The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Six Family Island airports will probably require a greater collective investment than the $150m a Bahamian merchant bank is seeking to raise from local investors, it was revealed yesterday.

Jim Lew, managing director of LeighFisher, the aviation consultants hired by the government to develop the private-public partnership (PPP)M process for outsourcing these assets to private developers/managers, told a bidders’ briefing that they would likely have to raise excess capital beyond the sum RF Bank & Trust is putting together.

Describing the award of this contract to the former RoyalFidelity as a “pre-step”, Mr Lew said the investment bank had been asked to raise the financing so that Bahamians “can invest in this project”. While the $140m-$150m “can be a source of financing” for the winning bidder, he added: “There’s a strong indication the $150m will not be sufficient to cover, so the private sector will have to find their own lenders to cover the shortfall.”

Mr Lew also said the financing for the six Family Island airports will be separate from the $200m now estimated as necessary for Grand Bahama International Airport’s complete transformation and rebuild after Hurricane Dorian.

With the North Eleuthera and Exuma airport revamps estimated to involve $65m each, the $10m price tags for San Salvador and Abaco, as well as $18m for Long Island and $15m for Great Harbour Cay, take total projected capital investment costs to $183m - well above the $140m-$150m to be raised by RF Bank & Trust.

Meanwhile Dionisio D’Aguilar, minister of tourism and aviation, told the briefing that by packaging the six Family Island airports together the government was mitigating the risk to bidders posed by a Hurricane Dorian-style storm wiping out one or two of these assets.

Describing the Family Islands as the fastest-growing and most resilient segment of the Bahamian tourism industry, he said: “Tourism has been impacted by the COVID-19 pandemic, but we are roaring back at a phenomenal rate. As Americans become vaccinated, they are yearning to travel and our tourism sector is roaring back at a phenomenal pace.”

Describing the growth potential of the selected Family Island airports as “substantial” in the post-COVID era, Mr D’Aguilar added: “There isn’t sufficient headroom in our Budget to do these airports out of the public purse..... The Government wants to enhance the infrastructure that visitors meet in these islands.

“The first impression is the airport infrastructure, and in most instances the growth of airport infrastructure has not been able to keep up with demand. Our Family Islands are very high-end, very boutique and we like to say they are designed for social distancing.

“That component of our arrivals is most resilient. No matter what happens, the attractiveness of our Family Islands grows unabated as people look for more off-the-beaten path types of activities. That part of the tourism arrivals has the greatest potential for growth.”