Airport Project Update – Invitation To Tender
We are pleased to advise that all of the preparatory work to finalise the Invitation to Tender (ITT) documents for the Airport Design, Build and Operate (DBO) contract has been completed.
We will now send the Invitation to Tender to Impregilo SpA and Basil Read Pty.
No other parties are being invited to submit tenders and we will only consider re-tendering the contract in the open market if we are unable to reach an acceptable contract with either Impregilo SpA or Basil Read Pty.
Both companies have confirmed their intention to tender for the works and we will await their proposals. The closing date for tender submission is Tuesday 3rd May 2011.
Sharon Wainwright
SHG Director of Access & Shipping
Ministerial Statement on Access to St Helena
Written Ministerial Statement
Access to St Helena
The Secretary of State for International Development (Mr Andrew Mitchell):
The Government recognises its special responsibilities and international obligations towards its Overseas Territories, and is committed to supporting their economic development. We want to provide a permanent, economically viable solution to the problem of access to St Helena. This is in the long term interest of both the British taxpayer and the citizens of this Overseas Territory.
St Helena is one of the most remote inhabited islands in the world and is currently accessible only by sea. In 2005, the previous Government committed itself to building an airport. It put the project out to tender in 2007. In October 2008, it appointed a preferred bidder and commenced contract negotiations. Two months later it “paused” the project. In 2009 the Government set up a further consultation on “whether an airport is the most appropriate option for access to St Helena in the current economic climate”.
Should an airport not be built, HMG would have to spend an estimated £64m on a new ship, because the current vessel is reaching the end of its economic life, and continue to subsidise its operating costs. St Helena would stand little chance of becoming financially independent, meaning it would permanently rely on substantial annual budgetary and other support from HMG (currently in excess of £20m every year). A new ship would provide a costly service but not a solution to St Helena’s stagnation and perpetual dependence on UK aid support.
It also appears that airport cost reductions can be achieved by reducing the length of the runway run-on using an Engineered Material Arresting System (EMAS). This shorter run-on still allows planes to stop safely after reaching the end of the runway itself. This is a technological advance in air safety, which is already in use in airports around the world but which has yet to be approved by Air Safety Support International, the regulator for the UK Overseas Territories.
Since taking office, the Government has reviewed the economic costs and benefits of a new ship compared to the construction of an airport. Further independent analysis has concluded that, provided certain conditions are met, the best long term solution from an economic and financial perspective for both HMG and St Helena is to construct an airport. This would allow us over time to eliminate the cost to HMG of servicing access to the island, to create the potential for St Helena to develop a self sustaining economy (hence eliminating the need for budgetary support from HMG) and to provide a permanent solution to economic isolation.
I have therefore reached the provisional conclusion, following careful discussion with Her Majesty’s Treasury and the Foreign and Commonwealth Office, that the additional short term costs of constructing an airport are outweighed by the long term benefits. So I believe that this option is likely to represent the best value for money for the British taxpayer.
We would therefore be willing 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 EMAS is approved by Air Safety Support International; and
- the St Helena Government undertakes to implement the reforms needed to open the island’s economy to inward investment and increased tourism.
We will make a further announcement once we are satisfied that the above conditions can be met.
Download: Verbal statement (MP3)
Airport to Revitalise St Helena
The go ahead for an airport on the island of St Helena will be given by International Development Secretary Andrew Mitchell – subject to strict pre-conditions – on the basis that it will provide best value for the British taxpayer and meet our obligations to this British Overseas Territory.
The airport will revitalise the British Overseas Territory of St Helena – one of the remotest islands in the world – which is currently accessible via a week long boat journey from South Africa.
The additional short term costs of constructing an airport are outweighed by the long term benefits. This is the right decision for the UK taxpayer. An airport should eliminate the island’s reliance on aid in excess of £20 million from the UK every year.
The island has been suffering economic and social decline, with more and more young people leaving the island to seek work and the average annual salary dipping to just £4,000. The airport should eventually make the island financially independent, not reliant on funding from the UK Government.
The UK Government believes a new airport is the best way to bring new financial opportunities to the island, not least a boom in tourism. At present just 950 visitors make the trip to St Helena each year by ship. With an airport it is estimated that more than 29,000 tourists will visit each year.
As well as rugged natural beauty, the island boasts historic sites like Napoleon’s tomb and rare wildlife, which will attract visitors.
The UK Government has an obligation to promote the wellbeing of the inhabitants of the Overseas Territories, who are British citizens. St Helena receives funding from the Department for International Development – over £20 million per year.
An airport should make the island self-sustainable, meaning no more funding from the UK will be needed. The other main option, a new ship, does not allow the island to become economically self-sustaining.
Estimates of the final costs for delivering the airport are currently confidential until the procurement process is completed. Through the use of developing technology, specifically designed to allow a new kind of runway, significant savings are expected. Value for money will be sought at every stage, with payments only made on the completion of agreed phases, which will help spread costs over a number of years.
The International Development Secretary is clear, however, that the airport can only go ahead if the following conditions are met:
- • An acceptable contract price must be achieved
• The risk of cost and time overruns after the contract has been awarded must be mitigated
• The airport design using Engineered Material Arresting System (to deliver a shorter runway) must be approved by Air Safety Support International
• St Helena Government must undertake to implement reforms necessary to open the island’s economy to inward investment and increased tourism
The people of St Helena have twice voted overwhelmingly for an airport – first in a referendum in 2002, then in a consultation in 2009.
International Development Secretary Andrew Mitchell said:
“It’s time to stop the years of dithering and give the people of St Helena the decision they have been waiting for since an airport was first promised by the Government in 2003.
“But these are tough times and we need to make sure we get the best deal for the UK taxpayer as well as for the people of St Helena.
“I believe an airport for St Helena will revitalise the island and ultimately make them self sufficient – no longer having to rely on UK funding. It will provide opportunities for tourism, business and improved access for this remote, remarkable island, and, in due course, a considerable saving to the UK taxpayer.
“We need to start treating the Saints as valued British citizens. We will build a new relationship with all the Overseas Territories, celebrating these unique outposts of Britishness with which we have such strong historic and cultural links.
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