Jamaica govt: US$300m for exit cost of Air Jamaica!

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TRINIDAD AND TOBAGO EXPRESS, February 14 – The Jamaica government will be allocating J$27 billion in the 2010/2011 budget to cover the cost of the administration’s exiting responsibilities for Air Jamaica.

“We are hopeful that before we get to the new financial year, we would have secured an arrangement for the privatisation, if not, the arrangements for its closure would be triggered by April 1, 2010,” Prime Minister Bruce Golding has said. “This means that the necessary notices will be served and the funds which will be provided in the budget will be dedicated to winding it up as quickly as possible,” he added.

Air Jamaica - SOLD!

The Prime Minster was making a statement on the privatisation of Air Jamaica, in the House of Representatives on February 10. Golding explained that shortly after taking office, government announced the decision to divest Air Jamaica. In pursuance of this decision, the government established a privatisation committee, headed by the Dennis Lalor, to oversee the divestment of Air Jamaica.

Expression of interest
An invitation for expression of interest was issued in April 2008 simultaneously with the launch of the Air Jamaica Privatisation Web site (airjamaicatransaction.org), which contained detailed information on the requirements that potential interests should have. Seven companies responded. Of these, four were considered to have fulfilled the technical and financial criteria as stated in the published invitation.

Golding explained that at the extended deadline for submission of firm offers, June 30, 2009, two bids were received from T&T’s Caribbean Airlines Ltd and Indigo Partners. On conclusion of the evaluation, Indigo Partners were evaluated as marginally superior to Caribbean Airlines. Based on these findings, the Cabinet gave approval for negotiations to be entered into with Indigo Partners. These negotiations continued for more than four months, but the parties were not able to reach a satisfactory agreement.

Termination of negotiations
“In November, the decision was taken, with the approval of cabinet, to terminate the negotiations and to enter into negotiations with the second-ranked bidder, Caribbean Airlines. These negotiations are well advanced, but have not yet been concluded. A non-binding letter of intent has been signed with a target date for completion by March 31, 2010,” Golding said.

Meanwhile, the Prime Minister disclosed that government would be selling the two aeroplanes it owns to cover outstanding taxes owed to the United States Internal Revenue Service (IRS), as well as the United States Department of Agriculture. “We owe a lot of money. We have had to use diplomatic channels to avoid our planes being seized for non payment of fees that are owed to the government of the United States of America, the IRS in particular,” Golding said.

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