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Upper House approves financing for airport redevelopment project

Contact: Shannon Lebourne

Wednesday, February 9, 2011 – The legislative framework to facilitate the financing of the Hewanorra International Airport Redevelopment project has been approved by the Upper House of Assembly.   

The $US140 million project will be financed by BB&T and repaid through the introduction of a $US35 Airport Development Charge (APD) which will levied on all travellers flying through the island`s two airports.

During debate on the Airport Development Bill in the Senate last week, the country’s Tourism and Civil Aviation Minister Honourable Allan Chastanet explained that the financing arrangement is designed to inject foreign investment directly into the local economy while at the same time not increasing the public debt.

“This loan will help reduce the debt burden to the country because it is a project where we have sought new financing to pay for the loan through the financiers BB&T ; this means that we have created a new revenue stream to pay for the project.

“I have heard several people  say that this is money that the government is loaning and that government had an option as to how the money will be used. The loan will be paid by a tax which will be paid by the people who use the airport facilities. Currently, almost ninety-five percent of the people going through the airports are tourists so that the vast majority of the loan will actually be paid for by the tourists.”

Minister Chastanet says there are contingency plans for the repayment of the loan in the event that tourism arrivals to Saint Lucia decline.

“Built into the loan amount is an extra amount which will account for any fluctuations in the arrivals. The projection for the amount of the loan is assuming a 2% growth in arrivals annually over a twenty year period.  To put that into context, we grew over 10% in 2010 . For the last fifteen years we have grown at a pace of 2% so we have taken the historical number and increased that amount to collect twenty percent more than what is required on a regular basis to finance the loan. At the end of the project if we have beaten the objective, there will be a sum of money remaining which will be dispersed to either SLASP or the government of Saint Lucia.”

Now that the legislative framework for the project has been approved work on the much talked about redevelopment is expected to begin in earnest.

Minister Chastanet has given the assurance that government will ensure that the interest of Saint Lucia is protected throughout all stages of the airport redevelopment.

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