Prime Minister Phillip Pierre Thursday stated there were ‘startling revelations’ from the report of the committee appointed to review construction works at the Hewanorra International Airport (HIA).
He disclosed that development works at the airport had to be readjusted due to a series of cost overruns that impacted its economic management and implementation.
Speaking at the St Lucia Hotel and Tourism Association [SLHTA] annual general meeting Pierre recalled that last August, the government set up a committee to review the operations at the HIA and their recommendations led to the hiring of a financial consultant to provide advice on the way forward.
According to PM Pierre, the committee was tasked to “review the project and to offer recommendations related to the project’s scope and financial arrangements with a view to identify the necessary fiscal space for reallocation of a priority budget for the government”.
He said the report submitted some ‘startling revelations’, which indicated that, “The development of the terminal building at HIA was projected to cost US$175 million or EC$472.5 million. The main contractor for the largest national project was selected by the (former) prime minister without any form of competitive bidding.”
Pierre said the contractor was later instructed to relocate the terminal building from its original spot to an area further west “requiring ten times more piling from the original plan of 311piles to 3,006 piles.”
He said the costs of the foundation escalated from EC $4.86 million to EC$51.3million, a cost overrun in the foundation of EC $46.4 million.
“The contract was not fully appraised and at its commencement the contracted price for the project was never fixed and was based on preliminary rather than detailed drawings,” the prime minster added. “The contractor claimed that the likely cost overrun up to the shed phase of the project will be approximately US$42 million or EC$113.4 million.”
Pierre contended that due to this scenario, “a continuation of the project under its current track …the project would have ended costing approximately US$400 million or EC$1.O86billion.”
He said these figures were calculated on its current trajectory as of last September, before increases due to inflation and other issues.
PM Pierre asserted that: “As a responsible government, we felt that whereas we want the airport (works) to continue, we want the airport to be renovated …but in all good conscience we could not continue on that path.”
Subsequently, he said, the Cabinet of Ministers requested the assistance of the International Financial Corporation (IFC) “to review the options proposed by the committee and to advise the government on the best value engineering option for the continuation of the HIA redevelopment project, in the interest of the people of St Lucia.”
The IFC was mandated to review the committee report. The committee provided two options, Pierre explained, adding that: “The IFC is called to review it and as soon as we have spoken to the SLASPA board we will tell you which of the options that the government will follow.”
He added: “I want to assure you we are going to continue work on the Hewanorra International Airport …but in all good conscience, we will not burden the people of St Lucia with a debt that might be near $1.2 billion.
“We are not going to play the blame game …and hopefully, with all things being equal, we will recommence work on the airport, and probably in a different manner we will commence work on the airport, most likely next year.”