Part of the $7.2 million government paid over to the seemingly defunct BVI Airways was used to clear the airline’s debts, Premier Dr D Orlando Smith revealed in the House of Assembly on Tuesday.
“It was spent paying off debts to the bank that provided financing [for the airline] to acquire the two aircraft,” Dr Smith said, adding that the funds were also spent on fees required by aviation regulators and on paying salaries to the airline’s pilots, flight attendants, and ground crews.
“Let me be perfectly clear, the money was not put in anyone’s pockets. No one got rich off the project,” the premier further said.
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.
That, the airline claimed, was because the expansion would facilitate competition from large airlines that are based in the United States.
“There is, after all, one great unanswered question about this whole saga, which is: Why did BVI Airways begin this project when they had to know that we intended the airport runway which would eventually mean competition from larger carriers?” Premier Smith asked.
Dr Smith said he could not answer that question but again assured that his government is still “working with legal advisors to explore the possibility for recouping some of or all of that $7 million invested in BVI Airways”.
Premier’s statement ‘misleading’
But, while the premier was keen to cast blame on the airline, Opposition member Andrew Fahie said Dr Smith’s statement was “intentionally misleading” members of the House.
Fahie reminded members that it was the Smith administration who gave the airline the full $7.2 million although the agreement said the monies were to be paid over six separate payments. According to government’s contract with BVI Airways, each payment was only to be made once the airline met agreed targets.
“There was a schedule of payments for the BVI Airways and they did not perform according to the schedule and they were given all the money [anyway]. On top of that, the airline came back for more money and government was going to give it to them had we not intercepted it on behalf of the people,” Fahie said.
The National Democratic Party (NDP) government had given the controversial airline some $7.2 million to commence non-stop flights from the British Virgin Islands and Miami in the United States. Since receiving the funds from the NDP, BVI Airways has missed all its promised dates to commence the flights. It then laid off its staff; claiming it needed more money to fly. BVI Airways has had a history of financial struggles.
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