SIX investor groups are seeking to win the bid to operate the Norman Manley International Airport (NMIA) amid plans by the state to spend nearly $1 billion to upgrade the airport this year.

“Work is moving apace for the identification of a public-private partnership concessionaire for the NMIA. Currently the pre-qualification of bidders is underway and submissions have been received from six potential investor groups,” stated the Jamaica Public Bodies for the year ending March 2016 published by the Ministry of Finance and Planning.

The Government of Jamaica expects to conclude the process and name a concessionaire for the operation and management of the NMIA by “March 2016”.

Currently the airport is managed and operated by the statutory body, the Airport Authority of Jamaica (AAJ). During fiscal year 2015/16 the AAJ plans to spend $973 million on capital development for the airport or three-quarters higher than a year earlier. It forms part of phase 1B of the 20-year capital development programme.

The call for an NMIA concessionaire comes at a time when the airport’s profit is set to rise based on a rate increase, effective this calendar year.

“Targeted activities and the implementation of an increase in aeronautical rates are expected to impact favourably on AAJ’s financial performance, resulting in a net surplus of $1.8 billion from $952.7 million a year earlier,” stated the public bodies document.

Prior to the increase, NMIA stated that it operated at one of the lowest earning margins (at 18 per cent) when compared to a sample of 80 airports globally.

Last year, the ‘NMIA Public-Private Partnership’ published an invitation seeking to shortlist private-sector entities with proven experience in the aviation sector to operate, finance, develop and maintain the NMIA. It means that the State will relinquish its responsibility to upgrade the facilities for 25 years.

The NMIA in Kingston is the second largest of three international airports in Jamaica. Investors aiming to acquire the NMIA are required to spend a total of US$134 million on capital investments, led by a US$76 million runway upgrade, according to the previously released NMIA Kingston Information Memorandum.

The 2.7-kilometre runway will see an additional 500 metres of length with an even longer section for a runway end safety area. Debate on the length of the runway surfaced following an incident in December 2009 when American Airlines flight 331 overshot the runway. None of the 148 passengers or crew members were killed. The Boeing 737 jet skidded off the runway during rainy weather, broke through the perimeter fence, and stopped on the beach across from the road leading to Port Royal. The aircraft broke in three places.

Total passengers are estimated at some 1.37 million at NMIA in 2014 with expectations that the number will increase to 2.1 million at the end of the concession.

— Steven Jackson