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NMIA seeking investor with US$120m to spend

Published:Sunday | December 14, 2014 | 12:00 AM
The Norman Manley International Airport in Kingston. - File

Avia Collinder, Business Reporter

Prospecting both locally and abroad, the Development Bank of Jamaica (DBJ) is going in search of an investor with at least US$120 million to spend, and the competence to take over the operation of the Norman Manley International Airport (NMIA).

Among the incentives, potential bidders for the NMIA concession are advised that they will have the option to increase non-aeronautical revenue, which currently accounts for more than half of total turnover, by reconfiguring shop concessions, as the current contracts for all shops expire this year.

New three-year contracts are to be negotiated for shops, whose offerings include restaurants, duty free shops and other services.

A Request for Qualification proposals was issued on December 1 in the early phase of the search for bidders. DBJ has set September 2015 as the deadline for the identification of the preferred bidder for NMIA, and aims to secure a deal by the end of that year.

The RFQ invitation is targeted at companies or consortia with relevant experience in the airport sector who are interested to submit an application to DBJ and its technical adviser, the International Finance Corporation (IFC), by January 19, 2015. The prequalified bidders will be announced on February 23, and those companies will be issued with a Request for Proposals.

NMIA is Jamaica's second largest airport located off the Palisadoes strip in Kingston. The airport, at year ending March 2014, pulled in US$26.06 million ($2.9 billion), which was 18 per cent better than its fiscal 2013 turnover.

Aeronautical revenue, comprising passenger service fees, landing and parking fees as well as security fees and loading bridge charges, brought in just over 40 per cent of revenue.

The large earner in this category was passenger service fees, accounting for 44 per cent of NMIA's aeronautical revenues or US$5.65 million at March 2014.

NMIA is described by the DBJ as the main airport for business travel to and from Jamaica and for the movement of air cargo. It caters to approximately 1.5 million passengers annually and handles more than 70 per cent of the island's air freight.

DBJ, which handles the divestment of government assets, is projecting an increase in traffic to 2.1 million by 2040, led by the Jamaicans living abroad, which is the largest travelling group through the airport.

Passenger traffic through NMIA are largely Jamaicans travelling to and from New York, South Florida, Toronto and London; followed by business and visitor traffic to other islands in the Caribbean.

The winning concessionaire will acquire a modern terminal building less than six years old "with sufficient capacity to accommodate anticipated traffic growth," said DBJ.

In the first seven years, the investor is expected to invest capital in a 500-metre runway extension, runway rehabilitation, and ICAO compliance projects - totalling at least US$120 million.

Beyond that, the DBJ memorandum notes that NMIA's capital investment needs will likely be limited to ongoing major maintenance, regulatory compliance and possible improvements to accommodate more long-haul routes served by wide-body aircraft.

The NMIA sits on approximately 230 hectares of land and has one runway, which is 2,716 metres long.

Its terminal complex is located north of the runway and consists of a three storey passenger terminal building, two passenger aircraft parking aprons, ground-support equipment, parking and staging areas, and administrative offices.

The DBJ said that the Jamaican Government has invested approximately US$136 million in NMIA's capital development programme since 2004.