Government Signs Final Loan Agreements For Airport Development Project
The loan for the extension of the runway at the Beef Island Airport is the largest ever undertaken by the government of the Virgin Islands from any one financial institution, according to Chief Minister and Minister of Finance the Honourable Ralph T. O'Neal.
He signed the financial agreement on Thursday November 2nd, along with President of the Caribbean Development Bank (CDB) Sir Neville Nicholls for the $19,631,000 loan. That agreement was signed jointly with another from Scotia Bank (BVI) Ltd., for $3,250,000. These two final financial agreements comprise Phases 1A and 1B of the Airport Development Project.
"The process that brought us here today was surely a long and laborious one," he stated. It was on 5th December 1997 that a motion was taken to the Legislative Council to approve the borrowing of funds, in principle, from five financial institutions for the airport project. The institutions are the European Union (EU), the European Investment Bank (EIB), the Caribbean Development Bank (CDB), the Social Security Board (SSB) and Scotia Bank (BVI) Ltd.
Records reveal that agreements have already been signed with the EU, EIB, the SSB and Barclay's Bank to guarantee the EIB loan. The scope of works covered included a new terminal building, cargo facilities, civil works and the extension of the runway. "The financial agreements between the government of the Virgin Islands and the financial institutions here today (CDB and Scotia) could not be signed before, because new procedures dictate that Her Majesty's Government must approve all borrowing for Her Colonies," Mr. O'Neal explained. He however noted that HMG has indicated that the procedures for future approvals will be better clarified, thus reducing the resulting downtime with respect to the execution of future projects.
Chief Minister O'Neal recalled that he made representation to the CDB on behalf of his government back in 1996 for possible on lending for this project. He noted that this was favourably received in principle, subject to the outcome of the appraisal report. The plans for the project were finalized by early 1997 and a formal application submitted to the CDB in early 1998. "Not only did the Bank live up to its in principle agreement, but given the urgency to complete the airport project for the 2002 tourist season, latitude was extended," the Finance Minister noted. This latitude included the simultaneous ratification of the final details of the project, the securing of the financing and the advancement of the procurement/tendering process, all of which were successfully completed before the close of 1999. Hon. O'Neal recognized the assistance of former St. Vincent and the Grenadines Prime Minister Sir James Mitchell, who he said played a very important role in helping the BVI get the grant from the European Development Fund. Scotia Bank (BVI) Ltd. came in for high praise from the Chief Minister for being "most gracious in not only providing funding, but also demonstrated strong support for this territory and its development." He said Manager Mr. Terry Bell attended all the signing ceremonies whilst his institution stood on the periphery awaiting approval. "This is in no way an indication of a lack of appreciation for the funds and as a matter of fact, I would be willing today to accept further in principle agreements for future funding, as there are many more projects on the drawing board," quipped the BVI leader. Before concluding his remarks, he expressed appreciation to all those who had a part to play in bringing these negotiations to this stage.
CDB President Sir Neville Nicholls, who has been with the Barbados-based bank for 29 years, has tendered his resignation effective 31st March 2001. The BVI leader thanked him for his years of services to the region and presented him with a token of the BVI's appreciation for his years of service to the bank. He noted that under Sir Neville's presidency, the BVI enjoyed a good relationship with the CDB and he hoped this would continue. In his remarks, Sir Neville noted that this was also the largest loan made by the CDB to the government of the BVI and also one of the largest project loans the bank has made in its 30 years of operation. He recognized that although this is a large project, it is a critical project in the context of the economy and the size of the Virgin Islands. He noted the concerns expressed by the International Civil Aviation Organization about safety requirements at Beef Island Airport, making it essential for the government to effect remedial measures to improve the facility. He spoke to the need to ensure effective project management, in order to avoid time and cost over-runs so that the estimated benefits will in fact accrue after the specified time. The CDB President went on to note that most of the bank's borrowing member countries are small islands where the natural eco-systems are very delicately balanced. He said therefore, the bank has to pay particular attention to the impact of development projects on the natural environment. "Our tourist industries depend on and benefit from these eco-systems; therefore, we have to be very careful that in carrying out development which involves major construction activities that we do not do permanent damage to the environment."
In addition, Sir Neville noted that small states do not have the resources to meet the cost of undertaking the necessary remedial measures that would be required if we ignore environmental issues and do damage to the natural environment when projects are implemented. "Another reason is that all of the donor members of the CDB have legislation in place which seeks to protect the environment from damage and (as such) cannot give approval for the financing of the project unless there are adequate environmental protection or mitigation measures in the project." For his part, Managing Director of Scotia Bank (BVI) Ltd. Mr. Terry Bell congratulated the government of the Virgin Islands on bringing to fruition another vital project which will see all BVIslanders and the territory itself grow from strength to strength. "It will, I'm sure, place the BVI in the forefront of the competitive tourism industry, which, along with the offshore financial sector, is crucial to the continued success of the territory." He said Scotia has grown along with the BVI and the bank looks forward to being a continued part of this success. "And it remains only for me to echo the concerns of everyone else that the project be on time for the year 2002 tourist season." Mr. Bell also received a token from the government for his bank's assistance to the territory.
Deputy Chief Minister and Minister of Communications and Works Hon. J. Alvin Christopher is the Minister responsible for the implementation of the Airport Development Project. He admitted his concern, when he observed the delay in the signing of these two final loans for the financing of this project. "And I must say Mr. (Stuart) Logan (Airport Development Engineer) this is the final loan for this project; now, it's up to you and I to make sure that this is the final loan for this project."