lacked relevant operational experience”.
And while noting that the age of BVI Airways’ aircraft would likely lead to “greater maintenance cost”, BDO advised the government not to proceed unless all the issues were rectified.
“None of the above recommendations by BDO was adopted,” the Auditor General’s report said.
When the decision documents were submitted to Cabinet for the approval, the Auditor General said, “the BDO financial assessment report that recommended changes for a more equitable arrangement was not included in the papers presented to Cabinet”.
It is not immediately clear what government department directly commissioned BDO.
But, indications from the Auditor General are that correspondence between BVI Airways and government largely went through the Office of the Premier, and the Ministry of Finance — both led by former Premier Dr D Orlando Smith.
The NDP government gave 7.2 million of taxpayer dollars for the airline to commence direct flights between the BVI and Miami, USA back in 2016.
However, operators of BVI Airways missed all of its promised dates for the commencement of those flights. And by July of 2017, the airline laid off its staff; claiming that it needed more money to fly.
After roughly three years, a criminal probe has now been launched into the controversial BVI Airways deal.
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