Argyle Airport debt is $400 million
State-owned companies have enough assets to pay for the EC$400 million in debt associated with the construction of the EC$700 million Argyle International Airport, Prime Minister Ralph Gonsalves told Parliament on Monday.
He told lawmakers and media audiences that these assets are owned by the International Airport Development Company –which constructed the airprot, the Argyle International Airport (AIA) — the firm managing the airport, and National Properties Ltd., a state company in which state assets such as lands and buildings are vested.
“In short, there are enough assets available to pay for the debt at Argyle International airport,” Gonsalves said, adding that anyone who wants to see “the vision” can find it in the speech he delivered at the Methodist Church Hall in August 2008.
The international airport, the nation’s first, is scheduled to open on Feb. 14 — six years behind schedule — with scheduled flights by regional carrier LIAT and other regional carriers, and a number of chartered flights from North American.
In his Budget Address, Gonsalves said EC$35.1 million is allocated to make payments related to the completion of the construction of the airport and furnishings and equipment for its operation.
“Additionally, as anticipated, there is a temporary subsidy for its operation,” Gonsalves said.
He had said in the Estimates debate one week earlier that the subvention given to the Tourism Authority, which is responsible for promoting St. Vincent and the Grenadines as a tourism destination, will be increased by EC$5.4 million.
The growth in this category of expenditure is mainly related to cost associated with the coming to operation of the AIA.
The prime minister reiterated that ECCAA has given the AIA the appropriate certification or approval as an international airport.
He said that as he had indicated, “both on account of the requisite for the publication of the civil aviation charts and procedures of the AIA and the very workings of the international airlines themselves, regularly scheduled international flights will not be available in the first few months of the AIA operations”.
Gonsalves, however, said that LIAT and other inter-Caribbean carriers, and regular charter flights from and to international destinations and cargo aircraft will immediately enhance air access to and from St. Vincent and the Grenadines for passenger and cargo.
“I am sure that the operation of the AIA will prove the politically jaundiced doomsayers wrong again.”
Gonsalves said that the estimated cost of the construction and equipping of the AIA is approximately EC$700 million, but the actual estimated value is in excess of EC$1 billion.
The debt on the AIA is approximately EC$400 million, over EC$300 million of which are on soft loan terms, mainly from ALBA, PetroCaribe and Taiwan.
“They are all inside of the Estimates. They are all there. They are not hidden, you just have to look at the public debt details, which are in the Estimates,” he said an apparent response to Member of Parliament for East Kingstown, Arnhim Eustace, an opposition lawmaker, who, during the Budget Debate, accused the government of not reporting EC$185 million in debt.
Gonsalves said the airport is one of four major initiatives in the field of civil aviation undertaken by his Unity Labour Party (ULP) administration –which came to office in March 2001 — “to address the critical developmental socio-economic issue of air access”.
The other three, Gonsalves said, are the saving of regional carrier, LIAT, and its on-going restructuring and development; the establishment of the ECCAA — in conduction with five other independent Organisation of Eastern Caribbean States nations — as a Category 1 civil aviation jurisdiction, and the construction of the jetport at Canouan.
“Each of these have been contributing positively to the socio-economic development of our country and will continue to do so in the future,” Gonsalves said.
He told lawmakers, that Argyle International Airport, “holds significant developmental possibilities” for the country.
Gonsalves noted that the conservative projection by the International Monetary Fund 2015 Article IV consultation estimated at least a 1.5 per cent increase in gross domestic product in the medium term from the operation of the airport.
“We must, thus, all make the AIA work for our nation’s further development. I have every confidence that the AIA management, under the chairmanship of Garth Saunders, working in tandem with the St. Vincent and the Grenadines Tourism Authority and all other relevant stakeholders, will make a success the AIA.”
The prime minister said he did not intend “to be detained today by providing rebuttals to the mountains of falsehoods, unwarranted and even unpatriotic statements made against the construction and the operation of the AIA by minority elements largely stuffed with political prejudice.
“Even at this moment, even after it has been constructed and is opening on the 14th of February, some of these jaundiced political elements, spurred on by the dog whistle utterances, or some more supposedly respectable personalities, are willing the AIA to fail or are wishing it a tsunami of harm for no reason other than the celebrated fact that ULP government has accomplished a veritable miracle by turning a long-held dream of a hopeful people into an historic reality.”
Gonsalves said the airport is not only the largest capital project to be constructed in the country, but is also “a metaphor, a symbol, an alive testament to what a determined people, properly led and supported by a wave of principled internationalist solidary of friends and allies can achieve.
“The construction of the AIA, amidst all the topographic, financing, managerial and resource challenges, is one to be recorded with justifiable acclamation in the annals not only of Vincentian and Caribbean history but in the development story of disadvantaged nations across time.”
The prime minister called on all citizens to make the airport work to the benefit of the entire nation at home and in the diaspora.
“It is our patriotic duty to ensure that this happens.”
“I invite all of St. Vincent and the Grenadines, including our diaspora to celebrate, when the AIA opens on Feb. 14, 2017, a national event. And, I hope that the opposition members, who have been invited, will come. Let us settle this, once and for all. The AIA is a magnificent accomplishment.”
The prime minister said that electricity cost at the airport will be significant, adding than over a year ago, he signed with the CARICOM Development Fund an agreement for the first phase of a solar electricity project at AIA.
VINLEC, the state-owned power company, is executing the first phase of the project at a cost of EC$2.4 million.
Gonsalves said that additional grant sources for solar energy at the airport are available to supplement this allocation.
The initial phase of the project is for the installation of a 300kilowattw solar PV system.
The aim is to secure solar capacity at AIA of 2 megawatts in shortest possible time, Gonsalves said.
Last week, lawmakers approved an EC$976.4 million package of Estimates of Income and Expenditure for 2017, paving the way for today’s budget presentation.
The package which is a seven per cent increase over the 2016 budget, shows an estimated EC$747.3 million will go towards recurrent expenditure, inclusive of Amortisation and Sinking Fund contributions and capital expenditure of EC$229.5 million.
The budget is financed by current revenue of EC$590.7 million and capital receipt of EC$368.2 million.