Friday, March 17, 2023
• Winning bidder aims to serve Latin America
• Freight plans to generate up to 500 positions
• DPM: 1,200 construction jobs over build-out
By NEIL HARTNELL
Tribune Business Editor
The deputy prime minister yesterday unveiled a $200m Grand Bahama International Airport redevelopment that aims to ultimately transform the facility into an international “air cargo hub” for the Caribbean and Latin America.
Chester Cooper, also minister of tourism, investments and aviation, in confirming the long-anticipated deal at the Grand Bahama Business Outlook also disclosed that the mixed Bahamian and UK joint venture consortium that won the bid plans to “consistently generate 1,200 construction jobs” over the project’s five-year build-out.
Signalling that the group’s ambitions extend beyond re-establishing a tourism gateway, and the return of US pre-clearance, he said their plans to establish an air freight hub for the region were designed to create an extra 500 jobs over a 10-year period.
Mr Cooper confirmed previous exclusive Tribune Business revelations that Bahamas Hot Mix (BHM); its chairman, Anthony Myers; and CFAL president, Anthony Ferguson, were all members of the Bahamian investor group that will spearhead what was billed as a complete overhaul of Grand Bahama International Airport. They are joined in Aerodrome Ltd by two fellow Bahamians - Anthony Farrington, an engineer; and Greg Stuart, a businessman.
BHM’s involvement in the project is through its UK-based international arm, BHM Construction International. The group has teamed with UK-based Manchester Airport Group as its operating partner, with financing for the project being provided by UK Export Finance, a British government body that provides credit guarantees and helps to arrange funding for that nation’s exporters.
Acknowledging that upgrading the airport, which was left in a state of disrepair following the devastation inflicted by Hurricane Dorian in September 2019, is “a key factor” in facilitating both Grand Bahama’s economic rebound and the Grand Lucayan’s sale, Mr Cooper pledged: “Grand Bahama, your new airport is coming and will be here very soon.”
He added that the Government has signed the agreement with Aerodrome Ltd, and its partners, in February 2023 for the airport’s redevelopment via a public-private partnership (PPP) that will see the consortium design, build, finance, upgrade and maintain a new main aviation gateway for Grand Bahama.
The consortium’s role, Mr Cooper said, will be to “generate [aviation and passenger] traffic, and to grow revenues and further enhance Grand Bahama International Airport”. He added: “Their mission is to transform Grand Bahama International Airport into a carbon neutral, climate resilient, commercially viable world-class airport.
“Subject to final design, this is expected to be an investment of $200m in that range, and this investment will begin its preliminary work this quarter, this month; March. The airport will consist of two phases which are expected to generate 1,200 construction jobs consistently over the next five years.
“Ninety percent of these jobs will be reserved for Bahamians, and work permits will only be granted where Bahamians cannot be found in accordance with our Immigration laws and policies. During the construction of phase one of the new Grand Bahama International Airport, which we expect to be completed no later than the first quarter of 2025, 300 construction jobs will be created along with 50 engineering, management and accounting jobs.”
Messrs Myers and Ferguson could not be reached via phone for comment yesterday, and messages left for them were not returned before press time last night. However, Mr Cooper made clear the consortium’s air cargo hub ambitions will only be pursued once it has restored Grand Bahama International Airport to an acceptable standard for tourist arrivals and airlines, facilitating sufficient airlift to support several multi-million resort and real estate projects in the pipeline.
The phase one redevelopment will feature a new domestic terminal, US pre-clearance terminal, new taxiways and aprons, new roads and car parks, a flood mitigation system, a flood mitigation basin, renewable energy systems, a sea defense berm and support bridges, and infrastructure for air freight cargo facilities. Particular emphasis appears to have been placed on combating flooding and storm surge given how vulnerable the airport has proven to such events.
The consortium’s second phase will result in the creation of expanded taxiways and aprons, a new domestic parallel runway, expanded roads and car parks, and an expanded heavy lift air freight cargo centre. Mr Cooper said the second phase is expected to begin construction around three years after the first phase start.
“We have many international airlines and partners interested in making Grand Bahama an air cargo hub for Latin America and the region,” the deputy prime minister added, although he did not provide further details. “The cargo zone’s construction is expected to commence within three years. New business at the cargo zone will create 50 permanent jobs consistently every year over ten years, creating 500 jobs in Grand Bahama.”
Establishing Freeport as an air cargo and freight transhipment hub is not a new concept. The idea was previously mulled by Dionisio D’Aguilar, Mr Cooper’s predecessor as minister of tourism and aviation, with the aim of exploiting Grand Bahama’s proximity - just 60 miles off the US coast - to develop an overspill cargo and break bulk facility given the lack of expansion space available at US airports.
Several sources, speaking on condition of anonymity, yesterday suggested that the airport consortium will need to either acquire or lease a portion of the nearby Sea Air Business Centre if it is to obtain the necessary warehouse and storage space to serve an air cargo facility.
Mr Cooper, meanwhile, said the winning bidder was poised to make an immediate start on transforming Grand Bahama International Airport. While Aerodrome, the Bahamian investor group, will lead the project’s financing and management under a contract with Airport Authority-owned Freeport Airport Development Company, BHM will serve as the design and construction partner.
Manchester Airport Group will manage the airport and develop a fee structure, including passenger user and management fees, to ultimately finance the overhaul while repaying UK Export Finance and other lenders and ensuring the Bahamian group get a return on their investment.
Any net profits produced by the airport will go into the Government’s planned Airport Infrastructure Development Fund. Although Mr Cooper did not say it, this structure implies that Grand Bahama International Airport will be operated under the same model as Lynden Pindling International Airport (LPIA), where the Government - via the Airport Authority - retains ownership of the real estate but leases the facility to the consortium long-term, which is likely to be for 30 years.
“We expect the work to begin before the end of this quarter,” Mr Cooper said, a period that closes at the end of this month. “Full design works are underway, and a design team will be on the ground on March 27. Demolition of the old international terminal and storage building will begin at the end of this month, or by the first week of April.”
He pledged that repairs to the air control tower will “begin immediately”, while those for the old Customs building will also start this week and “be given to Grand Bahama contractors for the benefit of residents of Grand Bahama”. The airport’s operating hours have also been extended to 8pm.
As for the prospects of having US pre-clearance restored, Mr Cooper said negotiations were taking place with the relevant US federal government agencies. “We will not belabour this issue except to say the Ministry of Foreign Affairs and Ministry of Tourism, Investments and Aviation are in active discussions with US Customs and US Border Patrol. That’s been going on for several weeks,” he added.
Airport construction, maintenance and improvement is listed as one of Bahamas Hot Mix (BHM’s) specialty areas on its website, and it has long experience of working at LPIA on areas such as runway paving and resurfacing. The company also last year announced the expansion of its Freeport-based concrete and asphalt production capabilities, and its plant will enable it to supply Grand Bahama International Airport with these needs during reconstruction.
Manchester Airport Group owns and operates three UK airports - Manchester, London Stansted and Birmingham East Midlands. Collectively, it says some 60m persons pass through these three airports every year and that they provide jobs for a combined 40,000 people. Grand Bahama could be its first venture outside the UK.
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