Alderney could borrow for first time to pay towards runway
ALDERNEY could contribute up to £3.5m. for the construction of its new airport and runway.
The States of Alderney and Guernsey are pursuing the most expensive of the alternatives, Option C+ – creating a new, longer runway, building a new terminal and refurbishing the airport fire station with an estimated price tag of £24m., including £12m. previously agreed by the States of Guernsey to cover the runway work.
Alderney’s contribution, if agreed by the island's States, would be made up of a combination of reserves and long-term borrowing from the Guernsey bond over a period of 22 years at an interest rate somewhere between 3.625% and 4.25%.
That means that Alderney could pay anywhere between £400,000 and £1.3m. in interest on the loan over that time, depending on how much it borrows and at what rate.
Policy & Finance chairman Ian Carter said this would be the most important Alderney infrastructure project to be considered since the breakwater in the 1800s.
‘The eventual outcome will have a material effect on how Alderney develops in the decades ahead in terms of its level and rate of economic development,’ said Mr Carter.
‘This is of particular direct relevance to younger people and others who are vested in Alderney’s mid- and long-term interests. It is for this reason that [P&F] feel it is right to contribute financially to the C+ longer runway option.’
If the loan is approved by Guernsey, it will be the first time the States of Alderney has borrowed money for a capital project.
The island’s government has recently funded capital spending from surpluses generated by the Alderney Gambling Control Commission.
The States said that committing to long-term repayment would not be a decision taken lightly, but the investment in the island’s key infrastructure was essential for Alderney’s economy and demographic.
Steve Roberts, one of Alderney’s representatives in the States of Guernsey, said that while no decisions had been made yet, the £3.5m. potential contribution had not been taken lightly.
In this week's States meeting, Deputy Lyndon Trott said Alderney’s spending was ‘stratospheric’ compared to Guernsey’s, saying the money being spent on the island’s airport would be the equivalent of Guernsey spending £800m.
‘I hope [the contribution] would ease the waters for some deputies,’ said Mr Roberts.
‘But Deputy Trott doesn’t seem to address Alderney – our policies are polar opposites. Alderney is in a deficit of £7m. and we want to change that. We are trying to fix things and address the benefits, but he doesn’t see that.’