Bim borrows big
Barbados is shouldering the greatest financial burden of the four shareholder governments who together have borrowed US$65 million from the Caribbean Development Bank to fund LIAT’s Fleet Modernisation Project.
But St. Vincent and the Grenadines Prime Minister, Dr. Ralph Gonsalves, who appealed today for St. Lucia, St. Kitts and Nevis, Grenada to “come on board” to help carry the burden, said this fact was “not anything to complain about” since Barbados was the “largest beneficiary” of LIAT’s services, a view he said Prime Minister Freundel Stuart shared.
While the individual loans for the four shareholder countries were approved by the CDB’s board on July 18, the terms were made public today for the first time, revealing that Barbados has borrowed US$33.2 million, Antigua and Barbuda $21.9 million, St. Vincent and the Grenadines US$7.5 million, and Dominica US$2.4 million.
Gonsalves, said his country had paid “the lesser amount” compared to Barbados and Antigua and Barbuda, with Dominica contributing the least but he noted that the funds would be on-lent to LIAT and that the airline, not the governments, would have to repay.
Barbados has the majority 49.33 stake in LIAT followed by Antigua and Barbuda (32.3 per cent) and St. Vincent and the Grenadines (11.19 per cent). Speaking at the execution of the loan agreement ceremony at the CDB’s headquarters here this morning, Gonsalves explained:
“The governments are borrowing the money, and we are on lending it to LIAT. LIAT is servicing the loan, this is a soft loan in the region of 3.9 per cent interest. It’s a good loan.
“Of course not every country in the equation, there are four, is taking the same extent of the loan because Barbados is the largest shareholder, and there is Antigua and Barbuda, St. Vincent and the Grenadines and then Dominica and in any event, and this is not anything to complain about. Barbados is the largest beneficiary as Freundel has pointed out of LIAT, there is a tremendous contribution there, there is Antigua and Barbuda.
Saying it was therefore understandable that the loan was “not divided equally”, Gonsalves stated: “It is an old principle, even before the time of Christ.”
The CDB said its standard terms and conditions would be used in this instance. It specified: “repayment: In the case of each Loan, in 52 equal or approximately equal and consecutive quarterly instalments commencing two years after the date of the respective Loan Agreement… Interest at the rate of 3.95 per cent … shall be payable quarterly on the amount of each Loan withdrawn and outstanding from time to time”.
CDB officials also said co-financing for the fleet renewal project was being provided by shareholder equity from Barbados and the other governments and from the sale of LIAT’s existing aircraft.
Gonsalves said the with the acquisition of modern aircraft, and through the forging of strategic alliances with other carriers, LIAT hoped to expand its schedule and fly to new destinations, including the Dominican Republic, Haiti, Jamaica, Central America, and Fort Lauderdale in Florida.
“There is no reason why we can’t do it. It is a matter which is within our hands. We are an authentic civilisation — look at where we have come from and where we have arrived and we have the institutions,” he said.
“There are some problems and we have to be reforming and changing and strengthening the management and it is not only LIAT.
“We have to get everybody on board as we go forward … Bit by bit we are getting there and while we are getting there those of us who are shouldering the burden we will shoulder it and we ask for understanding from the region as we go forward with this necessary desirable service.” (SC)