Business case will outline scope, size of project
Grand Cayman’s airport is aged, congested and increasingly unable to cope with passenger levels that are already double the intended capacity, according to a document outlining the case for a multimillion-dollar expansion.
Long-discussed plans to develop all three Cayman Islands’ airports took a significant step forward this week with the publication of the strategic outline case – the first step in a lengthy procurement and accountability process required for major public infrastructure projects.
The next phase is the production of a business case, which will involve a cost/benefit analysis on various options for the airport, including a new terminal building and expanded runway. The business case will compare the economic impact of various options for all three airports, including simply leaving them as they are, to determine the exact scope and size of each project.
The Cayman Islands Airports Authority is inviting consulting firms to bid for the contract to produce the business case, the prelude to a competitive bid for the design and construction work.
The document will also assess whether the project can be financed from the CIAA coffers or if a public/private partnership is required.
The strategic outline, published Thursday, argues for an upgrade at the Owen Roberts International Airport, warning that the Cayman Islands is not “maintaining its competitive edge” compared to neighboring tourist destinations.
It adds: “The growth in passenger numbers over the years has meant that the existing capacity of the airport is inadequate. The provision of an expanded terminal and associated infrastructure is consequently overdue.
“The airport terminal reflects a combination of aged and cramped facilities and a severely congested and uncomfortable environment, providing a poor level of service to travelers passing through the airport.”
It adds that expanding the runway to accommodate long-haul flights should be considered, as well as the addition of boarding bridges, which would improve “passenger experience” for an expected increase in ill or disabled travelers to the Health City medical tourism facility.
The potential value of other add-ons, such as a U.S. border control pre-clearance area and an expanded apron to accommodate additional aircraft parking space, will also be reviewed by the consultants.
The strategic outline points out that there is a “lack of projections for future passenger, aircraft and cargo movements to assist with determining the scope of project needed,” though it does not specifically request that this be part of the business case.
The model for financing the development, given government’s mandated borrowing limits, will likely involve a private sector partner, though the strategic outline leaves the door open for the CIAA to finance the project through increased passenger facility charges.
The CIAA will not cede control of the airport to a private partner in any development agreement, the document states.
“Due to the importance of the airport as a strategic national asset, the CIAA will retain the legal ownership and operations. Any financial model chosen for procurement will include consideration of that requirement against the need to provide assurance and security to a private sector investment partner.”
The document details the importance of the tourism industry as a pillar of Cayman’s economy. It points out that although only a fifth of visitors to the island arrive by air, they contribute 77 percent of total annual tourism revenue – nearly $300 million.
Tourism Minister Moses Kirkconnell said developing all three airports is key to maintaining the Cayman Islands’ status as a top class tourist destination.
“A number of benefits will accrue from the projects,” he said. “The construction and development phases, followed by fully operational facilities will generate additional jobs. More importantly, it will deliver significant economic benefits to the islands, notably improving public revenue and raising the gross domestic product from increased visitor arrivals.”