The devastating effect which the COVID-19 pandemic has had on Barbados’ economy has forced Government to change the structure of the Public-Private Partnership (PPP) at the Grantley Adams International Airport.
With the significant reduction in the number of visitors to the island since last year, Minister of Energy, Small Business and Entrepreneurship, Kerrie Symmonds said Government now had to relook the details of the lease agreement.
He made the disclosure during debate on the Grantley Adams International Airport (Amendment) Bill, 2021, this morning.
The PPP will see major renovations taking place at the GAIA to make it more attractive to visitors and to increase the airport’s revenues.
Symmonds said prior to COVID-19 they were on the second phase of the project.
“The project is now in its second phase of the preparation and that is, we had settled in January of 2020 on a structure to the transaction, but along comes a fella called COVID-19 having mercy on nobody anywhere in the world and therefore, the transaction that we contemplated having cannot now be had in the same way because of the very obvious reason that COVID has impacted the financial model that everything rested on,” the minister said.
“And what was the financial model? The financial model was that if you look at 71, 000 passengers coming to the island in January of 2019 and you compare it to 2020 that dropped to 62,000 and then by 2021 we are down to 4000. The major source markets where we draw the traffic from, in January when it is winter [and] cold, those people can’t go anywhere. They are in lockdown in their second wave, or in some cases the third and fourth waves of COVID. Barbados has to deal with a 95 per cent or more fall-off in traffic to the island
“It is unbelievable but the reality is that the structure of the transaction that one is planning has to be fundamentally revisited…”
The minister said this included Government’s initial offer to grant a private entity a 30-year lease to run the GAIA.
“At the time when we had the initial discussions we were looking at 30 years…In the window of the transaction discussions in terms of time, we were looking at 30 years being the life of the transaction. The transaction structure is now being re-discussed so I don’t want to commit to the House the period of time…” Symmonds said.
It was previously announced that 13 bidders had been shortlisted.
Symmonds maintained that the GAIA was not being sold.
“The effort that this Government is seeking to put in place with the International Finance Corporation so as to refurbish the GAIA is in no way related to any sale of the airport. The airport is not being sold. There is no intention, there is no interest in sale. The airport is to be expanded and is to be managed over a concession period which will be set in terms of time and then after that it reverts to the Government and people of Barbados,” he insisted. (RB)