Once again, government leaders are claiming that an unfinished business case supports their controversial plan to dramatically expand the Terrance B. Lettsome International Airport.
And once again, the public will have to take their word for it for now.
The second stage of the ongoing business case by consultant KPMG is now complete, and it will soon go to Cabinet for approval after review by the airport project’s steering committee, Communications and Works Minister Kye Rymer told the House of Assembly on May 8.
But like the first stage — a “Strategic Outline Case” completed last year — the new “Outline Business Case” hasn’t been published.
Nevertheless, Mr. Rymer said the government has already decided to follow the study’s recommendation to proceed with a public-private partnership that could see construction start in 2027 and finish in 2032.
“The economic rationale for this project has been meticulously evaluated,” the minister said. “The Outline Business Case confirms that the preferred option, which includes extending the runway and expanding the apron, offers the most favourable economic return among the shortlisted alternatives.”
Passenger numbers
By its 15th year in operation, the planned expansion is projected to boost annual passenger arrivals from the current 145,000 to more than 500,000, according to the minister.
The project, he said, will use a phased approach that defers expansion of the airport terminal until passenger growth warrants it.
“A mixed public-private financing structure is proposed, with risks appropriately allocated and value for money prioritised,” he said. “The Outline Business Case suggests a modest increase in passenger fees — comparable to regional peers — to support ongoing ‘availability payments’ under a public-private partnership model.”
He added that government will consider measures such as exemptions to mitigate the fee burden on residents.
Procurement strategy
To ensure efficiency and minimise risks, the Outline Business Case recommends a two-phase procurement strategy, according to Mr. Rymer.
The first phase involves using a competitive request for proposals to secure a “reputable international partner” with experience in airport expansion and management, he said.
The second phase, he added, involves delivering the project through a “Design-Build-Finance-Operate-Maintain Model,” where private investors would assume the risks associated with design, construction, financing and operations.
“A Special Purpose Vehicle, created by the private consortium, will oversee project implementation while the government retains control through Newco, a wholly-owned limited liability entity under the BVI Airports Authority,” he explained.
Cabinet approval
The Outline Business Case is not a final investment decision but a step toward securing Cabinet approval to proceed, according to Mr. Rymer.
For the next steps, he said, Cabinet will need to green-light the procurement of a development partner and provide a “notional commitment” to “future funding phases.”
Then the government will need to secure the necessary approvals from the United Kingdom Foreign, Commonwealth and Development Office under the territory’s fiscal governance framework, according to the minister.
“Upon receiving these approvals, the next milestones will include finalisation of the airport master plan; completion of the Environmental Impact Assessment and other regulatory clearances; issuance of the request for proposals; and submission of the full business case,” he said.
The Protocols
Mr. Rymer’s timeline, however, could violate a 2012 agreement the VI signed with the UK to promote fiscal stability and transparency.
That agreement — the Protocols for Effective Financial Management — requires government to complete and publish a business case and “robust” cost-benefit analysis before the procurement stage of any major capital project.
Mr. Rymer’s statement suggests that the business case would be completed after the procurement stage, and it doesn’t mention any plan to make it public — though officials have previously promised to do so.
The Governor’s Office told the Beacon last week that the Protocols for Effective Financial Management are still in effect.
“As outlined, all projects, however funded, need to be suitably appraised before the procurement stage to ensure value for money and show that a robust cost-benefit analysis has been carried out,” the office stated.
Mr. Rymer and government Communications Director Karia Christopher did not answer questions about the Protocols or the business case’s completion and publication timeline.
Mr. Rymer, however, did send a brief message that he described as an “initial response” pending a “formal reply.”
“Please note that nothing can proceed without Cabinet’s approval for the business case,” he wrote.
“The Strategic Outline Case is integral to the business case, which requires Cabinet approval in accordance with its guidelines. This includes considerations of the economic, financial, strategic, commercial and management aspects.”
Consultant KPMG (BVI) Limited, which was hired early last year to carry out the business case, didn’t respond to a message.
Controversy
A decision to withhold the second part of the business case from the public is likely to add further fuel to the controversy that has surrounded the project since it was first proposed nearly 15 years ago by then-premier Dr. Orlando Smith’s administration.
Dr. Smith and his successors — including Premier Dr. Natalio “Sowande” Wheatley — have argued that a major airport expansion is urgently needed to attract larger aircraft that can foster direct connections to the United States mainland and beyond, in turn increasing tourist traffic and revenue to the territory.
But detractors have questioned whether the expansion will bring the direct flights that VI leaders promise. And even if it does, they have said, a longer runway could adversely affect the existing tourism product by bringing more visitors than the territory can properly accommodate.
But without a comprehensive business case in the public domain — and without a national plan to guide tourism decisions — both sides have relied largely on speculation to make their arguments.
‘Green Book’ model
In November 2023, the BVI Airports Authority requested proposals for a comprehensive business case for the first time.
The study — which is expected to review the planned expansion in unprecedented detail — is designed in part to help answer longstanding questions about the project’s viability.
It is also designed to meet the 2012 Protocols’ requirement for a business case, according to officials.
To that end, officials have said, it is using the “Green Book Five Case Model” employed by His Majesty’s Treasury in the United Kingdom, which includes separate “strategic,” “economic,” “commercial,” “financial” and “management” cases.
The review, however, is taking much longer than planned.
When the BVI Airports Authority announced in February 2024 that KPMG (BVI) Limited had been awarded a $209,089 contract to create the business case, officials said it would be completed in about three months.
It was still ongoing nearly five months later when Mr. Rymer and other officials used a July 2 Facebook broadcast to announce that they had decided to extend the airport runway by at least 1,400 feet.
During a July 19 press conference, the premier defended the plan to proceed even though the business case was not complete and no public meetings about the project had been held in more than five years.
“We have, literally, been speaking about this as a community for decades,” Dr. Wheatley said at the time. “So I think we have passed the stage where we are trying to decide whether we are extending the runway or not.”
About three months later, Mr. Rymer announced that the first part of the business case was complete.
“I am pleased to report that we have successfully completed the Strategic Outline Case, which has been approved by the Cabinet on [Sept. 18],” he told the HOA last October.
“This document outlines the strategic objectives of the airport development, highlighting the necessity of the project while addressing potential risks and challenges. This approval marks a key milestone, paving the way for the detailed analysis and planning that lies ahead.”
Strategic Outline Case
Kurt Menal, the BVIAA managing director, told the Beacon at the time that the completed Strategic Outline Case was extensive.
“The Strategic Outline Case does not only [include] a strategic case as the name may imply,” Mr. Menal wrote in an October email, adding that it provides a “macroscopic” perspective of several areas. “It [also] consists of a strategic [case], a socioeconomic case, a commercial case, a financial case and management case.”
The next step, he said at the time, would be the Outline Business Case, which he said was scheduled to be completed in February of this year.
“The Outline Business Case evaluates the roadmap laid out in the Strategic Outline Case in greater detail and aims to determine what the preferred option for the project will be after considering as many factors as reasonably practicable,” Mr. Menal wrote. “The OBC is a comprehensive and detailed document that plays a key role in the UK Green Book Process.”
Following the Outline Business Case, he added, a “Full Business Case” will be prepared before the contract signing for the project.
“The purpose of the Full Business Case is to evaluate the project in its entirety, particularly with reference to the final contract being considered,” he stated at the time.
Mr. Menal and other government officials, however, declined to provide a copy of the completed Strategic Outline Case.
Cost-benefit analysis
In his Oct. 18 statement, Mr. Rymer said the Full Business Case will also evaluate the project’s economic benefits through a “comprehensive cost-benefit analysis” that will guarantee value for money.
“Additionally, it assesses the commercial viability, examining financing options and procurement strategies,” he said.
Also to be scrutinised are the financial implications for government, including funding sources and budget requirements, according to the minister.
“Finally, the OBC outlines how the project will be managed, addressing governance, risk management and timelines,” he said.
Skyrocketing cost
Such a detailed assessment may be unprecedented in the history of the project, whose estimated cost has skyrocketed over the past 12 years as the government has withheld many previous studies from the public.
When Dr. Smith’s National Democratic Party-led government first held public meetings on the plan in 2012, officials described the project as a “done deal” and said a 2,500-foot runway extension would cost around $38 million.
The announcement sparked heated dialogue between supporters and detractors of the project.
About seven years passed before another public meeting was held in January 2019 to discuss an environmental impact assessment, but in the meantime the projected cost ballooned over the course of two tender processes.
A first round of bids in 2013 came in at around $400 million, and a second round for a scaled-down project came in between $153 million and $200 million in 2016.
Documents withheld
Meanwhile, millions of dollars were spent on preparatory works and studies. Much of this documentation, however, was withheld from the public as leaders downplayed the lack of transparency.
When then-governor John Duncan was asked in April 2016 about the government’s failure to publish the business case required by the Protocols for Effective Financial Management, he told a Beacon reporter, “Well, let’s get away from the business case, because you’re doing what the French call chercher la petite bête, which means ‘looking for the small insect,’ literally speaking.”
About three months later, with the tender process apparently still ongoing, Dr. Smith’s government finally released a partial “outline” business case, along with another study.
But the documents — which were both created by PricewaterhouseCoopers — did not include a full cost-benefit analysis as required by the Protocols for Effective Financial Management.
And although the government promised at the time to complete and publish a full business case later, it never did.
Chinese bid chosen
Nevertheless, in December 2016, Dr. Smith’s government announced plans to accept a $153 million bid from the China Communications Construction Company.
More controversy followed as leaked CCCC bid documents suggested that the company would receive a series of concessions.
The CCCC plan later stalled for unexplained reasons, and by 2018 Dr. Smith’s government was floating the idea of a new public-private partnership as part of the territory’s recovery from Hurricane Irma in 2017. But that plan didn’t proceed either.
Change of tune
The project appeared to be dead in the water after then-VI Party leader Andrew Fahie came to power in the general election of February 2019.
While campaigning, Mr. Fahie had announced that his party was “not in support” of the proposed airport expansion at the time, calling it a “legacy project to” Dr. Smith.
However, soon after his party won control of the government and he was appointed premier, Mr. Fahie changed his tune.
In 2020, his government effectively restarted the project from scratch, hiring Atlanta-based consultant Brakkam Aviation Management, which recommended the construction of a 9,100-foot runway at an estimated cost of $183.78 million over a period of three to five years.
Mr. Fahie did not disclose how much the BVIAA paid the firm or say whether the consultancy was tendered.
Bakkram was founded by company CEO and President Miguel Southwell, a former general manager of the Hartsfield-Jackson International Airport in Atlanta, who was fired in 2016 amid a public spat with the city’s mayor, according to the Atlanta Journal-Constitution.
The BVIAA’s contract with the firm resulted in a six-month interim report that made various recommendations, beginning with suggestions for expanding the airport runway, Mr. Fahie said at the time.
The report, however, was never provided to the public.
2023 summit
Since then, leaders in the current and former governments have mentioned their commitment to expanding the airport with increasing frequency.
In February 2023, for instance, BVI Airports Authority Chairman Theodore Burke led a VI delegation to Miami to attend the Airport Expansion Summit for Latin America and the Caribbean.
On the delegates’ return, the BVIAA announced that public-private partnerships were again among the options being considered for funding the project.
Other options under consideration included government-funded and “self-funded” models, according to a government press release issued at the time.
Mr. Menal — who was part of the Miami delegation — said at the time that his team was revisiting various studies and plans that were developed over the years for the proposed expansion.
Secret ‘master plan’
The release added that the BVIAA and the Communications and Works Ministry had “shifted the focus from airport expansion to holistic airport development based on a master plan, which is a long-term guide to development that supports an airport’s business and infrastructure development strategy,” according to the press release.
At the time, however, Mr. Menal declined to provide a copy of the master plan, saying that it was in draft form and had not yet been presented to the government.
He estimated that the plan would be finalised within three to six months and made public sometime after that.
But since then, it has not been made public.
Mr. Rymer, however, provided a brief update on the plan during his HOA statement last October.
“In tandem with the [Outline Business Case] development, the BVI Airports Authority is also updating the airport master plan,” he said at the time.
“This comprehensive blueprint will guide the long-term development of our airport infrastructure, encompassing terminal modernisation, runway expansion, and the enhancement of support facilities. It is designed to ensure that our airport can accommodate future growth in air traffic.”
He added that the BVIAA is also conducting an air traffic forecast to provide passenger, tourism and cargo projections.
“This data, along with the updated master plan, will inform the [Outline Business Case], ensuring that our airport development is based on sound data and growth projections,” Mr. Rymer said.
Public meetings
Last November, the government hosted three public meetings about the project: two on Tortola and one on Virgin Gorda.
Attendees asked multiple questions about the economic and environmental impacts of the expansion, with some making critical comments and others voicing support.
At the start of the second meeting on Nov. 27 at Francis Lettsome Primary School, BVI Airports Authority Director of Special Projects Clive Smith told attendees that he and other officials wanted to hear from them.
The session, he explained, was part of the process to complete the Strategic Outline Case.
“We want to listen, respond and have a civil dialogue as to where we’re going, why we’re going, etcetera,” he said.
Seconds later, Mr. Smith got his first question.
“The strategic case, has it been released to the public?” an attendee asked.
“No. That’s because it hasn’t been laid on [the table of] the House [of Assembly],” Mr. Smith replied.
A moment later, he added that the results of a public survey undertaken by the BVIAA earlier in the year indicated that “most people” support the idea of expanding the airport.
The same attendee’s hand shot up again.
“The results of that survey, have they been made available to the public?” he asked.
“No, sir,” Mr. Smith replied.
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