BVI Beacon Airport Special Report 2

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Festival Schedule Weekend & Culture

— page 6

Thursday, August 2, 2012 |

The light that comes from wisdom never goes out.

| bvibeacon.com | 50 cents

KIDDIES FIESTA SPECIAL REPORT: AIRPORT PART 2 Residents worried about EIS expansion’s impact Effects on Trellis Bay a concern

By JASON SMITH jsmith@bvibeacon.com Though their articles appeared in separate publications six months apart, the two writers came to similar conclusions about the challenges and benefits of visiting the Virgin Islands.

“It requires effort to reach the British Virgin Islands but the Caribbean archipelago offers idyllic rewards,” Mary Wilson, a Financial Times journalist, wrote in her July 6 article about trends in VI property sales, titled “Happy Bays.”

Airport see page 30

Photo: NGOVOU GYANG

Participants in the Rotary Club of Road Town’s annual Kiddies Fiesta march through the capital on Saturday (see story on page 10). Though the event is independent, it is scheduled each year to coincide with the August Emancipation Festival, which officially opened later that day at the Festival Village (see story on page 14).

Stamp duty underpayment cost gov’t $3.4m Report: Scant evidence of intentional fraud

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Beacon Business..........................16 Vol. 28 No. 51 • 2 sections, 56 pages Road Town, Tortola, British Virgin Islands © 2012, The BVI BEACON

By CHRYSTALL KANYUCK ckanyuck@bvibeacon.com A yearlong inquiry into underpayments of stamp duty found that a systemic problem, rather than any one particular error, cost the government $3,430,885 in six years.

The commissioner who headed the probe made a series of recom-

mendations for improving the process, but found “no evidence of an intention to defraud, save perhaps in a single case.”

The Report of the Commission of Inquiry into the Possible Undervaluing of Property to Avoid Chargeable Stamp Duty was tabled in the House of Assembly July 24. Of the transferred properties valued at $750,000 or more between 2000 and 2006, 22 were “potentially contentious transactions,” mean-

ing that the parties involved may have underpaid stamp duty, according to the report.

“The commission is satisfied that … the inadequacies and inefficiencies in the legal regime and administrative structure and practices in the Inland Revenue Department have resulted in a substantial leakage of stamp duty,” the report states.

In April 2009, the commission appointed Deloitte & Touche as forensic accountants to “go

through the data at the Land Registry and Inland Revenue Department to identify transactions which may have been improperly assessed for stamp duty,” the report states. The firm’s investigation, included in the report as an appendix, focused on property transfers with a value of $750,000 or more made between 2000 and 2006.

The bulk of the underpaid duty – $3.1 million – came from

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Airport from page 1 And Daily Mail writer Richard Pendlebury spent the first seven paragraphs of his Jan. 4 article “Bewitched by the Bay” describing his delayed air arrival to the territory from the United Kingdom.

“The BVI positively celebrates the fact that it has no direct air service from the UK or North American mainland,” he wrote.

“That makes it more untouched, exclusive and desirable.”

For better or worse, those perceptions about the VI may soon change if the proposal to add nearly 2,500 feet to the runway at Terrance B. Lettsome International Airport moves ahead as planned. Deputy Premier Dr. Kedrick Pickering and other National Democratic Party leaders have described the project as crucial to boosting tourism and spurring future development.

But some residents, including several who live near the airport, have raised objections. Their concerns include fears that the project could reduce water quality, change water circulation and threaten marine life in Trellis and Well bays; that jet noise, construction and restrictions on yachts near the runway could harm Beef Island businesses; and that the VI’s culture and environment could be irrevocably altered for the worse, imperiling the current tourism product.

In preparation for the project, government hired a team of consultants to study the potential environmental, economic and social impacts of the expansion. The Runway Expansion Impact Assessment the consultants complete in May isn’t yet public, though a copy was leaked to the Beacon.

The study and its appendices discuss in detail some of the concerns that residents have been voicing about the expansion since the proposal was formally presented to the public at two meetings in March.

The assessment was produced by a team of consultants headed by the firm Kraus-Manning. They included Clive Petrovic, a biologist; a group of aviation consultants from the company Ricondo and Associates; and Dr. Birney Harrigan, who wrote the socioeconomic portion of the report.

Two options

During the March meetings, Dr. Pickering and BVI Airports

Special Report

How construction may unfold

E

xtending the Terrance B. Lettsome International Airport runway by about 2,500 feet could begin early next year, Deputy Premier Dr. Kedrick Pickering has said. The Runway Expansion Impact Assessment explains that construction likely would take place in five phases, which would include filling in a portion of Trellis and Well bays, followed by widening and lengthening the runway. The report does not detail how long each phase is expected to take, but Dr. Pickering said he hopes the project will be complete by December 2015. The consultants recommended that construction take place at night in order to minimise the impact on the airport’s operations. Their assessment mentions the possibility of placing a portion of the runway on elevated metal platforms, but its explanation of the construction process, below, assumes that the in-fill method will be used instead.

Phase 1: Workers will dredge the seabed, gathering material to fill more than 27 acres of land in Trellis and Well bays.

Phase 2: First, the runway on the Trellis Bay in-fill land will be built. Then workers will create a new route for the road along the Well Bay end of the runway and destroy the old road.

Phase 3: Workers will prepare a temporary runway entrance and taxiway so that the portion of the runway on the in-fill land in Trellis Bay can be used as the airport’s runway while work takes place on the western end.

Phase 4: The Trellis Bay portion of the runway extension will be officially commissioned, bringing the operable runway to 5,462 feet. Construction work on the western portion of the runway on the Well Bay infill land will begin.

Phase 5: The centre of the existing runway will be widened and the temporary taxiway will be demolished. When complete, the new runway will be approximately 7,000 feet long, enabling commercial jets to land.

Graphic: DAVID HELDRETH Authority officials showed the public two alternatives being considered for the runway expansion.

Option Four, which involved reorienting the runway to the northeast at a cost of $70 million, would have maintained a wide opening into Trellis Bay but would

have eliminated an ecologically important salt pond north of the existing runway.

In June, Dr. Pickering announced that the decision had been taken to move ahead with Option Six, a 2,500-foot extension along the current runway’s existing align-

ment. About 2,000 feet of the lengthened runway will jut out into Trellis Bay, while about 500 feet will be extended into Well Bay, he said. The option saves the salt pond and requires less of the seabed to be marred by in-fill land – only 37.4 acres of fill will have to be dredged

up and placed in Well and Trellis bays as opposed to the estimated 82.8 acres of fill that would be required under Option Four.

But Option Six would significantly narrow the gap between the end of the runway and Sprat Point, Jump see page 31

Special Report

Last Resort imperiled by airport expansion Owners worried about future

By JASON SMITH jsmith@bvibeacon.com To the guests eating dinner at The Last Resort, the planes taking off and landing at the Terrance B. Lettsome International Airport already seem close. They may get a lot closer.

The restaurant on Bellamy Cay sits in Trellis Bay only a few hundred feet from the site where the existing runway may be extended about 2,000 feet into the bay. While Bellamy Cay itself won’t be physically impacted by the extension, the potential effects on Trellis Bay combined with the noise and restrictions on yacht traffic that the big jets will bring could doom the 40-year-old restaurant, its owners fear.

Ben Bamford, who owns the business with his wife Jessica, said that the next few years of airport construction will be difficult.

“I think our business will be untenable during that phase, and when it’s finished we don’t know what the new reality will be,” he said.

History

Tony Snell, Jessica’s father, founded the restaurant in 1972 after his previous restaurant on Little Jost Van Dyke was destroyed by fire. Mr. Snell found and eventually repaired the dilapidated building on Bellamy Cay, which hadn’t been used in several years.

In 1954, Wladek Wagner, a Polish sailor, purchased the lease for Bellamy Cay for $75. He built the cay’s first structure – and helped construct the airport’s first runway – but Mr. Wagner’s business floundered, Mr. Bamford said.

“It was going to be built as a small resort, but it was way ahead of its time. There wasn’t anything else in the tourism industry,” he said.

A decade later, Mr. Snell had better luck as The Last Resort’s reputation among the sailing community grew.

“It’s been known as a bit quirky, not always following all the rules. But people like that about it.

It’s not a slick New York restaurant; it’s a quirky little BVI establishment,” Mr. Bamford said.

Those quirks — which at one time included a resident donkey named “Chocolate” and currently include regular entertainment such

Photo: TODD VANSICKLE Bellamy Cay seen from the air. as a singing chef – may be imperiled by the “very noisy jets” the runway will bring, Mr. Bamford said.

Impact

The Runway Expansion Impact Assessment, compiled by a team of consultants and completed in May, suggested that the effects of the jet noise could be reduced if government retrofits the restaurant with soundproofing materials in an act of “demonstrable goodwill.”

Mr. Bamford is sceptical that this measure will work.

“I don’t quite know how they’re going to mitigate a big jet landing 50 feet from our restaurant,” he said.

Noise is only one issue. In addition to a strong VI crowd, many of The Last Resort’s visitors come from charter yachts that Mr. Bamford fears would stop coming to the area if the runway obstructs entry to Trellis Bay. “How do the boats that want to come in come in with these mast height restrictions?” Mr. Bamford said.

The impact assessment suggests that a mast-height restriction zone for yachts would need to be implemented at the Trellis Bay end of the expanded runway and along its side, but the precise distances aren’t listed. A drawing of the expansion also indicates that yachts will still be able to enter Trellis Bay through a 390-footwide entrance between Sprat Point and the end of the runway.

Government discussions

Deputy Premier Dr. Kedrick Pickering, who is spearheading the runway expansion project, has previously said that government is

considering ways to limit the impact to Bellamy Cay. During a March 27 public meeting at the East End/Long Look Community Centre, Mr. Snell, 90, rose to sing a calypso song he wrote in opposition to the expansion. Minutes later, Dr. Pickering addressed his concerns.

“The government has no interest in destroying what goes on at Bellamy Cay; that’s not an issue that the government wants to deal with at all,” Dr. Pickering said.

Then he paused for a moment before continuing.

“But I also want to remind the gentleman from Bellamy Cay, there used to be a restaurant on Beef Island called Conch Shell. There used to be,” Dr. Pickering said, referring to a business that closed as a result of the previous runway expansion.

Mr. Bamford said he was confused by those remarks.

“I didn’t know what he was saying: If it was, ‘Don’t worry, you’ll be looked after just like there was compensation just like we gave to Conch Shell Point;’ or if he was saying, ‘Be careful because we can just eliminate you,’” Mr. Bamford said.

The Snell family includes three generations who have a strong connection to The Last Resort and the VI, he added.

“There was a lot of talk online of ‘Your bones won’t be buried here so why do you care?’ It’s important to understand that the business is owned by BVIslanders, long-term BVIslanders,” Mr. Bamford said, referring to the VI citizenship of his wife and her father. “It’s not an expatriate business.”

The BVI Beacon | Thursday, August 2, 2012

Airport from page 30 likely interfering with the current’s ability to naturally “flush” the bay, the consultants found.

“Either runway extension option will involve substantial land reclamation into areas where strong currents are common.

Therefore, some impact on the oceanographic processes should be expected. In particular, the question of alteration of currents and sediment transport is a major consideration,” consultants wrote in the impact assessment.

In his public statements Dr. Pickering has sought to allay critics’ fears that Trellis Bay could become a “dead bay,” saying that consultants would model the current patterns before government proceeds with the development.

“This government will do nothing to harm Trellis Bay,” he said at the March 27 public meeting, adding a few moments later that “no one in this room is more environmentalist than I am.”

Dr. Pickering declined to be interviewed about the expansion in May, and since then he has not responded to several more requests for an interview.

Altered currents

The impact assessment found that changing the current could have wide reaching effects.

“For example, the runway extension toward Trellis Bay could impact currents so that parts of Trellis Bay, or even more distant locations like Long Bay, may be affected. The result could be erosion and scouring of portions of the seabed or shore,” the assessment stated, though it adds that computer models of current activity “suggest such problems are unlikely to be serious.”

But Chris Syms, the co-owner of De Loose Mongoose and the Beef Island Guest House, worries that if the current is impeded, the resulting changes could harm marine life in the bay or erode the existing beach.

“Basically you’re putting an arm out into the current, reversing the flow of what is the flow now,” he said.

The business owner said he would be less concerned if the airport extension is built on top of elevated platforms that allow water to circulate underneath. Dr. Pickering mentioned this possibility in the House of Assembly on June 29.

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“This technology, even though new to the Caribbean region, has already been used elsewhere in the world in the construction of either runways, taxiways or aprons structures,” Dr. Pickering said.

He added that he and BVIAA Managing Director Denniston Fraser recently visited the LaGuardia International Airport in New York City to view the platform technology in action.

This method, however, could more than double the cost of the project. Placing the needed 242,000 square feet of the runway on elevated piles could add $34 to $62 million to the expansion’s estimated $38 million cost, according to the impact assessment.

Other mitigation

The consultants also analysed other options to preserve the bay’s circulation. A series of 29 10-footwide culverts below the runway would allow water to flow through, but would could cost an extra $8 to $10 million, they found. Additionally, those culverts might get blocked with marine life and require regular cleaning, according to the assessment.

Another option, removing several hundred square feet of Sprat Point, would improve circulation and allow wider access for yachts, the consultants found.

That alternative would also create about 140,000 to 170,000 cubic yards of fill that could be used to build the runway, they estimated.

But tests would have to be done to make sure the material is hard enough to be used, the assessment added. This option could cost an additional $2 to $3 million in dredging and removal costs, though the assessment does not state how much it will cost to purchase the land from its current owner, Quorum [BVI] Limited.

A fourth option, dredging a 4,000-foot channel parallel to the runway that would connect Trellis and Well bays to promote better flushing, would cost about $6 million to $8 million, according to the impact assessment. This alternative, however, is “considered an inefficient means to convey water between Trellis Bay and Well Bay,” the assessment stated.

The channel it would require “may develop into a maintenance concern and possible debris trap,” the document added. “If insufficient water volume may pass through the channel during a normal tidal cycle it may lead to

Airport see page 32

Page 32 | Thursday, August 2, 2012 | The BVI Beacon

Airport from page 31 future water quality issues in Trellis Bay.” Aragorn Dick-Read, an artist and spokesman for the Trellis Bay Business Association, said that business owners in the area have serious doubts that the mitigation measures will be cost effective or function properly.

“I haven’t seen anything that convinces me that they will, no.

And I haven’t seen anything that convinces me that business as usual can carry on in Trellis Bay,” said Mr. Dick-Read, who owns Aragorn’s Studio in Trellis Bay and organises a regional arts and crafts fair in the area each year.

Marine impact

If the bays aren’t flushed properly and if sediment from construction isn’t properly contained, the effects could be disastrous for marine life in the area.

“Without proper erosion control measures, sediment can pour into the sea and devastate the marine environments, turning the offshore coral reefs and sea grasses into a barren underwater wasteland,” the assessment stated.

Healthy corals could be choked by the sediment, which would further harm fish and the wider ecosystem. Mr. Syms, the bar and guesthouse owner, has seen it happen before. In the late 1970s, there was plenty of marine life in the area, including “big schools of spotted eagle rays” he said.

“Back in those days, if we got 15 boats in the bay, it was a big night,” Mr. Syms said.

As more boats started anchoring there, they damaged what had been a healthy reef, he said, adding that the reef began to recover once government installed mooring balls in the bay. Things worsened a bit again in 2000 once construction began on the previous runway expansion, he said, adding that he fears a new round of construction could further damage sea life.

“The environmental part is a huge concern for us,” he said.

While much of the runway expansion’s impact can be mitigated, the destruction of sea life where the in-fill land will be placed is “unavoidable and a consequence of development,” the assessment stated.

“Everything in the footprint of the runway extension will be lost (except for what may be relocated). The underwater habitats are widespread, and much more exists beyond the direct impact zone. Coastal mangroves in the Well Bay area will also be affected,” the document added.

Despite those impacts, the assessment also noted that “virtually nothing” of Beef Island’s “pristine and natural” habitat currently remains due to years of human habitation and development.

Other areas

The expansion’s impact could also be felt beyond Trellis and Well bays. Some of the sand that makes up Long Bay Beach may shift as a result of the changing current, but no net loss is expected, according to the assessment.

Additionally, though it is outside of the project’s immediate footprint, the Hans Creek Fisheries Protected Area is “sufficiently close” to the construction zone to merit consideration, the assessment stated.

“While it does not appear the fisheries area will be directly impacted by this project, issues may appear in the future that could require mitigation,” it said.

Concern over the fisheries area has stymied development projects on Beef Island in the past. A proposal by Quorum [BVI] Limited to create a luxury resort and 18hole golf course there was stalled in 2009 by an environmental group’s lawsuit.

The company originally purchased land for the development in July 1995, although the $80 million development wasn’t approved until about 10 years later, when then-Chief Minister Dr. Orlando Smith signed a preliminary development agreement with the company.

In the subsequent months, the Virgin Islands Environmental Council, a group of concerned citizens, formed. The VIEC successfully challenged the development in High Court. A judge ruled in 2009 that because Hans Creek may have been “adversely affected” by the development, the planning application Dr. Smith’s government approved was “void for illegality.”

But Quorum successfully appealed the judgment and won the right to continue with the development. However, while the pro-

Special Report ject’s development application is still on file at the Town and Country Planning Department, records indicate that nothing new has been filed in recent months.

Quorom representatives did not respond to requests for comment. Noni Georges, a member of the VIEC, said the group has not reached a formal position on the runway extension proposal but plans to discuss the issue at an upcoming meeting.

Noise concerns

Beyond Beef Island several surrounding communities may also be impacted by the extra noise that bigger jets flying overhead can bring. Residents of Hodges Creek, Great Camanoe, Well Bay, Trellis Bay and Little Mountain will likely experience higher noise levels, and residents fear that their property values will go down, according to the assessment “There is a concern from residents that property prices might be affected by this form of ‘pollution.’ This aspect is difficult to prove and further financial research and reporting is recommended,” the report stated.

Construction noise and dust could also affect businesses and residents in the area, the assessment found.

“It is essential that we learn from the experiences and examples in the past. Construction activities must be designed and managed to reduce negative impacts on the environment beyond the immediate project footprint. Erosion control must be employed to prevent sediment loss to the coastal environment,” the assessment stated.

Business worries

In addition to the fears that some VI residents raised about the runway construction’s effects in the short term, others are concerned that the expansion could affect their livelihoods permanently.

The assessment reported that Trellis Bay businesses and residents raised “serious warranted concerns” about the project, but it also suggested that “change can be adapted to and accommodated.”

Mr. Dick-Read, of the Trellis Bay Business Association, said that besides the environmental concerns he is afraid that the additional restrictions on boat traffic the expanded runway could bring will harm businesses’ customer base.

“The bottom line is that the

vessels that enjoy visiting Trellis Bay now — and [that] all of our businesses are dependent on — will not be coming to Trellis Bay as they have in the past,” he said, adding about 90 percent of his art studio’s customers are sailing guests.

“The whole concept of business in Trellis Bay is dependent on boats arriving and people enjoying the benefits of the beach community and the natural environment, which will all be compromised,” he said.

Yachting concerns

Charter Yacht Society Chairman Tim Schaaf said the Trellis Bay area is a great place to entertain charter guests due to the full moon parties businesses there host monthly, and because some restaurants like The Last Resort and the nearby Pusser’s Marina Cay have developed a strong following among sailors. Additionally, the bay’s central location makes it a convenient place to anchor as yachts cruise around Tortola and the sister islands, he said.

“Otherwise, it makes the trip from North Sound to Jost Van Dyke a very long trip,” he said.

The captain added that the mast restrictions that the extended runway will bring, combined with the loss of mooring balls and Trellis Bay’s narrowed entrance, will make it much more complicated for ferries and yachts to share the bay.

Mr. Syms, the guesthouse and bar owner, has seen his businesses grow and change since the late 1970s when he first came to the territory with his wife. While his four-bedroom guesthouse can accommodate about 10 people and was initially the focus of the business, traffic to De Loose Mongoose restaurant and bar eventually outpaced the guesthouse. But the guesthouse sometimes serves as an “airport hotel” for late-arriving visitors bound for sister island resorts, he added.

“More and more as the airport grew, tourism grew, we became sort of the little hub for the other resorts because we’re so close to the airport,” Mr. Syms said.

If the runway expansion reduces boat traffic into Trellis Bay, the businessman said, he hopes that the additional air arrivals will make up the difference for the lost restaurant and bar business.

Still, he can only take so many

guests with his current facility.

“If you’ve got a jet with 240 people and that jet can’t leave that night, where are those 240 people going to go? Not into my four bedrooms,” Mr. Syms said.

Focus groups

Dr. Harrigan performed the socioeconomic portion of the impact assessment through her consulting firm Reality Global. She conducted dozens of interviews and focus groups with parties likely to be affected by the runway expansion. Her portion of the assessment recommended that Trellis Bay business owners adapt to the change, noting that because several of the properties are on leased Crown land, their property values won’t be affected.

“The additional demand from the expected increase in the number of visitors may require those businesses to rethink their old strategies and find new ways to capture this new market,” Dr. Harrigan wrote.

For Mr. Dick-Read, though, the current strategy works well for Trellis Bay and other area businesses. He said that the “grassroots” contact that small businesses like his offer tourists are the type of “genuine experience” most tourists crave. He added that while he understands the rationale behind bringing in more visitors, he feels the expansion is the wrong project at the wrong time.

“I do fully support all efforts to find solutions to increase and improve the quality of airlift in the BVI,” he said.

Russell Harrigan, the chairman of the BVI Tourist Board and the owner of this newspaper, said that he understands the concern of residents who fear the territory’s culture and environment could be adversely affected by the expansion.

“We’ve always tried to strike a balance in what we do. I think to the best that we can, we do,” he said.

But he added that he feels that getting people to the VI is “the number one challenge we’re facing as a territory.”

“I think as a territory we have always struggled with this issue of air access from day one,” he said.

“In the earlier years, we were able to manoeuvre and get through it, but as the industry continues to grow we have to look at its longterm viability.”