Published On: Wed, Dec 28th, 2016

World Bank-sanctioned Chinese company selected for $153 million BVI airport contract

terrence-lettsome-airportROAD TOWN - Following a lengthy procurement process and consideration of the two remaining bidders for the runway extension project of the T.B. Lettsome International Airport, China Communications Construction Company (CCCC), which is currently barred by the World Bank from engaging in any road or bridge projects financed by it, has been selected by the government of the British Virgin Islands as the preferred bidder for the project.

The bid advanced by the CCCC was $153,432,572.10 and the competing bid by IDL-McAlpine Consortium was $198,910,525.

Negotiations will now get underway with the preferred bidder with a view to concluding a contractual agreement within three months that delivers the right outcome for the people of the territory. It has always been, and remains, the BVI government’s overriding objective to ensure a significant local involvement in the project. The government sees this as critical and thus it will figure heavily in the negotiations.

The runway extension project became vital once American Eagle left Puerto Rico and took with it the main access link from mainland USA to the territory. At the height of the Eagle’s operations, up to as many as 12 flights per day operated between Puerto Rico and the BVI giving excellent and seamless access from mainland USA and the rest of the world for most of the over 393,000 overnight visitors to the islands.

Extension of the runway at the T.B. Lettsome International Airport is fundamentally about the future of the territory, given that its industries – tourism and financial services – depend on having easy, reliable and affordable access to global markets. This is of utmost importance if the BVI is to remain globally competitive.

Extension of the runway from 4,645 feet to about 7,100 feet will allow current airline fleets (737-800 and Airbus 320) to fly directly to and from continental US and Latin America. At present, established US airlines all cite the inability of their existing fleets to operate from the BVI due to runway length.

In addition passenger surveys indicate that travellers do not like to make more than one connection to get to their destination. BVI hotels and other service providers are therefore losing their competitive edge due to visitor access to the territory.

In welcoming this development, premier and minister of finance, Dr Orlando Smith, stated that it is government’s responsibility to ensure that an adequate infrastructure is in place to support and grow the territory’s industries and ensure that its economy is able to produce the revenue streams required to ensure the quality of life the people of the BVI have become accustomed.

“Without the extension to the runway, new initiatives like our health tourism, the new BVI International Arbitration Centre and attracting new investors in tourism and financial services cannot succeed in providing additional revenue, jobs and business opportunities. Tourism can only be competitive if tourists can access the BVI easily. It is currently very inconvenient and expensive to visit the BVI,” he said.

Smith added, "The territory cannot afford to ignore the air access needs of our tourism sector since 62 percent of the aggregate economic activity in the territory is generated by tourism. Neither can we depend on other jurisdictions where we cannot guarantee the quality of the experience to our tourists which enable them to return again and again.”

The successful delivery of the project will also enable BVI’s main international airport to accommodate regional and international traffic from a wider range of destinations, which will act as a catalyst for the further development of the economy, and will enable future borrowings where needed for important social infrastructural developments.

“It will cement the BVI economic foundation and the future advancement of the territory for generations to come,” Smith noted.

CCCC was formed from a merger between several companies, including China Road and Bridge Company (CRBC), which was adjudged by the World Bank to have irregularities in a past road construction project in a neighbouring country.

As a result, the World Bank barred CRBC from engaging in any road or bridge projects financed by it.

A 2011 change to the World Bank sanctions system required successor organisations – through purchase or reorganisation – to be subject to the same sanctions applied to the original firm.

The successor company, CCCC, was therefore also made ineligible to engage in any road and bridge projects financed by the World Bank. However, the sanction will reportedly end on January 12.

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