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International Airport Development Company Limited (IADCL) – St. Vincent and the Grenadines’ Argyle International Airport Development

International Airport Development Company Limited (IADCL) – St. Vincent and the Grenadines’ Argyle International Airport Development

The small nation of St. Vincent and the Grenadines, located in the Caribbean Sea, is traditionally more associated with sea-bound travel more than airplanes. However, that’s all set to change now that St. Vincent, the largest island of the 32-island archipelago, is finishing the development of its Argyle International Airport later this year.

While it’s not the first airport on the islands – there are already five – it will be, by some distance, the jewel in the crown. We recently interviewed Dr. Rudy Matthias, Chief Executive Officer of the International Airport Development Company (IADC), the private limited liability company, owned by the government of St Vincent and the Grenadines, which is spearheading the development.

Origins

The idea for an international-class airport on the main island of St. Vincent goes a long way back. For many years, the islanders have recognized that tourism has the potential to become the country’s most important economic sector.  As Matthias explained: “We’ve known for years that without a high quality airport, the tourism sector is not going to develop the way we want it to. Until now, the island hasn’t been able to accommodate commercial jets.”

Therefore, one of the pillars of the election manifesto of the government, the ULP Administration led by Dr. The Hon. Ralph Gonsalves that came to power fifteen years ago in 2001, was to build a modern airport on St. Vincent, capable of dealing with commercial jet liners. In 2003 and 2004, the government held firm on its election promise and began to put systems in place to get development of the airport building underway. From the outset, there were huge challenges, which go some way to explaining why the country hadn’t had this airport before then. These challenges are also what make the delivery of the airport so remarkable.

A remarkable achievement

The first way in which the airport stands out is the way in which it was built. Matthias explains: “There was always a challenge of finding a good site because St. Vincent is a mountainous country. Most of the people on the island live on the coastal areas. So there are not many places where you have enough flat land to build an international airport, which has a runway 9,000 feet long.”

Eventually, a site was found, but it wasn’t flat: Three mountains had to be reduced and two large valleys needed to be filled to create an area flat enough to house an airport and its runway. And this only came after IADC had acquired the site: All of the lands for the site identified were owned by private individuals. In all, there were 135 middle-income families with whom the IADC entered negotiations for the purchase of their homes and lands. In all, the 275 acres of land where these houses were located cost the IADC about $60 million.

The second remarkable thing about the airport is that it was able to come to fruition at all given the enormous construction cost, relative to the size of the local economy. St Vincent and the Grenadines has a very small economy, and a small tax base, so the financing had to be creative to work. The total cost estimate for the airport was four times what it cost to buy the site, in the region of $240 million.

“If you were to float a bond for that amount, that bond alone would have caused our debt to GDP to become so high that it would have become difficult to pay off our debts going forward,” says Matthias, “so we had to find a way to build the airport without borrowing too much. After all, we have other social projects, other development projects, and we need to have the capacity to borrow in future.”

The solution was a creative finance solution that tapped the country’s network of partner countries for resources, in cash and in kind. These countries include the Republic of Venezuela (equipment), the Republic of Cuba (technicians and manpower), Taiwan (cash grants and loans) as well as Trinidad and Tobago, Libya, Iran, Austria, Georgia, Turkey, Mexico and also some funding from Caricom – an economic union of Caribbean states.

The result will be an airport with a 9,000ft runway and 3 inter-connecting aprons, which will allow simultaneous parking of around 30 aircraft, including  commercial and cargo planes and non-commercial and private jets. The terminal building, on which construction work was finished in December 2013, will be able to accommodate 1,000 passengers at peak hour in its two terminals – one for domestic flights and one for international flights.

The facilities at the Argyle International Airport is actually a jump in scale from what currently exists at the E.T. Joshua Airport on the island of St Vincent:   The Argyle Airport terminal building has 135,000 square feet on three floors. For a large country, that size terminal is relatively small, but for St Vincent and the Grenadines, this new terminal building at the Argyle Airport is six times the size of the terminal building at the existing E.T. Joshua Airport. Furthermore, the land at the existing airport is only 61 acres, compared to 275 acres at the new Argyle Airport. And the apron – the area for parking the planes – at the Argyle Airport is 22 acres of land, compared to only 2 acres of land at the existing E.T. Joshua Airport. Everything at Argyle is that much bigger!

Committing to CSR

Before work could begin, in 2006, the IADC enlisted a firm called Kochs Consult of Germany to carry out an environmental impact assessment (EIA) for the airport project. The IADC received the report from Kochs in 2008 before beginning the construction works, and carefully followed the recommendations in the report, including those on the environmental impacts and the measures required to avoid adverse impacts.

Of this, Matthias says: “We did several things over the years, based on the recommendations of the EIA and one of the noteworthy ones was the preservation of the history of the site. Over the years, we’ve done several archaeological excavations at Argyle, using established archaeological institutions and firms. During those excavations, we’ve uncovered a lot of artefacts, which have helped us to document the history of our country.”

At the peak of the construction work, IADC had 650 employees. Many of these were locals who learned technical skills and received on-the-job training from the experienced foreign crews that came to work on the project. Local and regional firms were also responsible for construction of the Cargo Terminal, Aircraft Rescue and Fire Fighting Station, and the Control Tower.  The construction works on the airstrip is being done directly by the International Airport Development Company, using mainly technical skills from Cuba.

A new beginning for St Vincent and the Grenadines

IADC’s main mandates are to develop the airport and to put management structures in place for its operation.  Therefore, later this year, as the airport opens, IADC is likely to be wound down and its assets distributed to the airport management company (Argyle International Airport Inc.) and other government agencies, as the IADC’s remits are fulfilled. However, the work for St. Vincent and the Grenadines has only just begun.

From now on, the challenge is to leverage the presence of the new airport to attract investors to the country, to develop tourism on the island and to create a more sustainable future for its people. Matthias takes a long-term view of this process: “We do not think the facilities could be most efficiently used in the next year or two, but in the next five years, the next ten years, the next 15-20 years, we expect the airport to process a large number of traffic and passengers that we’re going to see in that timeframe. So we have built it to allow for the expectations of the future.”

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