It’s about time. After more than a decade of bumbling attempts to expand the Terrance B. Lettsome International Airport, government is finally taking the proposal back to the drawing board — and re-starting it the right way.
For the first time, the BVI Airports Authority is publicly requesting proposals for a full comprehensive business case before deciding the way forward for what would be the largest capital project in the territory’s history.
The requested review — which must follow the robust “five-case model” recommended as best practice by His Majesty’s Treasury in the United Kingdom — will examine the economic rationale for the project and provide a full cost-benefit analysis.
It will also assess community input and potential impacts, analyse travel demand and potential for tourism growth, and estimate the cost and viability of the completed facility, among many other requirements.
In other words, it will address questions that have gone unanswered for more than a decade.
Such information is badly needed to inform the debate that has surrounded the project from its inception.
Supporters, including the current and former governments, have argued that the expansion is urgently needed to improve air access and bring the territory’s economy into the 21st Century.
They say the project will attract direct flights from the mainland United States, thereby helping fuel a tourism boom, bringing investment, and boosting efforts to expand a financial services industry that is facing existential challenges from abroad.
But detractors have pointed to the high cost and environmental concerns associated with the project and questioned whether it would indeed bring the promised direct flights. Even if it does, they say, the project would bring mass tourism that is anathema to the territory’s current reputation as an uncrowded, upscale destination.
In the absence of a comprehensive business case, this debate has often been based largely on speculation from both sides.
In fact, Virgin Islands officials have been obligated to produce and publish such a business case before the tender stage of all major capital projects ever since the VI and United Kingdom signed the Protocols for Effective Financial Management in 2012.
But sadly, this requirement has been routinely ignored.
No preliminary study is a cure-all — to understand that much, one need only consider the scandals that surrounded projects like the Big Dig in Boston and the High Speed Rail Project in the United Kingdom — but a comprehensive business case surely would have helped alleviate the mismanagement and wasteful spending that have plagued VI projects such as BVI Airways, the cruise pier park, the greenhouses, and many more.
After all, publicly exploring specific assumptions, costs and risks in advance of any project is simple common sense and the very definition of good governance.
Cutting such corners, on the other hand, appears to have greatly exacerbated the delays that have plagued the proposed airport expansion.
When the project was first described to the public in 2012, officials predicted that it could be completed for less than $40 million. They did not explain how they reached that number, but it was a gross underestimate, and we now know the true cost will be many times higher.
The price tag was just one of many areas where the government apparently had insufficient information about its own proposal.
Other cautionary tales come from abroad. St. Vincent’s Argyle International Airport, for instance, opened six years behind schedule in 2017 at a cost of more than $200 million.
But despite leaders’ big promises, St. Vincent and the Grenadines’ overall stay-over and yacht visitor numbers were “relatively flat” from 2015 until 2019 and are still recovering after the pandemic, according to the United Nations Development Programme.
The island nation welcomed its first daily flights to Miami in March — suggesting that better infrastructure can indeed bring more passengers, but progress can also be slow.
Moving forward with the business case, the BVIAA must choose a reputable independent consultant who has completed similar reports, who uses the best available real-world data, and who avoids unrealistic projections.
Now is also the time for the government to commission the national tourism plan that has been promised for more than a decade. In fact, such a plan is necessary for the requested business case, which must examine whether the proposed expansion would accord with the territory’s tourism strategy. With no tourism strategy in place, this mandate is impossible.
Finally, the BVIAA should also commit now to additional transparency as the airport expansion proceeds. This means publishing the business case soon after its completion and then holding further public meetings to gather input from the community — all before the expansion plan itself is finalised and tendered.
If carried out properly, the business case should bring to light the pros, cons and other implications of the airport proposal. Then an enlightened community discussion can commence.
Kudos to the government for restarting the effort on the right foot.