Editorial | Clarify airport plans

Plans for the further upgrading of Montego Bay’s Sangster airport and new aerodrome in the western town of Negril are, on the face of it, good for the economy. They would, it seems, facilitate increased arrival of tourists, the island’s primary industry.

But Mr Holness and/or his transport minister, Audley Shaw, must provide additional information to assuage taxpayers that they won’t be saddled with expenditures that aren’t rightfully theirs, or left with white elephants. Mr Shaw ought also to say how the proposed projects fit into a broader transportation policy, and if the Negril initiative would, in that context, be the best use of limited resources.

After the tourism industry’s near collapse at the height of the COVID-19 pandemic, Jamaica last year welcomed more than three million visitors, returning to, and passing, pre-pandemic numbers. Over two-thirds of those tourists were stopover visitors, meaning that they mostly arrived in aeroplanes and stayed in hotels or villas. They accounted for the lion’s share of the estimated US$3.7 billion grossed by the sector in 2022, reconfirming tourism as the island’s biggest industry by earnings. It employs over 100,000 people.

The industry is projected to continue to grow. Visitor arrivals, the Government expects, will reach five million by 2025 and gross earnings will be over US$4 billion. The proportion of stopover visitors relative to cruise passengers is expected to remain largely the same.

EFFICIENT FACILITIES

Jamaica, in the circumstances, needs good, efficient facilities – including airports – with which to welcome tourists and to keep the industry globally competitive. That was an important part of the context of Mr Holness’ announcement of the upgrading of Sangster, which is, by far, the primary gateway of Jamaica’s tourism.

According to Mr Holness, an additional US$70 million is to be spent to enhance physical infrastructure and systems at the airport that have become “outdated”. That work includes expanding the check-in hall, modernising concourses, improving lounges and building a car park.

This proposed expenditure is in addition to US$70 million on other ongoing infrastructure work at the airport, the major bit of which is the 400 metre extension of its runway.

“This is what I would call a strategic nation building investment,” Mr Holness said, after an inspection tour of the current projects. “This US$140 million in total will transform the experience here.”

We agree with the prime minister about the strategic value of the investment.

What, however, Mr Holness didn’t make clear is who, and how, this latest development will be paid for. Or more precisely, if the Government will meet any portion of the bill, and if so, under what condition.

While Sangster International Airport is owned by the Jamaican Government through the Airports Authority of Jamaica, it is operated by the MBJ Airport Ltd, an outfit 74.5 per cent owned by Desarrollo de Concesiones Aeroportuarias (DCA), a subsidiary of the Mexican airports operator Grupo Aeroportuario del Pacifico (GAP). The remainder is held by Vantage Airport Group (VAG) of Vancouver, Canada. MBJ’s 30-year concession has another decade to run.

Under the agreement Jamaica earns annual concession fees based on the airport’s revenue. As far as is known, the partners are responsible for capital works, which is a factor considered by the Jamaica Civil Aviation Authority (JCAA) in conducting its five-yearly determination of rates MBJ can charge its customers, which is aimed at allowing the company to operate in a manner that allows it to be competitive, while having an adequate return on its investment.

MBJ says that in the first 18 years of operating Sangster it spent US$287 million upgrading the facility. The new capital works announced by Mr Holness are significant at this time, given that the JCAA should already be into preliminary work on its determinations for the next five-year period.

FUNDING ARRANGEMENT

In that regard, even if only for clarity – it helps with transparency, too – the administration should explain the funding arrangements for the Sangster project and what, if any bit, properly belongs to Jamaican taxpayers.

It would be welcomed, too, if the Government provided an update of GAP’s investment timetable for the Norman Manley International Airport (NMIA), whose operation it assumed in 2019 under a 25-year concession agreement. GAP was committed, over the medium term, to spending US$100 million on upgrades at NMIA. That was supposed to include extending the runway.

However, tumbling of its income at the time of the pandemic, GAP, although maintaining less expensive projects, sought the Government’s approval to slow down its NMIA investments.

With respect to the international airport for Negril announced by Mr Holness in the Budget debate, the administration needs to make a better case for the project than any that is immediately obvious.

Negril is indeed an important tourist destination. But is only a little over 50 kilometres west of Montego Bay and the Sangster airport, over a relatively decent, although admittedly heavily trafficked, road.

Further, a bypass highway being built around Montego Bay, which has just started, will ease congestion in the city and improve travel times to and from Sangster. Further, the anecdotal evidence suggests that the upgrading of the Ian Fleming Airport at Boscobel, just outside of Ocho Rios, to accommodate commercial traffic, isn’t going well.

Jamaica suffers from an appalling public transport system. Fixing that is far more urgent than building another international airport.