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Airport Upgrades Gain 1% Of Needed $200m

Tourism Minister Dionisio D’Aguilar. Photo: Terrel W. Carey/Tribune Staff

Tourism Minister Dionisio D’Aguilar. Photo: Terrel W. Carey/Tribune Staff

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The government has allocated just one percent of the $200m needed to upgrade 28 Family Island airports in this year’s budget, a Cabinet minister revealed yesterday.

Dionisio D’Aguilar, minister of tourism and aviation, told Tribune Business that the $2m provided for the 2019-2020 fiscal year highlighted why The Bahamas must urgently “fix the model” for airport maintenance as the already-strained Public Treasury “is unable to carry the load”.

He voiced optimism that a passenger user facility charge will be introduced “in the near term” at Marsh Harbour’s Leonard Thompson International Airport to provide a funding mechanism for its upkeep, amid complaints from the Abaco Chamber of Commerce and others that visitors are being given a terrible first and last impression of The Bahamas due to its deterioration.

Mr D’Aguilar said such a move was part of wider plans to potentially roll-out the so-called “NAD model” to major Family Island airports, given that all are suffering from a lack of operational and capital improvement funding.

This structure, which involves a private sector entity taking over an airport’s management and financing, has already been adopted at the Lynden Pindling International Airport (LPIA) with the Nassau Airport Development Company, and the minister said the Government’s financial constraints give it no alternative but to look at similar public-private partnerships throughout the nation.

While aviation consultants, Stantec, estimated in 2013 that a $180m total investment was required to bring all Family Island airports up to international standard, Mr D’Aguilar said these costs had likely escalated to “very much north of $200m”.

The Minnis administration itself is not well-placed to do much about it, the minister admitted, as the Government has “allocated $2m for it this year”. All 28 airports remain under the control and management of the state-owned Airport Authority, with travelling passengers contributing nothing towards maintaining infrastructure vital to the tourism industry and inter-island commerce.

“The issue at many of our Family Island airports is a lack of funding for operations and capital improvements,” Mr D’Aguilar told Tribune Business. “So the Government is considering the implementation at some of the key Family Island airports of a business model similar to the one we have at LPIA, where we have an entity that manages that specific airport and raises funds through the implementation of a passenger facility charge.

“None of our Family Island airports charge a passenger facility charge. I don’t know of any international airport that does not charge a passenger facility charge. The business model at airports recognises the users of the airport pay for its use, but we don’t deploy that at Family Island airports, so they don’t have sufficient funding in place to fund operations and provide the necessary upkeep when needed.”

Acknowledging that this had resulted in The Bahamas possessing some of the cheapest airports in the Caribbean to fly into, Mr D’Aguilar said this had created an imbalance that needed to be addressed if this nation is to bring its aviation ports of entry up to world-class standards.

Using the Miami to Nassau route as an example, he revealed that airline ticket prices typically contained around $154 in total fees. While around $60 was incurred on the US side, the remainder on this end was made up of NAD’s charges ($48); Bahamian departure taxes ($29); and a $7 security fee with the remainder being Value-Added Tax (VAT).

While similar fees and charges may not be imposed at the same level in the Family Islands, Mr D’Aguilar said additional income streams were essential to address the Airport Authority’s “very limited funding for capital improvements and equipment upgrades” and “keep it on the cutting edge”.

“The process has begun for us to turn our airports into self-sustaining businesses,” he told Tribune Business. “Once we’ve done North Eleuthera and Exuma, we will bring attention to those airports receiving serious traffic and set up a business model that allows for sufficient revenue to upgrade and maintain them. We need to put that structure in place.

“I feel that we’re leaving money on the table that could be used to maintain them. We need to fix the business model. The public purse is not going to be able to carry the full load. The travelling public can expect, in the near term, to commence paying a passenger facility charge. I’m hoping that at Marsh Harbour we can achieve that in the near term.

“We’ve got to review how we roll that out, but Family Island airports are the cheapest in the Caribbean to visit. Yet it’s leaving no funds for us to keep them in an acceptable state. It’s not only foreign visitors bringing that to our attention but local residents. They want something a lot better and I can understand that.”

Mr D’Aguilar said Marsh Harbour was a prime example of the flawed airport operating model employed in The Bahamas. “The Government spent $30m on it, and we need to put in place a funding mechanism and business model that provide for the regular upkeep of the second busiest airport in the country,” he added.

“We need to step in and ensure there is no deterioration to the physical plant, and provide the necessary maintenance and up keep of the facility. There is no doubt we’ve been having some challenges at Marsh Harbour airport in terms of runway lighting, in terms of issues at the terminal that have been brought to our attention by the Chamber of Commerce and local community.

“We’ve obviously responded to those issues. There was a problem with the runway lighting that we’ve corrected, and I’ve been advised we’ve taken remediation steps to correct the other issues, but that will not solve the problem long-term.”

Mr D’Aguilar said “the biggest impediment” to transforming many Family Island airports is that they lack legally-defined boundaries, having simply “evolved” over the decades. This has forced the Government to hire surveyors via the Surveyor General’s Office to properly determine the limits for these assets.

Comments

TalRussell 3 months, 3 weeks ago

My negative, positive meter's needle has just tilted towards approaching more positive with Comrade Dionisio James's - Jesus 'enough is enough' moment to brungs some Christianity to Aviation Ministry - understanding he has just placed ministerial appointment on the line by his resisting any further participation central government's falsely claiming have the $200 million needed to invade for fixing the 28 Colony's Out Islands potholed landing strips. yes, no .... This should serve strong motivation clock winds down for his crown minister colleague responsible OBAN, to fess-up tell it likes the populaces at-large, done knows it be's - FAKE from fake signature signing ....total bullshi# - cra# .....

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JackArawak 3 months, 3 weeks ago

all these years, administration after administration and they still don't know where the money comes from for the maintenance of a busy airport like Marsh Harbour? LTIA is a new airport, how can they have spent that money with no maintenance plan moving forward? Ineptitude, the answer is ineptitude.

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Damifiknow 3 months, 3 weeks ago

Everybody gets a New John Deer riding mower !

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Damifiknow 3 months, 3 weeks ago

Tourism pays for all of it ! Get your facts straight ,while you rinding single file in the Suburban s with the black tags around town you know bust the tourist in the butt some more! 40 bucks a night on hotel tax in Nassau! Clean your eye glasses!maid fee,bed fee ,electric surcharge ,etc,etc You all go out to lunch together and eat in thirty minutes then sit there tongue tied waiting for someone to grab the check!

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DDK 3 months, 3 weeks ago

What is this Minister blabbering on about? They are already taxing locals and visitors alike to death! What in H-E-L-L do they do with all the departure tax and airport space rental fees? Not to mention the damn VAT! Flush it down the toilet? What a bunch of imbeciles!

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jamesg30 3 months, 3 weeks ago

Passenger Utility Fee will solve all the problems. what a joke. Georgetown and North Eleuthera were going to get these new airports- both are an embarrassment to the government and country. Solution now? create a Passenger Utility Fee and that will solve the funding problems. Even though the Bahamas already is the most expensive Caribbean destination in its market place, lets "ADD SOME MORE TAXES" to solve this problem too. Yes, let's increasingly make sure that when there is an economic downturn, that the Bahamas is the last place tourists will go to because they will be priced out of the marketplace. And let's forget the commitment the government made to at least get these two higher volume airports renovated so passengers are not lining up like livestock in the street to board their planes. 1% is what they could come up with? How about taking that 1% and spending that $2M on hiring the necessary forensic accountants to figure out where the $100's of millions of dollars went during the Christie administration? Keep the 1% and get the necessary money that was stolen to take care of this airport problem these out Islands have. I am sorry. this is a joke. A disappointment. And another bait and switch move by government. Promise some progress in areas that are so desperately needed and then say, "Whoops.... we can only find 1% of what is needed now". Oh, and let's keep dragging out feet on all the outstanding Real Tax bills that exist out there. Many by the wealthiest Bahamians in the country. No, let' just keep taxing, Vating, and dutying ourselves out of the tourism business.

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Well_mudda_take_sic 3 months, 3 weeks ago

D'Aguilar has always lacked a full deck and is about as deceitful as they come. Only a fool would be trusting of anything coming out of his mouth. He's always been all about himself and no one else and loves to mingle within the wealthy white community, whether Bahamian or foreign.

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Clamshell 3 months, 3 weeks ago

Already, if you eat a $50 restaurant meal your tab will be $65; if you stay in a $200 hotel room your tab will be $285. And these jokers think we need more fees and taxes? It’s the only nation in the world where you pay an 18% gratuity for some clerk to hand you a sack of burgers at McDonald’s. Gawd, this is sad.

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Bradgmichael 3 months, 2 weeks ago

Really, the flying public contributes nothing? $29 departure tax. I am a pilot, fly to Bimini. $50 landing fee $29 departure 4x Security fee of $7 per person to go to my own plane, $28. $200 to go fifty miles, I get to pay for gas, insurance and plane!

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