Too much $$ going to airport project – Opposition

The total sum borrowed by the government to complete the construction of the international airport at Argyle is EC$148.7 million, and according to Prime Minister Dr Ralph Gonsalves, all of the money was borrowed on soft loan terms.{{more}}

This was disclosed at a meeting of the House of Assembly yesterday, where legislators met to debate the Supplementary Appropriation (No. 4) Act of 2013, which allocates $204,799,800 from the Consolidated Fund to continue work on the construction of the Argyle international airport.

According to Gonsalves, the present loans should be contrasted with the debt left by the former New Democratic Party (NDP) administration on the Ottley Hall project, which was EC$180 million, of which Leader of the Opposition and former Prime Minister Arnhim Eustace paid back EC$19.5 million before he (Gonsalves) was granted debt relief.

The Bill will allocate $204,799,800 to continue work on the international airport; an additional $3.5 million is being used to meet the debt service costs associated with the $148.7 million borrowed for the project.

Of the $204,799,800, some $56,100,000 was raised through the sale of 40 acres of land on Canouan, and $2.5 million was raised from the sale of shares the government held in the Bank of St Vincent and the Grenadines (BOSVG).

$107,200,000 of the borrowed funds come from a loan from the Alba Bank of Venezuela; $26,800,000, from the Import Export Bank of the Republic of China on Taiwan and $14,699,800 was raised from a loan from the Bank of Nova Scotia in Canada.

Gonsalves had explained during the presentation of the Estimates in January this year, that he would have to return to the House, because he would require an additional US$80 million to complete the international airport project.

“So when someone tells the press that they are shocked, he was shocked, not because I was doing what I promised, but [because] I am actually achieving the promise of finding the funding to actually complete the airport; that is what shocks them,” the prime minister said.

Leader of the Opposition Arnhim Eustace had said on the New Times radio programme on Monday, that when received the supplementary appropriation document for the $208 million on Monday, it “nearly shocked the life” out of him.

The prime minister said that the members of the opposition had said that they supported the airport project, but the project could not be executed with “bottle stoppers”.

The project needed to be done through a supplementary appropriation, he said.

“That is the long and short of it.”

“So that there is no short circuiting on this matter, for those who speak and say why is it that you have to come in the House, why can’t you money give the money to the International Airport Development Company (IADC)?” he continued.

The Prime Minister, who is also the Minister of Finance and Economic Planning, explained that for the money to have gone directly to the IADC, it would mean that the government would have had to transfer the lands to the IADC, and let that entity sell the lands.

“But that would have been surreptitious, what is happening now is openness and transparency,” he said, adding that the money coming from the land needed to come to the government first, then on to the IADC.

He said similar situations existed in relation to the loans from the Alba Bank, and the two other commercial banks.

Gonsalves said since it was the government who contracted the loans, the money had to go into the consolidated fund.

“I can’t take the money and give it to the IADC,” he said.

Under the previous New Democratic Party government, Gonsalves said, specific appropriation or supplementary bills in excess of the statutory sum, would be brought to the House by way of a special warrant.

He said finance committee meetings were never held, except when it was in relation to appropriation Bills, which he said is a constitutional requirement.

The prime minister further stated that he understood that the Terrence Ollivierre, parliamentary representative for the Southern Grenadines, and the people of Canouan were opposed to the selling of lands on Canouan.

“They say they don’t know where the land is, but the intent is to embarrass (former prime minister) Sir James [Mitchell],” Gonsalves said.

The prime minister explained that under the Canouan Lease Ratification Act of 1990, the NDP administration of Sir James, by way of a lease hold, leased 1,230 acres of the 1,900 acres available on Canouan.

Gonsalves further explained that under the arrangement, the lease contained a provision for the developers to sell lots on a freehold basis.

But according to Gonsalves, this was not the first time that there was opposition to the sale of lands in the Grenadines.

He however made the point that when his Unity Labour Party (ULP) government borrowed US$15 million to construct the jet airport on Canouan, where the terms of the loan agreement were higher than those presently, the people of that island did not oppose.

The present loans are at a cheaper rate, he explained.

The largest loan, Gonsalves said, is the US$40 million (EC$107, 200,000), borrowed from the Alba Bank, which is at a 2 per cent interest to be paid over 20 years, with a two-year grace period.

“So the largest loan is 22 years and about 80 per cent of it is grant,” Gonsalves said.

He said that the EC$14,699,800 borrowed from the Bank of Nova Scotia is borrowed at an interest rate of 3 months LIBOR plus 2 per cent; with a 1 per cent fee upfront and a 0.85 per cent commitment fee. 

The loan of $26,800,000 from the Taiwanese bank, is at an interest rate of 6 months LIBOR plus one per cent for 17 years, with a three-year grace period, the prime minister said.

The Opposition however, debating the Bill yesterday, maintained their position that while they understand that the airport project is the largest capital project ever undertaken in St Vincent and the Grenadines, too much of the country’s resources are being put to the project, at the expense of other areas.

The Leader of the Opposition said this was the position of the Opposition regarding the project, but whenever anything negative about the airport project was said, it was deemed by the Government that they, the Opposition, were being unpatriotic or that they did not support the project altogether.

“But we have the right to question any project, we have been elected here and the people expect us to do our job and we will continue to do this,” Eustace said.

“The airport is not the end all and hence we will continue to comment.”

He said that he understood what the money was to be used for, but that the government treated the airport project as the only ongoing project in the land.

According to Eustace, the government has not addressed the banana, tourism or ICT industries; all sectors with the potential to provide jobs and generate revenue.

He also addressed the issue of the sale of the 40 acres of land on Canouan, saying that the concern was that in the future, availability of land would be a problem.

“There will be nothing there,” he said, adding that the talk about embarrassing Sir James was nonsense.

“In the context of the size of Canouan, how many people will be able to buy land? he questioned.

“That is the issue, more so in the Grenadines, than in any other part of the State,” Eustace said.

Ollivierre, Parliamentary Representative for the Southern Grenadines, of which Canouan is part, in his contribution to the debate, said that while the prime minister referred to Sir James and the fact that he leased over two thirds of Canouan to foreign developers, the difference was that Sir James came to the people beforehand, and told them what his intentions were.

This was not done in this case, Ollivierre said.