BVI News

Premier: Taxpayer $$ also used to pay BVI Airways’ debts, no one got rich from airline

Premier Dr D Orlando Smith

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.

BVI Airways/Gov’t contract: Scheduled dates when the gov’t was to pay portions of the $7 million wasted on BVI Airways.

“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.

Excerpt from government’s 2015 agreement with BVI Airways.

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  1. Hmmmm. says:

    Lock his old backside up!!!

    Like 4
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  2. ndp heckler says:

    Somebody need locking up

    Like 20
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    • Ms Smith says:

      If an audit and criminal investigation were ever needed it is now!

      We need to get to the bottom of this before the elections. One of the c———- could be in on the take.

      Doc’s logic is clearly intended to de——. He said they failed because of the runway extension BUT there is no runway extension and very little possibility of one. Besides, Doc was the one who made the decision to invest in BVI Airlines and has simultaneously been blindly promoting a runway extension. If Orlando Air failed for the reason that he stated then it was his fault for promoting a runway extension.

      You can’t have it both ways Doc. You failed. And you have now l–d to us with your cover up story.

  3. Political Oanserver (PO) says:

    “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.” Look as if the Premier is blaming BVI Airways, a bruk and defunct airline. However, the blame is squarely on the shoulders of the NDP government. It appears as if little to no due diligence was done; a 3rd form student googling BVI Airways would have hit the pause button based on his/her findings. So many questions?

    Why was the $7.2M payment front loaded instead of payments made in 6 installments as outlined in the agreement? If the payments were to be performance-based, why were payments made if the targets were not met? Since taxpayers paid for two planes, where are the planes and when will the BVI be taking custody of them? Did BVI Airways see the NDP government as an easy prey and rolled it for $7.2M? Did the opposition ringing the alarm bell stop the BVI Airways from picking the taxpayers pocket for more cold cash? Should the negotiators on this fiasco be banned from negotiating on behalf of the taxpayers? Who was on the negotiating team? Do they need to be cat-o-nine tailed? What was the role and responsibility of the HOA, if any, in this broad daylight fleecing? In the history of bad deals, where does this one ranks? 1st.

    Like 21
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    • Lodger says:

      I believe the planes were leased by BVI Airways from their owner. So they would never have become our property and its very questionable whether $7.2m would have been enough to buy them as well as all the setting up and running costs.

      Like 11
  4. Haha says:

    NDP the best choice for the BVI =suicide

    Like 15
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  5. Shock Wave says:

    Hon. Premier please dissolve the House of Assembly from talking muck about plane. Please be gone along with your cronies!!

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  6. scratching my head says:

    You mean that even after we were damaged by two hurricanes we still made payments to these people. You can’t make this stuff up even if you try. And the bald head minister is worried about people saying they are corrupt. WOW.

    Like 19
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    • @Scratching my head says:

      If your car was financed by the bank and it was damaged by a hurricane or something else, you still have to make monthly payments back to the bank even if the car is gone.

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  7. Bob's Burgers says:

    I had really expected better stewardship from this Doctor’s leadership, and expected him to go down in history as one of our best leaders. But he has disappointed me. He is too weak and meek and I don’t think we will find a weaker leader anytime soon

    Like 15
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  8. Wow says:

    With all respect Dr.Smith, Of course it went into pockets may not be yours but it did end up in pockets and it wasn’t the BVI’s pocket. You guys loose 7.5 million dollars and now looking to back it up or make it seem right ??Utter nonsense!!!

    Like 16
  9. Rainbow says:

    Do not insult the intelligence of the people of this territory. Every last one of you need to be in a cell. Government workers can’t get an increment and you bold face to say that you ‘risk’ 7.2 mil?!

    Like 15
  10. Consultant says:

    And see what NDP Red consultancy list looking like. I’m so ashamed

  11. Whats up Doc says:

    Doc just told us we lost 7.2million because of his plans to extend the runway! But didn’t Doc make the decision to invest in the airline AFTER he announced his plan to try to raise money for the runway extension? This defies logic?

    What’s up Doc?

  12. duck1951 says:

    Before transacting a a deal with this airline , the latter should have put up some type of collateral as a safeguard ( a standby letter of credit so that in the event of non-performance the Government would at least recover some of these funds Same thing happened with Peebles when the original contractor went belly up. When you go to get a loan in a bank you must have some back up. Those in leadership should know this ! This is stupidity !

  13. Hmmmm says:

    Precisely why you do not vote for a politician who is a medical doctor. It is a sad lesson for BVI locals.

  14. Nick says:

    20 miĺlions spent on consultants fee and still give 7 millions to a bankrupt airline conpany.

  15. Well says:

    This is the person whose name is to replace Peebles Hospital.

    Like 1
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  16. Hah says:

    The Premier have the BVI looking like fools. Not only did he pay these guys for nothing he wrote a letter to the US lobbying on behalf of BVI Airways who in turn left him high and dry. Investing in the Braithwaites would also have been a risk but NDP had no intention of investing in their own. Somehow I dont even think the lesson was learnt so we are doomed to repeat this blunder again. The original Pier Park deal was heading in this same path but we dodged a bullet but we ended in a ditch because the alternative was millions overspent.

  17. Brad Boynes says:

    @Nick….I don’t know

  18. Doc soup says:

    But the Doc said the airline failed because of his decision to try to extend the runway. So he should be held accountable.

    And since when is $7.2 million not a lot of money? The doc may not have gotten rich from the investment but did he receive any payola? Did anyone get payola? Why did the doc accelerate the payments to the airline? Why did he spend the money knowing the airline would fail because of his runway extension?

    So many unanswered questions. Shouldn’t these be answered before we vote?

  19. Really? says:

    Ok…..with the intentions to expand the airport wouldn’t the Government had known the effect on viability? And rather than stagger the payments as the agreement states gave it all in one go. Please… MAKE THAT MAKE SENSE!!!

  20. Real says:

    this articles is public knowledge all the politician in the House of Assembly know this. The government need to simply tell the people they were defrauded by scam artist. No fault of theres and currently retreiving the money.This matter is an ongoing matter in the District court of New York.

    These politicians are sickening just in the house playing polotics. Trying to score polotical points. Andrew always in partucular always acting like he so clean how he tend to forget that Bi-water was a company that defrauded us the same way they did not had no money but contract was signed and money paid.

    Like 1
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  21. He need licks says:

    Another reason the NDP keeps down the locals. The Braithwaites were perfect candidates for the government to invest in and they choose to get their eyes digged out by a company that left the BVI owing BVIAA a $100,000. Dr Smith you and all your cabinet members need licks. Fahie warned yall from the get go

  22. hmm says:

    So Dr. Smith you’re telling us nobody got rich off this deal should make it any better for the tax payers of the BVI. Nobody got rich but we the tax payers lost $7.2 million like it was a coin in a fountain. Dr. Smith you sicken me to my stomach mehson

  23. Good grief says:

    It is truly horrendous what this man is saying about this deal entered into by this government with these people who were essentially handed 7.2mill of taxpayers money and there is absolutely nothing to show for it. This man is saying the moneys were spend on among other things, salaries for pilots, ground crew and flight attendants – for an airline that never made one flight between Mia and EIS or anywhere else how the france does that make sense??? Based on what he has admitted, 7.2 mill flushed down the toilet by this government. The planes and the men on the other side of the deal have vanished into thin air, and we are now being asked to accept this as a mistake, suck it up and see our way to voting these suckers back in. LOL!! Not in a million years! Sorry! No!

  24. Willy says:

    Dear Lorna, I know you read BVInews. On behalf of all taxpayers, Please hit your husband a palmy to the back of his head. Not too hard though. Thanks in advance.

  25. @Wiilie says:

    What is a palmy? If she hit he and he put some fists on she, they will lock he up. Well, just my imagination for Doc is too nice a guy for that. That why every body step all over he.

  26. 7 Deadly Sin: Fox sin of Greed says:

    I understand from sources those colonizers only got 5 million. One your own SOLD YOU OUT the worst of the worst. Vile person.

  27. island man says:

    island man tax money bvi people especially those selfemployed do not pay much taxes or maybe no taxes at all because how does the tax collectors knows how much how much money they are making. They don’t know for sure they just accept what the person pay them so im saying most of those taxes they are talking about are from expats taxes and thats how they help to develop the bvi.

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