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The Jamaica Government has divested operations at the Norman Manley International Airport (NMIA) to a Mexican entity which will take charge of running the facility for at least the next quarter of a century.
Under a 25-year concession agreement signed yesterday, Grupo Aeroportuario del Pacifico S.A.B. De C.V. (GAP) will be responsible for improving the airport’s land and air operational efficiency, and financing and completing a modernization programme, at an estimated cost of over U$110 million.
Additionally, the Government will receive a guaranteed percentage of the airport’s gross revenues. The entity has the option to extend the arrangements by an additional five years.
GAP emerged the preferred of three bidders, which included two consortia of foreign and local investors. Their selection followed the public opening and evaluation and Cabinet’s subsequent approval in September of the three bid submissions received by the Development Bank of Jamaica (DBJ) in July. The transaction value for GAP’s bid totals over US$2 billion.
Prime Minister Holness, who witnessed the signing ceremony with Transport and Mining Minister Robert Montague, said the transaction represents another successful public-private partnership (PPP) deal, coming on the heels of similar arrangements with the Kingston Container Terminal and North-South Highway.
“The successful outcome of this public-private partnership attests to the transparency and equity of the process as well as the professionalism, accountability and integrity of all stakeholders involved,” he said.
Holness argued that this type of investment modality is critical to the Government’s economic growth strategy, adding that “it is evident that PPPs are excellent vehicles for unlocking the value of assets, reducing debt and mobilizing local and foreign investment in our economy.”
In his remarks, Montague said the aviation sector’s critical role to tourism and the services sector “made clear the need for [the] modernization and development of our airports.”
“Through a thorough analysis, the Government decided that privatization was the best available option for mobilizing the considerable resources that would be required to achieve our objective,” he noted.
Montague said the transfer of financing and operational responsibilities to GAP now enables the Airports Authority of Jamaica to focus on managing the concessions at NMIA and the Sangster International Airport in Montego Bay, which the Mexican entity has been managing through subsidiary company, Desarollo de Concesiones Aeroportuaris since 2003.
GAP’s Chief Executive Officer, Raul Revuelta Musalem, said his company welcomed the opportunity afforded to manage the NMIA’s operations.
“You can be assured that the group I represent will contribute to the achievement of Jamaica’s Vision 2030 [of] transforming the country into the place of choice to live, work, raise families, and do business,” he added.
GAP has concession management agreements, some totaling 50 years, for 13 airports in Mexico.