The government has promised to keep a close eye on the financial performance of LIAT, in light of its extensive capital investment in the regional airline.
Speaking in Parliament this week, Minister of Finance and the Economy Dr. Errol Cort said the government is looking to see its investment yield returns “evidenced by a viable, well structured, efficiently managed entity, committed to meeting the highest standards of excellence in consumer service.”
Dr. Cort made a statement in Parliament outlining the terms of a US$21,819,000 loan secured by the government from the Caribbean Development Bank.
The US$21.8 million is Antigua and Barbuda’s portion, or 36.3 per cent, of a larger loan of US$60 million secured for LIAT along with the two other shareholder governments of St. Vincent & the Grenadines and Barbados.
US$45 would be advanced from the CDB’s ordinary capital resources with an annual interest rate of 6.1 per cent, while the remaining US$15 million would come from the bank’s special funds resources, at the concessional interest rate of 2.5 per cent.
The finance minister explained that US$16.3 million of Antigua and Barbuda’s portion of the loan would be obtained at 6.1 per cent interest, and the remainder at the 2.5 per cent interest rate.
Under the terms negotiated with the CDB, Antigua and Barbuda will have a three year deferral period for the loan, with an additional 17-year repayment period.
The government has been criticised for continuing to pump funds into the airline despite extensive losses, but Dr. Cort defended this policy, saying that it is incumbent onthe government to do whatever is necessary to keep LIAT flying.
He noted that LIAT is a major contributor to Antigua and Barbuda’s gross domestic product and that the capital provided helped protect both the jobs of workers and the economy of Antigua and Barbuda.
“It is in the best interest of Antigua and Barbuda to have a resurgent, adequately capitalised and efficiently organised LIAT. This administration, in securing this loan facility with the CDB, confirms its strong and unwavering support for and commitment to the management and staff of LIAT, to the people of Antigua and Barbuda and to the flying public generally,” he said.
Barbados has secured just over US37.7 million, or 54.5 per cent of the total CDB loan for LIAT and St. Vincent & the Grenadines is responsible for the repayment of US$5.4 million, or 9.2 per cent of the loan.