Prime Minister Philip J Pierre has taken the previous administration to task for instituting no competitive tendering process for the selection of the contractor for the Hewanorra Airport Redevelopment project.
He made the announcement during his delivery of the 2025/2026 Budget Address to the nation Tuesday night, noting that the SLP Administration between the years 2012-2016 pursued the redevelopment of HIA through a Public Private Partnership (PPP) an arrangement in which the taxpayer would not incur any contingent liability.
“We worked with the International Finance Corporation (IFC) – an arm of the World Bank – to provide professional expertise for the planning and procurement process for HIA. In 2015, the PPP had reached the stage where it was ready to be executed. With a change of government in 2016, the PPP process was cancelled, costing the government millions of dollars, including a fine of USD 1 million,” Pierre said.
According to the prime minister, the then government pursued a debt-finance model for the development of HIA. They did this by seeking out three loans for the passenger terminal complex: (1) USD 100 million from the Export-Import Bank of the Republic of China (Taiwan), (2) USD 75 million from a consortium of local banks led by the Bank of Saint Lucia for and (3) USD 45 million from the World Bank for the CATCOP aimed at upgrading the runway and airside interventions.
“In 2022, our government engaged in two reviews. One by a group of local professionals, and secondly, a review by international airport consultants. Some of the findings of the review revealed:
- The contractor, Overseas Engineering Construction Company (OECC), was chosen by one man, the former Prime Minister.
- There was no competitive tendering process for the selection of the contractor.
- The terms of the loan dictated that a specific contractor be engaged.
- Apart from the normal interest charges on the loan, there was an additional 8% to be paid to the contractor on every disbursement. Meaning that the true cost of the loan could be as much as 13% with a loan interest rate of 5%.
- Noticeably absent was a detailed bill of quantities for the terminal building, but rather a rough order of magnitude (estimates).
- The project cost on the foundation package had increased by a factor of 10, from XCD 4.8 million to EC$48 million.
- The original design called for 311 piles, but increased to 3006 piles due to the change of location based on a decision made by the former Prime Minister.
- Based on the review, the cost of the terminal would be XCD 1 billion had we followed their plan.
- There were never any recorded concerns about closing operations at the airport to facilitate construction.
“The government could not, in good conscience, allow this arrangement to proceed under these conditions. The consultants provided SLASPA with three options. After discussion, the option chosen was a scaled-down (version) of the terminal size built on part of the constructed foundation, and a removal of the elevated roadway while keeping modern amenities like the jet bridges.
After a competitive bidding process, a quantity surveying firm was chosen to prepare the bill of quantities. The certified bill of quantities was received on 17th December 2024 and reviewed by SLASPA on 30th January 2025. Requests for proposals through an open tender process will be advertised in the coming weeks,” Pierre said.
“It is regrettable that this process has taken some time. However, as a responsible government, we could not pursue what would arguably have been the largest infrastructure project ever undertaken in this country under these conditions. We are currently exploring all financing options, including renegotiating the present debt financing as well as a PPP model. Let me assure the public of Saint Lucia that the Hewanorra Airport terminal building will be constructed with full transparency, accountability and in tune with the needs of the country,” the prime minister said.
He added that work on the control tower will continue with a new contractor. The upgrading of the runway to be compliant will also continue under the World Bank project, which will be consistent with International Civil Aviation Organisation (ICAO) standards.