A Story Worth Telling: A review of the Argyle International Airport Project "For which of you, intending to build a tower, sitteth not down first, and counteth the cost, whether he have sufficient to finish it? Lest haply, after he hath laid the foundation, and is not able to finish it, all that behold it begin to mock him, saying, this man began to build, and was not able to finish." Luke 14:25-33, King James Version.
Introduction In April 2014, four thousand years after the construction of the ancient Egyptian pyramids (and about 2,000 years after Luke), a team of Dutch researchers claimed to have solved the mystery of how massive construction materials – huge limestone and granite blocks and gigantic, rock-hewn statues – were transported across loose desert sands to their final sites. The technical puzzle may indeed have been unravelled by today’s scientists, and the answer to the question of why were the pyramids built in the first place is largely agreed upon by archaeologists (they were extravagant burial monuments for Egyptian royalty). But there were never any questions regarding the economics of pyramid-building. The Egyptians were highly sophisticated mathematicians, builders and artists, but economics as a discipline did not exist back then. The Pharaohs of the time simply ordered the pyramids built – cost was not a relevant factor; prospective benefits did not matter. Scholars estimate that construction of the Great Pyramid at Giza (the most spectacular of over 100 pyramids scattered across the sands of Egypt) took 10 to 20 years with a total workforce of up to 100,000 men and the structure, if it were to be built today, would cost tens of billions. How times have changed for the tower-builders of the world! In addition to engineering and technical feasibility, matters of economic trade-offs, financial return, social and environmental impacts and so on must now be considered by modern-day leaders harbouring Pharaonic tendencies – and especially so in democratic countries. But even in sophisticated societies, the occasional outlier slips through. The global history of large infrastructure is the story of man’s ability to design and build audacious technical marvels – and yet it is a story sprinkled with episodes on ivory towers, follies and outright frauds. The enterprise to build an international airport for St Vincent and the Grenadines (SVG) is, after almost a decade, increasingly looking like one that slipped through.
A national wish becomes an “on-rushing reality” In SVG, the idea of building a so-called international airport has deep historical roots. For decades, politicians in and out of government had touted the necessity of an international airport for the country’s development. After all, neighbouring countries such as Barbados and Saint Lucia had international airports and they were growing their economies, particularly with an increasing emphasis on mass tourism. The narrative was sold that in order for SVG to compete, we too had to have an international airport. Various technical studies were performed during the 1970s through the 1990s, the purposes of which were to determine the most suitable site for locating the airport and for estimating the likely capital cost of the eventual project. Promises began to be made by politicians and the international airport became a prize, to be vied for and attained by the most visionary leader. At one point (or so the story is told), James Mitchell, prime minister from 1984 to 2000, infamously boasted that he had the money to build the airport in his back pocket.
1
By 2001 when the Unity Labour Party led by Dr Ralph Gonsalves took office, the idea that SVG should have its own international airport was firmly established in the public mind. All that was necessary then, was for the new prime minister to convince himself and to persuade the nation that he was the man to turn the dream into a glorious reality. Having succeeded at the former, Prime Minister Gonsalves turned his attention to the latter and by 2004 he was notifying his government’s intention to proceed. On the 8th of August 2005 (which date was also his birthday), he officially announced his plans to build the project. Dr Gonsalves began by outlining the rationale for the project, which focused on “answering two queries posed by some persons”, namely: 1) Does St. Vincent and the Grenadines really need an international airport? 2) And if we need one, can we afford one? He briskly disposed of these questions then went on to a detailed discussion of various institutional and technical arrangements, including site selection issues and cost estimates which had been done by engineering consultants. The recommendation was that Argyle was the preferred location: the site was expected to consume 375 acres of land and the airport would have a paved runway 9,000 feet long and 500 feet wide. The terminal building would encompass 53,820 square feet – and the capital cost (that is, the cost to build the project) would be US$178 million (EC$480.6 million), broken down as shown in Table 1. Table 1: Original capital cost estimate for the AIA Project Capital Cost Cost Component % of US$M
EC$M
total
1
Site Acquisition
31.0
83.7
17%
2
Earthworks / Siteworks
68.1
183.8
38%
3
Apron, Runway, Taxiway
15.3
41.3
9%
4
Roads & Support Services
6.4
17.3
4%
5
Terminal Building & Control Tower
14.1
38.1
8%
6
Project Delivery / Management
20.4
55.1
11%
7
Contingency
22.7
61.3
13%
Grand Total
178.0 480.6 100%
Dr Gonsalves was careful to put his personal stamp on the enterprise. “Personally, I have been tireless in my efforts on the International Airport Project”, he advised, one-quarter of the way through his presentation. “I have spent countless man-hours on this Project at home and abroad, in divers lands. I am fully satisfied that the government’s decisions on this matter are correct and that the international airport will be an operational and functional reality by 2011, at the latest.” He went on to discuss the “huge” capital cost of the project, which he advised would amount to almost one half of our country’s GDP, 140 percent of the estimated current revenue for 2005 and about 55 percent of the country’s total public sector debt. Therefore, Dr Gonsalves correctly concluded, financing the project by borrowing was out of the question; “creative and innovative” ways must be found. This, he admonished, was not an exercise for “the faint-hearted, the overly-cautious, the pessimist or one stuck in a neutral gear of learned helplessness”. On the contrary, this was a matter for “a government with a vision; 2
for a government which is creative, innovative and well-connected regionally and internationally”. His speech went into great detail on the plan for financing the undertaking and his tone was that of a man who had already accomplished the extraordinary thing he was proposing: “In all our economic and fiscal circumstances we have had to put together a package that does not require us to increase significantly our long term debt stock. Achieving this is nothing short of remarkable.” It is worthwhile at this point to note the language of the sales pitch. There was no mention of risk, no allowance for the idea that things might not go as planned. On the contrary; the country was supposedly witnessing a remarkable achievement, wholly formed and already in place. The creative financing plan had two components: money would be raised from the sale of state-owned lands (having an estimated value “in excess of US$100 million”) and we would get money and in-kind support from a group of friendly governments, which were termed the coalition of the willing, comprised of Cuba, Venezuela, Canada, Mexico, Taiwan, and Trinidad & Tobago. Responsibilities had been allocated: Cuba would design the overall master-plan of the project and would complete the earthworks component in partnership with Venezuela. This component, which amounted to almost 40% of the total capital cost, would be “substantially a grant”; Cuban manpower would perform the work and Venezuelan oil money would pay the bills. “Both Cuba and Venezuela have given their firm commitments to assisting us with the international airport” we were assured. The plan also envisaged a funding shortfall of some US$20 million (EC$54 M) to be covered by the regional private sector which, we were told, had already expressed keen interest and were involved in discussions. In concluding his presentation, the prime minister’s tone was triumphal. “As you are no doubt aware this is the first time ever that a Prime Minister of St. Vincent and the Grenadines has addressed the nation in a focused and comprehensive manner on the matter of the building of an international airport on mainland St. Vincent. After all, public policy is serious business to be conducted by serious people. It is not part of the mock entertainment industry.” “Delivery time for the construction of the international airport at Argyle has now come” he continued. “No more delays; no more false hopes; no more deception; no more marginalisation of St. Vincent and the Grenadines. The International Airport Project is now with us, for the first time, at last. The Argyle International Airport will be a lived reality, for the first time, at long last. Direct flights from London, from Toronto, from New York and other metropolitan capitals to St. Vincent are an on-rushing reality, for the first time, at last. All this is realizable only with the ULP government. Without us there will be no international airport. Only the ULP administration can deliver this. It is all so crystal clear. Let us face it: Which government, other than that of the ULP, can put together a ―coalition of the willing consisting of Cuba, Venezuela, Canada, Mexico, Taiwan, Trinidad & Tobago, to construct the international airport? Which other leadership can do it but the current leadership in the ULP administration? Today, marks the beginning of another chapter of immense achievement for our blessed homeland.” And, in a final rhetorical flourish, Dr Gonsalves quoted a joyous scripture: “Psalm 65 teaches that: Praise belongs to you, O God, in Zion; ….You crown the year with your goodness; abundance flows everywhere. The deserts have become pasture land, the hills are clothed with gladness, the meadows covered with flocks, the valleys decked with grain— they shout and sing for joy.” But despite the prime minister’s confident exposition, the rhetorical edifice he had erected was fundamentally flawed and suffered from a number of gaping holes – logical, philosophical and practical. 3
The “serious business” of project planning and management For a project of this scale and scope, five critical, big-picture aspects should have been considered during the preparatory stages. These are: engineering issues; environmental and social impacts; economics; finance and project management issues. Let us for the moment assume that engineering aspects were adequately dealt with (I believe there are a few engineering issues that raise questions, but those will require a separate article to discuss). An environmental impact study was performed. And Dr Gonsalves spoke eloquently on the matter of the financing of the undertaking. The critical matters of economics and project management remained – and were essentially ignored. First: economics. A careful observer would immediately have recognized that Dr Gonsalves had taken special care to avoid – indeed, to obscure – any discussion regarding the economics of the enterprise. For example, in his presentation he had asserted that “The requisites of economic diversification and regional and international competitiveness demand an international airport.” This, as any trained lawyer (or anyone who has studied fallacies of reasoning or argumentation) could tell you, is a classic example of a false dilemma. The requisites of economic diversification and regional and international competitiveness actually demand several things, of which an international airport could be one. In other words: Dr Gonsalves could equally have said that the requisites of economic diversification and regional and international competitiveness demand the development of an affordable energy supply based on indigenous renewable energy sources – or something of the sort. In point of fact, there had been no economic feasibility analysis performed on the proposed project, so his confident statement amounted to little more than speculation. But moreover, he continued, “air access difficulties constitute a practical brake on the movement of our nationals who reside in North America and Europe in returning to their homeland as frequently as many of them would like. The international airport will engender a greater oneness between the components of our nation at home and overseas in much the same way as the easy availability of advanced telecommunications facilities has done.” In logical fallacy terms, this is an example of what is called a red herring. First off: a relatively poor, tiny country with a miniscule population does not build an international airport, amounting to the single largest project in the history of the country, to facilitate the transit of overseas nationals. Second, using the idea of a oneness engendered by advances in telecommunications to compare the two things sounds superficially useful, but is not useful at all, as the two enterprises are entirely different. In this context, the most important difference being that the telecommunications revolution was financed with little or no public investment on our part and whatever investments were made (whether private or public) have always been hugely profitable. The only thing the two enterprises have in common is the word ‘communications’. But this red herring was well-seasoned and particularly valuable, as it played precisely to the personal fancy of Vincentians who want the airport. We could proudly step onto a plane at New York, Toronto or London in the knowledge that we would step off directly onto Vincentian soil. The indignities suffered during transit (apparently mostly through Barbados) would be a thing of the past. We have ours now. Dr Gonsalves’ brief and entirely superficial mention of the economics of the issue was concluded in dogmatic fashion. “In replying to the query: can we afford an international airport? I retort with another: 4
can we afford not to have an international airport? I appreciate the genuine concern about the huge cost of constructing and operating an international airport. I realise that the international airport in the shortto-medium term will not be able to generate enough revenues to pay for the costs of its construction. However, in the long-run it will be economically viable. In any event, without it we are likely to be severely hampered in our thrust for further economic development.” Here was the sleight-of-hand in full display. In the absence of any economic feasibility analysis whatsoever, the proponent simply assured the nation of its viability: “in the long run it will be economically viable”, he confidently asserted. Trust me, was the implicit message. And in case we did not trust him, the warning was reiterated that “In any event, without it we are likely to be severely hampered in our thrust for further economic development.” Note the well-chosen words here. “In any event”, or in other words, whether it is economically viable or not – if we don’t build it, we’re going nowhere. So, an economic analysis is not even necessary, you know? Thus, in a few paragraphs spoken out loud, the minister responsible for the country’s economic development neatly sidestepped the absolute first requirement for a publicly-funded development project in modern times – that there must be an analysis and assessment of the costs and the offsetting benefits of the enterprise. And so, a national wish that had developed over decades into an article of faith was now being propelled to reality – and only one question remained: where would the money come from to build it? Prime Minister Gonsalves had the answer. “The huge cost of the International Airport Project enjoins us, however, to find the most creative methods of financing it so as to lessen the burden while maximising our benefit”. But despite this glib sentence about burdens and benefits, a sense of unease among observers at this point would have been justified. A project involving the largest single public capital expenditure in the history of a small, relatively poor country was being pushed through without even a rudimentary economic feasibility study. Make no mistake: being able to find the money to acquire something is not the same as being able to afford that thing. Dr Gonsalves spoke eloquently on the former matter, but not at all on the latter. In fact, no one – not even the chief proponent himself – had any idea how the likely capital and operational costs stacked up against any potential benefits over time. That question was simply sidestepped. Notions of increased tourism, investment and so on were vaguely mentioned, but not quantified or analysed. The word ‘risk’ was not mentioned even once in the prime minister’s 26-page presentation. In point of fact, Prime Minister Gonsalves had come to the end of his lengthy presentation without actually answering the two central questions he cited at its beginning – and what appeared on its face to be a moment of personal triumph, political vindication and national pride was actually the moment that a hugely expensive and highly risky enterprise had gotten off to a bad start.
This is not a project The prime minister’s approach essentially ignored considerations of economics, focusing instead on the financing challenge. His solution for financing the project was creative – but largely speculative, for two basic reasons. The first problem (which the nation would learn about only much later) was simple and fundamental: some members of the “coalition of the willing” had not actually made any firm commitments to provide a specific sum of money or payments to the project. For example: we eventually learned in 2012 that there was no signed agreement with the government of Venezuela for their 5
“support” – and what actually transpired was that the government of SVG had to find alternative sources of funds, to defray the costs of the Cuban workers who were carrying out the earthworks (the largest single cost component of the project). Second was the business of land sales. Having US$100M worth of land for sale to finance your project is all well and good, but what if there are not sufficient buyers for the land in a timely fashion? Surely this would affect the schedule for the implementation of the project? And of course, shortfalls in funding from the coalition members and from land sales mean that there would be a larger-than-anticipated funding gap to be filled – which gap would have to be filled quickly, if the project is to be implemented according to its schedule. These observations bring us to consider the project-management aspects of the enterprise – and reveal another glaring conceptual hole in the entire business. It is both a philosophical and a practical absurdity to say that you are building a huge project and that the construction will be complete within a specific timeframe, while at the same time saying that you don’t have all of the money necessary to build the project. Or to put it another way: if you are building something big and expensive and you don’t have the money needed to build it already set aside, you cannot have an actual schedule for building it. You can have an estimate of how long it should take to build (if you had the money) – but, unfortunately, that’s not the same thing. Let’s suppose you have inherited a plot of beachfront land and you want to build a small hotel on it, because you think that having a hotel would be a good business to be in. You hire an architect to design the property and he provides a cost estimate for the construction (which, let’s say, is one million dollars). The architect also estimates that construction should take a year. You want to proceed, but you don’t have anything close to one million dollars. You own another plot of land that you can sell, which will raise a good part of the sum, and you can borrow some money against your account at the credit union. But a large part of the necessary money is still not in hand. So, you approach family and friends, who agree to help you out. Some of them give you small amounts of cash, which you put into the construction fund. Others give you promises to provide cash, or materials. One fellow donates some second-hand tools. A few friends promise to come over and pitch in some labour from time to time. Fortified by all of this support, you start the construction. But the fundamental question is: under these circumstances, can you say that the construction will be completed in a year (according to the architect’s original timeframe)? The answer, of course, is no. For example – suppose it takes two years to sell the land? Without the sale of the land, a large sum of money is not available to pay for large, critical amounts of materials and labour – and therefore large, critical items of work cannot get done. Yes, you can make a start but clearly, under the circumstances, you have no idea what your completion date will be. In fact, the very act of assigning a schedule for completion under the above circumstances would amount to a fiction; a bogus act. Just such a fiction was entered into on August 8th 2005 by this country’s prime minister, who is also the minister responsible for finance, planning and economic development. The fiction, moreover, was eagerly echoed by his subordinates, long after construction had begun. Dr Rudy Matthias, holder of a PhD in financial economics and CEO of the International Airport Development Corporation (IADC), a state-owned corporation set up by the government to oversee the airport project, was interviewed in 2011 by Judy Bastyra for the in-flight magazine of LIAT, the sub-regional airline. At the start of the interview, Dr Matthias blithely explained that “What we are essentially trying to do here is to build an international 6
airport without money, which clearly is a problem. I don’t know anyone who has done that before. We are essentially trying to do the impossible, but we are succeeding and it is a story worth telling.” Towards the end of the interview, apparently oblivious to the logical absurdity he had earlier pronounced, he confidently noted that they were “on track to finish in June 2013”. Matthias’ completion date had effectively pushed back the prime minister’s original 2011 timeframe by two years – and in every year since that interview, we have heard of a new completion date for the project. Clearly, this matter of an ever-retreating project completion date is problematic. Delays on any large, expensive undertaking are never welcome. Significant delays raise doubts in the minds of observers and, as the prime minister himself pointed out (during the part of his speech where he chastised the previous administration for failing to build the airport), delay is a thief of time and time is money. But the delays at Argyle are not the normal, run-of-the-mill delays that could be experienced on any large project. These delays are happening because, strictly speaking, the so-called largest-ever project is not a project. From the very beginning, the undertaking to build the biggest infrastructure in the country’s history was poorly planned and inadequately organised – and did not even qualify to properly be called a project. Let’s consider the details. In order for an undertaking to be properly classified as a project, it must satisfy several basic requirements. First of all, a project must have a scheduled start date and a scheduled end date. There is no such thing as an indefinitely ongoing project. The start date was 13th August 2008 and, as discussed above, this ‘project’ did indeed have a scheduled end date – but that date was always a fiction. Second, a project must have a properly-defined scope of work, that is: a set of identified activities and tasks that, when carried out, will result in the delivery of the planned outcome. Corresponding to the scope of work, the project must have a budget: the project’s owner must know the estimated cost of carrying out all of those activities and tasks. Next (and this is critical); the project budget must have a committed source of funds assigned to it. As discussed above, if there is not sufficient money to pay for the implementation of the planned activities, then it stands to reason that some of the activities cannot be completed. Next, a large project must have a project manager, who has the necessary authority and resources (including suitable staff) to manage the entire project and its associated contract, to ensure delivery in accordance with the project’s budgeted scope, specifications, cost and schedule. In some cases, a project manager is someone who gets saddled with the responsibility for supervising a project related to his or her already full-time job. In other cases, a project manager is allocated on a full-time basis. Naturally, a full-time project manager is a necessity for exceptionally large and complex projects. And needless to say, the manager of any large and complex engineering project must be a credible professional, with suitable engineering and construction expertise and experience for the job at hand. Last but not least, is the project contractor. On most (if not all) large, public-sector construction projects executed anywhere in the world, there is an entity called a contractor, which has the responsibility to build and deliver the entire project to the project’s owner, in accordance with a legally binding contract. (For example, when the first phase of VINLEC’s Lowmans Bay powerstation project was built during 20042007, the project contract was documented in a set of volumes that ran to hundreds of pages). The contract would include things such as the project’s architectural and engineering drawings; the applicable technical standards and specifications; a detailed project schedule; operating methods; testing 7
requirements; a framework for reporting and managing project issues including changes in the design, and so on. Everything that needs to be done is set down on paper as far as possible, so that the contractor can focus on the performance of the work at hand. Furthermore, for large and complex projects, the contractor must be of proven capability – ie: must demonstrate previous experience and must have the current capability (know-how, equipment and technology, manpower, financial resources, etc.) to execute the work in question. Not by accident, this is how the government of this country builds roads, schools, hospitals and other large public infrastructure projects. Now, let us look at the Argyle International Airport (AIA), in relation to the above-stated criteria. This view is summarized in Table 2 below, which shows that of the seven required items, the AIA started out having two without question, one with caveats, one that was fictional and three not at all. A score of two and a half out of seven, more or less. Table 2: Basic requirements for large, complex projects and their status at Argyle Required Item
Required Status
Status at AIA
1
Scheduled start date
Must have
Has
2
Scheduled completion date
Must have
Has, but fictional
3
Defined scope of work
Must have
Has (with caveats)*
4
Budget
Must have
Has**
5
Actual funds to cover budget
Must have
Does not have (never had)
6
Overall Project Manager
Must have
Does not have (never had)
7
Contractor responsible to deliver entire project, in accordance with a legallybinding contract
Must have
Does not have (never had)
* These include (a) an initially incomplete ‘master plan’ that subsequently had to be significantly revised after construction started, to include an additional 30 acres of land and (b) incomplete wind studies which are relevant to the as-yet-unanswered question of whether a crosswind runway is required for the operation at Argyle of LIAT aircraft and other smaller craft. ** To explain the current state of extensive cost overruns, this original budget number is now said to be a preliminary figure – but it was not presented as such at the launch of the project in August 2005.
Bear in mind that this is no ordinary undertaking. It is, we are constantly reminded, the largest ever project in the history of St Vincent and the Grenadines. And also note that the airport must be designed and built to international standards, in order for it to be certified for commercial operations. Surely such an undertaking should have had the benefit of thorough and capable planning, proper organization and competent implementation? In his speech, Prime Minister Gonsalves took pains to point out that public policy is serious business for serious people, and in this he was absolutely correct. But the foregoing review shows clearly that the largest ever public policy undertaking in this country’s history, was poorly planned and inadequately organized from its inception – and is now being implemented in a fashion that does not suggest that the people running the show have any serious understanding of the task at hand. The consequences of this are large and entirely negative. Let us expand further on this by taking a look at some practical project-management aspects of the matter. As a general proposition, we can say that on any large and complex project, problems will (and do) arise almost on a daily basis. On a properly organized project, a problem that arises today will quickly be identified and fixed – because the project is organized to 8
facilitate that outcome. The next day, another problem crops up which gets identified and fixed, and so on. Over the life of the project, the total cost of fixing the inevitable problems is relatively small, because they are dealt with in the daily scheme of things in accordance with the provisions of the contract (so their total cost is just the arithmetic sum of each relatively small cost). And so, at the point where the project is substantially complete, there is a manageable list of issues, which are typically resolved in an orderly fashion within a reasonable timeframe and at a nominal cost. On a project that is improperly organized, problems also arise on practically a daily basis. But some of these problems will not be identified or resolved in a timely fashion. The next day, the same thing – and so on. In this case, new problems are being built on top of old, unresolved problems. So by the end of the poorly organized project (if it ever gets to an end), there will be a large, untidy accumulation of unresolved problems and issues, which will incur a high cost to resolve at that point, because they have all been compounded, one on top of the other, over time. A problem that would have incurred a nominal cost to fix had it been spotted and fixed at the time, now incurs a large cost, because other problems are now compounded with it. And because of this compounding effect, the time required to fix such problems is greater than it would have been if the problems were found and fixed when they occurred. Naturally, this increases the overall project delay and blows up the budget. Unfortunately, the above is not an abstract discussion. Consider the recent situation with the airport runway, which was reported in May 2014 to have failed foundation compaction tests. A runway is a special type of pavement that allows aircraft to take off and land. Essentially, a runway performs the same function as a road, but because aircraft must land onto the pavement from flight, the load-bearing requirements of the pavement are far more stringent than those for normal roads. (A typical highway is designed and built to withstand dynamic loads of less than 10 tonnes per square meter; an international airport runway is designed and built to withstand dynamic loads on the order of 100 tonnes per square meter). The matter of the compaction of the foundation materials (crushed aggregate, in this case) is therefore extremely critical to the construction of a structurally sound runway. On a properly organized project, the compaction testing of a crushed aggregate foundation is something that would be done on a per-lot basis. A lot would typically amount to a few days’ worth of material laid, so once the laying and compaction of the foundation had commenced, compaction testing would be done every few days. If today’s test indicated failed compaction, the work would be redone over the next few days. And, importantly, tomorrow the contractor would be more careful to do a better job – so his overall failure rate should decrease, and cumulative project cost, delays and risk are reduced. On the other hand, on a poorly-organized project, testing is not likely to be done on an appropriate schedule (luckily, even on poorly-organized large projects, some testing still must be done at some point), so it is quite possible for weeks or months of sub-standard work to accumulate, which would only be confirmed as such when the testing is eventually done. By this time, problems have compounded, time has passed, costs have increased and the schedule is significantly affected. Which is, more or less, what happened at Argyle between the months of September 2013, when the work commenced to lay and compact the runway’s foundation, and April 2014 when the foundation compaction tests were failed and the work was interrupted. Up to that point, aggregate had been laid to almost the entire length of the runway – which work will have to be redone. Now, here is the conceptual conundrum: On every large highway construction project in this country, an experienced contractor, with demonstrable experience in road construction, is engaged to build the 9
highway. For example, in April 2014, the government signed a construction contract worth EC$25 million with Dipcon Engineering Ltd for the Leeward Highway reconstruction and rehabilitation project. That contractor is fully responsible to build the highway according to a binding contract previously set out and agreed by the parties. Yet, the Argyle airport, the largest ever construction undertaking in our history, has no contractor and has no binding contract. And the runway, originally estimated to cost EC$41 million (far more than any highway project implemented in this country) and which must be constructed to far higher engineering standards than any highway, is not being constructed by an experienced contractor. Instead, we were advised in the prime minister’s January 2012 budget address that the “IADC intends to do the pavement works in-house and to set up its own industrial complex with stone-crusher, asphalt and concrete batching plants, with supporting equipment” and he went on to explain that a team of 70 persons (32 Cubans and 38 Vincentians) would carry out the work. In other words, what is arguably the most critical aspect of the entire undertaking is being executed by a construction team of unproven capability, comprised of in-house personnel assisted by some resources from Cuba. Think of it as the government’s public works department with some outside help. On a large, complex undertaking, the outcomes of such grossly inadequate arrangements are entirely predictable – and are such as we are witnessing now: substandard work, significant schedule delays and the corresponding cost overruns. The official response to that specific problem was as absurd as the situation itself. After the compaction failure was first publicly flagged on May 3rd by a citizen journalist on Facebook and picked up by a local newspaper, the official spokesperson for the IADC in one of her regular television updates breezily assured the public that it was no big deal. Dr Gonsalves himself, in a subsequent press conference, criticized the newspaper’s reporting on the matter and went on to advise that, according to the IADC, correcting the problem “is not causing any delay to talk about, and the cost is relatively minimal.” A week later, speaking in Parliament, he told the nation he had been advised by the IADC that the project would be “substantially completed” by the end of 2014. As were the previous ones, this December 2014 completion date was a complete fantasy. At that point several large and costly items of work remained to be done, such as construction of the entire runway; the diversion and bridging of the Yambou River (which is meant to flow under the completed runway) and significant earthworks at the northern end of the site. And financing was still a problem, as the aforementioned financing issues had not been resolved. But the date was set and this time, its proponents were sticking to it. On an August 7th site visit the prime minister, surrounded by his cabinet colleagues and IADC top brass, confirmed that December 2014 was indeed the target for substantial completion of the project, while Dr Matthias assured the public that the plan was to have the airport operating by the middle of 2015. For the business of completion (substantial or otherwise, fictional or not) now had an urgent rationale: general elections were looming and the prime minister’s legacy project, originally supposed to take three years to complete at a cost of EC$481 million was now heading into its seventh year, with an ‘official’ cost estimate that had ballooned to EC$700 million – and with no credible end in sight.
Conclusion In January 2012, after the originally-advised 2011 project completion had already been missed, Dr Gonsalves was presenting his government’s budget to the country’s parliament and he spoke at length about the 10
airport. Despite (or perhaps because of) the clear reality that the enterprise was not going well and was nowhere close to being completed, his rhetoric soared ever higher. “None of the traditional, conventional or text book modes of financing was appropriate for the Argyle International Airport”, Dr Gonsalves advised. “It is for that simple reason that no government before this ULP administration attempted to build the airport. Previous governments would talk the talk on international airport development; they would conduct yet more studies. But in the end, they did absolutely nothing because they were unable to conceive a creative approach to finance its construction” he chastised. “To venture first of all to conceive of the idea of a different, imaginative, creative and practical approach, demanded an emancipated mind, free of a sense of a colonial paralysis of thought; devoid of a distorted, classical empiricism which is one-sided in that it extols limitations and sees not possibilities; and untamed by any consideration of failure, impotence, or defeat. We applied what Chatoyer and Che Guevera taught us: Never permit the imagination of the mind to be constrained by the imposition of artificial limits. Once all this was recognised and it became a noise in our blood and an echo in our bones, we knew that a different, creative path was possible. Central to this was the solidarity of our people; and the extraordinary solidarity which we conceived was possible to be built between ourselves and other nations.” And, leaving little room for doubt as to whose accolades were forthcoming, Dr Gonsalves lauded “the genius of the creative path fashioned to construct the international airport” and its mobilization of a very special coalition of the willing which, according to him, had “swiftly metamorphosed into a Compact of the Committed.” By that point however, the prime minister’s stylish eloquence was the equivalent of Camus’ sheer silk. The eczema it could no longer hide, was the fact that the entire enterprise had instead metamorphosed into two overlapping disasters: one being a massive, costly project-management bungle that was costing the country tens (if not hundreds) of millions of dollars in lost time and cost overruns – and the second; a slow-motion economic disaster in progress. Now, three years after the undertaking should (according to the original presentation) have been completed, the country is incurring enormous amounts of debt, to the tune of hundreds of millions of dollars, to plough funds into an undertaking that (a) we were told would not incur any significant long-term debt, (b) the likely economic benefits of which are unknown, to say the least, (c) has no known, credible completion schedule and (d) is now approaching the status of a 100% cost overrun. Meanwhile, other critical, national development projects are put on hold, or are unable to be implemented, because of the country’s growing debt commitment to the airport ‘project’. What is worse, we are being exhorted to continue along this path. We have gone too far to turn back now is a common refrain, which reveals nothing but a susceptibility to the sunk-cost fallacy, another classic error of thinking. On that point: those in charge of this undertaking have demonstrated nothing that indicates a high likelihood of a successful outcome. The record is there and it is clear: this government claims to be involved in serious public policy business and boasts that it is building the largest ever infrastructure project in the history of SVG, all the while taking an actual approach more suited to the construction of a village road. Why should we expect that continuing in the same vein will lead to a better outcome in the future? As Vincentians, we have developed over the past several decades a national, collective and emotional attachment to the idea of having our own international airport. For policy-makers, this fact clearly has its place in the scheme of things. After all, mobilizing emotional factors in public affairs is important for the necessary sales pitch (eg: to persuade the public to give their support for large undertakings). However, in the realm of serious public policy, emotion must be put into its rightful place. Appeals to emotion cannot 11
replace logic, hard facts and thorough analysis. In other words: the requisites of economic development also demand an intelligent, capable leadership that understands and accepts the fundamental difference between the two types of decision-making. Unfortunately, as far as this unprecedented undertaking is concerned, the foregoing review shows that – despite the lofty rhetoric and the superficial, outward appearances – the necessary level, quality and capability of actual leadership has been sorely lacking; the proponents of this enterprise have clearly demonstrated their profound lack of understanding of the task at hand and their incapability to deliver the goods. We should at this point be in no doubt about the dire position in which this country has been placed. The government’s decision to proceed with this massive public undertaking; to expend public funds on a hugely costly and highly risky enterprise with no economic analysis and without fully committed financing was not an act of creative genius – it was an act of recklessness. The shoddy planning and incompetent organization surrounding the implementation of the largest infrastructure undertaking in the history of the country is not a case of being emancipated from traditional, text-book modes of thinking – it is a case of wilful negligence. If this enterprise eventually fails, all of us in this country will carry the burden, but we will know who carries the blame.
Herbert A (Haz) Samuel September, 2014
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