The Usual Suspects Regroup on St Lucia Airport Redevelopment Project
The on-again, off-again redevelopment of Hewanorra International Airport (HIA) in Vieux Fort, Saint Lucia, is once again consuming the time and attention of policymakers, the business community and the people of Saint Lucia.
There is much justified discussion and speculation, given that this is the largest infrastructure project to be undertaken in Saint Lucia (apart from the DSH/citizenship by investment horse racing facility), amid calls for total transparency, accountability and prudence.
In an address to the Parliament on March 21, 2018, Stephenson King, minister for infrastructure, ports, energy and labour, said, “The current administration intends to bring the airport project back to the gates of execution before the end of this year.”
There has been major concern with regard to financing and successfully positioning HIA operations to compete and remain viable.
There is also much local suspicion that the political directorate is caught up in personal interests that override those of the public at large in the light of recent awards of multiple no-bid contracts to political and personal cronies, allegations of bribery, and material omissions in public statements by the government.
There was an assertion of “probable cause” in a corruption probe undertaken by the previous administration in relation to an earlier iteration of the HIA redevelopment project set out in a letter to the US Department of Justice requesting mutual legal assistance in relation to US businessman Antonio Assenza and promises by the current Saint Lucia prime minister, Allen Chastanet, to “investigate the investigation”.
Assenza and his local company Asphalt & Mining (St Lucia) Company Limited (A&M) were targets of the airport project corruption investigation, while one of the ministers implicated, Guy Joseph, welcomed the corruption probe.
Chastanet said in his recent budget address: “Redevelopment of HIA will take place in a phased manner using concessional loan financing. We are currently finalizing the loan agreement with the Republic of China (Taiwan) for the US$100 million required. The US$15 million a year in airport tax will be used as security against repayment of the loan.”
Leader of the opposition, Philip J. Pierre, replied to the policy statement, saying: “The government has rejected the public private partnership agreement that would have been supervised and monitored by the IFC, an arm of the World Bank.
“All plans for the construction of a modern state of the art Hewanorra International Airport had been finalized by the last Labour government with work about to commence without the government incurring any related debt. The airport would have been leased for a period of 30 years, at the end of which commercial control would revert back to the government of St Lucia. This arrangement had three major benefits: oversight of the project would have been done by a competent agent of the World Bank — the IFC; there would be no additional debt incurred by the government of St Lucia and we would have had a long awaited state of the art international airport.
“Having rejected and cancelled this agreement in September 2017, the government was offered by the investment arm of the Canadian government to enter into a memorandum of understanding to provide all the expertise in designing, financing, constructing and delivering the airport and the north south highway. The project would have been guaranteed by the Canadian government with no need for debt financing by the government of Saint Lucia.”
With the knowledge there was an approved transaction structure for the HIA public private partnership (PPP) already in place since January 2015, Pierre continued:
1. “Why is the government persistent in trying to avoid dealing with reputable international agencies that encourage good governance especially as it relates to procurement rules?
2. “We appear to be revisiting the age of A&M, which is still a subject of investigation by the US Attorney.
3. “When the UWP last governed in 2011, A&M had failed the due diligence test and its proposal to undertake work at HIA was rejected by the Deutsche Bank.
4. “What are the contractual relationships between this government and this company or its look-a-like for the redevelopment of HIA?
5. “The prime minister needs to clarify the procurement methods and whether an open tender process will be used given the size of this HIA redevelopment project.”
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Image: Wikimedia Commons