The Bahamas is to receive a US$50 million loan to improve its air transportation system in a programme expected to increase flights within the island chain and modernise its airports. The Inter-American Development Bank says its loan also will be used to create an independent body to investigate aviation incidents and accidents. Nearly US$48 million will be used for aviation reforms, while the remainder will be used for technical support and analysis of transportation issues between the smaller islands. Five domestic airlines and 17 international ones currently serve the Bahamas. The loan was announced this week.
IDB team leader Esteban Diez Roux said: “The Bahamian economy is based on two pillars: tourism and international financial services, both of which are aviation intensive. “The programme will promote the development of safe and efficient air transport in the country following international standards. The air transport is crucial to ensure mobility and transport of goods, services and people in the country, as well as to integrate The Bahamas within the Caribbean region and also internationally.” The IDB said that a fundamental condition for approving special financing of this nature was confirmation of macro-economic stability and sound management by the Government. The Ministry of Tourism and Aviation will be in charge of the project. The IDB loan is for a 20-year term, with a five-year grace period, at a variable interest rate based on LIBOR.
Air transport in The Bahamas is provided by 17 international airlines and five domestic ones. There are a total of 53 licensed airports in the country. A modern air transport sector needs to provide the greatest connectivity to global markets and invest in its facilities. A comprehensive reform of the existing institutional and regulatory structure will require the implementation of a new legal framework and arrangements for financing and infrastructure management. Transport reform will introduce a modern civil aviation regulatory regime, create an independent entity to investigate aviation incidents and accidents, and modernise the existing air traffic control infrastructure.
Measures will be taken to promote competition and to introduce a booking system to expand local air carrier services, fostering a commercial and entrepreneurial attitude towards ensuring economic and financial sustainability of the sector. This loan consists of two components: (1) US$47.5 million in budget support on the basis of agreed advances in the reform of the sector, as well as (2) US$2.5 million in technical support which will help implement the reform, assess the Family Islands transport, carry out the airport optimisation, and monitor and evaluate programme results.
