Grantley Adams International Airport Going PPP

With Christmas approaching how many Barbadians have registered the news that Grantley Adams Airport (GAIA) is going the route of a Public Private Partnership (PPP) to fund the running of the airport? This is an interesting move by the government; a new transaction for Barbados concerning one of our main ports of entry.

As civic minded Barbadians we must insist on transparency. Government has teamed up with the International Finance Corporation (World Bank) to help oversee the bidding process.

Reports indicate the government has received several offers from investors to invest $300 million in the PPP. This week we also learned that government granted a 5 year contract to a US-based firm to ramp up marketing of the island’s products and services at the Grantley Adams International Airport (GAIA).

The upside is that a good PPP will be a win win for Barbados by providing access to the investment to maintain a world class airport therefore relieving government of the ‘responsibility of allocating scare resources and/or attract more debt in times of austerity. The downside is that there must be transparency and Barbados has struggled in this area of governance.

 

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139 comments

  • Barbados need to live within it means and be able to repay and reduce it debt load

    So far we need
    Buses
    Sanitation trucks
    Road network upgrade
    Sewage plants up grades
    Standby generators on all pumping stations
    Airport upgrade

    IMO the first three should be worked on the other can wait

    Yet some don’t want us to borrow anymore

    Like

  • peterlawrencethompson

    @John2
    Why do we need an airport upgrade?? What precisely needs to be upgraded?

    Like

  • @PLT
    Why do we need an airport upgrade?? What precisely needs to be upgraded?
    #########################################################################

    I have been thinking about this question that you have posed repeatedly today. Maybe it would be good to get a response from the Minister or any other spokesperson of the government.

    As far as I can see, the current BLP government has locked itself into a narrative that the problems facing the country are a result of the ‘incompetence’ of the previous DLP government.

    So they have no alternative vision for bringing about the economic turn around that they have promised after the current bitter austerity medicine than to press on with the old economic model of everything in the tourism basket. As you know our country has the same relationship with tourism as a crack addict has with crack. So as far as I can make out, the aim of the upgrade is to allow the airport to accommodate more tourist arrivals. Hence also new investment in hotels like the proposed Hyatt, even as hotels on the west coast are struggling with occupancy rates. But that’s just my reading. Minister Kerrie Symmonds might have a different answer.

    Like

  • As PLT noted, the customer experience for arriving passengers is pleasant and efficient. I was very impressed in my recent travels – so it was not a one-off coincidence. From the time I landed, I was out of the airport in about 10 min.

    The departure experience was also improved. Whatever dated expansion plans the GAIA had for arriving passengers needs to be revisited in light of the significantly improved efficiencies.

    Further, the increased efficiency has not been given a chance to be reflected in the annual financial statements. Therefore, the decision to pursue a PPP, with the current uncertainty, is alarming.

    Liked by 1 person

  • Plt

    My list was made up from what I have read other ask for on BU. I don’t agree with all of them.
    Beside the runway which must be replace after a certain period I see no other reason for airport upgrades at this time

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  • peterlawrencethompson

    @John2
    The runway needs periodic maintenance but it is already long enough for even the largest aircraft.

    I think it would be sensible to invest in four or five jetway bridges so that airline passengers can disembark in a thunderstorm without getting rained on. The cost is $US$300k each so that might add up to a Bd$6 million installed total. GAIA can almost certainly afford to do that out of retained earnings (Bd$17 million in the bank at the end of 2015, probably more by now).

    What else? I wouldn’t object to commissioning a good public art installation. Bd$1 million for that.

    I already get much better service at GAIA that Boston, Miami, NewYork, or Toronto; what more could I possibly ask for?

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  • peterlawrencethompson

    I have actually written to the board chair at GAIA to congratulate Airport staff, management and board on the high quality of my recent experiences there. I am very vocal with my public criticism when things do not work properly— it is therefore incumbent upon me to be vocal with my public congratulations when anyone, particularly a SOE, is performing well.

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  • fortyacresandamule

    The airport is too important to fail. Therefore the issue of moral hazard is still relevant. In a worst case scenario, the government would be left holding the bag.

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  • “I think it would be sensible to invest in four or five jetway bridges so that airline passengers can disembark in a thunderstorm without getting rained on. ”

    both lying governments have PROMISED airbridges for year….the billion dollars in VAT that was STOLEN and they wrote off for their cirminal friends and bribers could have bought airbridges to line up and down the tarmac…they do not WANT TO or they WOULD HAVE…they only say that around election time..

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  • I “think” if you look at it from the Government, the challenge they face is they have no money, borrowing is limited to IMF, IDB, CDB etc etc, hence to ‘create activity’ they have to be willing to work with what is profitable, what others will invest in. We can talk all day about the various SOE’s, but most are not structured to generate profit. The former group, targeted BNTCL and Hilton, two other assets/operations which can generate profit. We have heard Caves of Barbados is another ‘exploring possibilities’. GEMS must also have a few properties left? The Port and ???? (other potential public profit centers)
    So while they are several valid arguments against GAIA, it isn’t like it is GAIA, or BWA/TB/QEH etc. As an investor, are you willing to invest in another public entity, beyond the profitable ones?

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  • @Peter

    To install jet bridges there will have to be a remodel of the airport.

    To be fair to the project we need to hear some more about the development that is contemplated. Do we know what is required to efficiently run a state of the art airport?

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  • “Ithink” if you look at it from the Government, the challenge they face is they have no money, borrowing is limited to IMF, IDB, CDB etc etc, hence to ‘create activity’ they have to be willing to work with what is profitable, what others will invest in.”

    they first thing i would ask government is WHY THEY HAVE NO MONEY…when they so EXPANSIVELY WROTE of 1 BILLION DOLLARS of VAT stolen from the treasury by their tiefing minority friends…

    if they can’t answer that..me nah want to hear nutting..as my son-in-law would say.

    Like

  • peterlawrencethompson

    @David
    “ Do we know what is required to efficiently run a state of the art airport?“
    ++++++++++++++++++++
    Yes, GAIA has proven that they can be efficient… ten minutes from aircraft to parking lot upon arrival is efficiency that large foreign airports cannot match.

    What is the need for “state of the art” unless it contributes to more efficiency? Are we just proposing to spend millions of dollars for no tangible benefit?

    Like

  • @Peter

    There is more.

    – security

    – entertainment facilities

    – other ancillary services

    If tourism is our business should we support a strategy of product differentiation in all areas?

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  • peterlawrencethompson

    @David
    Is there any evidence that security at GAIA is inadequate??

    An airport is transportation infrastructure NOT an entertainment facility! Any attempt to integrate “entertainment” into airport operations will result in crappy entertainment that damages the efficiency of transportation.

    “Other ancillary services” are usually overpriced food and a retail mall selling other overpriced garbage. We need none of this. It will DETRACT from the efficiency of the airport and compromise security. Think about it… food and souvenir retail exists primarily to distract travelers who would otherwise be annoyed by delays or other inefficiencies. Is it not a better idea to run an efficient operation rather than rely on distractions to cover up inefficiencies?

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  • @Peter

    The MoT and PM have expressed the view the airport should be optimally leveraged to showcase Bajan products. One example.

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  • peterlawrencethompson

    @David
    But that is a really stupid idea. You want people to move through transportation infrastructure as quickly as possible, not be forced to waste time on objectives which are irrelevant to their true purpose.

    Let us think this through… when do you want to showcase Bajan products to tourists? surely on their arrival in Barbados so that they can actually spend money acquiring or consuming them, not in the departure lounge when they have already blown their budget. However the departure lounge is the only time and place that showcasing is feasible in an airport setting. It makes much more sense to showcase Bajan products in Hotel lobbies… much more bang for the same dollars because the visitor gets repeated exposure and can integrate what they want into their planned spending.

    Liked by 1 person

  • @Peter

    What about departing passengers et al?

    Also how does an improved airport plant assist the path to the country achieving Cat 1 designation?

    Like

  • @WURA-WAR-on-U
    first thing i would ask government is WHY THEY HAVE NO MONEY

    @NorthernObserver
    As an investor, are you willing to invest in another public entity, beyond the profitable ones?

    ################################################################################

    These two questions go to the heart of the matter of which the proposed PPP at the airport is just a symptom. The current Minister of Finance, the previous one in the DLP government nor the so-called economic experts from the IMF are able to explain how it is that a country with a population of just under 300, 000, which produces goods and services to the value of BD$ 10 billion each year, and in which the local private sector boast of uninvested savings of BD$8 billion, finds itself in a situation where the government is so broke that it can’t even provide basic services like sanitation and public transport.

    Secondly, why would a government in such a parlous financial state take steps to further reduce its revenue by cutting corporate taxes and sellng off its profitable enterprises?

    The reality is that the current government, like the previous one, is signed up to the programme of neo-liberal austerity that is now the IMF/World Bank orthodoxy and which aims to remake the economic space globally so that the wealth directed to meeting the needs of the mass of people is reduced in order for more to be directed into the hands of the super rich. Whereever this project is applied, it leads to growing social inequality and subsequent political instability. Once we understand the big picture, policy decisions which seem strange or irrational begin to make sense.

    Liked by 1 person

  • @P{T
    Lol. You are being too logical and rational. 🙂

    Liked by 1 person

  • peterlawrencethompson

    @David
    Departing visitors are broke and in debt from overspending. We need to make their journey back home as efficient and barrier free as possible. Tying up the airport in unnecessary construction projects which create dust and delays to create useless retail mall space is just about the worst thing we can inflict on departing visitors.

    Liked by 1 person

  • peterlawrencethompson

    @David
    “… assist the path to the country achieving Cat 1 designation…”
    ++++++++++++
    I don’t have a clue what Cat 1 designation is. Please enlighten me.

    Liked by 1 person

  • The question has already been raised. Is it a necessary to refurbish a minor airport?

    Why is this government pushing the Public Private Partnership (PPP) model. We in the UK have been using this model for decades and it has proved to be an unmitigated financial disaster.

    Do your research and you will

    Liked by 1 person

  • PLT……have you noticed that NOT ONE of them have any creative imagination or inventive skills and everyone is afraid to go near them as black people, because if you so much as show this you are thus gifted….the first thing they do is call up their minority bribe masters and make plans to rob you…that is what you are dealing with..

    the house negro at their reality defying best..

    Liked by 1 person

  • “We in the UK have been using this model for decades and it has proved to be an unmitigated financial disaster.”

    you have answered your own question..

    the WHY…i answered above.

    Liked by 1 person

  • Vincent Codrington

    @ David BU

    When the motives for policies are put to the tests, their inconsistencies and their unfitness for purpose surface. Activity is not productive action. Very often it compounds the problem.

    Like

  • Agree Vincent, adopted a provocative role to ensure all points hitting the inbox were posted for discussion.

    Liked by 1 person

  • Tee White December 6, 2019 8:38 AM

    An observation I have made over years as a volunteer credit counselor, is those sitting across from me are not there due to how much they make, but how much they SPEND/spent. Hence, without specificity, we know the entity, The GoB, ended up financially broke, due to its spending. You may ask, given the void in expenditures on capital and infrastructure items, WHERE was that money spent?

    When you state the ‘private sector’, you are referring to all local savings NOT held within the public domain. This tells you the majority of people in Barbados, when they make decisions about THEIR OWN money, are capable of running their own affairs somewhat responsibly. Not all, the majority. This savings number may offer some clues as to where the GoB excess spending has ended up??

    I am unsure the prior administration(s) was signed up to any austerity program? It is difficult to explain how 13 consecutive annual public deficits represent austerity. Many of which, were not even remotely close to balanced. Poorly conceived spending? Maybe.

    Possibly, once the myriad of delinquent annual reports are generated, we might have some greater specificity, as to where and how public monies were spent. Then again, the public custodians are not usually keen to throw each under under a bus. The continued delay in reporting, sends a powerful message that damage control maybe difficult.

    Like

  • @Northern Observer

    The haircut to individuals have penalized those properly managing their affairs?

    Liked by 1 person

  • Whilst the braniacs battle with PPP. Folks like me struggles with

    https://barbadostoday.bb/2019/12/06/drax-hall-folk-want-relief-as-access-worsens/

    “Just recently we had a lady coming in from overseas and the taxi could not bring her in all the way because of how bad the road is.”

    Can you see a plump lady getting out of the taxi, balancing a valise of her head and pulling her carry-on behind her and walking the last half-mile?

    PPP – Plump pretty Porter (Now I get it)

    Liked by 1 person

  • fortyacresandamule

    @David . The Cat 1 status is only relevant for countries with their own airlines wanting to fly into the USA or Europe.

    Like

  • David December 6, 2019 2:01 PM
    IMO…if you were ‘properly managing’, there was no haircut to be had? Participating in GoB instruments post 2013 was full of risk.
    Let’s see how many jumped on the Sagicor bandwagon, buying shares on BSE to trade later on TSX? One of the easier ways to convert $BDS to fx.

    Like

  • @ PLT
    You cannot be seriously saying that dust and other inconveniences are to be avoided in order to facilitate departing passengers. In my travels , I have discovered that numerous airports seem to under perpetual construction in some form or other, not to mention ongoing maintenance.
    Travelers appreciate that such is being done to enhance their safety and future convenience.
    You are bordering on the ludicrous .

    Like

  • @ David
    You are a victim of mendicancy. Here you are with pie in the sky non sense about Barbados showing the world how to successfully negotiate an IMF program. This is perhaps the most extreme form of mendicant thinking I have read in the last twenty or so years. That kind of thinking brings tears to the eyes of any self respecting citizen. You should be ashamed.
    Where is our private sector in this GAIA plan?

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  • You have your opinion, keep it!

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  • “Where is our private sector in this GAIA plan?”(Quote)
    Your slamming of the private sector is approaching legend, a bias so large you can drive a truck through it.
    The private sector runs the fuel delivery, food delivery, Seawell Air Services, ground transportation, ground handling, and the vast majority of the retail. At this time they do not operate the parking, nor the airport itself. I don’t know who controls the security. This is probably part of the reason, the GAIA operates as well as it does. The GoB retains control of Customs and Immigration, as it should.
    Further, how do you know the private sector isn’t bidding on this current plan? They have certainly shown interest in the Caves, even though a Jamaican firm is frequently mentioned as the front runner.

    Like

  • @ NorthernObserver
    “ Further, how do you know the private sector isn’t bidding on this current plan? “

    Exactly. I don’t know. That’s why I asked.

    Like

  • All the airport need is a cover or bridge so you can walk right into the plane, instead of walking on the open tarmac and getting wet when the rain falls. Workers dont need to tell you where to walk because the walkway will be only one direction you go.

    Like

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