Expensive bid
TRANSPORT, Works and Housing Minister Dr Omar Davies has instructed the enterprise team responsible for the privatisation of Norman Manley International Airport (NMIA) to conduct a thorough assessment and review of the transaction process, which has so far cost the country $120 million (US$1 million).
Dr Davies told the House of Representatives yesterday that the committee has been asked to indicate possible reasons for the lack of bids for the privatisation and to submit its recommendations regarding the way forward for the airport.
“I am expecting to have this report by the end of this month. At that time I will be in a position to advise on the next steps,” he told the House.
Davies also said that the Government has already received new queries and expressions of interest from companies regarding their possible participation in a resumed process.
He said that the process has cost his ministry a total of US$1 million as at December 2015.
The Government admitted last week that it had closed the bidding for the privatisation of the airport, without receiving a single bid.
Airports Authority of Jamaica (AAJ) Chairman Dennis Morrison confirmed that no bid was received by the submission deadline of December 30, 2015.
The chairman of the enterprise team, Michael McMorris, said the Government had engaged in a robust bidding process, which utilised the services of the International Finance Corporation as lead advisors for the transaction, and the Development Bank of Jamaica as the Public-Private Partnership Secretariat, without success.
In response, Opposition spokesman on transport and works Mike Henry said that the failure to attract a bid demonstrated the need to “revert to the Jamaica Labour Party’s multi-modal transport policy of collectively packaging more than one of the island’s airports for privatisation”.
“It must be clear that the location of the NMIA condemns it to ultimately be a city airport, as it lies below sea level and will need heavy expenditure to accommodate larger aircraft, and also lacks the land space to support the transport hub concept which Jamaica needs to lift us from poverty to prosperity,” Henry said.
However, in a quick retort, Dr Davies reiterated that the privatisation of the airport would not be through a “fire sale”.
“There is no urgent imperative to propel us to privatise the asset at this time. However, our policy remains to pursue the privatisation of the airport, in keeping with the objective to introduce private sector management and expertise to improve operational efficiencies; mobilise additional private sector investment in airport infrastructure; and increase the service quality standards in line with international best practices,” he said.
The minister said that the AAJ has been proceeding with its expansion plans, and will continue to do so.
“The entity is not a charge on the budget and, in fact, it has posted a significant increase in revenues (over 30 per cent) and profits for this fiscal year to December 2015, while passenger traffic increased by five per cent over last year-to-date,” he added.