When it comes to borrowing for major infrastructure projects, the Virgin Islands is trapped in a financial “straitjacket” imposed by the United Kingdom, Premier Natalio “Sowande” Wheatley has claimed.
The accusation came as the premier called for more fiscal flexibility from London regarding a $400 million-plus expansion of the Terrance B. Lettsome International Airport runway.
Mr. Wheatley urged the British Treasury to see the ambitious bid to extend the 4,648-foot runway to 7,000 feet as a “pro-growth” initiative and not just a contingent liability on the UK.
He also called for a review of the 2012 Protocols for Effective Financial Management, a UK-VI agreement that sets limits on VI borrowing options.
“Right now, we would be in what I would refer to as a fiscal straitjacket,” Mr. Wheatley said of the protocols during a Friday press conference.
He added that the territory needs more room to manoeuvre financially to boost its economy.
“We are limited in being able to borrow,” he said. “Most countries borrow up to, perhaps, 100 percent of gross domestic product. We are far below 100 percent of GDP. I think we might be six percent of GDP — if that much.”
Mr. Wheatley, who said the territory’s annual GDP is $1.7 billion, added that the finances for the airport expansion do not add up under the current arrangements.
“The protocols limit us to 80 percent of recurrent revenue for this year,” he said. “Airport expansion is going to cost us over $400 million, so we have gone past that easily.”
Talks with London
Mr. Wheatley added that he is in urgent talks with London on the matter.
“One of the things we are trying to discuss with the UK government is relaxing some of those provisions; making an adjustment to some of those provisions so that we can invest in growth,” he said. “And when we invest in growth, we are less of a contingent liability to the UK Treasury.”
He added that the protocols impede the territory in other ways as well. “We have had devastating hurricanes,” he said. “The protocols make no provisions for what happens in a natural disaster. We have to review those protocols in light of the changing situation and increased vulnerabilities.”
Business case
The protocols also require the government to complete a business case and “robust” cost-benefit analysis before the procurement stage of any major capital project — and to publish it.
In February 2024, a comprehensive five-part business case was commissioned from consultants KPMG (BVI) Limited under a $209,087 contract.
Two parts of the study — a Strategic Outline Case completed last November and an Outline Business Case finished in May — have since been submitted, but they have not been released to the public despite government plans to start the procurement process in the coming weeks.
However, that may change soon, according to Communications and Works Minister Kye Rymer.
Mr. Rymer said at the Friday press conference that the Outline Business Case will soon be made public, though certain financial information will remain confidential.
“We received the Outline Business Case; the full business case is not completed,” he explained. “What we will release to the public is the Outline Business Case, where we will do some redaction based on the financials that are included before we go to the tendering of the expressions of interest for any persons who would be interested in the airport development.”
The minister said he could not yet give a specific timeframe for when the redacted information will be released.
Procurement process
Announcing the airport expansion plans in the House of Assembly last month, Mr. Rymer said the next steps include launching the procurement process with a request for expressions of interest to “identify and shortlist qualified partners” for Cabinet consideration.
“This transparent and structured process will ensure that only reputable, experienced firms with the proven capacity to deliver a project of this scale will move forward,” Mr. Rymer told the HOA. “The feedback from potential investors will also help refine the request for proposals, which is expected to be issued in the first quarter of 2026.”
Controversy
Plans to extend the territory’s main runway have been sparking intense debate since the initiative was first put forward by then-premier Dr. Orlando Smith’s administration about 15 years ago.
Supporters of the move insist it would boost direct flights from the US mainland and Europe, but opponents have challenged this assumption and warned that the project would have a detrimental environmental impact.
However, in the absence of a full business case in the public domain, coupled with the lack of a national tourism strategy, advocates on both sides of the debate have often relied largely on speculation to make their cases.
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