NMIA to be tendered in 12 months
Published:Friday | July 29, 2011 | 12:00 AM
International Finance Corporation (IFC), the private-sector arm of the World Bank Group, has been appointed lead adviser to the Jamaican Government on the privatisation of the Norman Manley International Airport (NMIA) and domestic aerodromes.
Jamaica has tapped IFC's aviation expertise before on the Air Jamaica divestment, in which the Government swapped the loss-making carrier with Trinidad for a 16 per cent stake in Caribbean Airlines.
Jamaica plans to divest NMIA using a similar template to the 30-year build-own-operate-transfer concession negotiated with MBJ Airports Limited and finalised in 2003.
Christopher Zacca, chairman of the NMIA Enterprise Team (NMIAET) formed to oversee the privatisation of the airports, said Thursday that IFC would be paid US$570,000 by Airports Authority of Jamaica (AAJ), and would also be due an unspecified 'success fee' by the winning bidder.
Timeline
The NMIAET is working with an 18-month timeline to select the airport investor. The project is to be tendered within 12 months, said Zacca, and the winning bid selected four to six months later.
The NMIA deal is expected to include the new Ian Fleming International Airport at Boscobel, St Mary, the Ken Jones Aerodrome in Portland, and the Negril Aerodrome in Hanover.
The facilities are currently managed by the Airports Authority of Jamaica, whose role will be diminished by the divestments.
Another aerodrome, Tinson Pen, has not been included in the package.
The Sangster deal committed the international consortium of investors headed by Canadian-based Vancouver Airport Services to spending US$190 million to expand and improve the airport.
MBJ Airport pays an annual concession fee to the Jamaican Government calculated on the flow of passengers and cargo through the airport. Its three components include a base-fee per passenger or per one hundred kilogram of cargo, in addition to 45 per cent of the total gross of any excess revenue, and equal sharing of returns beyond a threshold of 25 per cent.
NMIA has only 50 per cent of the traffic handled by Sangster, the latter being Jamaica's main gateway for tourist traffic.
Expansion programme
Plans to divest NMIA were disclosed two years ago, but AAJ has been pressing ahead with a decade-long expansion programme to modernise the facility and create more commercial opportunity on the land side through expanded shop space.
In October 2003, NMIA Airports Limited was created as a wholly owned subsidiary of AAJ.
More than J$7 billion has been spent by AAJ on upgrades with further development planned for a three-phased overhaul of the main airport and the aerodromes.
Most recently, Boscobel in St Mary was commissioned into service after a J$200-million transformation from an aerodrome to a gateway for international flights.
The July 1 selection of IFC as technical follows the securing of US$500,000 (J$43m) in loans from the Inter-American Development Bank in May to fund the divestment process.
"The strategic objectives of this programme are focused on helping structure the concession of the airport to improve operations efficiency and to complete the upgrading and expansion plan for the NMIA," said a release issued Tuesday from the NMIAET secretariat within the Development Bank of Jamaica.
The IFC's role as technical adviser will extend beyond the NMIA divestment, but the airport is the priority, the release said.
"The Government is seeking to identify and appoint a suitably qualified concessionaire to develop and operate the NMIA and develop and expand select GOJ-owned aerodromes."