- File
Onlookers watched with pride when the newly renovated Donald Sangster International Airport in Montego Bay, St. James, was formally opened.
Denise Clarke, Staff Reporter
WESTERN BUREAU:
GOVERNMENT STANDS to raise in excess of US$30 million annually through an airport improvement fee to be introduced at the Sangster International Airport in March.
The US$5 per person fee come as the Government relinquished operation of the airport to an international consortium, MBJ Airports Limited. The agreement for the privatisation of the airport was signed at the Ritz-Carlton Hotel in Montego Bay last week.
The fee is to be imposed on outbound travellers using the airport as of March 1 when the new managers take over operations. According to Government officials, between 1,400 and 1,800 passengers pass through the airport each hour. If 50 per cent of these passengers are outbound, then the Government can collect up to US$39 million or J$1.9 billion each year. This is in addition to the annual concession fee, which MBJ will pay the Government during the 30-year lease.
Minister of Transport and Works, Robert Pickersgill, who made the announcement, said provision for the airport improvement fee is included in the Airport Economic Regulations Act passed last year.
"Section 6 of the Act makes provision for an airport improvement fee of US$5 to be levied on each passenger using the airport for travel from Jamaica, except for passengers exempted from such taxes," Mr. Pickersgill said.
Similar to the US$20 departure tax already being paid by outbound passengers, this latest fee will also be included in the prices of airline tickets. The money is to be remitted to a special bank account to be used specifically for the improvement of the Sangster Airport. "Charges will be collected using the ticketing system. Airlines will collect the charges on behalf of the airport and the Government of Jamaica to be paid over on a weekly basis," explained Mr. Pickersgill.
The agreement for the privatisation allows the Government to retain ownership of the Sangster International Airport, while relinquishing the operations of the facility. The consortium, which is headed by the Canadian-based Vancouver Airport Services Limited, is obliged under the agreement to develop and expand the airport facilities during its tenure.
MBJ Airports Limited will pay the Government an annual concession fee, that will be determined by three factors.
A base concession fee per workload unit; a workload unit is equal to one passenger or a hundred kilograms of cargo going through the airport.
Forty-five per cent of total gross revenue in excess of that forecast by the concessionaire; Jamaica will share any amount that is in excess of that revenue.
Equal sharing of returns beyond a threshold of the internal rate of return of 25 per cent.
Under the agreement, the concessionaire will put up a capital investment of US$190 million for the expansion of Sangster Airport. The work will be carried out in several phases and will begin shortly after the new managers take office. The expansion will see the installation of six jet bridges on the existing terminal, a modern computerised security control system, and the construction of a new terminal and a 12-gate concourse.
