1.           SUMMARY

 1.1         The proposal will transform external physical access arrangements for St Helena .  This will greatly improve and shorten travel-time to and from the island, thereby contributing substantively to sustainable economic regeneration and ultimate financial self-sufficiency for St Helena .  The changes will take effect before withdrawal from service, in or around 2010, of the island’s dedicated and subsidised passenger/supply ship.

1.2         The improvements will be achieved through a DFID funded project, costed at up to █████ over 10 years, to introduce access by air to the island.  It will entail construction of an airport, with runway length to support safe operation of standard Boeing 737-800 or equivalent aircraft, and █████ introduce scheduled air services.  The project will also enhance local institutional arrangements to both stimulate and manage the expected economic development, especially from tourism.

1.3         The project goal will be sustainable financial self-sufficiency for St Helena .  This will be measured through economic and demographic indicators and gradual reduction (and eventual termination) of the island’s dependence upon external (primarily UK ) assistance.  The project purpose will be the development of sustainable and unsubsidised air access.  This will stand in contrast to the present subsidised (█████) shipping service and purpose-built ship, which needs replacing at roughly 20-year intervals. The present ship entered service in 1990, at a capital cost of £32 million: over its 20‑year lifespan, the total cost to HMG of maintaining access by sea will be circa █████ in 2005 prices. 

1.4         The key project outputs will be: a completed runway with associated instrumentation and navigational aids; airport buildings and support infrastructure, including a permanent access road; necessary fire-fighting, sea rescue and fuel storage facilities; an air services contract with a recognised international passenger carrier; appropriate arrangements to manage and regulate the air services; and proactive tourism marketing.  Commercial arrangements will be made separately for sea freight to/from the island.

1.5         With support from the project, the St Helena Government (SHG) will enhance the capacity and role of the existing Development Forum to establish a new St Helena Development Board, comprising representatives of both SHG and the private sector.  The Board will aim to maximise the potential benefits of air access.  SHG has also undertaken to review its policy environment in relation to inward investment, land-holding, immigration and taxation. DFID support will be provided on the clear prior understanding that essential reforms, including those identified in this review, will be fully implemented.

1.6         The airport construction will involve significant earthworks on a tightly constrained site in rugged terrain. The construction process, however, will deploy well-established and proven technology; and construction risks already have been well defined. Detailed design will need to take account, for example, of the need for take-off and landing over the sea and across steep bluffs at both ends of the proposed runway.  Air Safety Support International (ASSI), the aviation regulatory body for the Overseas Territories (OTs), has been closely involved in initial project design: it will stay engaged throughout implementation. 

1.7         The implementation strategy will be based on a DBO (Design, Build and Operate) arrangement with a suitable contractor, to be selected by international competitive tender. This is expected to minimise the construction and other risks to DFID/SHG; and it will allow time for local development of appropriate airport management and servicing skills.  The tendering and implementation of the DBO facility will be supervised by specialist expertise with a proven track record in the delivery, to budget, of other major airport development undertakings.

1.8         Sound management structures will be essential.  Dedicated DFID and SHG project teams will oversee the work, ensuring that parallel and complementary activities are in place as necessary.  A communications strategy will be developed at an early stage, ensuring that all interested (or potentially interested) parties are kept suitably informed throughout.  SHG’s firm commitment to the project goal, together with the empowerment of the Development Board, will help to secure an improved policy environment for all related activity.

1.9         The Project Officer in DFID, reporting through the DFID Programme Manager to the Head of the DFID Overseas Territories Department (OTD), will be the OTD Engineering and Infrastructure Adviser.  The Project Officer in St Helena will be the SHG Access Project Manager.  For accountability purposes, the DFID Project Officer will take the lead in all matters relating to the project, in consultation with the SHG Project Officer. All financial decisions will entail consultation with DFID.

1.10       DFID Management and Ministers, and SHG Management and Elected Members, will be consulted if necessary on key issues that may arise during detailed project design and implementation.  Risks to project viability, including any cost increases, will be monitored with great care.

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