The operators of Jamaica’s two international airports have each submitted a multi-million dollar claim on the Government of Jamaica (GOJ), as a result of losses sustained from the coronavirus (COVID-19) pandemic.

The claims also arose from the resultant ban on travel imposed by the Government of Jamaica (GOJ). The claims by MBJ Airports, operator of the Sangster International Airport in Montego Bay and Mexican based, Grupo Aeroportuario del Pacifico S.A.B. De C.V., operator of the Norman Manley International Airport in Kingston were done under the force majeure clause of their Private/Public Partnership (PPP) with the GOJ.

In addition to the two airport operators, TransJamaica Highway, operator of the East-West leg of Highway 2000 toll road also submitted a claim on the government.

The claims were made on the people of Jamaica given the continued negative impact of the pandemic on international travel and the resultant revenue loss by the operators.

Government now assessing claims

The claims by the airport operators are now being assessed by the Government. On December 14 last year, the Cabinet of Jamaica approved the claims and appointed a negotiating team to assess further proposals by the concessionaires to facilitate economic recovery and long-term sustainability.

The exact amounts of the claims are not known but what is known is that it runs into millions of dollars. In the case of TransJamaica Highway, the company has already submitted a notice of claim for revenue losses.

However, these claims would be subject to further assessment based on a clause in the North-South Highway concession agreement that allows for an extension of the agreement to facilitate the recovery of losses incurred. The extent of the losses impacting these concessionaires has however not been quantified as the primary cause, the COVID-19 pandemic, is still in effect.

However, the Auditor General’s Department has advised that the National Road Operating and Constructing Company (NROCC), which is the public body responsible for the two highway concession agreements closely, monitored the situation to manage potential fiscal risks.

Auditor General livid at no reference to claims in Jamaica’s Fiscal Risk Statement

Auditor General, Pamela Monroe-Ellis is livid that there is no reference to the claims in GOJ’s interim Fiscal Policy Paper (FPP).

She highlighted in her examination of the GOJ’s interim Fiscal Policy Paper (FPP), which accompanied the First Supplementary Estimates for 2021/2022 that “there was no reference in the Fiscal Risk Statement, regarding the size of the claim, funding arrangements or implication for the Public Debt. “

The Auditor-General remarked that “In a context of Jamaica’s commitment to achieving the revised debt to Gross Domestic Product target of 60 per cent by end-FY2027/28, we expected some indication in the Fiscal Risk Statement of the magnitude of the size of the claim, source of funding and implication for the public debt stock. However, the interim FPP did not quantify the size of these losses or claims from the concessionaires and whether an assessment was done to measure the potential impact on the fiscal accounts and the public debt stock.”

In spite of the losses being claimed by the airport operators, the Auditor-General pointed to the interim FPP, where it was reported by the Jamaica Customs Agency that passenger arrivals for the April to July 2020 period increased by approximately 758 per cent when compared to a similar period in 2020.

This was the result of the reopening of the country’s borders and the subsequent corresponding increase in traffic.

It has been assessed that “nonetheless, given the continued impact of the pandemic and the attendant uncertainty, continued, effective monitoring will be critical.”