The Vincentian private sector did not expect the government’s projection that the nation’s first international airport would have been “substantially complete” by December 2014 to materialise.
The EC$729 million Argyle International Airport has been under construction since 2008 and has missed several completion deadlines, including 2011, 2012, 2013, and the most recent — December 2014.
In the Budget Address late January, Prime Minister Ralph Gonsalves said the airport “will be completed this year and ready for operation”. He said the paving of the runway will be complete in June 2015.
Speaking Thursday at a private sector overview of the 2014 Budget organised by the Chamber of Industry and Commerce and sponsored by accounting firm KPMG, accountant Brian Glasgow of KPMG, said “it’s in everybody’s interest to hope and expect that the project is completed reasonably within schedule”.
He pointed out that even the smallest construction project gets delayed, adding that persons who have built houses and have had to deal with contractors and promises from contractors know about delays in construction projects.
“And I think there isn’t anyone in this room who really expected that the airport would have been completed at the end of 2014,” he told the gathering of private sector representatives and media workers.
“On the other hand, it is a project that is so critical to the future of this country that it is in everyone’s interest to hope that it can be completed within a very reasonable time,” Glasgow said.
‘cautious’ private sector
Asked if he was satisfied that the private sector was positioning itself to take advantage of the opportunities that the government says will come when the airport becomes operational, Glasgow said that the local private sector “traditionally has been a very cautious”.
“The private sector in St. Vincent and the Grenadines traditionally would not commit themselves to making an investment unless they are one hundred per cent confident that there will be a definite start date,” he said.
“As we get closer to a definite start date, as the private sector sees more progress, as the paving continues, the river crossing and so on, and the private sector is satisfied that within a reasonably short space of time the airport will be completed and operational, I am confident that we would see more interested response from the private sector regarding investment in the superstructure which is necessary to support the international airport,” he said.
Accountant Reuben M. John, a partner at KPMG, in his presentation, noted that EC$74.7 million, 25.2 per cent of this year’s capital budget will go to the airport this year.
“And you will appreciate that this project, once completed, will bring significant benefit to the state,” he said, noting that the International Monetary Fund said late last year that the economy could grow by up to 3 per cent in 2016 once the airport becomes operational in 2015
John said that the airport will create opportunities for investment in tourism, transportation and other support infrastructure.
No immediate profits
He, however, pointed out that during the initial stages of the operation of the airport the revenue generated “is hardly likely to be able to cover the operating cost”.
“So, that is something that the policy makers would have to address, and I am certain that it will be addressed from a long-term standpoint. An airport investment is a long-term project. It is not a project that you expect to break even in the short- or medium-term.
“… There is s significant capital outlay upfront, and it takes a longer time — the higher the capital investment initially, the longer it will take to recover the cost of the capital. It is natural in any business venture and the airport is like that,” John said.
“And, as a nation, we have to work to maximize the opportunities for economic growth from this project, and be supportive, as far as possible.”
‘When will the airport really be ready?’
Speaking during the Budget Debate in January, Leader of the Opposition Arnhim Eustace again expressed doubt that the airport will begin operating this year.
“Mr. Speaker, when will the airport really be ready? That, for me, is a fundamental question. Why are we making projection after projection about arrivals and these sorts of things? We have not completed negotiations with any airline at all. Why are we making these statements? Why are we giving our people the hope of employment as the airport will contribute to other sectors of the economy and we are not ready? Why are we doing it? I understand the politics. Is that why we are going it? Fooling people?” Eustace told lawmakers.
“There is no way you are going to open this airport in 2015, and you know it. … Mr. Speaker, I think we need to come clean with the people of this country on when we are ready for this airport,” Eustace told Parliament.
“Mr. Prime Minister, I would like when you do your wrap-up — if you tell me a specific date seriously for airport opening, I would accept that.
“You know, as Prime Minister, you are there all the time, you know the circumstances of the financing, and you are not blind. You can see the practical state of the airport. You know that in six months time it ain’t finish,” Eustace said.
Like a lot of people, these accountants are just engaging in wishful thinking when they claim the airport “is a project that is so critical to the future of this country” and that “it will bring significant benefit to the state.” The PM himself couldn’t have said it any better.
On the other hand, Kenton Chance’s excellent photos speak for themselves.
I regret very much that I was unable to be present at this event. Are these persons evangelists of ‘The Gospel according to Gonsalves’? Those who know them as I do will draw their own conclusions.
I would have asked the following question.” Given the construction and future operational costs, including incentives to airlines, what is the basis for the conclusion that this airport project is crucial to the future development of the country? In answering, please state the credible and authoritative present numbers and indicators that lead to such a conclusion, the measures being taken to improve the competitive position of St. Vincent and the Grenadines in Tourism , Services, and Agriculture to enable it to attract movements through the new airport, and the time frame that defines that economic catch all dodge, ‘the long term’, bearing in mind the trenchant observation of the noted economist John Maynard Keynes, ‘ in the long run we are all dead.’!” I challenge them to provide an answer.
I don’t know these gentlemen’s political allegience. What I do know is that most Vincentians — whether they are accountants, lawyers, teachers, or street vendors — are looking at the airport through a myopic lens of patriotism and emotion rather than through an expansive lens of logic, analysis, and evidence.
All politicians in the world take advantage of these primitive sentiments to ram through projects they want (for their legacy, to gain more power and prestige, for graft and corruption, etc.) or to build up maximum political capital that will translate into votes at the next election.
I beg the people who have not recently visited the airport to do so before the next election so they can see for themselves what their patriotism and emotion have wrought.
I also dispute Kenton Chances’ assertion that construction of the airport began only as late as 2008 since there was much preliminary planning, consultation, fund raising, building removal, etc. which began as early as 2005. The PM in his “famous” 2005 speech even said that much research had proceeded his decision to go ahead with a new airport at Argyle. As in any large project, all this preliminary work has to be considered part of the construction process. Similarly, all the work that will have to be done between the full completion of the airport (if this ever happens) and the date the first international commercial flight lands and departs (if this ever happens) is part of the overall airport construction project.
This airport has become a disgrace too the current regime. And why? Well, at the onset of this project, several right thinking people raised concerns about (a) the cost of the project (b) the completion dates and (c) how profitable it would be too SVG. For having such concerns and opinions, people were labeled fools, dunces, backwards thinkers, possessive of a learned helplessness and so on. The insults came from the ULP acolytes left right and centre. Even people who knows nothing about airport development lashed out at people who may know a thing or two. Once u questioned anything you were cussed out. I remember silly comments from the likes of Elson crick, who famously stated that in 2010, people in North America were collecting money too charter a 747, too be the first too land at argyle. Who are these people? How can I get in touch with them? Where are those monies today? UTTER GARBAGE.
I’m not saying that projects can’t miss completion dates, it happens, but I remember when folks questioned the projected completion dates how members of the ULP took offence. Now that we have missed several completion dates, these same people are now singing a new song: it’s now, “well it building and that’s all that matters”.
The ULP (because it was billed as a ULP project) should be ashamed of themselves with this project, it’s now a blight and an embarrassment too them. So much so that the CEO of the tourism authority as of December 2014, could not give us one airline that was committed to land at argyle for an airport the was too be completed since 2010? Think about that for a second, a project that was schedule from completion in 2010, ok let me be generous and say 2012, in 2014 he could not give us any airlines committed too flying into SVG for a projected completion date of 2012
And that is what does get me vex
I’ve always said that accountants can only count money and that’s after they have it in their hands. They very seldom come up with plans to make money. These guys are no different.
It would take many years before Argyle can operate in the black. There is no way Vincentians can benefit from one or two plane loads of visitors weekly. Here is something Ralph and even the accountants can do: Please give the people a dry run of the monies expected in the first 10 years of operation. Who would build a hotel that cannot be supported by the small number of visitors to the island? Right now, only Vincentians visitors from foreign are here twice a year in any number. Guess what? Many have homes or families and don’t need to stay at a hotel.
There are no products to ship out and an airport can only be profitable if the service is a two way stream: Visitors coming in and goods going out. James talked about tri-tri being shipped immediately to the US and Canada and I keep wondering if hell be looking at a tri-tri farm, to supply the market. Banana was the only profitable product from SVG and that was made easy because the same boat collected banana from all the other islands. Thats why I believe all these people are all dreaming in Technicolor.
Let me preface my comment by saying that it is Absolutely absurd that it takes nearly a week to moderate what I write in the Newspaper . I believe that others do not have to wait nearly a week to have what they write published in this Newspaper .
Look there are two Websites where persons can look at the progress of the Airport at Argyle.
Therefore in my opinion , it is exceedingly stupid , to put it mildly , for persons to claim that they did not know that the Airport will be completed this year .
I believe that in the last quarter of this year , the Airport will be open for business . The third quarter will be for Test Flights , and a general ” shakedown of all its various facilities . I am
fully aware of the fact that during the last half of this year , WE , will be able to ascertain , whether the Naysayers are Right or Wrong regarding all the negative things that have been stated regarding the Airport .
I would like to remind those who are hysterical about the Airport , the fact that Mitchell & his
Party were in Office for a long time ; they could have built an International Airport , but History
informs us that the only Airport the built was in Bequia . Now this aint a figment of my imagination . I am well aware of the fact that Elections is due between now & next year , and so we will have many scurrilous comments in SVG , like stating that a person had Ebola .
This rush to judgement is not only asinine , but harms the Nation , regardless of Political affiliation . That apparently does not matter to some , the lust for power is palpable .
The Airport is to benefit the people of St. Vincent & the Grenadines , regardless of which Party they support . As I have stated elsewhere in this Newspaper , This is not going to be immediately bring a lot of Tourists to the Region ; or get a lot of Goods sold Overseas , immediately .
SVG is a small Country , therefore in selling goods Overseas , People will have to form CoOperatives , because of the amount of say , Mangoes ; Breadfruit etc that large Supermarkets will want to buy .
Here is a comment I posted earlier…..
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Developed infrastructure don’t fall from the sky. The building of roads, airports, and power stations are investments in the country’s economic development.
If you build, but do not use it as intended, then, it might become a “white elephant”. However, having modern infrastructure serves to spur economic activity by facilitating internal and external trade and helps to attract foreign investment. Foreign corporations would not come to SVG if it is difficult to reach or if it is inefficient to transport goods in and out of the country. Businesses, both local and foreign, also need a stable and cost-effective power supply.
At the end of the day, the people of SVG need to see such projects as catalysts for a brighter future. They would not automatically bring wealth and it’s true that there might be some short-term pain. However, you need to seize the opportunity and start thinking about ways to take advantage of these investments. Maybe, it’s time for citizens to invest in industries or skills that are related to airports operation, power plant operation, service industries, IT skills, textile manufacturing, other manufacturing, etc.
It’s time to stop the debate over whether the decision to construct Argyle Int. Airport was the correct one. At this stage, nobody, and I mean nobody, in his right mind would cancel it. Anyone who promises otherwise should not be taken seriously and should be deported on the first plane that lands there.
Sure, such projects cost money in the short term; but, capital infrastructure never make sense in short run, be it in SVG or USA. But in the long-term, they enhance the country’s economic development. Whether or not it was a mistake to build the airport is now irrelevant. The nation needs to come together and embrace the project with pride and start thinking about ways to benefit from such investments in capital infrastructure.
Vincentians need to stop looking at this as a political issue. It doesn’t matter which political party decided to construct it. It is not a private airport for any politician, it is the people’s airport! We also need to ignore the voices of the “Doubting Thomases”. These people, and you know who you are, are just turning this into a political issue and are depressing the people of SVG. Okay, I sense that a lot of the posts are from people who don’t like the current government. We get it and it’s your right in a democratic society; but it’s an injustice to mislead Vincentians by preaching doom and gloom without contributing meaningfully to the discussion of a brighter future for SVG resulting from construction of the Argyle Int. Airport. If you can’t find anything positive, then it might be best not to say anything at all. Stop living in the past!The debate on whether to build it has passed. It’s now time for people with ideas to speak up. It’s childish to criticize respected professionals like Mr. John, who is a respected accountant. It’s time to tap such professional advice and get ready to benefit from projects such as Argyle.
Vincy in Canada
Despite all your nice words, history will prove that building Argyle International Airport has been the biggest boondoggle (and we have had too many already) in the history of our beloved country.
You say, “its time for citizens to invest in industries or skills that are related to airports operation, power plant operation, service industries, IT skills, textile manufacturing, other manufacturing, etc.” You must be a young person not to remember that we’ve been there, done that long ago (the 1970s). These opportunities left 30 years ago for cheaper regimes like China and they will never return. The only purpose for Argyle International Airport is to stimulate international tourism which it will never do.
This is not about politics, except for the politicians; it is about evidence-based policy making and from that perspective, the airport is a doomsday project.
Sorry, but I want the best for my country and I strongly believe that there is not one positive thing to say about Argyle International Airport.
“Whether or not it was a mistake to build the airport is now irrelevant”(Vincy in Canada). Well i beg to differ in the words of George Santayana
“Those who do not remember the past are condemned to repeat it “.
Vincentions need to admit that it might not have been the best idea for such a huge project. After we have gotten rid of denial,then we have to ask what then must we do to make the best out of a messy situation. There are a number of messy things but two I will mention. People are thefting out at AIA and nothing is being done, some Cubans being accuse of not being able to work but rather getting rich from us and actually will cry tears when they are going back,not that i have anything against them living the big life here but truth is truth. They were wrong who ever they are at AIA to sell the airport as St.Vincent big break, that opportunities will jump in our laps. They now have to face critisim with our Prime Minister being at the center of it all and he must take every last one that is good like a man.I am not being negative, I am being realistic. Let me say it like this if you do not want critisim do not sign up to be a leader!
None of us as rational thinkers can say tourists come to a country because of an airport, with that being said SVG needs better roads, enhance tourist attractions, better customer care, better every thing. Remember people do not try to stay in airports,instead they try to get from,so when they do can we effectively entertain them.Simply put Argle International Airport is not suppose to Vincentions top Priority for opportunities and development.
Dave from Toronto and Verdical seem to be missing some fundamental points as far as I can see.
The issue of whether or not to build the airport is moot. It is being built. The real issue is that there should be no self delusion that there will be significant benefit flows. Instead there will be significant costs to operate, and to bring airlines. We may find that despite the tremendous costs to build, that may have been the less difficult part. To those who are projecting the benefits will flow, in medium or long term, I invite to rise to the challenge I posed to Messrs Glasgow and John in my first comment. Show us the factual as against the wished for basis of your conclusion. What are your assumptions? I have pointed to what I perceive to be the costs inherent in operating an international airport. I have also pointed to the costs of the incentives for airlines to fly. I have pointed to our very weak tourism profile, which can only be changed over time with substantial investments in product development and marketing. I have said that the financial burden of the airport will be exorbitant, even as it may have to be met. What will be the consequence of that? Are you aware of a small country called Greece? If if these two persons want to be starry eyed and pie in the sky, on the grounds of not depressing Vincentians by preparing them to face the facts, that is a matter for them and a grave disservice to the very Vincentians they purport to speak for.
On the matter of being partisan, they will do well to recall that this was the posture of the ULP Government and supporters from the outset. All of a sudden, as the truth begins to be revealed, they are calling for people not to be partisan? But you know what? I AGREE WITH THEM! I am calling for people to be truthful and realistic, whatever the partisan posture. That is how we will make progress.
Well said.