The BVI Airports Authority is seeking proposals for a comprehensive business case to decide the way forward for the development of the Terrance B. Lettsome International Airport.
The study — which would be the first to review the planned expansion in such detail — should help answer longstanding questions about the project’s viability.
Successive governments have pushed the airport expansion for more than a decade, but none have published a full business case as required by a 2012 agreement the Virgin Islands signed with the United Kingdom to promote fiscal stability and transparency.
That agreement — the Protocols for Effective Financial Management — requires government to complete and publish a business case and “robust” cost-benefit analysis before the procurement stage of any major capital project.
Now, for the first time, the government appears to be on track to follow that rule with the proposed airport expansion.
‘Five case model’
In a request for proposals issued on Nov. 9, the BVIAA is seeking a business case created under the “Green Book Five Case Model” used by His Majesty’s Treasury in the UK.
That model requires a five-pronged approach that includes separate “strategic,” “economic,” “commercial,” “financial” and “management” cases (see sidebar).
Those components will examine wide-ranging aspects of the plan, including its economic viability, its costs and benefits, its potential revenue, its value for money, its compatibility with the territory’s economic and tourism strategies, and others. It will also help determine the best financial model to be used for the expansion, according to a Nov. 10 press release from government.
‘Visioning exercise’
The request for proposals follows a “comprehensive visioning exercise” held recently in the territory, the release added.
This exercise was not open to the public, but Communications and Works Minister Kye Rymer said it included a “primary group of stakeholders who provided invaluable insights” on the direction for the project, according to the release.
He also stressed the importance of public input and said the tenderer chosen to carry out the business case will be “tasked with fostering an inclusive dialogue” and “ensuring that the community’s voice is heard and considered” throughout all stages of the project.
“As we embark on this transformative journey, the government of the Virgin Islands invites all stakeholders and community members to stay informed and engaged,” he said.
Mr. Rymer added that he recently led a delegation to the UK to meet with the Foreign, Commonwealth and Development Office, which pledged support for the airport expansion.
Controversy
If completed as requested, the business case should help settle questions at the heart of the controversy that has surrounded the project since it was first proposed in 2012 by then-Premier Dr. Orlando Smith’s administration.
Dr. Smith and his successors have argued that a major runway expansion is urgently needed to attract larger aircraft that can foster direct connections to the US mainland and beyond, in turn increasing tourist traffic and revenue to the territory.
But detractors have questioned whether the expansion will bring the direct flights that VI leaders promise.
And even if it does, they have said, a longer runway could adversely affect the existing tourism product by bringing more visitors than the territory can properly accommodate.
But without a comprehensive business case in the public domain, both sides have relied largely on speculation to make their arguments.
Dramatic shifts
Meanwhile, the parameters of the proposed expansion have shifted dramatically over the years.
When government first held public meetings on the plan in 2012, officials described the project as a “done deal” and said it would cost around $38 million.
About seven years passed before another public meeting, but in the meantime the projected cost ballooned over the course of two tender processes. A first round of bids in 2013 came in at around $400 million, and a second round for a scaled-down project came in between $153 million and $200 million in 2016.
Meanwhile, millions of dollars were spent on preparatory works and studies. Much of this documentation, however, was withheld from the public as leaders downplayed the lack of transparency.
When then-Governor John Duncan was asked in April 2016 about the government’s failure to publish the required business case, he told a Beacon reporter, “Well, let’s get away from the business case, because you’re doing what the French call chercher la petite bête, which means ‘looking for the small insect,’ literally speaking.”
About three months later, with the tender process apparently still ongoing, Dr. Smith’s government finally released a partial “outline” business case, along with another study.
But the documents — which were both created by PricewaterhouseCoopers — did not include a full cost-benefit analysis as required by the Protocols for Effective Financial Management.
And although the government promised at the time to complete and publish a full business case later, it never did.
Nevertheless, in December 2016 Dr. Smith’s government announced plans to accept a $153 million bid from the China Communications Construction Company.
More controversy followed as leaked CCCC bid documents suggested that the company would receive a series of concessions.
The CCCC plan later stalled for unexplained reasons, and by 2018 Dr. Smith’s government was floating the idea of a new public-private partnership as part of the territory’s recovery from Hurricane Irma in 2017.
Change of tune
The project appeared to be dead in the water after then-VI Party leader Andrew Fahie came to power in the February 2019 general election.
While campaigning, Mr. Fahie had announced that his party was “not in support” of the proposed airport expansion at the time, calling it a “legacy project to” Dr. Smith.
However, soon after his party won control of the government and he was appointed premier, Mr. Fahie changed his tune.
In 2020, his government effectively restarted the project from scratch, hiring Atlanta-based consultant Brakkam Aviation Management, which recommended the construction of a 9,100-foot runway at an estimated cost of $183.78 million over a period of three to five years.
Mr. Fahie did not disclose how much the BVIAA paid the firm or say whether the consultancy was tendered.
Bakkram was founded by company CEO and President Miguel Southwell, a former general manager of the Hartsfield-Jackson International Airport in Atlanta, who was fired in 2016 amid a public spat with the city’s mayor, according to the Atlanta Journal-Constitution.
The BVIAA’s contract with the firm resulted in a six-month interim report that made various recommendations, beginning with suggestions for expanding the airport runway, Mr. Fahie said at the time.
The report, however, was never provided to the public.
Ongoing work
Since then, leaders in the current and former governments have periodically mentioned their commitment to expanding the airport.
This February, BVIAA Chairman Theodore Burke led a VI delegation to Miami to attend the Airport Expansion Summit for Latin America and the Caribbean.
On the delegates’ return, the BVIAA announced that public-private partnerships were again among the options being considered for funding the project.
Other options under consideration included government-funded and “self-funded” models, according to a press release issued at the time.
BVIAA Managing Director Kurt Menal — who was part of the Miami delegation — said at the time that his team was revisiting various studies and plans that were developed over the years for the proposed expansion.
‘Master plan’ not public
The release added that the BVIAA and the Communications and Works Ministry had “shifted the focus from airport expansion to holistic airport development based on a master plan which is a long-term guide to development that supports an airport’s business and infrastructure development strategy,” according to the press release.
At the time, however, Mr. Menal declined to provide a copy of the master plan, saying that it was in draft form and had not yet been presented to the government.
He estimated that it would be finalised within three to six months and made public sometime after that.
Since then, Mr. Menal has not responded to requests for an update on the plan’s status.
Invitation-only meeting
Meanwhile, a stakeholder meeting about the project was held on Aug. 18, but the public and media were not invited.
“This initial meeting was the first stakeholder consultation meeting,” Chief Information Officer Desiree Smith told the Beacon at the time. “The invitees consisted of a cross-section of government departments and agencies and key private-sector stakeholders and industry partners.”
Ms. Smith did not list the invitees or say how they were chosen, but she said that public meetings about the expansion plan would be held “at a later stage.”
“At the moment, the Ministry [of Communications and Works] is conducting the preliminary works, like reviewing and updating existing plans and previous feasibility studies, business cases, Environmental Impact Assessments, etcetera,” Ms. Smith told the Beacon.
A few weeks after the stakeholder meeting, opposition member Julian Fraser asked about the project plans during a Sept. 5 House of Assembly meeting.
Mr. Rymer remained tight-lipped, but he allowed that the BVIAA was “focused on the holistic development of the [airport] based on an airport master plan, which includes the extension of the runway and associated airside infrastructure.”
No public meetings on the project have been scheduled.