House Approves Resolution Giving Access to AIF

The House of Representatives, approved a Resolution on November 4, seeking amendment to Regulations, to facilitate access to the Airport Improvement Fund (AIF), to repay loans to the European Investment Bank (EIB) and the Caribbean Development Bank (CDB).
The loans have been used to refinance short-term bridging finance, used for direct construction and contractor payments for Phase 1A of capital development works, at the Norman Manley International Airport (NMIA) in Kingston.
Minister of Transport and Works, Michael Henry, who moved the Resolution in the House, explained that as of August 2008, US$92 million has been spent on Phase 1A of the capital development works at the NMIA. Of this, the AIF has contributed US$22 million, with the debt requirement of US$79.5 million, secured by short-term facilities from RBTT, the National Insurance Fund, and the PetroCaribe Fund, which were used to undertake the current capital works at the airport.
The approval was necessary, he said, due to the protracted negotiations to finalise the long-term financing loan agreement, which is being negotiated jointly with the EIB and the CDB in the sum of US$51 million.
“It is intended that the loans from the EIB and the CDB will be used to refinance the bridging loans. However, the AIF regulations in existing form, do not allow for the AIF to be utilised to permit servicing of loans used to refinance existing interim financing for the capital development works at the NMIA. The amendment is necessary in order to repay the EIB and the CDB,” he explained.
Mr. Henry noted, however, that in the case of the Sangster International Airport, in St. James from the outset, AIF regulations for that airport allowed for the use of AIF to repay loans accessed by the private airport operator, to reimburse the Airport Authority of Jamaica (AAJ), for advanced works undertaken there.
The Minister explained that the primary reason for implementation of the airport improvement fee, is to assist with the capital development programme being undertaken at both international airports. “The AIF is well established internationally, as a source of financing capital development programmes at airports, and it’s charged by many airports in North America and the Caribbean, as well as other airports around the world,” he said.
Mr. Henry noted that the fee was implemented under the Airports Economic Regulations Act, which was passed in Parliament in February 2002.
The capital development programme at the NMIA is being carried out in two phases, with phase 1A (2004-2008), costing US$120 million; phase 1B (2008-2012), costing US$26 million, and phase two (2013-2033), to cost US$15 million.