Over a dozen investors have so far expressed interest in a 30-year deal to run the Grantley Adams International Airport (GAIA) have so far answered Government’s offer to any corporation willing to pump $300 million (US$150 million) into a private-public sector partnership, Minister of Tourism and International Transport Kerrie Symmonds declared Wednesday.
He said the concession was necessary for the port of entry to be redeveloped in Government’s bid to make Barbados a year-round destination and better accommodate an expected influx of visitors. The deal would also be expected to boost the airport’s contribution to the state’s coffers.
But Government does not have the millions required to expand and improve the airport, which should begin in early 2021, the Minister insisted.
“Over the life of the concession, which will be 30 years, there is an intention for there to be ($260 million to $300 million) US$130 million to US$150 million being invested in the airport in terms of expansion and development over the period,” Symmonds said.
But for the concession’s first four years, the new operator must spend no less than $108 million (US$54 million) on “a number of initial fundamentals” that cannot be compromised, he said.
Government is to retain ownership over the three decades, while the private operator will only have the right to use the airport assets and the right to invest and expand the airport, similar to a lease, for the length of the partnership.
At the end of the public-private partnership, the airport assets are to be returned to Government, he said.
Officials are now in the request-for-proposals phase, which is open to local, regional and international investors.
Declaring that there will be a rigorous selection process in which those who put forward proposals would have to meet a number of criteria, Symmonds gave the assurance that the redevelopment project would be done in the most “transparent and committed way”.
“I want to begin by giving that assurance because I do know that investors on a journey of this type obviously must be able to [have] confidence in the process,” Symmonds told a half-day local investor conference at the Lloyd Erskine Sandiford Centre on Wednesday.
So far, 14 companies have expressed interest, some of which have come from as far away as the UK, where the pitch was first made earlier this month during the Global Airport Development World Conference in Dublin, Ireland.
The International Finance Corporation (IFC), the private sector arm of the World Bank Group, is offering technical advice to the GAIA to help pick the best-qualified operator through the tendering process.
Symmonds pointed out that when the new airport was built in 1976 to replace the former Seawell Airport, its carrying capacity in the arrivals or departure terminals was for 1,200 people at peak time. But, he said, it was now possible on any given day in the winter season for there to be up to 1,600 people at any time between 1 p.m. and 6 p.m.
“It makes for an unbearable experience in terms of the comfort of the passenger,” said Symmonds.
He said there was no doubt that the redevelopment project would take place since it was needed for a long time, but insisted that Government was not in the financial position to do it.
The Minister told reporters: “So now that we have come to crisis stage in my view, the country really can’t afford to do it because the Government is not in a position for argument sake, to go and get a loan.
“So the reality is there is only one way of doing this, which is (to) go to the investment community and say to them…‘operate this for us and put some money in it over a period of 30 years and you will have a chance to have a return on your investment.”
Symmonds reeled off a laundry list of the Government’s expected improvements under the first four years of the concession, including a second-floor departure area with at least three boarding bridges and space for more shops run by small businesses. He also identified improved catering for both staff and travellers and an upgraded administrative space to comfortably accommodate all the related departments including port health.
He said while it was not difficult to sell brand Barbados during the winter season, the same could not be said for the summer period and this redevelopment would change that.
The Tourism Minister also told the potential investors at the conference that with approximately 1,300 new hotel rooms to be built over the next three years, an expected increase in conference facilities and the hosting of some major events, the airport’s development is critical.
He said he saw the expansion of the GAIA as critical to increasing its revenue and helping to make the country more competitive and becoming “an exemplar of what this type of business should be in the Eastern Caribbean”.