S.S.B. Warned Against Loan to Airport Authority; P.U.P. Agrees

A proposed loan by the Social Security Board to the Belize Airports Authority is making the headlines tonight. The said loan is to finance construction of the Caye Caulker Airstrip Runway. Tonight, S.S.B. Chair Doug Singh says the Investment Committee has yet to consider the application before it even gets to the main S.S.B. board. But there is an unconfirmed report that the investment committee has met and given the green light.  News Five has obtained a confidential report by the Board’s Investment Services Unit which urges particular caution in loaning the funds. It calls the investment “risky” because its stress test shows that the Authority has no other source of funding if it is not able to collect from its main sources, namely an increased rider fee and the Belize Airport Concession Company.  Opposition Leader John Briceño also has a copy of the twenty-six-page report, and at a press conference this afternoon, he quoted liberally from it in support of his own insistence that the Authority should not get a dime of the people’s money.

John Briceño

John Briceño, P.U.P. Leader

“When they are talking about the weaknesses of the loan, they are saying, “The debt servicing ratio does not support ability to comfortably repay the loan and is worsened in stressed scenarios.” In effect they are saying, if we take the word of the Belize Airport Authority, that they are going to get the revenues, with that we know that it is going to be difficult for them to pay; but now, if we do the stress test and follow by what they have been actually collecting which is less, then it becomes even worse, the ability to pay. The next point I want to make when they are talking about the investment that Social Security has, it says: “However, ability to comfortably repay the increased sums is only marginally evident” – that’s when they are talking about the increase in tourism – “and based on the current projections, the proposal is a risky investment. If pursued, this proposal is expected to be subjected to increased public scrutiny noting the [Social Security] Board’s plans to increase contributions…” In effect we already know that Social Security wants to increase the contributions that we have to make, and they’re saying that with all of what is going to take place, this is going to create a bigger outcry. And the last point on their recommendations; I just want to read this, where they say, “The Authority has consistently fallen short of its projections and thus it is highly probable that the forecasts will not be achieved. Should this occur and as per the stress test, net inflow is less than the required loan payments in most of the forecast years.” In effect, the Investment Services Unit is telling the Social Security management and board that it is a bad loan; that it is a bad investment that they shouldn’t make.”