Grand Cayman Airport Expansion Plans Move Closer
A deal to redevelop Owen Roberts International Airport under the coordination of the Canadian government’s procurement agency is on the table after the premier announced the possible public-private partnership. According to a presentation given by Canadian Commercial Corporation along with its local partner the Paramount Group, it will be taking on the $200 million project to double the airport’s capacity via a concession agreement and leasing the airport for as long as 40 years. The CCC says there will be no cost to government and it will return as much as $13 million to the CIAA. However, it is still not clear if the arrangement will pass muster with the Framework for Fiscal Responsibility.
If government goes ahead with the proposed deal the corporation will be taking fees from the airport that would have gone to the government owned company. It will use that money to develop what will remain a public owned resource.
The corporation and its partners will make their profit mostly from the retail that will form part of the redevelopment and, it said, from doubling traffic to the airport. The $200 million development will include the extension of the runway and an expansion of the terminals. The proposed deal also includes an up-front payment to the Cayman government of $30 million.
The corporation will be responsible for the project but alongside the Paramount Group, which was described as the “strategic local partner”, the lead developer will be Aecon group inc, the aviation advisor will be Mott MacDonald Limited, the lead architect will be Scott Associates, and the money will come from Scotiabank, with Heenan Blaikie LLP, as the “Co-developer and Legal Advisor”.
The presentation reveals a commitment to employ local sub-contractors and to help civil servants working at the airport to transition into the private sector. The corporation also promises to train local staff and provide employment and engage local businesses to develop the new Airport.
The corporation said it would also work with the Cayman Islands Tourism Association (CITA) and the Department of Tourism to increase air traffic to Cayman. Under the deal the Canadian government will guarantee contract performance and to pay a yearly concession fee to the CIAA. It will run and maintain the airport to the required service levels and uphold international environmental standards.
The local airport authority will still own the airport, set the performance standards, regulate and monitor the concession and receive a share of the profits. It will also retain responsibility for air traffic control, weather, fire and rescue, security and the airports emergency plan.
Paramount released a statement as well as the CCC’s presentation regarding the talks Thursday, which stated that positive feedback had been received at all meetings held by the Canadian team. Pointing to the doubling of capacity and the cash for government, Paramount said there would be important short-term safety upgrades, and the generation of significant employment opportunities and dramatically improved customer service experience, all at no cost to the Cayman Islands public purse.
“Canada, through the Canadian Commercial Corporation, offers the advantage of contracting for the delivery of complex infrastructure projects on a Government-to-Government basis. Simplified acquisition, reduced risk and an enhanced bilateral relationship are key advantages of this approach. Collaborative project definition and planning are the foundation of the project development and implementation process proposed by the Canadian team,” Paramount stated in the release.
