No bids received for airport divestment

by

January 15, 2016
Minister of Transport, Works and Housing Dr Omar Davies
The Norman Manley International Airport
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The failed attempt to put the Norman Manley International Airport into private hands has come at the cost of US$1 million or some J$120 million.

Transport, Works and Housing Minister Omar Davies made the disclosure in the House of Representatives on Tuesday.

He said US$648,000 (J$78.2 million) was paid to the International Financial Corporation (IFC), which was lead advisor. The IFC is the private sector arm of the World Bank.

Like it did with the Sangster International Airport in St James, the Government was seeking to put the airport into private hands to improve its efficiency and to attract greater levels of investment.

Five international companies were shortlisted to participate in the bidding process for the selection of a concessionaire to further develop and operate the NMIA.

However, at the close of the bidding process, mid-December, no bid had been received.

In addition to paying the IFC for its role in the failed divestment process, some US$109,000 (J$13.2 million) has had to be paid to the Airport Authorities of Jamaica for legal and other services. A sum of US$175,000 (J$21.2 million) was paid to the Development Bank of Jamaica for management services.

Davies said the country will not be giving away the airport in a fire sale.

"There is no urgent imperative to propel us to privatise the asset at this time. However, our policy remains to pursue the privatisation of the airport, in keeping with the objective to introduce private-sector management and expertise to improve operational efficiencies; mobilise additional private-sector investment in airport infrastructure; and increase the service-quality standards, in line with international best practises," Davies said.

Meanwhile, the minister said the Southern Coastal Highway, from Harbour View to Port Antonio, is budgeted to cost US$1 billion (J$120.7 billion).

He said US$350 million (J$42.3 billion) will be spent on the highway, from Harbour View to Morant Bay. Construction of the highway is expected to start in the last quarter of the 2016/2017 fiscal year.

Davies said a toll road will not be feasible going east, and told fellow parliamentarians that St Thomas and Portland have been "neglected in terms of infrastructure," and that the road construction is an investment to drive development in those eastern parishes.

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