$300m deal to transform Grantley Adams Intl ‘nears completion’

After four setbacks, a lucrative $300 million deal to operate the state-owned Grantley Adams International Airport (GAIA) is set to be finalised by next month, Minister in the Ministry of Finance Ryan Straughn has revealed.

Straughn told Barbados TODAY that all elements of the proposed public-private partnership (PPP) management contract for the Dubai-Chilean consortium are nearing completion.

In July 2023, GAIA Inc. and the investing stakeholders – the Private Office of Sheikh Ahmed Dalmook Al Maktoum of Dubai and Chilean company Agencias Universales SA – signed a memorandum of understanding (MOU) with the government for a comprehensive investment package.

The PPP is for the investment, development and operation of the airport, a hemispheric hub for cargo, expanded airlift and additional luxury hotel capacity, jobs and enhanced customer experience.

He said: “The government is moving ahead with a few key infrastructural improvements that we are financing. So, right now we are in negotiations in relation to how we will be able to execute that. The talks with the Emirati have resumed. I think we have found a way past the issues that came up, coming out of the pandemic in terms of arrivals and those types of things, given that the targets that we had originally set – obviously, COVID had its impact – and now that we have pretty much exceeded 2019 levels, and the negotiations in relation to the share with respect to profitability, moving ahead, that’s been settled.”

He continued: “One of the key areas that we have been focusing on is, how do we enfranchise the workers who work at the airport directly and indirectly, because, as you would appreciate, whilst the airport has its own staff, there are lots of other public entities that support the work of the airport; and therefore we have been in talks with the unions in relation to how we will be able to create a structure that works with the investor so that all the persons who work within the airport understand very clearly their role as potential shareholders in that.”

Another element is security considerations for achieving category one status for Grantley Adams International. This is a US government designation that allows a carrier to fly to a US destination.

Straughn explained that this would allow Barbados to gain the investment to facilitate pre-clearance in the United States to open the market, allowing passengers from US flights to enter the country without clearance under a common Customs practice.

“The impact of achieving that status upon the operation of the airport would be very different from the current set of circumstances. The discussions are continuing. The TSA [Transportation Security Administration] was recently here to do an audit in relation to all the things that we are currently doing on the areas that we need to be able to change,” the minister of finance announced.

He said that such changes would ensure that from a security perspective, everybody who works in the airport, people who transit the airport, and flights in and out of the jurisdiction, are appropriately scanned in order to meet the highest Federal Aviation Standards.

“So, it’s all coming together,” Straughn revealed, “and I am hoping that before the end of March, fingers crossed – because once the lawyers get involved with the final drafting – I am hoping that by the end of March, if not early April, we should be in a position then to settle the new arrangement with respect to the PPP with the airport.”

Reiterating that the government was not selling the airport, the minister acknowledged that the negotiations have been a “long protracted process”.

However, he said: “But the key here really is to unlock investment by the concessionaire, have a new arrangement in place where workers at the airport have a vested interest in the success and profitability of the airport, government is not selling the airport; we have spoken for a long while about collecting revenues of the aeroplanes going over. We have invested heavily in a Civil Aviation Authority, which will upgrade our capability for radar and ensuring that in recent times, air traffic control and the technology that can be utilised in the 21st century, is there,

Straughn highlighted that there is, therefore, a public safety and revenue-generating factor in the pending PPP deal, which the government wants to ensure complements the entire management arrangement, so that passengers have as good a welcome to Barbados as possible.

He said: “We have done reforms within Immigration. So, as people are aware…we have already started to see some of the benefits of the changes. We now need to make sure that we double the passenger traffic in the airport over the next five years, and we are pushing hard to achieve that. Therefore, getting the investment in, a new deal effectively for the workers, opening up the category one status, upgrading the airport infrastructure as well as the security, is really part of the mix in being able to pursue this important intervention.”

The minister said he hopes Barbadians would be able to see in short order, not just the physical works, but more opportunities, more aircraft coming in beyond peak time that enable full capacity and usage of the airport infrastructure to pay dividends.

Straughn pointed out that Barbados has had a “very” successful intervention from Latin America with Copa Airlines as the country continues to open up air services agreements, as was done with Africa and the Middle East in order to “cover our bases while we enhance what we are doing in the traditional markets”.

“So, it’s really an all-encompassing approach,” he assured, “that will be able to help…that the money that is being spent, can actually generate more returns for the country and Barbadians by extension.”

emmanueljoseph@barbadostoday.bb