Work Advanced on Expansion of Sangster International

The programme of upgrading and expansion of the Sangster International Airport is advanced with work already completed on the widening of the apron, the installation of a fuel hydrant system, and the construction of an air-conditioned hold room.
Work is now underway on the erection of six jet-loading bridges and the redesign and rehabilitation of the northern drainage ponds; the installation of public address and computer controlled security systems; expansion of immigration, baggage/customs and ground transportation halls; and partial refurbishing and modification of the existing terminal.
The programme of expansion, which also include the widening of the airport terminal from 25,000 square metres to 55,000 square metres, along with the construction of a new eleven-gate concourse, is being undertaken by MBJ Airports Limited on a phased basis over the next five years, at a cost of US$130 million.
Work on Phase I started in April of this year and should be completed in May 2004, the second phase is slated to begin in January 2004 for completion by mid 2006, with the third and final phase ending by 2007.
Stephen Wedderburn, Director for Divestment at the National Investment Bank of Jamaica (NIBJ), while addressing the recent Engineers Week Lecture at the Terra Hotel in Kingston, informed that the first two phases would cost US$80 million and funding was sourced from shareholders’ equity, loan funds from the International Finance Corporation, capital contributions from the recently established Airport Improvement Fee and internally generated cash flows.
He said that funding for the final phase had not yet been confirmed and if MBJ failed to secure such funding, they faced the possibility of termination of the concession and loss of their equity contributions for the first two phases.
MBJ Airports Limited took over operation of the Sangster International Airport in April of this year after Government decided to divest the facility.
Mr. Wedderburn explained that the divestment took place within the context of Government’s privatisation programme, which has the objectives of, among other things, securing greater operational efficiencies, enhancing access to foreign markets, technologies and capital, and reducing the drain on Government fiscal resources.
In the case of the Sangster Airport, Mr. Wedderburn stated that its divestment was driven by the recognition that the international gateway for stopover tourists was becoming too small to handle the growing level of traffic.
Explaining the details of the contract, the Divestment Director informed that the concession agreement between the Government, through the Airports Authority of Jamaica (AAJ) and MBJ, would run for 30 years. During this time, the AAJ has sub-contracted all rights and responsibilities in respect of the management, operation and maintenance of Sangster Airport to MBJ Airports.
MBJ will bear all the expenses of management, maintenance and operation of the facility, while receiving all the revenue resulting from the operation of the facilities.
It will also pay a monthly concession fee to AAJ based on passenger and cargo throughput and will assume all financial, economic, and other business risks and responsibilities, without recourse to Government.
MBJ is also obliged to maintain, repair and renew the Sangster Airport assets as required to run the business.
At the end of the concession, all rights over Sangster Airport assets, including titles over those assets added by MBJ during the concession, will revert to AAJ at no cost.
Mr. Wedderburn noted that the five-year development plan to be implemented at Sangster Airport would “significantly improve the comfort of airport users and the services and amenities offered at the airport.”
Observing that the option of financing infrastructure through private means was likely to be pursued in cases where the Government is expected to face tight fiscal constraints, he mentioned other successful privatisation drives, such as the liberalization of the telecommunications sector, the privatisation of Jamaica Public Service Company, and the construction of Highway 2000.
The MBJ consists of a four member consortium – Vancouver Airport Services of Canada; Agencias Universales of Chile; Dragados Concesiones of Spain and the Ashtrom Group of Israel.
The Jamaica Institute of Engineers (JIE) observed Engineers’ Week from September 21 to 25 under the theme “The Impact of Engineering on National Development”.