Spotlight: 3 major Caribbean airport projects in limbo
Caribbean
Plans for three airport projects in the Caribbean region, all involving private investments, have been delayed due to government decisions and the pandemic. The projects are still on standby and could be tendered quickly or works could resume if there is enough political will.
BNamericas takes a look at these projects.
Dominican Republic: Bávaro international airport (AIB)
The future of the US$200mn airport is still in limbo after the superior administrative court (TSA) sided with civil aviation institute Idac on its decision to suspend the project that was awarded to conglomerate Grupo Abrisa.
Works started in September 2020 after former president Danilo Medina approved construction via executive decree. However, under the administration of his successor, President Luis Abinader, who took office in August 2020, Idac suspended the project because it violated “the principles, norms and procedures established in the current legal system.”
Since then, the company that was consolidated to manage the airport, also called AIB, has attempted to revive the project. The facility could be the third in the Dominican Republic’s east. Yet, all levels of government, including the judicial branch, rejected the project.
In February, TSA rejected an appeal filed by the company to revoke Idac’s decision.
AIB’s defense argued that the suspension violated the principles of public administration as Idac did not have the competence to decide on an agreement signed between the government and the airport company.
But judges sided with Idac, reiterating that the conglomerate has not presented “the relevant documents and technical reports for the continuation of the airport.”
Another argument against the airport is that it is being built too close – less than 50km – to the existing Punta Cana international airport. Several social, competitive and environmental concerns are also at play.
Barbados: Grantley Adams international airport (GAIA)
Although the government has not canceled plans to award a 30-year concession to operate, expand and improve the GAIA terminal through a public-private partnership, it has also not updated the status of the tender process, for which 13 bidders prequalified in August 2020.
At the end of November, the government information service (GIS) denied rumors that the airport had awarded the PPP contract to China. It then provided an update.
“The PPP project is in the procurement phase … With the impact of the COVID-19 pandemic on the aviation sector, GAIA Inc. has been reviewing the structure of the PPP,” it said in a statement, adding that “the 13 prequalified bidders will receive requests for proposals in the first quarter of 2022 when the restructuring of the transaction is complete.”
Under the partnership, the government will remain the airport’s owner, and the private operator will only have the right to use the assets and the right to invest and expand the airport, similar to a lease, for the length of the partnership. The assets will return to the state at the end of the contract.
To pick a winner, authorities have requested advisory services of the International Finance Corporation (IFC).
The Bahamas: Out Island airport upgrades
Uncertainty also surrounds a plan to award a 30-year concession to operate and improve seven airports on the Out Island after the government announced it was reviewing the bidding contest.
In June, the tourism and aviation ministry (MOTA) said it was seeking qualified private partners to update, operate and improve a number of Family Island airports aimed at increasing visitor arrivals and driving economic growth. It wanted to launch the bidding process last year and award the contract by 1Q22, but the tender has not yet been launched.
A change of government happened in September, with Philip Davis succeeding Hubert Minnis as prime minister.
In October, deputy prime minister Chester Cooper said the government “put a hold” on the US$400mn plan to analyze it, according to local site Eye Witness News.
“We want to ensure that what has been done is consistent with the policies of our government. Once we have completed our review, you will hear more about it,” he reportedly said.
The airports included in the PPP airport program are:
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