Castries, Saint Lucia, Friday November 19, 2021:– Government is slowly counting the costs and added challenges inherited in the latest saga of the unending decade-old efforts by three successive administrations to complete the Hewanorra International Airport (HIA) Redevelopment Project.
Windows are also opening on the extent of unusual procedures employed by the last administration that have contributed to the project being delayed by over nine months.
The public is also now getting a bird’s eye view of a multiplicity of factors like contractual arrangements with local and foreign companies, including a Taiwanese construction firm.
During its five-year term the previous Allen Chastanet-led United Workers Party (UWP) administration clipped the wings of the original project inherited from the SLP administration led by then Prime Minister Dr Kenny D. Anthony.
The project was already near implementation with financing from the World Bank’s International Finance Corporation (IFC).
Instead, after halting the project, the Chastanet administration started a new US $175 Million project involving a US $100 Million loan from Taiwan and $75 million from a banking consortium.
But between 2016 and 2021, the project encountered several difficulties that never allowed for actual take-off from being an architectural plan.
Ahead of the July 26th 2021 General Elections, it became clear that a mixture of political infighting in the UWP and ministerial clashes over responsibility for the airport had contributed greatly to the costly delays.The Saint Lucia Labour Party (SLP) promised during the election campaign to investigate the project if it won.
True to that promise, the Philip J. Pierre administration – which also includes the previous administration’s Infrastructure and Ports Minister Stephenson King – launched an investigation soon after taking office.
In August, the Cabinet of Ministers appointed a committee “to review the project and offer recommendations related to its scope and financing arrangements” and “to identify fiscal space for reallocation to other priority projects of the government.”
Though the committee has a 90-days assignment (from August 30 to November 30, 2021), the committee earlier submitted an initial report including “initial findings, critical issues which have been observed during the review, and urgent recommendations.”
Indeed, the team noted that “commencement and implementation of the HIA project had been impacted by political, economic, and financial factors and, more recently, a health pandemic.”
The Committee found that the Saint Lucia Air & Seaports Authority (SLASPA) “entered into a construction contract with the Taiwan-based firm Overseas Engineering & Construction Co. Ltd (OECC) for the execution of the Redevelopment of the Terminal Building of HIA.”
It also noted that “The selection of OECC was solely determined by the political directorate, devoid of competitive bidding,” by an award official letter dated February 20th, 2019 from the SLASPA General Manager.
The committee found that SLASPA also engaged the Florida-based Architectural firm CBRE/HEERY (previously named Heery–S&G) comprising of Heery International Company (a Georgian Corporation) and Sequeira & Gavarrette (S&G) Inc, a Florida Corporation wholly-owned by Heery International Company.
Heery–S&G formed part of the consortium with Asphalt & Mining (A&M) when SLAPSA attempted to pursue the airport redevelopment utilizing a Design-Finance-Build model in 2010.
Disclosing some of the findings in parliament on November 16 during his address on his government’s achievements in its First 100 Days, Prime Minister Philip J. Pierre, who is also Finance Minister, revealed extensive details about various related contractual arrangements.
According to PM Pierre, “The A&M Consortium was paid US$2 Million (EC$5.7 Million +) for Intellectual Property Rights to the airport designs.”
One Day Before…
He continued, “These same designs were used and modified by the current architects, CBRE/HEERY who were again engaged at a contract price of US$15.9 million (EC$42.9 million).”
The PM also drew parliamentarians’ attention to the fact that “An addendum to this contract, with an amended Scope of Services and cost, was signed by the Chairman of SLASPA on July 23, 2021” which was just “one working day before the last General Elections.’
ECMS and Amicus Legal
According to the initial report, “Executive Consulting & Management Services Inc (ECMS), was retained by Contract Agreement (dated July 19, 2018, to November 30, 2020), to provide the project coordination services at a contract price of US$770,650 (EC$2.08 million).”
In addition, “ECMS was further retained by Contract Agreement (dated December 1, 2020, to May 30, 2023), at an additional contract price of US$733,500 (EC$1.98 million).”
The legal firm of Amicus Legal, which was already “retained as SLASPA’s External Counsel, was also paid an additional EC$1.689 million for vetting of the loan agreements relating to the project.”
The Prime Minister’s revelations later drew several references by other parliamentarians on the Government side, as well as mixed comments on social media platforms and online news media.
But this wasn’t all, as the Prime Minister also revealed several other agreements and arrangements, as well as changed plans, including relocation of the terminal building to facilitate the nearby controversial Desert Star Holding (DSH) project, that contributed to lengthy delays incurring expensive cost-overruns.
Unclear and Uncertain…
The team’s initial report has already left the government very uncertain about the actual full costs of the project.
According to PM Pierre, “Separate and apart from the HIA Terminal Building and the World Bank’s CATCOP component, there are enabling works and other master plan projects related to HIA.”
Counting the Costs…
However, the Treasury is still counting the costs to taxpayers…
According to PM Pierre, “The full costing and financing information (for the Terminal Building and the World Bank’s CATCOP component) are not yet available to the Committee.
“Consequently, the total cost to the Government of the entire HIA Capital Improvement Program (CIP) remains unclear.”
But with the November 30 deadline approaching quickly, the focus of public attention remains on whether there’ll be more revelations and exposures to come, in the investigating committee’s Final Report.