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Fiscal Prudence at Heart of HIA Redevelopment Project, PM Pierre

Hewanorra International Airport
Hewanorra International Airport

Prime Minister Philip J. Pierre has stated that prudent fiscal policies and proficient financial management of the country’s revenue is essential in directing Saint Lucia to a progressive path of equitable and sustainable development.

Government sources contend that Prudent Fiscal Management policies with the input from professionals in the field of local, regional, and international relations has assisted in guiding the Pierre administration’s approach to initiating the Hewanorra International Airport ( HIA) redevelopment project.

During a recent discourse with Saint Lucians in the diaspora, the prime minister provided an update on government’s plans to exercise financial prudence with the management of the state’s resources and infrastructural project undertakings.

“The review told us that if we continue on that trajectory, the airport will cost us about US$500 million,” PM Pierre told the gathering at a New York town hall meeting.

Additionally, it has been deduced that the decision to back out of the PPP arrangement in favour of a go-it-alone approach set the country on track to rack up more than $1.3 billion in debt.

Referring to the controversies involving the restructuring of the HIA project, Pierre retorted, there is no way that “I would put my country through a $1.2 billion debt for an airport…you think your children would ever forgive me.”

Under the previous Public Private Partnership (PPP) arrangement that government struck with the International Finance Corporation (IFC), the conditions state that the authorities would not be required to spend multi-million dollar sums to finance the HIA redevelopment project. In addition, the IFC was set to cover maintenance costs for the duration of the PPP arrangement.

Pierre explained that the bidding tender process for the HIA works was held in France “and there was about 60 interested firms that said they wanted to get involved in that PPP”.

Upon completion of the process, he added, three firms were selected “and these three firms were ready to go ahead with the arrangements”, but then, the Saint Lucia Labour Party (SLP) lost at the 2016 polls.

Pierre recalled that when the last United Workers Party (UWP) regime came into office, they declared that there would be “no PPP…they made a calculation because there is something that is called an Airport Development Tax (ADT).” He said they (UWP administration) then multiplied the ADT x the number of visitors coming through the HIA and deduced that there was profit to be obtained from that process.

As a result of the previous regime pulling out of the PPP format, it has been estimated that the ‘previously scrapped’ PPP arrangement between the government authorities, at the time, and the World Bank’s IFC to redevelop the Hewanorra International Airport [HIA] cost taxpayers nearly a $1 million dollar penalty.

Last August, the government appointed a seven-member committee to review the scope and financing arrangements of the HIA redevelopment project. The committee’s findings has been submitted and it is anticipated that debate on that issue will be held in parliament, in due time.

Pierre said the authorities sought for five options from the HIA Redevelopment Committee team, and after taking the matter before cabinet, the cabinet decided that “out of the five options, there are two that we think are feasible”. And so, government returned to the IFC to get advice on which of the two options to proceed with.

Since then, government has resumed negotiations with the IFC and guided by the recommendations from an independent committee review, sources say it (government) has returned the HIA redevelopment project to a more ‘fiscally responsible’ course.

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