$87M Transport Board loan draws Opposition scrutiny over road funding

By Algernon Watts
algernon.watts@antiguaobserver.com
serpy316@gmail.com
Parliament has approved a government guarantee for an EC$87 million loan to the Antigua and Barbuda Transport Board, with EC$67 million of the facility earmarked to refinance existing debt and EC$20 million expected to be immediately available for road works.
The resolution, approved during Monday’s sitting of the House of Representatives, authorises the government to guarantee the loan from a syndicate of local and regional banks at an interest rate of 6.5 percent.
According to the resolution, the financing is intended both to refinance existing liabilities and support the development and rehabilitation of the national road network. The government has also undertaken to cover any shortfall in the Transport Board’s monthly loan repayments.
During the debate, Prime Minister and Finance Minister Gaston Browne explained that the EC$87 million facility forms part of a wider EC$167 million financing arrangement.
He said EC$67 million of the initial amount will be used to pay off debt owed to the Finance and Development Company (FDC), while the remaining EC$20 million will be made available to the government as a bridging facility for road works.
Browne said a further EC$80 million is expected to become available once the wider loan documentation is completed, bringing the net amount available to government for road rehabilitation to EC$100 million.
“This is a facility in the amount of 87 million to cover the 67 million to pay out FDC, plus an advance of $20 million to the government,” Browne told Parliament, adding that the balance would follow after completion of the financing arrangements.
The explanation prompted questions from Opposition Leader Jamale Pringle, who argued that previous public discussion of the financing had focused on a $100 million road loan without sufficiently explaining that part of the wider borrowing arrangement would be used to refinance existing liabilities.
Pringle questioned whether only EC$20 million of the EC$87 million immediately approved would be available for road rehabilitation and called for greater disclosure of the supporting loan documents and construction contracts.
Browne rejected suggestions that the financing had been misrepresented, saying the resolution clearly states that the loan would be used both for refinancing existing liabilities and for road infrastructure.
He maintained that the broader arrangement would still provide the government with EC$100 million in net proceeds for road works once the full financing is completed.
The government had previously said it was pursuing an EC$100 million financing programme from local banks to accelerate road rehabilitation across Antigua and Barbuda. In June, Browne told Parliament that the government had not yet drawn down proceeds from that facility but expected access to begin shortly.
Cabinet subsequently reported in July that the EC$100 million financing programme, alongside a US$33 million Caribbean Development Bank loan, would support a major expansion of the national road rehabilitation programme.
Under Monday’s resolution, the government guarantee covers the full EC$87 million facility involving ACB Caribbean, Antigua Mortgage and Trust Company Limited and ACB Grenada Bank Limited.
The resolution also commits the government to meeting any shortfall in monthly repayments should revenues assigned to service the Transport Board loan prove insufficient.
The facility carries an interest rate of 6.5 percent.
Parliament approved the resolution following the debate.