NOR­MAN MAN­LEY AIR­PORT DI­VESTED

The gov­ern­ment has di­vested the op­er­a­tion of the Nor­man Man­ley In­ter­na­tional Air­port (NMIA) to Mex­i­can en­tity, Grupo Aero­por­tu­ario del Paci­fico S.A.B. De C.V. (GAP)

The Star (St. Lucia) - Business Week - - PUBLIC-PRIVATE PARTNERSHIPS - BY JA­MAICA GLEANER

A25-year con­ces­sion agree­ment was signed on Wed­nes­day at the Of­fice of the Prime Min­is­ter by Chair­man of the Air­ports Au­thor­ity of Ja­maica, which owns the NMIA, Wil­liam Shagoury, Pres­i­dent and Chief Ex­ec­u­tive Of­fi­cer, Aud­ley Dei­drick, and GAP’s Chief Ex­ec­u­tive Of­fi­cer, Raul Re­vuelta Musalem, and Head of the en­tity’s sub­sidiary, PAC Kingston Air­port Lim­ited, Saul Vil­lar­real Garcia.

The for­mal­i­ties were wit­nessed by

Prime Min­is­ter An­drew Hol­ness and Trans­port and Min­ing Min­is­ter, Robert Mon­tague.

Un­der the agree­ment, GAP will be re­spon­si­ble for im­prov­ing the air­port’s land and air op­er­a­tional ef­fi­ciency, and fi­nanc­ing and com­plet­ing a mod­erni­sa­tion pro­gramme, at an es­ti­mated cost of over US$110 mil­lion.

Ad­di­tion­ally, the gov­ern­ment will re­ceive a guar­an­teed per­cent­age of the air­port’s gross rev­enues. The en­tity has the op­tion to ex­tend the ar­range­ments by an ad­di­tional five years.

The GAP emerged the pre­ferred of three bid­ders, which in­cluded two con­sor­tia of for­eign and lo­cal in­vestors.

The se­lec­tion fol­lowed the pub­lic open­ing and eval­u­a­tion and Cab­i­net’s sub­se­quent ap­proval in Septem­ber of the three bid sub­mis­sions re­ceived by the De­vel­op­ment Bank of Ja­maica (DBJ) in July.

The trans­ac­tion value for GAP’s bid to­tals over US$2 bil­lion.

Hol­ness said the trans­ac­tion rep­re­sents an­other suc­cess­ful pub­lic-pri­vate part­ner­ship deal, com­ing on the heels of sim­i­lar ar­range­ments with the Kingston Con­tainer Ter­mi­nal and the North-South High­way.

“The suc­cess­ful out­come of this pub­lic-pri­vate part­ner­ship at­tests to the trans­parency and eq­uity of the process as well as the pro­fes­sion­al­ism, ac­count­abil­ity, and in­tegrity of all stake­hold­ers in­volved,” he said.

Hol­ness ar­gued that this type of in­vest­ment modal­ity is crit­i­cal to the gov­ern­ment’s eco­nomic growth strat­egy, adding, “It is ev­i­dent that PPPs are ex­cel­lent ve­hi­cles for un­lock­ing the value of as­sets, re­duc­ing debt and mo­bil­is­ing lo­cal and for­eign in­vest­ment in our econ­omy.”

In his re­marks, Mon­tague noted that NMIA has played a crit­i­cal role in Ja­maica’s eco­nomic de­vel­op­ment for many years.

He said the avi­a­tion sec­tor’s crit­i­cal role to tourism and the ser­vices sec­tor “made clear the need for [the] mod­erni­sa­tion and de­vel­op­ment of our air­ports”.

“Through a thor­ough anal­y­sis, the gov­ern­ment de­cided that pri­vati­sa­tion was the best avail­able op­tion for mo­bil­is­ing the con­sid­er­able re­sources that would be re­quired to achieve our ob­jec­tive,” the Min­is­ter noted.

Mon­tague said the trans­fer of fi­nanc­ing and op­er­a­tional re­spon­si­bil­i­ties to GAP now en­ables the AAJ to fo­cus on manag­ing the con­ces­sions at NMIA and the Sang­ster In­ter­na­tional Air­port in Mon­tego Bay, which the Mex­i­can en­tity man­ages through the sub­sidiary com­pany, De­sarollo de Con­ce­siones Aero­por­tu­aris.

For his part, Musalem said GAP wel­comed the op­por­tu­nity af­forded to man­age the NMIA’s op­er­a­tions.

“You can be as­sured that the group I rep­re­sent will con­trib­ute to the achieve­ment of Ja­maica’s Vi­sion 2030 [of] trans­form­ing the coun­try into the place of choice to live, work, raise fam­i­lies and do busi­ness,” he added.

GAP has con­ces­sion man­age­ment agree­ments, some to­talling 50 years, for 13 air­ports in Mex­ico.

The en­tity has been manag­ing the Sang­ster In­ter­na­tional Air­port op­er­a­tions since 2003.

Prime Min­is­ter, An­drew Hol­ness (left, stand­ing) and Trans­port and Min­ing Min­is­ter, Robert Mon­tague (mid­dle, stand­ing), ob­serve as Chief Ex­ec­u­tive Of­fi­cer of Mex­i­can en­tity, Grupo Aero­por­tu­ario del Paci­fico S.A.B. De C.V. (GAP), Raul Re­vuelta Musalem (2nd right, seated) signs the 25-year Nor­man Man­ley In­ter­na­tional Air­port con­ces­sion agree­ment

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