News & Media
More than $70 Million from PJIAE Insurance claim released for Airport reconstruction
Airport – A two-year negotiation by the Princess Juliana International Airport (PJIA) to settle an insurance claim following the passage of Hurricane Irma in 2017 is finally resolved, with Airport CEO, Mr. Brian Mingo, taking receipt this week of a settlement amounting to more than $70 Million.
The settlement amount was agreed upon since August last year, however bondholders restricted the proceeds, seeking certain guarantees about the reconstruction. The bondholders were holding onto the funds until they were satisfied with other funding for the reconstruction provided by the World Bank and the European Investment Bank (EIB) that was secured by the Dutch government, but had to be first put in place.
PJIAE’s CEO, Mr. Brian Mingo, says this is the final piece in a complicated puzzle to complete the picture of funding for the Airport Reconstruction project. While the airport is not receiving the full $139 Million of the original insurance claim, it can utilize a sizable amount of over $70 Million agreed upon by an arbitration panel in August, 2019 - just above 50 cents on the dollar.
“The release of the insurance settlement by the bondholders shows they are confident that we will be able to follow through with our plans to totally reconstruct the Airport and make it more robust and resilient to future hurricane conditions of the magnitude and strength of Hurricane Irma,” said Mr. Mingo. He said the insurance funds will be solely used to cover out -of-pocket expenses, administrative and project costs and other expenses not covered by the capital loan set aside for the Airport reconstruction. The complete amount of over $70M has already been earmarked and assigned towards commitments. The funds will also allow the airport to invest in a more comprehensive insurance package for the Airport going forward.
The CEO continued by thanking the bondholders for their trust and assures that they will be satisfied with the improved final product. Mr. Mingo also thanked his own management team, PJIAH and its Supervisory Boards, RSG (Royal Schiphol Group), legal firms Lexwell, Simmons & Simmons and DLA Piper, also officials of the World Bank and European Investment Bank (EIB), the Netherlands Government, the St. Maarten Government and the NRPB Project Bureau on St. Maarten, for their support and trust.
“At the start of this process I called for everyone to work together as one so that we could achieve success together, and I believe we have all been tremendously successful in securing the correct funding package with the correct partners for a correct outcome,” continued, Mr. Mingo. Indeed, the PJIAE management team has reached this milestone in providing funding for the Airport Reconstruction plan despite all the obstacles that were thrown in their way for the past two years. Not only did the team have to process numerous damage reports and assessments to back up their claims, they also had to continue running a make-shift Airport operation even resorting to the use of outdoor tents, after the main Terminal building was rendered unusable.
Another major undertaking of the Management Team was convincing bondholders and financiers that they would be able to make up the balance needed to complete the estimated $100 Million to reconstruct the airport facility despite an insurance claim shortfall and without the possibility of being able to take additional commercial loans.
The hard work to rebuild the airport’s broken image began with the Airport putting its own house in order. The Management Team were charged with checking off requirements set by government for a Corporate Governance Program to put checks and balances in place assisted by officials of Schiphol Airport.
“I really must commend the management team for turning around what was then a damaged image of our Airport and its prospects for the future,” said Mr. Mingo. He said the financiers at the time were very disappointed that the reconstruction was not going to be met with proceeds from the entire insurance claim, which was falling way short.
But when the bondholders were presented with other funding options, consisting of a capital program with a comprehensive reconstruction plan supported by both the Government of St. Maarten and the Netherlands, everyone was on board, and this is down to the professional way the PJIAE Management Team made their case.
The Airport CEO, Mr. Mingo, says now that the funding is squarely in place, the only thing holding back the start of reconstruction in the present lockdown caused by the Coronavirus outbreak globally and locally.
“The Airport’s Coronavirus Task force is putting all efforts towards having all COVID-19 mitigations implemented supporting the overall objective of the team “to be the Caribbean's Airport leader in preventing and controlling the spread of COVID-19.” Said Mr. Mingo. “The Airport facility itself is in a state of hibernation, but we are continuing to work so that we can immediately start as soon as the State of Emergency is lifted and we can get the bidding process completed for the reconstruction to begin.” Mr. Mingo continued.
He said If all goes well, the tender process for reconstruction will be after the summer (July - August 2020) and then the start of the reconstruction - December 2020 - January 2021.
Mr. Mingo admits that the Covid-19 outbreak makes the business landscape more complicated for PJIAE at this time, however the Management team has not been resting on its laurels, but instead, has its own plan for business continuity.
“Today the airport generates zero income since the island is in a lockdown mode, a period during which we will have to conserve our resources and energy to prepare for our ‘back to business’ drive,” continued the CEO, Mr. Mingo.
He said the Airport currently has a plan to endure the shutdown and continues to keep personnel engaged with remote working protocols as much as possible.
“We are thinking of ways to keep ahead of the curve when the tourist engine is cranked up once again, so that we can be prepared for when the visitors return. The start of the reconstruction of our Airport Terminal will happen before the end of the year and should be completed Q4 2022,” stated Mr. Mingo.
“We have a plan, we are focused, we are ready,” says an emphatic CEO, Mr. Mingo.