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Kingston airport to resume heavy expansion projects

The capital expansion programme for Norman Manley International Airport, NMIA, led by the upgrade of the runway and terminal store space, will resume following an agreement reached between operator PAC Kingston Airport Limited and the Jamaican government.

“The main thing that will change is the timeline, but the costs are going to increase. Many of the projects will be executed soon, meaning the runway extension will start next year in the first quarter. And other [projects] are going to be executed before that,” said Fernando Vistrain Lorence, CEO of PACKAL.

Lorence said that the capital programmes will be fast-tracked, including the runway repavement and extension; expansion of the commercial stores in the terminal lounge; expansion of its solar power plant from 2.0 megawatts to 5.0 MW, which aims to reduce its reliance on the national electricity grid by 75 per cent; and wastewater treatment rehabilitation. Additionally, the airport will add concession agreements with third-party store operators, with plans to open a service station by the airport roundabout, and an airport taxi service this year.

The original capital programme totalled US$213 million for NMIA, based on terms set in the concession agreement some five years earlier.

The airport welcomed 1.0 million total passengers between January and July, or 25 per cent higher than the 807,000 total passengers a year earlier. The airline JetBlue holds the largest market share at 34 per cent, followed by American Airlines with 18 per cent. From a cargo perspective, the top providers are Caribbean Airlines with 35 per cent, British Airways with 26 per cent, and Amerijet, also with 26 per cent.

At a forum on Friday, the airport was described as an old operating plant, but one which could be modernised. PACKAL started managing the airport under a 30-year agreement in October 2018.

Minister of Transport Daryl Vaz said feedback was expected from Cabinet on the capital agreement with PACKAL.

“There has been a sign-off, with tweaking from the original agreement, and I am hoping to get comments back from Cabinet within the next week,” he said on Friday. “Once that is done and signed, that will pave the way for PACKAL to do and live by that agreement. It will include timelines and when things need to be done. And that template will be non-negotiable. You have lost enough time due to COVID-19, and lost enough time with the issues of the plant.”

Vaz added that more needs to be done to address regulatory and consumer issues at the airport.

President of the Airports Authority of Jamaica Audley Deidrick said the new agreement was not a renegotiation of the concession but rather, an adjustment due to reductions in travel arising from the COVID-19. The reduction in travel would impact on PACKAL’s revenue, and, therefore, its return on investment and ability to fund its capital expenditure.

“It was a focused matter of the impairment which the airport suffered as a result of COVID-19 pandemic, and sought to rebalance their affairs … . That is the only focus of this process,” said Deidrick. “It was not a process of renegotiation; that was never accommodated by the Government of Jamaica.”

PAC Kingston is a subsidiary of Mexico-based Pacific Airport Group. The company also holds the concession for the Jamaica’s largest airport, Sangster International, in Montego Bay through MBJ Airport Limited.

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