Construction for the multi-million dollar redevelopment of Owen Roberts International Airport is scheduled to start this September and to be finished in 2012.
Minister for Tourism Charles Clifford made the announcement Tuesday in the Legislative Assembly.
The redevelopment of the main terminal, which has gone a year and a half behind its original schedule, will result in the tripling of the floor space from 80,000 to 220,000 square feet to accommodate projected traffic levels for approximately 20 years.
‘Today, I reiterate the fact that our islands’ airports are the first and last part of the tourism product that people see whether they are here for leisure or investment purposes and, in 2012, I expect that we will have a much larger, modern, user-friendly airport for the comfort of our visitors and residents that will pave the way for the continued development of the Cayman Islands,’ said the Minister.
Key components of the redevelopment include an expanded ticketing and flight check-in hall, a new arrivals hall, a domestic arrivals and departures hall, a new international departures hall on the second floor and an expanded tarmac to accommodate three additional aircraft parking slots.
Plans for airport expansion were first formally announced under the previous government back in May 2005.
The PPM government took over after this and planning permission was granted in January 2006.
Minister Clifford noted that up to 2007 they had been concentrating on a final settlement of assets and liabilities for the Cayman Islands Airports Authority and the Civil Aviation Authority, as the CAA had split into these two agencies in 2004.
Although site works were carried out at the airport starting towards the end of 2007, the first main phase of the airport redevelopment was originally scheduled to start in February of last year, but that never happened. Had that gone to schedule, completion of the project was slated for June 2010.
Expansion went well behind schedule, which the CIAA cited as ‘financing issues’ with the multi-million dollar project.
The CIAA noted last year, ‘The CIAA is seeking to fund this project without it being a burden to the national government.’
If the project had had started in February of last year when it was originally scheduled to do, the transformed and expanded airport would have been expected to be finished by June 2010.
The Minister noted that CIAA used a portion of its operating surplus to complete the preparatory site works valued at more than $4.1 M.
The completed site works include a new staff parking lot, redesigned traffic flow that has resulted in one way traffic in front of the Terminal building, and reconfiguration of both short and long term parking lots to facilitate increased capacity and optimise traffic flow.
The Minister noted that in respect to the overall redevelopment, the CIAA has employed local financial expertise to help it assess and ensure the project’s long term financial feasibility.
He said that local firm KPMG performed a strategic and operational review of the CIAA, which included the preparation of a 25-year financial forecasting model. During this review, a calculation of the newly implemented Passenger Facilities Charge was completed and in January 2009 this new PFC was brought into effect to help fund the Terminal Expansion Plan.
‘Having secured the necessary revenue streams to augment its operating surpluses, the CIAA continued its due diligence by enlisting Deloitte to assist it in reviewing various financing options,’ the Minister added.
The initial Request For Proposal for the financing package was issued in December 2008.
‘Initial proposals have been evaluated and the decision taken to repeat the tender process so as to refine and maximise the competitiveness amongst financial institutions.
‘This ongoing tendering process for the financing package is due to close on 3 April 2009.’
Minister Clifford said the process is similar to the process utilised by the Cayman Islands Government.
‘The revised RFP has been issued to local Class A banks and one overseas bank. The Central Tenders Committee is providing oversight on this project to ensure value for money and necessary due diligence.’
He said this financing package is also expected to facilitate the construction of the required new airport in Little Cayman and some enhancements at the General Aviation Terminal.
The next steps call for the tendering process for the six pre-qualified local contractors to commence at the end of April 2009 once the designs are finalised by architects Chalmers Gibbs Martin Joseph and RS&H.
‘Construction is scheduled to commence in September 2009 and is expected to conclude in 2012,’ said the Minister.
He commented, ‘The CIAA is commencing the project on solid grounds having a healthy balance sheet, positive cash position, secured additional means for financing the project and having already funded the completion of preliminary works from its operating surplus.’
Minister Clifford added that the Government is presently involved in discussions that could lead to a public/private sector partnership that would facilitate a 2,000 foot extension to the runway at the Owen Roberts International Airport.