The government will soon borrow a record-setting $100 million from CIBC Caribbean bank to boost infrastructure and facilities seven years after the twin hurricane strikes of 2017, officials announced this week.
However, the opposition raised concern that the long-awaited move, which the House of Assembly unanimously approved on Friday, will cost too much and fall short of meeting the territory’s needs.
During a Monday press conference, Premier Dr. Natalio “Sowande” Wheatley hailed the loan as the largest in Virgin Islands history and described it as a breakthrough in pushing forward the ongoing recovery from hurricanes Irma and Maria.
Of the $100 million in funding, nearly $54 million will be earmarked for infrastructure, he said. Of that tranche, almost $36 million, including some support from the Transportation Improvement Network Funds, will be spent on roadwork, he added.
Sewerage work
Long-delayed sewerage work in East End and Long Look will get $7.5 million in investment, and a similar project in Cane Garden Bay will receive $3.9 million, according to the premier. Other water-related projects in the territory will get $8 million.
The plan also includes $31 million for building projects and facilities improvements, including work on the shuttered Ralph T. O’Neal Administration Complex, the premier said.
Additionally, monies will be used to construct a residential facility for homeless people in East End and a detention centre for migrants.
A home ownership project will receive $6.5 million in funding, and some $8 million will be used for loan refinancing, Dr. Wheatley said.
Opposition concerns
Though the loan passed through the HOA Friday without a dissenting vote, some opposition members raised concerns about the deal.
Myron Walwyn (R-D6) said then-premier Andrew Fahie’s Virgin Islands Party administration had “dropped the ball” in 2019 when it declined the United Kingdom’s offer of a £300 million loan guarantee, which amounted to more than $400 million at the time.
He added that the previous National Democratic Party-led government — in which he served as education and culture minister — had been negotiating with London on the issue until it lost power.
“All the new government had to do when they got in was forward themselves to the bank to try to access that money,” he said.
Yesterday, Mr. Walwyn told the Beacon, “The VI would be in a better state if the opportunity had been taken. They wasted five years.”
Asked why the opposition did not attempt to vote down the new loan last week, Mr. Walwyn said, “There would be no point: The government has the numbers. But concerns were raised.”
Skelton’s view
Opposition Leader Ronnie Skelton told the Beacon this week that the loan is too costly and will not go far enough, and he urged the government to provide more information about it.
“This loan is definitely not enough to fix our infrastructure problems,” he said. “The £300 million that was offered before was more realistic. And with the UK on board, it would have been a much better interest rate.”
Mr. Skelton also questioned the finances of the new deal.
“At a 6.5 percent interest rate, without a UK guarantee, this loan is going to cost a lot of money as it’s now on commercial rates,” he said. “It will be dear.”
Mr. Skelton added that the HOA was given scant detail of where the money would specifically go before the measure was approved.
Renegotiating?
Dr. Wheatley said Monday that it would be possible to try to renegotiate the 6.5 percent interest rate ten years into the 18-year loan, but he was unable to say how much the territory would have to pay back in total.
The premier added that the government is also looking at revenue-raising options, noting that many government fees have not increased in three decades.
“I’m charging the ministries to come up with a few areas where we have some revenue-raising initiatives,” he said.
However, Dr. Wheatley, who is also finance minister, also said he wants to protect the most vulnerable residents.
“We don’t want to hit our people in their pockets while they are struggling, so we need to find ways to raise fees that don’t disproportionately affect the most vulnerable in our population,” he said.
Guarantee offer
With the territory still reeling from the 2017 storms, the HOA originally voted to accept the UK’s £300 million loan guarantee offer in March 2018. As required by the deal, the government subsequently established the independent Recovery and Development Agency to administer the funding.
However, negotiations subsequently stalled, and successive governments never accessed any loans under the guarantee.
In August 2022, shortly after becoming premier, Dr. Wheatley announced that the guarantee was “no longer on the table.”
On Monday, he told the press conference that the British Conservative government, which lost power in July, had not done enough to help the VI recover from the 2017 hurricanes over the past seven years.
As of Beacon press time yesterday afternoon, Dr. Wheatley had not responded to a request for comment on the opposition concerns.
