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INSIDEBeacon Business..........................16

Vol. 28 No. 51 • 2 sections, 56 pages

Road Town, Tortola,

British Virgin Islands

© 2012, The BVI BEACON

Residentsworried aboutEIS expansion’simpact

SPECIAL REPORT: AIRPORT PART 2

INSIDE:

Festival ScheduleWeekend & Culture

— page 6

Report: Scant evidenceof intentional fraudBy CHRYSTALL KANYUCKckanyuck@bvibeacon.com

A yearlong inquiry into underpay-ments of stamp duty found that asystemic problem, rather than anyone particular error, cost the gov-ernment $3,430,885 in six years.The commissioner who headedthe probe made a series of recom-

mendations for improving theprocess, but found “no evidence ofan intention to defraud, save per-haps in a single case.”

The Report of the Commis-sion of Inquiry into the PossibleUndervaluing of Property toAvoid Chargeable Stamp Dutywas tabled in the House of As-sembly July 24. Of the trans-ferred properties valued at$750,000 or more between 2000and 2006, 22 were “potentiallycontentious transactions,” mean-

ing that the parties involved mayhave underpaid stamp duty, ac-cording to the report.

“The commission is satisfiedthat … the inadequacies and inef-ficiencies in the legal regime andadministrative structure and prac-tices in the Inland Revenue De-partment have resulted in asubstantial leakage of stamp duty,”the report states.

In April 2009, the commissionappointed Deloitte & Touche asforensic accountants to “go

through the data at the Land Reg-istry and Inland Revenue Depart-ment to identify transactionswhich may have been improperlyassessed for stamp duty,” the reportstates. The firm’s investigation, in-cluded in the report as an appen-dix, focused on property transferswith a value of $750,000 or moremade between 2000 and 2006.

The bulk of the underpaidduty – $3.1 million – came from

Stamp duty underpayment cost gov’t $3.4m

Effects on TrellisBay a concernBy JASON SMITHjsmith@bvibeacon.com

Though their articles appeared inseparate publications six monthsapart, the two writers came tosimilar conclusions about thechallenges and benefits of visitingthe Virgin Islands.

“It requires effort to reach theBritish Virgin Islands but theCaribbean archipelago offers idyl-lic rewards,” Mary Wilson, a Fi-nancial Times journalist, wrote inher July 6 article about trends in VIproperty sales, titled “Happy Bays.”

Airport see page 30

KIDDIES FIESTA

Photo: NGOVOU GYANGParticipants in the Rotary Club of Road Town’s annual Kiddies Fiesta march through the capital on Saturday(see story on page 10). Though the event is independent, it is scheduled each year to coincide with the AugustEmancipation Festival, which officially opened later that day at the Festival Village (see story on page 14).

Stamp see page 28

And Daily Mail writer RichardPendlebury spent the first sevenparagraphs of his Jan. 4 article“Bewitched by the Bay” describinghis delayed air arrival to the terri-tory from the United Kingdom.

“The BVI positively celebratesthe fact that it has no direct airservice from the UK or NorthAmerican mainland,” he wrote.“That makes it more untouched,exclusive and desirable.”

For better or worse, those per-ceptions about the VI may soonchange if the proposal to addnearly 2,500 feet to the runway atTerrance B. Lettsome Interna-tional Airport moves ahead asplanned. Deputy Premier Dr.Kedrick Pickering and other Na-tional Democratic Party leadershave described the project as cru-cial to boosting tourism andspurring future development.

But some residents, includingseveral who live near the airport,have raised objections. Their con-cerns include fears that the projectcould reduce water quality, changewater circulation and threaten ma-rine life in Trellis and Well bays;that jet noise, construction and re-strictions on yachts near the run-way could harm Beef Islandbusinesses; and that the VI’s cul-ture and environment could be ir-revocably altered for the worse,imperiling the current tourismproduct.

In preparation for the project,government hired a team of con-sultants to study the potential en-vironmental, economic and socialimpacts of the expansion. TheRunway Expansion Impact As-sessment the consultants completein May isn’t yet public, though acopy was leaked to the Beacon.

The study and its appendicesdiscuss in detail some of the con-cerns that residents have beenvoicing about the expansion sincethe proposal was formally pre-sented to the public at two meet-ings in March.

The assessment was producedby a team of consultants headed bythe firm Kraus-Manning. Theyincluded Clive Petrovic, a biolo-gist; a group of aviation consult-ants from the company Ricondoand Associates; and Dr. BirneyHarrigan, who wrote the socioe-conomic portion of the report.

Two options During the March meetings,

Dr. Pickering and BVI Airports

Authority officials showed thepublic two alternatives being con-sidered for the runway expansion.

Option Four, which involvedreorienting the runway to thenortheast at a cost of $70 million,would have maintained a wideopening into Trellis Bay but would

have eliminated an ecologicallyimportant salt pond north of theexisting runway.

In June, Dr. Pickering an-nounced that the decision had beentaken to move ahead with OptionSix, a 2,500-foot extension alongthe current runway’s existing align-

ment. About 2,000 feet of thelengthened runway will jut out intoTrellis Bay, while about 500 feetwill be extended into Well Bay, hesaid. The option saves the salt pondand requires less of the seabed to bemarred by in-fill land – only 37.4acres of fill will have to be dredged

up and placed in Well and Trellisbays as opposed to the estimated82.8 acres of fill that would be re-quired under Option Four.

But Option Six would signifi-cantly narrow the gap between theend of the runway and Sprat Point,

Special ReportPage 30 | Thursday, August 2, 2012 | The BVI Beacon

Extending the Terrance B. Lettsome International Airport runway by about 2,500 feet could begin early next year, Deputy Premier Dr.Kedrick Pickering has said. The Runway Expansion Impact Assessment explains that construction likely would take place in five phases,which would include filling in a portion of Trellis and Well bays, followed by widening and lengthening the runway. The report does not

detail how long each phase is expected to take, but Dr. Pickering said he hopes the project will be complete by December 2015. The consult-ants recommended that construction take place at night in order to minimise the impact on the airport’s operations. Their assessment men-tions the possibility of placing a portion of the runway on elevated metal platforms, but its explanation of the construction process, below,assumes that the in-fill method will be used instead.

How construction may unfold

Phase 1: Workers will dredgethe seabed, gathering materialto fill more than 27 acres ofland in Trellis and Well bays.

Phase 2: First, the runway onthe Trellis Bay in-fill land will bebuilt. Then workers will createa new route for the road alongthe Well Bay end of the runwayand destroy the old road.

Phase 3: Workers will preparea temporary runway entranceand taxiway so that the portionof the runway on the in-fill landin Trellis Bay can be used as theairport’s runway while worktakes place on the western end.

Phase 4: The Trellis Bay por-tion of the runway extensionwill be officially commissioned,bringing the operable runwayto 5,462 feet. Constructionwork on the western portion ofthe runway on the Well Bay in-fill land will begin.

Phase 5: The centre of the ex-isting runway will be widenedand the temporary taxiway willbe demolished. When com-plete, the new runway will beapproximately 7,000 feet long,enabling commercial jets toland.

Airport from page 1

Jump see page 31

Graphic: DAVID HELDRETH

Special Report The BVI Beacon | Thursday, August 2, 2012 | Page 31

Owners worriedabout futureBy JASON SMITHjsmith@bvibeacon.com

To the guests eating dinner at TheLast Resort, the planes taking offand landing at the Terrance B. Lett-some International Airport alreadyseem close. They may get a lot closer.

The restaurant on BellamyCay sits in Trellis Bay only a fewhundred feet from the site wherethe existing runway may be ex-tended about 2,000 feet into thebay. While Bellamy Cay itselfwon’t be physically impacted bythe extension, the potential effectson Trellis Bay combined with thenoise and restrictions on yachttraffic that the big jets will bringcould doom the 40-year-oldrestaurant, its owners fear.

Ben Bamford, who owns thebusiness with his wife Jessica, saidthat the next few years of airportconstruction will be difficult.

“I think our business will be un-tenable during that phase, and whenit’s finished we don’t know what thenew reality will be,” he said.

HistoryTony Snell, Jessica’s father,

founded the restaurant in 1972after his previous restaurant onLittle Jost Van Dyke was destroyedby fire. Mr. Snell found and even-tually repaired the dilapidatedbuilding on Bellamy Cay, whichhadn’t been used in several years.

In 1954, Wladek Wagner, aPolish sailor, purchased the leasefor Bellamy Cay for $75. He builtthe cay’s first structure – andhelped construct the airport’s firstrunway – but Mr. Wagner’s busi-ness floundered, Mr. Bamford said.

“It was going to be built as asmall resort, but it was way ahead ofits time. There wasn’t anything elsein the tourism industry,” he said.

A decade later, Mr. Snell hadbetter luck as The Last Resort’sreputation among the sailing com-munity grew.

“It’s been known as a bitquirky, not always following all therules. But people like that about it.It’s not a slick New York restau-rant; it’s a quirky little BVI estab-lishment,” Mr. Bamford said.

Those quirks — which at onetime included a resident donkeynamed “Chocolate” and currentlyinclude regular entertainment such

as a singing chef – may be imper-iled by the “very noisy jets” the run-way will bring, Mr. Bamford said.

ImpactThe Runway Expansion Im-

pact Assessment, compiled by ateam of consultants and completedin May, suggested that the effectsof the jet noise could be reduced ifgovernment retrofits the restaurantwith soundproofing materials in anact of “demonstrable goodwill.”

Mr. Bamford is sceptical thatthis measure will work.

“I don’t quite know howthey’re going to mitigate a big jetlanding 50 feet from our restau-rant,” he said.

Noise is only one issue. In ad-dition to a strong VI crowd, manyof The Last Resort’s visitors comefrom charter yachts that Mr. Bam-ford fears would stop coming tothe area if the runway obstructsentry to Trellis Bay.

“How do the boats that wantto come in come in with thesemast height restrictions?” Mr.Bamford said.

The impact assessment sug-gests that a mast-height restrictionzone for yachts would need to beimplemented at the Trellis Bayend of the expanded runway andalong its side, but the precise dis-tances aren’t listed. A drawing ofthe expansion also indicates thatyachts will still be able to enterTrellis Bay through a 390-foot-wide entrance between SpratPoint and the end of the runway.

Government discussionsDeputy Premier Dr. Kedrick

Pickering, who is spearheading therunway expansion project, has pre-viously said that government is

considering ways to limit the im-pact to Bellamy Cay.

During a March 27 publicmeeting at the East End/LongLook Community Centre, Mr.Snell, 90, rose to sing a calypsosong he wrote in opposition to theexpansion. Minutes later, Dr. Pick-ering addressed his concerns.

“The government has no in-terest in destroying what goes onat Bellamy Cay; that’s not an issuethat the government wants to dealwith at all,” Dr. Pickering said.

Then he paused for a momentbefore continuing.

“But I also want to remind thegentleman from Bellamy Cay, thereused to be a restaurant on Beef Is-land called Conch Shell. There usedto be,” Dr. Pickering said, referringto a business that closed as a resultof the previous runway expansion.

Mr. Bamford said he was con-fused by those remarks.

“I didn’t know what he wassaying: If it was, ‘Don’t worry,you’ll be looked after just likethere was compensation just likewe gave to Conch Shell Point;’ orif he was saying, ‘Be careful be-cause we can just eliminate you,’”Mr. Bamford said.

The Snell family includesthree generations who have astrong connection to The Last Re-sort and the VI, he added.

“There was a lot of talk onlineof ‘Your bones won’t be buried hereso why do you care?’ It’s importantto understand that the business isowned by BVIslanders, long-termBVIslanders,” Mr. Bamford said,referring to the VI citizenship ofhis wife and her father. “It’s not anexpatriate business.”

likely interfering with the current’sability to naturally “flush” the bay,the consultants found.

“Either runway extension op-tion will involve substantial landreclamation into areas wherestrong currents are common.Therefore, some impact on theoceanographic processes shouldbe expected. In particular, thequestion of alteration of currentsand sediment transport is a majorconsideration,” consultants wrotein the impact assessment.

In his public statements Dr.Pickering has sought to allay critics’fears that Trellis Bay could becomea “dead bay,” saying that consultantswould model the current patternsbefore government proceeds withthe development.

“This government will donothing to harm Trellis Bay,” hesaid at the March 27 public meet-ing, adding a few moments laterthat “no one in this room is moreenvironmentalist than I am.”

Dr. Pickering declined to beinterviewed about the expansionin May, and since then he has notresponded to several more re-quests for an interview.

Altered currents The impact assessment found

that changing the current couldhave wide reaching effects.

“For example, the runway ex-tension toward Trellis Bay couldimpact currents so that parts ofTrellis Bay, or even more distantlocations like Long Bay, may beaffected. The result could be ero-sion and scouring of portions ofthe seabed or shore,” the assess-ment stated, though it adds thatcomputer models of current activ-ity “suggest such problems are un-likely to be serious.”

But Chris Syms, the co-ownerof De Loose Mongoose and theBeef Island Guest House, worriesthat if the current is impeded, theresulting changes could harm ma-rine life in the bay or erode the ex-isting beach.

“Basically you’re putting anarm out into the current, reversingthe flow of what is the flow now,”he said.

The business owner said hewould be less concerned if the air-port extension is built on top ofelevated platforms that allowwater to circulate underneath. Dr.Pickering mentioned this possi-bility in the House of Assemblyon June 29.

“This technology, even thoughnew to the Caribbean region, hasalready been used elsewhere in theworld in the construction of eitherrunways, taxiways or aprons struc-tures,” Dr. Pickering said.

He added that he and BVIAAManaging Director DennistonFraser recently visited the La-Guardia International Airport inNew York City to view the plat-form technology in action.

This method, however, couldmore than double the cost of theproject. Placing the needed242,000 square feet of the runwayon elevated piles could add $34 to$62 million to the expansion’s es-timated $38 million cost, accord-ing to the impact assessment.

Other mitigationThe consultants also analysed

other options to preserve the bay’scirculation. A series of 29 10-foot-wide culverts below the runwaywould allow water to flowthrough, but would could cost anextra $8 to $10 million, theyfound. Additionally, those culvertsmight get blocked with marine lifeand require regular cleaning, ac-cording to the assessment.

Another option, removingseveral hundred square feet ofSprat Point, would improve circu-lation and allow wider access foryachts, the consultants found.That alternative would also createabout 140,000 to 170,000 cubicyards of fill that could be used tobuild the runway, they estimated.

But tests would have to bedone to make sure the material ishard enough to be used, the as-sessment added. This optioncould cost an additional $2 to $3million in dredging and removalcosts, though the assessment doesnot state how much it will cost topurchase the land from its currentowner, Quorum [BVI] Limited.

A fourth option, dredging a4,000-foot channel parallel to therunway that would connect Trellisand Well bays to promote betterflushing, would cost about $6 mil-lion to $8 million, according tothe impact assessment. This alter-native, however, is “considered aninefficient means to convey waterbetween Trellis Bay and WellBay,” the assessment stated.

The channel it would require“may develop into a maintenanceconcern and possible debris trap,”the document added. “If insuffi-cient water volume may passthrough the channel during anormal tidal cycle it may lead to

Last Resort imperiled by airport expansion

Photo: TODD VANSICKLE

Bellamy Cay seen from the air.

Airport from page 30

Airport see page 32

future water quality issues inTrellis Bay.”

Aragorn Dick-Read, an artistand spokesman for the Trellis BayBusiness Association, said thatbusiness owners in the area haveserious doubts that the mitigationmeasures will be cost effective orfunction properly.

“I haven’t seen anything thatconvinces me that they will, no.And I haven’t seen anything thatconvinces me that business asusual can carry on in Trellis Bay,”said Mr. Dick-Read, who ownsAragorn’s Studio in Trellis Bayand organises a regional arts andcrafts fair in the area each year.

Marine impactIf the bays aren’t flushed prop-

erly and if sediment from con-struction isn’t properly contained,the effects could be disastrous formarine life in the area.

“Without proper erosion con-trol measures, sediment can pourinto the sea and devastate the ma-rine environments, turning theoffshore coral reefs and sea grassesinto a barren underwater waste-land,” the assessment stated.

Healthy corals could bechoked by the sediment, whichwould further harm fish and thewider ecosystem. Mr. Syms, thebar and guesthouse owner, hasseen it happen before. In the late1970s, there was plenty of ma-rine life in the area, including“big schools of spotted eaglerays” he said.

“Back in those days, if we got15 boats in the bay, it was a bignight,” Mr. Syms said.

As more boats started anchor-ing there, they damaged what hadbeen a healthy reef, he said,adding that the reef began to re-cover once government installedmooring balls in the bay. Thingsworsened a bit again in 2000 onceconstruction began on the previ-ous runway expansion, he said,adding that he fears a new roundof construction could further dam-age sea life.

“The environmental part is ahuge concern for us,” he said.

While much of the runwayexpansion’s impact can be miti-gated, the destruction of sea lifewhere the in-fill land will beplaced is “unavoidable and a con-sequence of development,” theassessment stated.

“Everything in the footprint ofthe runway extension will be lost(except for what may be relo-cated). The underwater habitatsare widespread, and much moreexists beyond the direct impactzone. Coastal mangroves in theWell Bay area will also be af-fected,” the document added.

Despite those impacts, the as-sessment also noted that “virtuallynothing” of Beef Island’s “pristineand natural” habitat currently re-mains due to years of human habi-tation and development.

Other areasThe expansion’s impact could

also be felt beyond Trellis andWell bays. Some of the sand thatmakes up Long Bay Beach mayshift as a result of the changingcurrent, but no net loss is expected,according to the assessment.

Additionally, though it is out-side of the project’s immediatefootprint, the Hans Creek Fish-eries Protected Area is “suffi-ciently close” to the constructionzone to merit consideration, theassessment stated.

“While it does not appear thefisheries area will be directly im-pacted by this project, issues mayappear in the future that could re-quire mitigation,” it said.

Concern over the fisheries areahas stymied development projectson Beef Island in the past. A pro-posal by Quorum [BVI] Limitedto create a luxury resort and 18-hole golf course there was stalledin 2009 by an environmentalgroup’s lawsuit.

The company originally pur-chased land for the developmentin July 1995, although the $80million development wasn’t ap-proved until about 10 years later,when then-Chief Minister Dr.Orlando Smith signed a prelimi-nary development agreement withthe company.

In the subsequent months, theVirgin Islands EnvironmentalCouncil, a group of concernedcitizens, formed. The VIEC suc-cessfully challenged the develop-ment in High Court. A judgeruled in 2009 that because HansCreek may have been “adverselyaffected” by the development, theplanning application Dr. Smith’sgovernment approved was “voidfor illegality.”

But Quorum successfully ap-pealed the judgment and won theright to continue with the devel-opment. However, while the pro-

ject’s development application isstill on file at the Town and Coun-try Planning Department, recordsindicate that nothing new hasbeen filed in recent months.

Quorom representatives didnot respond to requests for com-ment. Noni Georges, a member ofthe VIEC, said the group has notreached a formal position on therunway extension proposal butplans to discuss the issue at an up-coming meeting.

Noise concernsBeyond Beef Island several

surrounding communities mayalso be impacted by the extra noisethat bigger jets flying overheadcan bring. Residents of HodgesCreek, Great Camanoe, Well Bay,Trellis Bay and Little Mountainwill likely experience higher noiselevels, and residents fear that theirproperty values will go down, ac-cording to the assessment

“There is a concern from resi-dents that property prices mightbe affected by this form of ‘pollu-tion.’ This aspect is difficult toprove and further financial re-search and reporting is recom-mended,” the report stated.

Construction noise and dustcould also affect businesses andresidents in the area, the assess-ment found.

“It is essential that we learnfrom the experiences and examplesin the past. Construction activitiesmust be designed and managed toreduce negative impacts on the en-vironment beyond the immediateproject footprint. Erosion controlmust be employed to prevent sed-iment loss to the coastal environ-ment,” the assessment stated.

Business worriesIn addition to the fears that

some VI residents raised aboutthe runway construction’s ef-fects in the short term, othersare concerned that the expan-sion could affect their liveli-hoods permanently.

The assessment reported thatTrellis Bay businesses and resi-dents raised “serious warrantedconcerns” about the project, but italso suggested that “change can beadapted to and accommodated.”

Mr. Dick-Read, of the TrellisBay Business Association, saidthat besides the environmentalconcerns he is afraid that the ad-ditional restrictions on boat traf-fic the expanded runway couldbring will harm businesses’ cus-tomer base.

“The bottom line is that the

vessels that enjoy visiting TrellisBay now — and [that] all of ourbusinesses are dependent on —will not be coming to TrellisBay as they have in the past,” hesaid, adding about 90 percent ofhis art studio’s customers aresailing guests.

“The whole concept of busi-ness in Trellis Bay is dependenton boats arriving and people en-joying the benefits of the beachcommunity and the natural envi-ronment, which will all be com-promised,” he said.

Yachting concernsCharter Yacht Society Chair-

man Tim Schaaf said the TrellisBay area is a great place to enter-tain charter guests due to the fullmoon parties businesses there hostmonthly, and because some restau-rants like The Last Resort and thenearby Pusser’s Marina Cay havedeveloped a strong followingamong sailors. Additionally, thebay’s central location makes it aconvenient place to anchor asyachts cruise around Tortola andthe sister islands, he said.

“Otherwise, it makes the tripfrom North Sound to Jost VanDyke a very long trip,” he said.

The captain added that themast restrictions that the ex-tended runway will bring, com-bined with the loss of mooringballs and Trellis Bay’s narrowedentrance, will make it much morecomplicated for ferries and yachtsto share the bay.

Mr. Syms, the guesthouse andbar owner, has seen his businessesgrow and change since the late1970s when he first came to theterritory with his wife. While hisfour-bedroom guesthouse can ac-commodate about 10 people andwas initially the focus of the busi-ness, traffic to De Loose Mon-goose restaurant and bareventually outpaced the guest-house. But the guesthouse some-times serves as an “airport hotel”for late-arriving visitors bound forsister island resorts, he added.

“More and more as the airportgrew, tourism grew, we becamesort of the little hub for the otherresorts because we’re so close tothe airport,” Mr. Syms said.

If the runway expansion re-duces boat traffic into Trellis Bay,the businessman said, he hopesthat the additional air arrivals willmake up the difference for the lostrestaurant and bar business.

Still, he can only take so many

guests with his current facility.“If you’ve got a jet with 240

people and that jet can’t leave thatnight, where are those 240 peoplegoing to go? Not into my fourbedrooms,” Mr. Syms said.

Focus groupsDr. Harrigan performed the

socioeconomic portion of the im-pact assessment through her con-sulting firm Reality Global. Sheconducted dozens of interviewsand focus groups with partieslikely to be affected by the runwayexpansion. Her portion of the as-sessment recommended that Trel-lis Bay business owners adapt tothe change, noting that becauseseveral of the properties are onleased Crown land, their propertyvalues won’t be affected.

“The additional demand fromthe expected increase in the num-ber of visitors may require thosebusinesses to rethink their oldstrategies and find new ways tocapture this new market,” Dr. Har-rigan wrote.

For Mr. Dick-Read, though,the current strategy works well forTrellis Bay and other area busi-nesses. He said that the “grass-roots” contact that small businesseslike his offer tourists are the typeof “genuine experience” mosttourists crave. He added that whilehe understands the rationale be-hind bringing in more visitors, hefeels the expansion is the wrongproject at the wrong time.

“I do fully support all efforts tofind solutions to increase and im-prove the quality of airlift in theBVI,” he said.

Russell Harrigan, the chair-man of the BVI Tourist Boardand the owner of this newspaper,said that he understands the con-cern of residents who fear theterritory’s culture and environ-ment could be adversely affectedby the expansion.

“We’ve always tried to strikea balance in what we do. I thinkto the best that we can, we do,”he said.

But he added that he feels thatgetting people to the VI is “thenumber one challenge we’re facingas a territory.”

“I think as a territory we havealways struggled with this issue ofair access from day one,” he said.“In the earlier years, we were ableto manoeuvre and get through it,but as the industry continues togrow we have to look at its long-term viability.”

Special ReportPage 32 | Thursday, August 2, 2012 | The BVI Beacon

Airport from page 31