A wide variety of stakeholders can expect to hear about investment opportunities for the proposed Public-Private Partnership (PPP) at the Grantley Adams International Airport (GAIA) when an investors’ conference takes place later this month.
Investment promotion agencies, construction companies, financiers, entrepreneurs, and service providers are among those likely to be interested in attending the Local Investors’ Conference and learning about the PPP. The conference will be held on Wednesday, November 27, at the Lloyd Erskine Sandiford Centre.
A public-private partnership (PPP) is a way to fund public infrastructure projects and is structured as a contractual engagement between public and private entities for their mutual benefit.
PPPs are primarily used for providing infrastructure in areas such as transportation systems, including airports and ports, energy, water and sanitation, building and equipping schools and hospitals.
At the conference, it is expected that officials from GAIA Inc. will give background on the airport and its operations, as well as the opportunities in the context of the future redevelopment of GAIA under a PPP arrangement.
The International Finance Corporation (IFC), which is advising GAIA Inc. on the PPP, will give details on the proposed structure of the partnership, opportunities for local investors and expected timelines on the process.
Minister of Tourism and International Transport, Kerrie Symmonds said that the conference is another development in the process of finding a suitable and qualified partner to operate the facility.
“There will be opportunities for local and foreign investment in the airport, which will be a positive development for Barbados. The PPP is also likely to have sub-contracting opportunities for local firms in areas such as civil works, food and retail businesses, financing and insurance providers,” he added.
The Tourism Minister explained that the GAIA Inc. is seeking an experienced, qualified private investor to operate, expand and improve operations at the airport to assist with driving increases in revenue and further enhancing quality of service. To achieve further growth and the expected increase in passenger numbers, the airport needs to be expanded.
He said: “It makes sense for this expansion to be funded privately so that Government does not have to make a large financial outlay. Across the world, Governments are turning more to the private sector as an alternative, additional source of funding to narrow the funding gap and alleviate constraints on public resources.”
Speaking to the proposed benefits of a PPP, Acting Chief Executive Officer of GAIA Inc., Mr. Terry Layne noted: “Through this partnership, the operations of the airport are set to be transformed through enhanced services, efficiencies and amenities. And we see this happening in a way beneficial to the airport, the economy and the country.
“Users of the airport can expect to see an expansion and a new layout to improve traffic flows in the terminal building to meet international, industry recommendations and projected increased traffic,” Mr. Layne added.
The airport CEO also explained that the proposed PPP for GAIA is not a sale of an asset. “The Government and People of Barbados will retain ownership of the infrastructure, but the private partner will be granted a concession or lease for a number of years to expand, operate and maintain the facility until the end of the contractual period,” he said.
In the case of the airport, the partnership is expected to last up to 30 years.
GAIA Inc. is working with the International Finance Corporation (IFC) on the PPP. The IFC is the private sector arm of the World Bank Group and offers advisory and investment services.
It is advising GAIA Inc. in the process of finding the most qualified airport operator for the airport. This will take place through an open, transparent and competitive tender process.
The final say by GAIA Inc. and Government on which operator will be awarded the contract will be based on the outcome of the evaluation of bids received, against the pre-established criteria set.
The tender for the new airport operator is likely to be awarded in the third quarter of 2020 with operations being fully handed over in early 2021. Those interested in attending the local investors’ conference are asked to email email@example.com for more information and to register for the event.
Media Fact Sheet – Grantley Adams International Airport Public-Private Partnership
GAIA Inc. is seeking an experienced, qualified private investor to operate, expand and improve operations at the Grantley Adams International Airport through a PPP.
- GAIA Inc. will enter into a long-term performance-based public-private partnership with an airport operator.
- A PPP (Public-Private Partnership) is a contractual arrangement between the public and private sectors, typically long term, where significant risks are transferred to the private sector.
- PPPs are primarily used for providing infrastructure, such as transportation systems including airports and ports, energy, water and sanitation, building and equipping schools and hospitals.
The proposed PPP between GAIA Inc. and an airport operator is slated to begin by early 2021.
- No agreements have been signed with any airport operators; a number of steps need to take place before this happens, including finalizing the structure of the PPP and requirements for the airport operator, preparing bid documents, promoting the transaction to investors, negotiating with bidders, evaluating bids, and awarding the contract.
The Grantley Adams International Airport is not being sold.
- The ownership of the airport will remain at all times with the Government of Barbados.
- The private operator will only have the right of use to the airport’s assets and the right to invest and expand the airport, similar to a lease, for the length of the partnership.
- At the end of the PPP, the airport’s assets return to the Government.
Earlier this year GAIA Inc. began working with the IFC to help find the most qualified airport operator.
- The International Finance Corporation (IFC) is the private sector arm of the World Bank Group which offers advisory and investment services.
- The IFC is advising GAIA Inc. in identifying the most qualified airport operator through an open, transparent competitive tender process.
- The final decision on which operator will be awarded the contract will be based on the evaluation of bids received against the criteria set by GAIA Inc./Government. IFC will provide support to them in the bid evaluation process.
- The IFC is not the new airport operator, it is only advising GAIA Inc. on identifying the most qualified operator.
GAIA Inc.’s partnership with the private airport operator will last up to 30 years.
- GAIA Inc./Government will retain full ownership of the airport during this time.
- GAIA Inc. will closely monitor performance in line with the contract and financially penalize the operator in case of non-performance.
- At the end of the partnership, operations of the expanded airport will return to GAIA Inc.
A number of steps are being followed in order to attract the most suitable and experienced airport operator.
- September 2019 – The IFC completed a comprehensive appraisal, or due diligence, of the airport and its operations.
- September and October 2019 – A team from the IFC was in Barbados for further engagement with stakeholders and to outline the indicative Master Plan that will be used to guide the contractual obligations related to capital improvements to be made to the airport by the new operator.
- IFC is developing a detailed structure for the partnership and the obligations the private operator will be required to meet under the PPP.
- The government is due to approve this structure in November 2019.
- After this the bid process to find a suitable private partner will begin in earnest.
- The investor selection process and award for the GAIA PPP will be concluded in 2020.
- Following the award to the winning bidder, the investor will need to conclude financing agreements with lenders before taking over the airport.
- The investor will start operating the airport by early 2021.
- This process is highly structured, keeping in line with international. standards, and has a number of detailed steps to ensure the best outcome for Barbados.