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PM: Hewanorra International Airport Redevelopment Project to take off in the New Year

By OPM

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Allen Chastanet

(PRESS RELEASE) — The People of Saint Lucia are finally set to see the Hewanorra International Airport Redevelopment Project take off as the Government of Saint Lucia continues to deliver on its promise to expand and improve local infrastructure.

This project is essential to Saint Lucia’s overall economic growth, especially as the island continues to expand as a leader in leisure and business travel. Prime Minister and Minister for Finance, Economic Growth, Job Creation and External Affairs, Honourable Allen Chastanet, explained that the Government has been preparing for this project by starting the Airport Development Charge in January 2018.

In order to ensure this project starts in the New Year, the Minister for Finance on Tuesday brought a resolution before the House to guarantee a loan of US$100 million from the Export–Import Bank of the Republic of China (Taiwan) for the Hewanorra International Airport Redevelopment Project on behalf of the Saint Lucia Air & Sea Ports Authority (SLASPA).

The Prime Minister explained that the among the objectives of the HIA project was to alleviate the congestion during peak arrival, to implement urgent investments that will position SLASPA to take advantage of Saint Lucia’s competitive advantage as the ideal location for a hub for regional travellers, improve the earning potential of SLASPA and to expand the infrastructure of Saint Lucia and increase the capacity of the country to accommodate growth.

The Minister of Finance also explained to the House of Assembly the myriad of shortcomings of the current airport, among them the inability to handle increased arrivals.

“As at the end of 2017, the HIA handled 715,955 passengers with 16,879 aircraft movements. The HIA is currently operating well beyond its limits, with the terminal building in particular straining to accommodate passengers at peak times. The continued increase in passenger arrivals while crucial to Saint Lucia’s economic development has placed tremendous pressure on the facility which suffers from a myriad of design challenges which limit the facility’s ability to meet current and future market demands.”

The airport also has several inadequacies including the number of check-in counters and absence of automated check-in facilities, space allocations for the Immigration services and inadequate road infrastructure to facilitate the seamless operations of ground transportation. The tower and technical block are also in need of upgrading and the current facility poses challenges in meeting security requirements. Other issues include the inadequate seating within the departure concourse and the fact that the location of the terminal building does not allow for parking of wide bodied aircraft directly in front of the terminal.

Prime Minister Chastanet noted that “for Saint Lucia to grow it was imperative that this project commence, adding that the redevelopment of the HIA will alleviate the many challenges which plague the airport and would ensure the facility can cater for the anticipated growth in the tourism industry by accommodating more airlines in the airport space.”

The redevelopment includes: a new terminal building, control tower, apron, taxiway, air field and ground lighting system, and car park and roadway. The redevelopment will also result in the introduction of modern processes and procedures in the operations of the airport.

The Minister of Finance explained the terms of the loan as follows: the loan payments shall commence after the grace period of five years has expired; with interest repaid in the amount of US$2,195,000.00 semi-annually during the grace period and thereafter at the six month London Inter-Bank Offered Rate plus 1.5% per annum. The loan is repayable over a period of 20 years from the date of the first disbursement on the loan inclusive of a five-year grace period.

The Government of Saint Lucia reintroduced the Airport Development Charge (ADC) of US$35 per departing passenger effective January 2018 with these funds to be used by SLASPA to repay its loan for the redevelopment of the HIA.

During his presentation the Prime Minister expressed immense gratitude to the Government and People of Taiwan for their confidence in the Government of Saint Lucia. The People of Saint Lucia are finally set to see the Hewanorra International Airport Redevelopment Project take off as the Government of Saint Lucia continues to deliver on its promise to expand and improve local infrastructure.

This project is essential to Saint Lucia’s overall economic growth, especially as the island continues to expand as a leader in leisure and business travel. Prime Minister and Minister for Finance, Economic Growth, Job Creation and External Affairs, Honourable Allen Chastanet, explained that the Government has been preparing for this project by starting the Airport Development Charge in January 2018.

In order to ensure this project starts in the New Year, the Minister for Finance on Tuesday brought a resolution before the House to guarantee a loan of US$100 million from the Export–Import Bank of the Republic of China (Taiwan) for the Hewanorra International Airport Redevelopment Project on behalf of the Saint Lucia Air & Sea Ports Authority (SLASPA).

The Prime Minister explained that the among the objectives of the HIA project was to alleviate the congestion during peak arrival, to implement urgent investments that will position SLASPA to take advantage of Saint Lucia’s competitive advantage as the ideal location for a hub for regional travellers, improve the earning potential of SLASPA and to expand the infrastructure of Saint Lucia and increase the capacity of the country to accommodate growth.
The Minister of Finance also explained to the House of Assembly the myriad of shortcomings of the current airport, among them the inability to handle increased arrivals.

“As at the end of 2017, the HIA handled 715,955 passengers with 16,879 aircraft movements. The HIA is currently operating well beyond its limits, with the terminal building in particular straining to accommodate passengers at peak times. The continued increase in passenger arrivals while crucial to Saint Lucia’s economic development has placed tremendous pressure on the facility which suffers from a myriad of design challenges which limit the facility’s ability to meet current and future market demands.”

The airport also has several inadequacies including the number of check-in counters and absence of automated check-in facilities, space allocations for the Immigration services and inadequate road infrastructure to facilitate the seamless operations of ground transportation. The tower and technical block are also in need of upgrading and the current facility poses challenges in meeting security requirements. Other issues include the inadequate seating within the departure concourse and the fact that the location of the terminal building does not allow for parking of wide bodied aircraft directly in front of the terminal.

Prime Minister Chastanet noted that “for Saint Lucia to grow it was imperative that this project commence, adding that the redevelopment of the HIA will alleviate the many challenges which plague the airport and would ensure the facility can cater for the anticipated growth in the tourism industry by accommodating more airlines in the airport space.”

The redevelopment includes: a new terminal building, control tower, apron, taxiway, air field and ground lighting system, and car park and roadway. The redevelopment will also result in the introduction of modern processes and procedures in the operations of the airport.

The Minister of Finance explained the terms of the loan as follows: the loan payments shall commence after the grace period of five years has expired; with interest repaid in the amount of US$2,195,000.00 semi-annually during the grace period and thereafter at the six month London Inter-Bank Offered Rate plus 1.5% per annum. The loan is repayable over a period of 20 years from the date of the first disbursement on the loan inclusive of a five-year grace period.

The Government of Saint Lucia reintroduced the Airport Development Charge (ADC) of US$35 per departing passenger effective January 2018 with these funds to be used by SLASPA to repay its loan for the redevelopment of the HIA.

During his presentation the Prime Minister expressed immense gratitude to the Government and People of Taiwan for their confidence in the Government of Saint Lucia.

(3)(2)
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11 comments

  1. That all you concerned about. Tourist!! What about us locals. Our health our children’s health, our grand children’s health. Not all of is can afford to fly for medical attention.

    (0)(0)
    • If you think its bad now imagine if tourist stop coming. Through lack of foresight, by our so-called leaders, all our eggs are in one tourist basket. Now we have to keep tourism alive or we perish with it. Its as simple as that.

      (1)(0)
  2. The dumbest decision in this whole mess is the ADT reduction! The supporters of this decision need to show me (i need numbers) that st.lucia received more tourist arrivals after the reduction. The tax raised by now would have made all this borrowing unnecessary. Now we a stuck between a rock and a hard place with two crooks in control.

    (6)(0)
  3. William Worthington

    Look, the airport needs upgrading particularly with the racecourse development in the South which is expected to bolster passenger numbers even further. It is true, there are significant waiting times in the airport currently and that is enough to put some tourists off returning. So US$100m is needed to upgrade the airport.

    If 715,955 passengers depart each year and $35 departure tax is charged that will generate a US$25,058,425 of extra income.

    By my calculations, US$25,000,000 should have already been saved since January 2018 when the tax was introduced to service the loan. In three years more years, there will be $100,000,000 saved up.

    So why not start the project in 3 years time and avoid taking out the loan? By then an additional US$75m will have been saved up. Why pay out interest for 25 years? Seems very costly to me when there is already a lot of debt to service.

    Even if a $100m loan is taken out, if interest is charged of 4.5% per annum minimum (will likely go up with base rates expected to do so next year again), that will equate to a minimum charge of 4.5%x$100m = $4.5m interest per year or $90 million interest over 20 years. Plus there is a need to pay down the original capital over 20 years which is $5m per year. So total cost of servicing the loan will be $5m+$4.5m = $9.5m per year x 20 years = $190m over 20 years.

    Wouldn't it be better to avoid the interest by not taking a loan out at all? Cut our cloth according to what we have? We don't need to be saddled with another $4.5m interest per year.

    I appreciate the revenue from $35 per departing passenger is going to more than support the interest payments but why pay any interest payments by saving up for three more years prior to commencing works and then pocket the $35 per passenger or $25m per year for the next 25 years which equates to $625,000,000 - something which will really help the country get out of debt. In 2016, national debt was $1,145m (source: https://countryeconomy.com/national-debt/saint-lucia) so that will help the country pay down more than 50% of it's debt.

    This continual borrowing is getting the country further and further into debt with a buy now pay later mentality. Borrowing and paying later is the easy option. But saving is obviously harder - something the Chinese banks are good at! Yes, we will definitely pay later as a nation if a cost handcuffs policy isn't implemented as a matter of urgency as the Chinese banks do.

    (1)(0)
    • When was the last time you heard of a politician saving tax payers money. I'm 70 years old and have never heard of such a thing in my life time!
      I have seen excessive departure fees deter tourism. No body likes to be be over charged. Beware the two G's Greed and Gouging.

      (0)(0)
  4. Great picture of Allen Chastanet!
    Where are the pictures of this new aiport that is supposed to start construction in the new year. You can not just hand someone a bag of mony and say " Build me an airport " There have to be drawings on paper! There have to be artist presentation pictures on paper!There have to be plans on paper! Why are people not demanding to see them. They have to exist. Why are the news papers publishing them?

    (1)(0)
  5. This is why we can't have nice things.

    (0)(0)
  6. Prime Minister Chastanet keeps saying St Lucia is growing? With the selling and giving of lands to foreign intrests the St lucian's St Lucia is actualy shrinking.

    (2)(3)
  7. Is it only me or does anyone else notice how quiet they are about who the contractor will be ? Ho ho ho its not who you know it's who you blow could it be that " GUY" and A&M again ? Yeah man high five ! Check the numbers US 2,195,000.00 payment is due every six month during the grace period of five years at 1.5 percent annum that's 3,292, 500 The loan is repayable over 20yrs from the date of the first disbursement "INCLUSIVE" of the FIVE YEAR period 3,292,500 x 240 month = 791,726,000 million US dollars plus or minus nice, nice man high five . That $35.00 departure tax ain't going to cut it so you know who will have to pay, but you will have a shiny new airport and lifetime of debt.

    (5)(1)
    • The interest rate is LIBOR + 1.5%, it's not 1.5%. Libor right now is 2.89525%. Let's just say 3% for simplicity so the effective interest rate is 4.5% right now....However, LIBOR can go up or down. Right now it's been heading up. What's also very deceptive is that no where in the article does it say how much the airport will cost. And you're right, no mention of the contractor either. This sounds like a mess waiting to happen.

      (4)(1)
      • NEPOTISM and CRONYISM in full effect for 2019 from the time you see him quite so just watch it all unfold. This man has put St Lucia ever soo deep in a financial sink hole not in my lifetime we will ever get out it. US100 million plus on top of what he inherit and still St Jude cant finish yet and he borrowing AGAIN for that too. Worst part of it some people just edging him on to borrow more and more just to say look what we have done god help us. My father always had a saying he is not taking credit on nothing he can't pay for.

        (1)(1)

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