St.Helena Chamber of Commerce

St.Helena - FINALLY - to get an airport

The 3rd of November 2011 will become a date remembered by many as the day that St.Helena's airport project finally bore fruit. The ministerial announcement this morning might be regarded as the end of a long and arduous process of getting a contract signed with an airport contractor, and there are many people to thank for their efforts in achieving this much.

But the fact is, that it is really only a beginning of a different, but likely equally arduous, project of making St.Helena a world-class tourism destination, developing the infrastructure to be able to cope, and, more importantly perhaps, ensuring that a vibrant and visionary private sector has developed to make the whole project work.

This last will be a particular focus of the Chamber of Commerce in the coming years as we move from a largely government-focused economy to an economy dominated by private sector interests. No-one believes the transition will be painless, but the talent on the island is, with the right help and direction of those with more worldly experience, more than capable of making a success of this huge opportunity.

Stuart Moors, President

Here are a number of press releases about the announcement:

Ministerial statement

Written Ministerial Statement for 3 November 2011
St Helena Airport
The Secretary of State for International Development (Mr Andrew Mitchell):

In my statement of 22 July 2010 I confirmed this Government’s willingness to finance an airport for St Helena on condition that:

an acceptable contract price is achieved;
the risk of cost and time overruns after the award of the contract is addressed;
the airport design using Engineered Material Arresting System (EMAS) is approved by Air Safety Support International: and
the St Helena Government undertake to implement the reforms needed to open the island's economy to inward investment and increased tourism.

I am pleased to announce that these conditions have now been met. We will now proceed to enter into a contract for the design, construction and operation of an airport on St Helena.

The airport will end five centuries of isolation for this UK Overseas Territory, which to date has been accessible only by sea. It will provide its British population with the means to build an economy which, in the long term, is expected to lead to financial self-sustainability and an end to UK budgetary aid. This vision of a more vibrant, self-sufficient Territory would not be possible if we were to provide a replacement ship. Continued sea access as the only way to get to and from St. Helena would consign the island to a bleak future of further emigration and economic decline.

We will now enter into a contract in the amount of £201.5 million for the design and construction of the airport, with an additional up to £10 million in shared risk contingency, and £35.1 million for ten years of operation. We are confident that both the negotiated price and the allocation of risk represent value for money for the British taxpayer. In the long run, and including the investment cost, this decision to proceed with the airport is expected to save money for the UK taxpayer.

The contract for the amount represents a better deal for the taxpayer than that negotiated in 2008, a saving of more than 20% in real terms, taking into account inflation and the value of the pound.

Chamber's own Press Release

Airport announcement signals St.Helena’s renaissance

Today’s announcement is, of course, the best news that we could have hoped for, and in a time of serious global financial turmoil, St.Helena should be particularly grateful to HMG for placing their trust in us to make the best use of this enormous opportunity.

I have been overwhelmed by the hard work, the innovative thinking and the commitment to the cause that SHG and other stakeholders have shown in the past months, as we have worked to fulfil our side of the bargain by implementing the promises we made in the MOU, and so I am totally convinced that we are at the beginning of an exciting phase, at the end of which we will have not only an airport, but a world-class destination, a thriving tourism industry and a functioning and growing economy based predominantly on private sector initiatives, whose confidence will have seen a significant step change today.

Of course, we’ve been in this position before and I can fully understand investors’ reticence in committing funds and effort until the project actually begins, but we can now see that the project really has begun with the signing of the contract with Basil Read. In any case, the signs were so different this time, and I am more optimistic now than ever that this really is the beginning of our future.

As President of the Chamber of Commerce, I am eagerly awaiting the arrival of the Basil Read executives in a couple of weeks time and I look forward to working in partnership with all stakeholders during the next phase of St.Helena’s renaissance.

Stuart Moors
President, St.Helena Chamber of Commerce

SHG Press Release

Airport to be built on St Helena

On 22 July 2010, the Secretary of State for International Development, Andrew Mitchell, confirmed DFID’s willingness to finance an airport for St Helena on condition that:

• an acceptable contract price is achieved;
• the risk of cost and time overruns after the award of the contract is addressed;
• the airport design using Engineered Material Arresting System (EMAS) is approved by Air Safety Support International: and
• the St Helena Government undertake to implement the reforms needed to open the island's economy to inward investment and increased tourism.

Since that announcement our Government has been working hard on the necessary reforms, not just to meet the Secretary of State’s condition, but to put in place a legal and policy framework that would allow us to make the most of the opportunities that any future airport would bring. These reforms are vital. Without them we would not be able to justify the investment in an airport. The September 2011 review of progress concluded that the reform process is substantially on track and that there are robust plans in place for ensuring that the work will continue. The report will be issued today.

We are pleased to announce that the Secretary of State’s conditions have now been met, and that we have today entered into a contract with Basil Read (Pty) Ltd in the amount of £201.5 million for the design and construction of the airport, an additional up to £10 million in shared risk contingency, and £35.1 million for ten years of operation. This represents a saving of more than 20% in real terms from the 2008 price, taking into account inflation and the value of the pound.

This is momentous news for St Helena. The airport will be the largest single investment ever made in our island. It is an expression of confidence by the UK Government in St. Helena’s future. It will give us the best chance we will ever have of reversing the economic decline of the last 50 years. Saints currently overseas will be encouraged to come back home and contribute to a growing economy. Getting on and off the island will be easier, quicker, and more convenient for everybody.

In the short term it will create new jobs, not only on the airport construction itself but also in supporting industries. The airport will also encourage development of the tourism infrastructure that we will need to accommodate new visitors to our island. New jobs will allow Saints to return to St Helena and to their families.

The airport will inevitably bring changes, and we will need to work together to make sure that these are changes for the better. Working closely with the UK Government, SHG is committed to ensuring that St Helena gains maximum benefit from this investment.
The DFID Project Manager for the airport will visit St Helena in January and we will use this as an opportunity to talk with you in your local communities about the airport and the future.

Lastly, I would like to pay tribute to Sharon Wainwright. Her dedication to this project, and her resilience in the face of the many and significant difficulties experienced in bringing it to fruition cannot be measured and is something to which we can all aspire. I would also like to give special thanks to Clare Harris for her unstinting work through the years, stepping up after the loss of Sharon, and helping to deliver this outcome.

3 November 2011
Mark Capes, Governor of St Helena