The Bar­ba­dos-based Caribbean De­vel­op­ment Bank (CDB) says it is not a par­ty to the sale agree­ment re­gard­ing the air­craft be­long­ing to the re­gion­al air­line LI­AT (1974) that went bank­rupt ear­li­er this year.

It said its “on­ly role is to pro­vide the nec­es­sary con­sent for the sale, which it has done” and that un­der the sale arrange­ment agreed to by the share­hold­er gov­ern­ments, they “ap­proved that mon­ey from the sale should be pro­por­tion­ate­ly al­lo­cat­ed to­wards pay­ing out­stand­ing bal­ances on the CDB loans that were ini­tial­ly made to the share­hold­er gov­ern­ments to sup­port LI­AT (1974) Lim­it­ed’s op­er­a­tions.

“The de­ci­sion about the use of the sale pro­ceeds rests with the share­hold­er gov­ern­ments. CDB is not in­volved in the fi­nanc­ing or any as­pect of the op­er­a­tions of LI­AT 2020.”

The CDB state­ment fol­lowed com­ments by An­tigua and Bar­bu­da Prime Min­is­ter Gas­ton Browne ear­li­er this month that he would be writ­ing to the share­hold­er gov­ern­ments of the col­lapsed re­gion­al air­line sug­gest­ing that they re­lin­quish their in­ter­est in an es­crow fund and use the fi­nance to meet the sev­er­ance pay­ments owed to the for­mer em­ploy­ees.

“The An­tigua and Bar­bu­da gov­ern­ment has al­ways agreed to and main­tained that the LI­AT work­ers should be paid gra­tu­itous pay­ment rep­re­sent­ing the sev­er­ance that would have been payable if the com­pa­ny had as­sets,” Browne said.

He said his ad­min­is­tra­tion had ini­tial­ly put for­ward a pro­pos­al to pay 50 per cent, but it was re­duced to 30 per cent “be­cause of the lack of co­op­er­a­tion of the An­tigua and Bar­bu­da Work­ers Union (AB­WU).

But the AB­WU is in­sist­ing that the for­mer LI­AT work­ers, in­clud­ing pi­lots, are owed mil­lions of dol­lars (One EC dol­lar=US$0.37 cents) in sev­er­ance and oth­er ben­e­fits and has been call­ing on the gov­ern­ment to ne­go­ti­ate the pack­age.

The share­hold­er gov­ern­ments of the for­mer air­line are An­tigua and Bar­bu­da, Bar­ba­dos, Do­mini­ca and St. Vin­cent and the Grenadines.

“I am now call­ing on…pub­licly and I will be writ­ing to them for­mal­ly on Mon­day, call­ing on all of the share­hold­ing gov­ern­ments of LI­AT (1974) Lim­it­ed to sub­or­di­nate their in­ter­est in that mon­ey and al­so the Caribbean De­vel­op­ment Bank too to sub­or­di­nate their in­ter­est and to make the US$12 mil­lion avail­able to the for­mer work­ers of LI­AT (1974) Lim­it­ed as an ex-gra­tia pay­ment in lieu of the sev­er­ance that would have been payable.”

Browne said that this move would not harm the share­hold­er gov­ern­ments or the CDB, adding “be­cause when you look at the amount, you talk­ing about in the case of the Bar­ba­dos gov­ern­ment say, six mil­lion US dol­lars.

“Six mil­lion dol­lars in the con­text of the size of the Bar­ba­dos gov­ern­ment can­not hurt that gov­ern­ment. In the case of the An­tigua gov­ern­ment you talk­ing about four mil­lion US dol­lars (and) that can­not hurt the An­tigua gov­ern­ment. But you have staff out there hurt­ing for years.

“In the con­text of the Caribbean De­vel­op­ment Bank they have noth­ing to lose be­cause it’s a sov­er­eign debt that we have been pay­ing,” he said, adding that af­ter the US$12.1 mil­lion is paid over to the work­ers, the share­hold­er gov­ern­ments could then pay the dif­fer­ence to en­sure that the work­ers re­ceive the 100 per cent sev­er­ance owed to them.”

In De­cem­ber 2022, the St Lu­cia gov­ern­ment made good on its promise to pay com­pen­sa­tion to the St. Lu­cia-based em­ploy­ees of the air­line af­ter Prime Min­is­ter Phillip J Pierre said that his ad­min­is­tra­tion had en­tered in­to an agree­ment with the non-man­age­ment LI­AT work­ers in Cas­tries who had been ter­mi­nat­ed by the clo­sure of the com­pa­ny.

In March last year, the Bar­ba­dos gov­ern­ment said it would pay the three-year-old out­stand­ing sev­er­ance owed to for­mer em­ploy­ees of LI­AT(1974) Lim­it­ed amount­ing to BDS$10 mil­lion (One BDS dol­lar=US$0.50 cents).

An­tigua and Bar­bu­da is now in­volved in an agree­ment with the pri­vate Niger­ian-based air­line, Air Peace in the es­tab­lish­ment of LI­AT 2020 air­line and ear­li­er this year Browne had said that Air Peace would be putting in close to US$65 mil­lion, while his gov­ern­ment is in­vest­ing US$20 mil­lion.

In ad­di­tion, the An­tigua and Bar­bu­da gov­ern­ment said it would pay US$12.1 mil­lion in­to an es­crow ac­count for the ac­qui­si­tion of oth­er planes owned by the CDB as ef­forts con­tin­ue to launch LI­AT (2020) Lim­it­ed.

In its state­ment, the CDB said fol­low­ing the col­lapse of LI­AT (1974) Lim­it­ed, the share­hold­er gov­ern­ments agreed to the sale of LI­AT’s three air­craft to the An­tigua and Bar­bu­da gov­ern­ment.

“An Air­craft Sale Agree­ment, for the sale of the three air­craft over which the Caribbean De­vel­op­ment Bank (CDB) holds mort­gages, has been ex­e­cut­ed be­tween the Ad­min­is­tra­tor for LI­AT (1974) (as the sell­er) and the Gov­ern­ment of An­tigua and Bar­bu­da (as the buy­er),” it said.

The CDB said that it “con­tin­ues to take a strong in­ter­est in the de­vel­op­ment of re­gion­al trans­porta­tion and re­mains a strong ad­vo­cate for the de­vel­op­ment of the Caribbean’s trans­porta­tion net­works and in­fra­struc­ture”.

BRIDGETOWN, Bar­ba­dos, Jun 28, CMC

CC/gf/ir/2024