Government signs long-overdue funding agreements for airport reconstruction
PHILIPSBURG – In February MP Frans Richardson of the United St. Maarten party (USp) declared during a debate about funding for the reconstruction of the airport terminal in parliament that “The agreement with the World Bank is the worst agreement this country has ever signed.” On Monday, December 11, the government of which Richardson’s USp is now a part signed the same loan agreements with the World Bank and the European Investment Bank (EIB). The loan conditions have not changed; only the government changed.
The agreement that was signed on Monday includes a $72 million grant from the World Bank Trust Fund and a $50 million loan from the EIB. The Princess Juliana International Airport Operating Company will contribute $7 million to the terminal reconstruction project, bringing the total budget to $129 million.
According to Tasheen Sayed, the World Bank’s country director for the Caribbean, the reconstruction project aims to restore the airport terminal to its pre-Hurricane Irma capacity of handling 2.5 million passengers per year.
A press release from the World Bank describes the conditions attached to the grant as “a package of financial and technical support.” It mentions airport staff capacity development and management training and “institutional and governance strengthening.”
In the real world, this means that airport board members will have to go through a screening and that the board will be strengthened with a Chief Financial Officer from the Schiphol Group. The opposition balked previously at these conditions, but now that the opposition parties have become the de facto government, their objections have melted away.
Prime Minister Silveria Jacobs, who previously as a member of the opposition stated that “there is no way this process can be stopped,” now expressed her satisfaction with the signing of the funding agreements. “Tourism is the backbone of St. Maarten’s economy so restoring the full capacity of the airport is of vital importance to the economic recovery and development of our country,” she is quoted as saying in the World Bank press release.
Airport director Brian Mingo is obviously pleased with the fact that the funding agreements have been signed, stating in a separate press release that “it could not have come at a better time before Christmas.”
Mingo said that the terminal-reconstruction will now begin in 2020. He thanked the previous and the current government, adding that Prime Minister Jacobs and Finance Minister Irion “stepped up to the plate to get things done.”
Mingo also noted that the airport’s financial health was on the brink of collapse, describing it as “serious and close to fatal.”
Remarkably, none of the press releases mentions anything about the position of the bondholders. When parliament discussed the airport funding under the previous government in November, then finance Minister Perry Geerlings declared that the role of the bondholders is key to getting everyone on board. The opposition factions of the National Alliance and the United St. Maarten party refused however to support a motion tabled by St. Maarten Christian Party MP Claude Peterson that would have convinced the bondholders of the government’s authority to sign off on the funding agreements.
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