The usual suspects regroup on St Lucia airport redevelopment project

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Hewanorra International Airport. Photo: SLASPA

By Melanius Alphonse
Caribbean News Now associate editor

CASTRIES, St Lucia — The on-again, off-again redevelopment of Hewanorra International Airport (HIA) in Vieux Fort, Saint Lucia, is once again consuming the time and attention of policymakers, the business community and the people of Saint Lucia.

There is much justified discussion and speculation, given that this is the largest infrastructure project to be undertaken in Saint Lucia (apart from the DSH/citizenship by investment horse racing facility), amid calls for total transparency, accountability and prudence.

In an address to the Parliament on March 21, 2018, Stephenson King, minister for infrastructure, ports, energy and labour, said, “The current administration intends to bring the airport project back to the gates of execution before the end of this year.”

There has been major concern with regard to financing and successfully positioning HIA operations to compete and remain viable.

There is also much local suspicion that the political directorate is caught up in personal interests that override those of the public at large in the light of recent awards of multiple no-bid contracts to political and personal cronies, allegations of bribery, and material omissions in public statements by the government.

There was an assertion of “probable cause” in a corruption probe undertaken by the previous administration in relation to an earlier iteration of the HIA redevelopment project set out in a letter to the US Department of Justice requesting mutual legal assistance in relation to US businessman Antonio Assenza and promises by the current Saint Lucia prime minister, Allen Chastanet, to “investigate the investigation”.

Assenza and his local company Asphalt & Mining (St Lucia) Company Limited (A&M) were targets of the airport project corruption investigation, while one of the ministers implicated, Guy Joseph, welcomed the corruption probe.

Chastanet said in his recent budget address: “Redevelopment of HIA will take place in a phased manner using concessional loan financing. We are currently finalizing the loan agreement with the Republic of China (Taiwan) for the US$100 million required. The US$15 million a year in airport tax will be used as security against repayment of the loan.”

Leader of the opposition, Philip J. Pierre, replied to the policy statement, saying: “The government has rejected the public private partnership agreement that would have been supervised and monitored by the IFC, an arm of the World Bank.

“All plans for the construction of a modern state of the art Hewanorra International Airport had been finalized by the last Labour government with work about to commence without the government incurring any related debt. The airport would have been leased for a period of 30 years, at the end of which commercial control would revert back to the government of St Lucia. This arrangement had three major benefits: oversight of the project would have been done by a competent agent of the World Bank – the IFC; there would be no additional debt incurred by the government of St Lucia and we would have had a long awaited state of the art international airport.

“Having rejected and cancelled this agreement in September 2017, the government was offered by the investment arm of the Canadian government to enter into a memorandum of understanding to provide all the expertise in designing, financing, constructing and delivering the airport and the north south highway. The project would have been guaranteed by the Canadian government with no need for debt financing by the government of Saint Lucia.”

With the knowledge there was an approved transaction structure for the HIA public private partnership (PPP) already in place since January 2015, Pierre continued:

1. “Why is the government persistent in trying to avoid dealing with reputable international agencies that encourage good governance especially as it relates to procurement rules?

2. “We appear to be revisiting the age of A&M, which is still a subject of investigation by the US Attorney.

3. “When the UWP last governed in 2011, A&M had failed the due diligence test and its proposal to undertake work at HIA was rejected by the Deutsche Bank.

4. “What are the contractual relationships between this government and this company or its look-a-like for the redevelopment of HIA?

5. “The prime minister needs to clarify the procurement methods and whether an open tender process will be used given the size of this HIA redevelopment project.”

Former member of parliament and Cabinet minister, Richard Frederick, on his television talk show, Can I Help You, revealed that Sean Matthew, former general manager of Saint Lucia Air and Sea Ports Authority (SLASPA), is now the sole director of the recently formed Executive Consulting and Management Services Ltd (ECMS), as evidenced by a notice of directors and certificate of incorporation dated April 11, 2018.

ECMS chairman and chief executive officer, Matthew, also submitted an HIA redevelopment project, management and co-ordination proposal on March 27, 2018, to Daren Cenac, acting general manager of SLASPA.

A leaked email from Cenac, with the subject, “Proposal from ECMS to councillors”, said:

“This approval is urgent.

“The objective is to provide the GOSL [government of St Lucia] and the St Lucia Air and Sea Ports Authority the essential services required for the delivery of a new terminal building, associated buildings and infrastructure at Hewanorra International Airport (HIA).

“…Along with the proposed cost over the duration (26 months) with an estimated cash flow. Services total of [US$1,350,300] (that includes a 5% contingency sum of US$$64,300), exclusive of all taxes, VAT and duties. An allocation for travel, hotel and incidentals that would be payable on proof of invoicing. This stands at US$150,000. ~ Sean Matthew, ECMS”

Frederick said that there are some important and disturbing questions that needed to be answered, including if the multimillion dollar contract is a payoff to Matthew not to testify against Guy Joseph if called upon to do so.

In a bizarre turn of events, a government press release took aim at the opposition Saint Lucia Labour Party (SLP) instead of Frederick:

“The government of Saint Lucia has NOT signed any agreement with Mr Sean Matthew for the redevelopment of Hewanorra International Airport! This is just another case of fake news, lies and deceit of the St Lucia Labour Party hoping to frustrate and delay the progress of the country.”

The SLP has since challenged the government to provide proof of any statement made in respect of the contract to Matthew prior to May 3, 2018.

The SLP posed the following questions:

1. Is it true that ECMS has been or will be contracted to provide consultancy services in respect of the Hewanorra Airport Redevelopment Project?

2. Is the contract sum in the range of US$1.35 million to US1.5 million?

3. Was the consultancy contract put out to tender?

4. How will the selection of the main contractor for the project be conducted?

5. What is the exact cost of the project?

6. Where is the loan for the project to be secured?

7. What are the conditions associated with the loan and how is it to be secured?

8. What is the expected impact on the country’s debt to GDP ratio?

There is an established and ill-defined nexus between Allen Chastanet, Guy Joseph, Sean Matthew and Antonio Assenza, in relation to which the US Department of Justice, Criminal Division, was requested to assist by the previous SLP government.

Further questions remain why Saint Lucia has lost ground in the 2017 Corruption Perceptions Index, down five points to a score of 55 compared to a score of 60 last year.

This is not helped by Chastanet’s curious remark at the recent Summit of the Americas in Lima, Peru, when he said, “Transparency should not be so onerous that it takes precedence over development,” noting that he fully supported anti-corruption efforts but worried that extra rules and bureaucracy would make it hard for small countries like Saint Lucia to compete.

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