New government, same secrecy on airport plan

For more than a decade, successive governments have regularly refused to publish taxpayer-funded studies on the feasibility of the airport expansion that leaders say the territory desperately needs.

Now, the secrecy continues.

The first part of a five-part business case for the proposal is now complete after months of delays, and Cabinet approved it in September ahead of public consultations set to start in late November.

But the government has declined to publish the document.

“The Strategic Outline Case is not a public document,” acting Government Communications Director Karia Christopher told the Beacon on Oct. 28. “It is an internal working document, and because it has not been laid on the House’s table, it cannot be shared.”

Though Ms. Christopher said the final business case will be published after it is finished, completion is not expected for three months or more.

Decision made

Meanwhile, leaders’ recent comments suggest that any community input gathered at the planned consultations won’t alter a decision they announced in July to extend the runway by about 2,400 feet in what would be the largest capital project in Virgin Islands history.

Communications and Works Minister Kye Rymer continued to toe this line when he delivered an update recently in the House of Assembly, asking residents for input not on whether the project should proceed but on how it should be carried out.

“As we move into the next phase, KPMG [(BVI) Ltd.], our engaged consultant, will lead stakeholder consultations towards the end of this month, October, into the first week of November 2024,” the minister told the HOA on Oct. 18.

“These discussions will ensure that the airport’s development meets the needs of our local community, businesses and the broader aviation industry.”

The “stakeholder” meetings got under way this week, but the public was not invited and government did not release a meeting schedule or say which stakeholders were chosen to attend.

Public not invited to ‘stakeholder’ meetings for airport project

However, BVI Airports Authority Managing Director Kurt Menal told the Beacon that consultations “with the general public” will be held in late November.

Controversy

The decision to withhold the first part of the business case from the public is likely to add fuel to the controversy that has surrounded the project since it was first proposed in 2012 by then-premier Dr. Orlando Smith’s administration.

Dr. Smith and his successors — including Premier Dr. Natalio “Sowande” Wheatley — have argued that a major airport expansion is urgently needed to attract larger aircraft that can foster direct connections to the United States mainland and beyond, in turn increasing tourist traffic and revenue to the territory.

But detractors have questioned whether the expansion will bring the direct flights that VI leaders promise. And even if it does, they have said, a longer runway could adversely affect the existing tourism product by bringing more visitors than the territory can properly accommodate.

But without a comprehensive business case in the public domain — and without a national plan to guide tourism decisions — both sides have relied largely on speculation to make their arguments.

Despite American Airlines’ June 2023 launch of daily direct flights to Miami aboard midsized jets (above), government says the existing runway at Beef Island is not long enough to support the larger jets leaders hope will add more connections to the mainland United States. Not all residents are convinced. (File photo: DANA KAMPA)

Request for proposals

Last November, the BVI Airports Authority requested proposals for a such a comprehensive business case for the first time.

The study — which is expected to review the planned expansion in unprecedented detail — is designed in part to help answer longstanding questions about the project’s viability.

It is also designed to meet requirements in a 2012 agreement the VI signed with the United Kingdom to promote fiscal stability and transparency.

That agreement — the Protocols for Effective Financial Management — requires government to complete and publish a business case and “robust” cost-benefit analysis before the procurement stage of any major capital project.

But despite successive governments pushing the project hard for more than a decade, none has met this requirement.

The ongoing business case, which officials have said will comply with the Protocols, is using the “Green Book Five Case Model” employed by His Majesty’s Treasury in the United Kingdom, which includes separate “strategic,” “economic,” “commercial,” “financial” and “management” cases, officials have said.

The review, however, is taking longer than planned.

When the BVI Airports Authority announced on Feb. 12 that KPMG (BVI) Limited had been awarded a $209,089 contract to create the business case, officials said it would be completed in about three months.

More than eight months later, Mr. Rymer said on Oct. 18 that only the first part is complete.

“I am pleased to report that we have successfully completed the Strategic Outline Case, which has been approved by the Cabinet on [Sept. 18],” he told the HOA.

“This document outlines the strategic objectives of the airport development, highlighting the necessity of the project while addressing potential risks and challenges. This approval marks a key milestone, paving the way for the detailed analysis and planning that lies ahead.”

Officials say the planned airport expansion is needed to allow larger jets to use the facility. (File photo: RUSHTON SKINNER)

Strategic Outline Case

Mr. Menal, the BVIAA managing director, told the Beacon last week that the completed Strategic Outline Case is extensive.

“The Strategic Outline Case does not only [include] a strategic case as the name may imply,” Mr. Menal wrote in an email, adding that it provides a “macroscopic” perspective of several areas. “It [also] consists of a strategic [case], a socioeconomic case, a commercial case, a financial case and management case.”

The next step, he added, will be an “Outline Business Case” that is now scheduled to be completed in February.

“The Outline Business Case evaluates the roadmap laid out in the Strategic Outline Case in greater detail and aims to determine what the preferred option for the project will be after considering as many factors as reasonably practicable,” Mr. Menal wrote. “The OBC is a comprehensive and detailed document that plays a key role in the UK Green Book Process.”

Following the Outline Business Case, he added, a “Full Business Case” will be prepared before the contract signing for the project.

“The purpose of the Full Business Case is to evaluate the project in its entirety, particularly with reference to the final contract being considered,” he stated.

Board not complete

Like Ms. Christopher, however, Mr. Menal declined to provide a copy of the completed Strategic Outline Case.

“I would be more comfortable releasing the SOC with the blessing of our board,” he wrote. “However, the board is not fully constituted at the moment, so that is not possible.”

In his Oct. 18 statement, Mr. Rymer did not mention the “Full Business Case,” but he said the Outline Business Case will establish “the need for the project, ensuring alignment with broader government national priorities as defined in the National Sustainable Development Plan.”

He added that it will also evaluate the project’s economic benefits through a “comprehensive cost-benefit analysis” that will guarantee value for money.

“Additionally, it assesses the commercial viability, examining financing options and procurement strategies,” he said.

Also to be scrutinised are the financial implications for government, including funding sources and budget requirements, according to the minister.

“Finally, the OBC outlines how the project will be managed, addressing governance, risk management and timelines,” he said.

Skyrocketing cost

Such a detailed assessment may be unprecedented in the history of the project, whose estimated cost has skyrocketed over the past 12 years as the government has withheld many previous studies from the public.

When Dr. Smith’s National Democratic Party-led government first held public meetings on the plan in 2012, officials described the project as a “done deal” and said a 2,500-foot runway extension would cost around $38 million.

The announcement sparked heated dialogue between supporters and detractors of the project.

About seven years passed before another public meeting was held in January 2019 to discuss an environmental impact assessment, but in the meantime the projected cost ballooned over the course of two tender processes.

A first round of bids in 2013 came in at around $400 million, and a second round for a scaled-down project came in between $153 million and $200 million in 2016.

Documents withheld

Meanwhile, millions of dollars were spent on preparatory works and studies. Much of this documentation, however, was withheld from the public as leaders downplayed the lack of transparency.

When then-governor John Duncan was asked in April 2016 about the government’s failure to publish the business case required by the Protocols for Effective Financial Management, he told a Beacon reporter, “Well, let’s get away from the business case, because you’re doing what the French call chercher la petite bête, which means ‘looking for the small insect,’ literally speaking.”

About three months later, with the tender process apparently still ongoing, Dr. Smith’s government finally released a partial “outline” business case, along with another study.

But the documents — which were both created by PricewaterhouseCoopers — did not include a full cost-benefit analysis as required by the Protocols for Effective Financial Management.

And although the government promised at the time to complete and publish a full business case later, it never did.

Chinese bid chosen

Nevertheless, in December 2016 Dr. Smith’s government announced plans to accept a $153 million bid from the China Communications Construction Company.

More controversy followed as leaked CCCC bid documents suggested that the company would receive a series of concessions.

The CCCC plan later stalled for unexplained reasons, and by 2018 Dr. Smith’s government was floating the idea of a new public-private partnership as part of the territory’s recovery from Hurricane Irma in 2017. But that plan didn’t proceed either.

Change of tune

The project appeared to be dead in the water after then-VI Party leader Andrew Fahie came to power in the general election of February 2019. While campaigning, Mr. Fahie had announced that his party was “not in support” of the proposed airport expansion at the time, calling it a “legacy project to” Dr. Smith.

Then-Premier Andrew Fahie speaks during a January 2020 rally in Cappoons Bay, during which he announced his plan to proceed with the airport expansion he had previously criticised. (File photo: DANA KAMPA)

However, soon after his party won control of the government and he was appointed premier, Mr. Fahie changed his tune.

In 2020, his government effectively restarted the project from scratch, hiring Atlanta-based consultant Brakkam Aviation Management, which recommended the construction of a 9,100-foot runway at an estimated cost of $183.78 million over a period of three to five years.

Mr. Fahie did not disclose how much the BVIAA paid the firm or say whether the consultancy was tendered.

Bakkram was founded by company CEO and President Miguel Southwell, a former general manager of the Hartsfield-Jackson International Airport in Atlanta, who was fired in 2016 amid a public spat with the city’s mayor, according to the Atlanta Journal-Constitution.

The BVIAA’s contract with the firm resulted in a six-month interim report that made various recommendations, beginning with suggestions for expanding the airport runway, Mr. Fahie said at the time.

The report, however, was never provided to the public.

2023 summit

Since then, leaders in the current and former governments have periodically mentioned their commitment to expanding the airport.

In February 2023, for instance, BVI Airports Authority Chairman Theodore Burke led a VI delegation to Miami to attend the Airport Expansion Summit for Latin America and the Caribbean.

In February 2023, BVI Airports Authority Managing Director Kurt Menal (second from left) and BVIAA board member Elvis “Juggy” Harrigan (left) attend a meeting during the Airport Expansion Summit for Latin America and the Caribbean in February in Miami. (File photo: GIS)

On the delegates’ return, the BVIAA announced that public-private partnerships were again among the options being considered for funding the project.

Other options under consideration included government-funded and “self-funded” models, according to a government press release issued at the time.

Mr. Menal — who was part of the Miami delegation — said at the time that his team was revisiting various studies and plans that were developed over the years for the proposed expansion.

Secret ‘master plan’

The release added that the BVIAA and the Communications and Works Ministry had “shifted the focus from airport expansion to holistic airport development based on a master plan which is a long-term guide to development that supports an airport’s business and infrastructure development strategy,” according to the press release.

At the time, however, Mr. Menal declined to provide a copy of the master plan, saying that it was in draft form and had not yet been presented to the government.

He estimated that the plan would be finalised within three to six months and made public sometime after that.

But since then, it has not been made public.

Mr. Rymer, however, provided a brief update on the plan during his HOA statement this month.

“In tandem with the [Outline Business Case] development, the BVI Airports Authority is also updating the airport master plan,” he said. “This comprehensive blueprint will guide the long-term development of our airport infrastructure, encompassing terminal modernisation, runway expansion, and the enhancement of support facilities. It is designed to ensure that our airport can accommodate future growth in air traffic.”

He added that the BVIAA is also conducting an air traffic forecast to provide passenger, tourism and cargo projections.

“This data, along with the updated master plan, will inform the [Outline Business Case], ensuring that our airport development is based on sound data and growth projections,” Mr. Rymer said.

No public meetings

Though the business case is not complete and no public meetings about the project have been held in more than five years, the government decided the way forward for the project months ago.

In a July 2 Facebook broadcast, Mr. Rymer and other officials announced their decision to extend the Beef Island runway by about 2,400 feet.

During a July 4 government Facebook livestream (above), officials announced that government had decided to extend the runway by about 2,400 feet. From left are Communications and Works Minister Kye Rymer, Communications and Works Ministry Permanent Secretary Elvia Smith-Maduro, BVI Airports Authority Managing Director Kurt Menal, and BVIAA Special Projects Director Clive Smith. (Screenshot: GIS)

The decision came from the project “steering committee” that government established in February, BVIAA Special Projects Director Clive Smith said at the time.

The steering committee includes public-sector representatives from the BVIAA; the Ministry of Communications and Works; the Premier’s Office; the Town and Country Planning Department; the Ministry of Natural Resources, Environment and Climate Change; the BVI Tourist Board; and Attorney General Chambers, Communications and Works Ministry Permanent Secretary Elvia Smith-Maduro said at the time.

Also on the committee is BVI Finance, which represents the financial services industry, and “private-sector partners” from the tourism sector, she added.

Additionally, the committee includes the “lead team” from KPMG, government has said previously.

Premier’s backing

During a July 19 press conference, the premier defended the plan to proceed with the expansion despite the decision being made ahead of promised public meetings and the completion of the business case.

“We have, literally, been speaking about this as a community for decades,” Dr. Wheatley said in response to questions from the Beacon. “So I think we have passed the stage where we are trying to decide whether we are extending the runway or not.”

KPMG did not respond to a request for comment.