~ Completion entire PJIA reconstruction by 2022 ~
PHILIPSBURG–The December 2019 salaries of workers at Princess Juliana International Airport (PJIA) will be in jeopardy if the insurance proceeds are not made available, Prime Minister Silveria Jacobs cautioned on Monday.
She was at the time responding to questions from Members of Parliament (MPs) during an urgent meeting on the financing of the Airport reconstruction.
Jacobs said salaries cannot be paid if the insurance proceeds are not made available and 2018 bonuses have been deferred until further notice. “If the agreement with the bondholders is signed on time, the employees will be paid and I will certainly wish them a very joyful Christmas.”
On Monday, Members of Parliament (MPs) unanimously passed a motion regarding government’s authority to sign agreements with the bondholders. The adoption of the motion means that Finance Minister Ardwell Irion is now in a position to finalise the signing of an agreement with PJIA’s bondholders, which will allow for the immediate release of US $5 million in insurance proceeds and “get the airport out of the woods.”
As it relates to the financing of the airport reconstruction, Jacobs said there are five agreements that still need to be signed by the government of St. Maarten: the agreement with the bondholders, which will be signed by the government, the bondholders and PJIAE (the operating company of PJIA); the agreement with the European Investment Bank (EIB), which will be signed by the government, the bondholders and PJIAE; the agreement with the World Bank to be signed by the government and the World Bank; and the on-lending agreements for the EIB and World Bank parts of the financing, both to be signed by the government and PJIAE.
In light of the applicable articles of incorporation, PJIA’s holding company PJIAH will not be a signatory to these agreements.
In response to a question on how much money PJIAE will have to use for reconstruction and whether the new building will able to withstand Hurricane Irma wind speeds, Jacobs said the total obligations are estimated at US $159.5 million and total funds available are US $171.9 million. The EIB/World Bank package will give the Airport access to US $101 million for reconstruction and US $21 million as potential liquidity support. The remaining funds will come from the insurance proceeds. Once rebuilt, the Airport should be able to withstand Irma wind speeds, the prime minister noted.
She said the plan is to have the entire Airport reconstruction completed by the first quarter of 2022. The reconstruction will be done in phases. For example, if the first floor is completed this will go online while the other phases are being executed.
She said the airport has a very poor liquidity status with numerous liabilities. “Without the release of insurance proceeds, the Airport can no longer fulfil its financial obligations in December.”
On the issue of pre-clearance, Jacobs said the first step that needs to take place is the conclusion of a legal agreement between the Kingdom of the Netherlands on behalf of St. Maarten, and the United States. There is other homework to be done as well by the Airport and government, including a financial feasibility study which includes a business case. “At this moment, there is no clear timeline until implementation, but … as Prime Minister I will do everything in my power to finalise the necessary agreements.”
The current reconstruction plan of PJIA is fully compatible with US pre-clearance, which means that all upgrades and new installations will conform to US pre-clearance specifications. It can be added once financing is available for pre-clearance.
Source: The Daily Herald https://www.thedailyherald.sx/islands/92981-pjia-staff-december-pay-in-jeopardy-if-insurance-proceeds-not-made-available
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