ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(75)236
Vol.1975/0085

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COMMISSION OF THE EUROPEAN COMMUNITIES
COM(75)236 final.
Brussels ,20june 1975
COMMUNICATION FROM THE COMMISSION TO THE COUNCIL
onafinancing proposal which did not
receive afavourable opinion from the EDF Committee ,
under the internal agreement onfinancing and manage­
ment ofCommunity aid (art.15§2) -
CCK(75 )236final .

COMMUNICATION .FROM THE COMMISSION TOTHE COUNCIL
- • enafinancing –
» ~ •- .• A . .
proposal which didnotreceive afavourable ,opinion from *theEPF
Committee ,under 'the internal agreement onfinancing andmana^e -
nient ofCommunity aid(3»£,.4.5%S)
TheDirectorate General forDevelopment 'and .Co-operation
presented thefinancing proposal annexed (Doc.VIIl/l400/74-F
rev. 2)tothe97th'meeting of •th«-Committee oftheEuropean
Development' Fund onFebruary 25th ,197'5*'
Theproject inquestion concerns theprovision "bytheEuro­
pean Development Fund ofAntilles Florins 7320000 (roughly equiva­
lent tou.a.3390000)innon-repayable aidforthfewidening and
extension ofthelanding strip onBonaire island ,tomake itsuita­
bleforaircraft oftheDC8andBoeing 707type .Thisimprovement^'
isconsidered a"sins© quanon"condition byalltheinvestors inte- '•
rested inbuilding hotels inBonaire ,aswell asbythetravel
agencies approaohed bytheAntilles authorities with aview toin- /
eluding Bonaire island intheir programmes . ,
When examined bytheCommittee oftheEuropean Development :
Fund ,only four delegations were in ,favour "oftheproject .This did
notamount tothequalified weighted majority of67votes required
byarticle 13,§3oftheinternal ,agreement onfinancing andmanage -
V .
ment ofCommunity aid. ' .
TheCommission istherefore notable tomake afinancing de­
cision ontheproject .Under article' 1%,§2(l)oftheinternal
agreement ,itisnonetheless able torequire adecision from the
Council . c
(l)Thearticle reads :
"IftheCommission decides todiffer from .theopinion expressed bythe
Committee ,orifthelatter does notdecide infavour ,theCommission
maywithdraw itsfinancing proposal orapply totheCouncil ,which ta­
kesadeoision under thesamevoting system astheCommittee ".

2.-
Before having recourse tothis possibility ,the Commission
has considered ,itappropriate to "bring certain new aspects ofthe
project totheattention ofthe Committee ofthe European Development
Fund .These derive from forecasts which have reached the Commission
inthe meantime and would appear toanswer the preoccupations expres­
sed "bysome members ofthe Committee onFebruary 25th .With this in
mind ,the Commission has drawn upasecond proposal which itconsiders
would allow anew assessment ofthe project without altering its cost
orcharacteristics .This financing proposal ,also annexed (Doc.
VIIl/210/75-F)1has "been presented tothe EDF Committee ,within the
statutory time limits ,forconsideration atits 98th meeting onApril
22nd ,1975 .
However ,one ofthe delegations has expressed the opinion
that the internal financing agreement does not allow the Committee
ofthe European Development Fund toberequired toreconsider apro­
ject which itrejected inaprevious session .Although not ofthis
opinion ,the Chairman ofthe Committee has decided toremove the pro­
ject from the agenda inorder toavoid adebate onprocedure .The
Commission consequently finds itself back inthe situation following
the vote ofthe 97"th meeting ofthe Committee ,viz.itmust apply to
the Council ifitdoes not wish towithdraw itsfinancing proposal .
The arguments infavour ofapplication tothe Council are as
follows :
-one ofthe two delegations considering themselves unable to
*accept theproject atthe 97"th meeting preferred ^r.ottovote .This
delegation isprincipally opposed tothe idea that the tourist acco­
mmodation envisaged onBonaire should beprimarily intended for "well-
off"customers (Americans andCanadians );thedelegation considered
V
' * • *

3.-
that adevelopment ,aid investment should "bsnef itordinary rather than
-privileged tourists ;
–theother delegation against was opposed todeveloping thetertiary
sector when the primary and secondary sectors remained ,very inconsi­
derable intheNetherlands Antilles ingeneral ,and inBonaire in
particular# This delegation further expressed concern over the turn
international tourism might take inview ofthe present economic
situation ofthe United States addthe consequences ofthis trend
fortheprofitability ofthe investment under consideration .The
delegation wasfurthermore opposed tothe form offinancing (non-
repayable aid)proposed bythe Commission 'sservices#
The Commission canadvance thefollowing considerations to
meet these preoccupations :
1.The island authorities ,the promoters andthe hotel-keepers
are anxious toavoid the problematic choice between "luxury "and
"mass"tourism because they are aware that Bonaire owes itstourist
potential tothe calm ,rural beauty oftheisland andthe simplicity
ofitsdaily life .They .would prefer discreet ,sport-orientated
tourism to .either choice . >
Inthis context ,the present "Bonaire Hotel "intends topro­
mote confortable but .relatively cheap accommodation .Ontheir side ,
the group ofDutch promoters expressing interest intheisland would
like a"flag-ship "hotel intheir large –scale programme (800to1000
rooms ),butareabove allconcerned topromote something quite diffe­
rent from luxury ,casino-style tourism .Thegroupie initial projects ,...
which arealready artavery advanced stage ,show real concern for
architectural concepts adapted totheisland 'slandscape and sky–line.
2.The development oftheprimary and secondary sectors would
doubtless constitute -amore' solid .foundation fortheAntilles' .economy .
However ,theclimate ,thearid soil andthelack ofnatural resources
are fundamental obstacles tothis development .Itwas hoped that
these could'' beovercome in .the framework oftheAssociation byattrac­
ting suitable industries forexport toEurope ,butthis hope proved
unfounded ,largely because oftheobstacles setupbythedefinition
ofproduct rules oforigin .

Newhopes maybeentertained nowthat these obstacles have
"been partly removed under theLomS Convention ,"butlittle canbe
expected inthe short terra# There isalso thefact that theindus­
tries setting upincountries like Bonaire ,without natural resour­
cesorfavourable conditions forindustrial activity (l),areoften
of .a"mobile "character unsuited tolarge ,permanent investments (2);
their first concern istoprofit from cheap labour oradvantageous
fiscal conditions ,they cannot offer asteady ,dependable contribu­
tion totheeconomy ofthecountry where they establish themselves
andthey often constitute anelement ofuncertainty andarisk of
social unrest inthecountry involved because oftheir flexibility
(varying turnover andlabour force..#)#
3*TheCommission ,like theEDFCommittee ,hasconsidered the
possible consequences fortourism oftheworsening economic situa ^-
tion intheworld andmore especially intheUnited States# Ithas
come totheconclusion (seeDoc# VTII/14OO/74annexed )that there
aregrounds forexpecting favourable developments intourist areas
with areputation forsocial andpolitical tranquillity andsuitably
served bytheinternational airlines# While studying theproject ,
theCommission hasbeen strongly aware ofthenecessity ofassessing
tourist investments against asthorough anexamination aspossible of
thepossibilities offered bytheAmerican market ;itnotes that the
existing agreements between theAntilles authorities andthepromoters
ofhotel schemes require these schemes tobegoverned bymanagement (
contracts with hotel companies ofgood repute .Nohotel building can
therefore begin without amajor hotel firmbeing convinced ofits
success ,andsuch firms arenaturally closely aware oftourist problems
Moreover ,aspecial condition oftheforthcoming financing
Convention will tietheEDFrunway improvement project tothestart
ofconstruction onatleast onebighotel :theinvestment requested
from theEDFwill therefore only become effective after ahotel firm
hasundertaken responsibility forrunning this ,orthese ,hotels#
(l) Except for harbour facilities (natural ),afavourable geogra -
phical situation ,etc#
(2)Forexample ,aseombly plants forphotographic orelectronic equipment ,
small industrial workshops ,etc# "

5.-
4#Itisestimated that theproject will break even economically
tr:when Bonaire island has 600hotel vrooms# The island currently has .
60"luxury "and 85"tourist "class rooms# Another 78"luxury "^rooms
are "being "built and 40more will follow# Inthetourist class th-re
are anumber ofserious projects :a200-room hotel would "bring
the number ofavailable "luxury "rooms to -373 and "tourist "rooms to
190,providing atotal ofabout 575 «
5#The forecast use oftheairport isbased onthe hypothesis
that theisland will offer 575 rooms by1977 for 42^700 tourists per
year ,and1^000 rooms by1983 for107^000 tourists peryear# (see
page 15ofDoc# .VIIl/1400/75annexed)#The forecast isbased onfares
recently inforce atCurasao airport and onthe recommendations of
experts from the "Rijksluchtvaartdi6nst",(the Dutch national air
transport service ), .'
The forecast isequally based onthe reasonable hypothesis
that thelevel ofoccupancy will rise from 40$in1977 to82%in
1983 ,andthat the average length ofstay will rise from 3,7 days in
1977 to5,0 days in1983.
Although ^other things being equal ,anincrease inaverage
length ofstay would beadvantageous tothe hotel business ,itwould
have anegative effect onthe operation oftheairport because ofthe
implicit reduction inthe number ofpassengers andaircraft# This
explains why the hypotheses considered show amodest butpositive
result for several years' operation oftheairport and then anegative
result for 1984® Ifother .conditions remain unchanged ,orunchanged
relative toeach other ,anincrease ,intheairport company's' charges
would nodoubt benecessary atthis point#
.i
Thenet annual results will inany case remain excessively
poor# Atonepoint aloan onspecial conditions was considered ,at
1%interest for30years (thelength oftheinvestment 'seconomic
life ):this loan would require anannual payment ofabout Ant#f «
283^000 tooffset interest andrepayments andwould involve thebusi­
ness running atapermanent loss#

Another consideration isthe Antilles authorities' wish to
adapt the rhythm and even the amount ofinvestments tothe availa­
bility oflabour andtothenecessity ofsafeguarding thenatural
"beauty ofthe island .This desire tolimit the volume oftourism
will affect theresults ofrunning the airport .
Thefinancial situation ofthecontrolling authority will
therefore never "be "brilliant ,,"butitshould not runataloss either ,
provided the airport isnot loaded with debts from the start .
Itshould also beunderstood that the financial situation of
the Bonaire island authorities will never becomfortable either .
Whatever the future political configuration ofthe Dutch Antilles ,
Bonaire island will always depend financially onacentral govern­
ment «The Government ofthe Dutch Antilles faces anextremely worry­
ingeconomic situation (seeDoc.VIIl/310/75)'thecost ofliving
index rose by21foin1974 duetoimported inflation ;thebalance
ofpayments has sodeteriorated that acatastrophic deficit is
predicted for 1975 (more than u.a.100million ),which will wipe
out gold and foreign currency reserves inone year ;and various
"mobile "industries have laid off workers inlarge numbers .It
therefore follows that the social situation istense ,especially
inCuragao ,the main island inthe Dutch Antilles and the seat of
the central government .There have been several demonstrations in
recent months (l).
The Commission therefore considers -quite apart from the
fact that the credit available for the Dutch area under the 3rd EDF
inthe form ofloans onspecial conditions has already been alloca­
ted toanother project intheAntilles -that itisperfectly
justifiable tofinance the present project bymeans ofagrant .
(l)Intheisland council elections onApril 25th ,1975 »theCastro-styled
"Prente obrero "party increased its representation inthe island coun­
cil from 3to8seats .

The arguments presented above tojustify ,oneconomic grounds ,
allocating tothis project the Community aid setaside forthe Dutch
Antilles under the 3rd EDF,should "beseen inthelight ofthe Dutch
Antilles Government 'spolitical desire toavoid further increasing
discontent among the Bonaire population ,who consider themselves .
discriminated against inthe development field compared with other
islands# This government ,which has "been informed ofthedifficul­
ties facing Community financing ofthe project up-to now ,recently
informed the Commission that itwas keeping the project among its
priorities and hoped for afinal decision "onitassoon aspossible#
Inconclusion ,the Commission ,making use ofthepossibility ;
offered byarticle 15,§2oftheinternal agreement onfinancing and
management ofCommunity aid,presents the annexed financing proposal
tothe Council and proposes that ittake the following decision :
"THE COUNCIL ,
"HA VING REGARD toarticle 15,§2oftheinternar agreement onfinan-;
"cing and management ofCommunity aid (l),
"HA VING REGARD tothe proposal ofthe Commission,'
"CONSIDERING the supporting arguments presented inthe financing t>ro-
"posal and inthe Commission 'scommunication tothe Council ,
"CONSIDERING that the Committee ofthe European Development Fund did
"not deliver afavourable opinion atits meeting onFebruary 25th ,1975
"HAS DECIDED :..
"toapprove under the conditions laid down inthe proposal before it,
"the project described hereunder : .
Régi stration Title .of Commitment proposed
number Project asagrant
AN/309/74 Improvement of Ant.f .7320 000
landing strip , roughly equivalent to
Bonaire island u.a.,3390 000
(l)Officiai Journal L282,28.12.1970 ,

"togran -!:commitment authorisation for alictal sum ofAnt.f .
"7320 000,equivalent toapproximately 3390 000u.a «(rounded ,off),
"toinstruct the Chief Authorising Officer ofthe European Develop­
ment Fund toarrange for any modifications that prove necessary to
"ensure the smooth execution ofthe project under the hest economic
"and technical conditions *"

COIMISSION •
OF TES
EUROPEAN COICÎUNITIES
FINANCING PROPOSAL
Third EDP
|TITLE OPPROJECT . Improvements tothe Bonaire runway
TYPE OF PROJECT -
jEconomic infrastructure investment
(Article 19(0ofthe second
iYaoun&e Convention )
RECIPIENT STATEI
;Netherlands Antilles
r•-■■ ■ ;
AUTHORITY SUBMITTING THE PROJECT
>
I
I
I
I : IThe Netherlands Government by
Letter No2815 of21May 1973 from
'the Netherlands ?Permanent Repre­
sentation
-– ■– – -–– 1 ■
• ■· ι
REGISTRATION NUMB2R OF THE PROJECT AN/309/74
I 1 1 1 1 –
COMMITMENT PROPOSED AS AGRANT
• -Inlocal currency(Equivalent inu.a.l
Ant.f.7320 000 3390 000
(rounded off)
r
Reference documents :
VIIl/l37(7l)-F Memo onmeasures proposed "bytheCommunity intheNether­
lands Antilles
VIIl/328(71 )-F Memo ontheEconomic Development oftheNetherlands Antilles
I

vin/1400/74-E
I.TIIE PROJECT
Thepurpose ofthis project istowiden andextend therunway onBonaire
tomake itsuitable forDC–8andBoeing 707type aircraft .
II.BACKCROUND OPTHE PROJECT^sauascBU &>.–s>ss
Bonaire airport hasalready "been tho .subject ofaCommunity scheme .
financed from thethird EDFbyx*hich theCommission approved (financing
proposal forproject At?/300/70-document VIIl/l45(7l)-P )thefinancing
oftheconstruction ofanewairterminal with .a.control tower anda
^parking apron taprojeot which iscurrently being carried out.
Asexplained inthoabove-mentioned document thedryclimate andthefact
that there isusually nolayer offertile soil have caused theisland to
concentrate onfishing ,attracting industries and ,most important ofall,
tourism .
Thus thedecision tofinance thenewairterminal was .aimed atpromoting
theisland 'stourist industry .This newairterminal ,which wasplanned
2toreplace asmall building with anarea of60n,was'moreover comple­
mentary toascheme financed by .Dutgh aidforlengthening theexisting
runway to1750metres tomake itsuitable forDC-9 type aircraft ,a
facility which itwasconsidered would give theinitial impetus todeve­
loping tourism . >
Although theNetherlands Antilles Government hadwanted arunway of
approximately 2600mamdsuitable for3)0-8 ond .Boeing 707 "typo aircraft
tobeconstructed ,theauthorities responsible f<?yButch aidtothe
Antilles considered thelengthening oftherunway to1750nasapro­
visional measure ,tobefollowed byalarger scheme ifthedevelopment "
oftourism produced encouraging results .Thelengthening oftherunway
to1750metres made itpossible foraerial links tobeestablished ,
including routo flights toNowYork (with tworefuelling stops ),which
would bring inasizoablo number oftourists . *

-2- νΐΙΙ/^ΟΟ/Τ^-Ώ
Now since the runway ^asbee .*lengthened Bonairo has ciiowa aa©netjuregs ingrowth
■fcotirxwEW Bec.au2& ofthe -fact fiat the -£slasd .could Jus-'c .result "boecr-vod "byEC
aircraft belonging tothonational airline the Bonaire Hotel ,with 74rooms
the island 'slargest hota1,was taken over "bynew owners who "bymeans of
cloverly directed publicity have managed toobtain mere than satisfactory
bookings * However ,noDC–9aircraft other than those ofthenational
airline which 'provide the link between Curacao ,Aruba and Bonaire has
landed attheairfield since the runway was lengthened ,.which means that
the errsxccgcd direct internat ional lirj.es have notmaterialized . There
are variouB reasons for thexs^^ -alisatic -.iof'thesa -'-sxpeotations.
Tobegin v/ith,theairlines which carry passengers between ITorth America ,
Central America and Latin America nolonger use EC-9 type aircraft onthose
routes .Consequently ,thepossibility isautomatically excluded oftheir
making' stops inBonaire andthere remains only thepossibility ,which more­
over ismore realistic ,ofDC-9 charter aircraft .
Eowevov *aviation baa fictfolopsd inexi»h away th£,t £2-9 aircraft s£cVirtually no
longer used for intercontinental flights . Because' ofthis inthe United
States –the prime market for tourism tothe Caribbean -the DC-9 isnow
mentally associated with tho intor«oity aircraft .providing transport between
tho main American towns .Consequently thin type ofaircraft isnot much
1lavoured for holiday flights particularly over' the sea . The route flight
between New York and Bonaire would moreover include one and probably two
refuelling stops while inrecent years people have become increasingly
accustomed tolong-distance flights without' stops#
1
Atpresent flights ovep the sea -lasting more than five hours byaircraft/{ ■ •with only 'two engines are nolonger allowed . '

•3 . vin/1400/74-E
Finally ,tho increased price offuel .hasintensified thecharacteristic
differences between thevarious types ofaircraft .Thus ,.although asearly
as1970 itwasdistinctly cheaper torunaDG-S rather than aDC–9forthe
Hew York-Bonaire flight ,thebreak–even point today forthe New York–Bonaire
flight atthe same fare would "bereached if115$ oftheseating capacity
were filled inthecase ofaDC-9 and 6$%inthecase ofaDC-8 !
Itfellows that theprice ofa1charter seat inaDC-9 has tobevery much
higher than that ofacharter' .seat inaDC-8 .However ,itisobvious that
travel agencies will refuse tooffer atrip which isconsidered less comfor­
table atahigher price than that ofidentical trips offered byother
agencies . '
Because they are conscious ofthis aspect all investors interested inthe
construction ofhotels onBonaire are making the execution oftheir project
dependent onthe -possibility ofdirect flights byDC-8 orBoeing 707between
New York andBonaire ,which .they consider asaprerequisite *
Inrecent years ,given that they hadthe DC–9runway ,tiieBonaire authori­
ties have approached anumber ofinternational tourist organizations asking
them toshow an .interest inBonaire ..Without exception thereply they
received wasthat Bonaire was undoubtedly anattractive tourist centre and
that they would bedelighted toorganize tours toBonaire assoon asthe
island 'srunway could accept DC-8 andBoeing 707aircraft.'
When the Bonaire authorities approached investors inhotels andhotel -
operators they usually received the saroreply ..Nevertheless ,there are
currently anumber ofserious -andrealistic hotel projects .
These involve inparticular theBonaire Hotel the owners ofwhioh (agroup of
private individuals )areabout "tostart building a78-roon extension ,
bringing thecapacity ofthohotel to150 rooms ,and -aninitial group of40
condominiums ,each able toaccommodate sixpersons .Intwoyears the
owners hope .tostart building asecond group of40condominiums andatthe -
same time thecentral facilities foranew 200-room hotel ,followed bythe
final phase consisting ofthe completion ofthehotel andathird group of

VIII/I400/74-E
condominiums .- Thehotel owners' have ,however ,stated :that they cannot
carry outthe second phase -oftheir extension projects orincrease the cap­
acity ofthehotel beyond 150 room3 and 40condominiums unless the custo­
mers nolonger have toznake their journey -via Curasao ,inother words unless
they canflydirectly toBonaire byDC-8 orBoeing 707 *
The same attitude was metwith atthe Palace Hotel -Bonaire ,owned byagroup
ofthree Venezuelan businessmen' 'which "has-' acquired along building lease for
thesite ofthe Sorobon hotel project and which isconsidering building a
250-^room hotel onit. .The members ofthis group ,'who intend tohave their
hotel run byawell-known hotel -chain ,have also stated that their project
will berealized only ifBonaire airfield ismade suitable for DC-8 or
Boeing 707aircraft . . ..■:v.
Athird project ,byfarthe largest ofthe remainder ,isthat ofagroup of
Dutch firms 1.Thegroup has -acqsired enoption cn "thelongbuilding lease forthe
coastal strip atLac with aview tobuilding four 200-roo 'mhotels :. The
group also hopes tobeable totake over the lease for the Sorobon project
and thus boable tobuild afifth' 200-room hotel .
The programme ,which will cost atotal ofAnt «f.100million (29*8 million
u.a.)andwhich isafull-scale project to'becompleted before 1580 ,compri­
ses the construction of:
i, alow-rise hotel made upofacentral building and detached buildings
providing 200 rooms tobecompleted atthe same time asthe runway
extension iscompleted ;' '• ■v -•
Turnovor ofthelargest firm :Ant *f•700million (approximately 208
million u.a.);orders inhand :more than Ant.f.1000million -(appro xi­
■mately 29Smillion u.a.)

-5- VIII/1400/74-E
ii.aprestige 200-room hotel tobecompleted four tosix months after the
low-rise hotel j'
iii.possibly asecond 200-roon hotel (Soro"bon project )}
iv.a200-roon hotel offering flat-type accommodations
v. ahotel with acountry club atmosphere ,also of200 rooms .
Aprovisional agreement has already been signed "between thepublic authorities
andtheprivate company information .Inthis agreement the Dutch group makes
therealisation ofitsprojects conditional on .the.drawing upofmanaging agency
agreements with ,hotel development companies ofgood standing ,andhas made it
anessential condition ofcarrying outitsprojects that the Bonaire runway be
extended toaccept DC-8 and Boeing 707aircraft .The group ,which isnotasking
for any government aidorguarantee ,has,however ,requested that the Bonaire
authorities ,with the .tourist potential oftheisland inmind ,should agree to
draw upadevelopment plan for the island which will 'enable thenatural sites
andbeauty ofthe island tobeprotected from the consequences ofany uncon­
trolled tourist development but which will still permit orderly development .
Although they are happy with theinfrastructure which will shortly beprovided
(except asregards theairport ),thegroup hasasked that thepublic' authorities
constantly adapt this ,infrastructure tothe possible needs ofanexpanding
tourist industry .
Although this ishot included intheoriginal agreement ,the group hasalso
appliecf foralong-term' lease ontheold Aruba-Anbwana plantation ,'where it'
intends togrow thevegetables forthehotel restaurants (l).
(1)Using ,after purification ,thewaste water from thehotels .

-6- VIII/1.400/74-3
Conscious oftho foot that avery rapid development oftourism would provoke
-as -far asmanpower isconcerned --problem which .could besolved only
byspreading cutthe denaads over' theperiod ,theintillos authorities wished
oftheir own •accord toliait the "pace and even the importance ofinvestments .
For this reason ithas "been decreed 2
-that aconstruction permit will not !>egranted for ,thethird ,fourth andfifth
hotel projects oftheprivate coapasy until itiscertain that at]east 50%of
theafeizdst-'ative percc xsnel ,?0£ofthe s-fcsSJ c5thefcsr,&$tAtsx2!z& andfcitchcn ,
end 50 ofthe domestic staff areavailable onthe ground forthebringing into operation
ofthe project under consideration 5
-that the percentages will beequally valid ,forthe development ofthefirst
twoprojects oftheprivate company *
-that inaddition ,andtherefore apart fron the percentages mentioned ;recruitment
.ofexpatriate personnel will/lotbepermitted except where Antilles candidates
erenotavailable j ' v ' '
--that the private company isrequired toprovide aplan -bynumber end grade -of
thepersonnel necessary for the development ofeach individual project ,to
inform the public authorities ofthetraining methods envisaged ,-andtocooperate
actively inthetraining ofpersonnel ofallcategories .'
Onthis side ,thepublic authorities atBonaire undertake tocontribute inequal
parts tothetraining offuture employees .
/
.\

-?- VIÎl/1400/74-2 , ;
iïl.ASSSSS^ETJF TESKIOJSCP
A»Social and economic 'aspects • •'''
Introduction ;
Itwould bedesirable ,asexplained inmemo UpVHI/328(71)-F onthe
Economic Development oftheNetherlands .Antilles ,fortheefforts to
develop theAntilles economy to "bedirected .firstly tothe develop­
ment ofthe primary and secondary sectors .
The dry oliraato andthefact that there are nonatural resources have ,
however ,sofar prevented successive governments from effectively deve­
loping theprimary sector .Nevertheless ,theconstruction ofaplant
forpurifying waste water ,financed bybilateral Dutch aid,will shortly
provide Curacao with irrigation forthocultivation ofcrops forlocal
consumption . Moreover aproject toimprove theirrigation infrastru –
cture ofanoldplantation onCuragao i3currently "being examined by
the Commission . Thofinal study onfinancing theproject from the
funds ofapossible fourth EDS'will shortly belaunched .Ifthe
project iscarried outitwould bepossible tocultivate relatively
largo quantities ofmarket gardening crops . ■
Asregards development ofthesecondary sector ,theUniting factors arethe
absence ofrawmaterials and,thofaot that tholooai and'regional markets are
email orQYen .no^-dxi&ient .Adddd tothis ,anyhope of "being able to:•
attract industries exporting toEurope within the framework ofthe Asso­
ciation wasdestroyed because oftheconditions fordefining theorigin
•.ofproducts .' ';V '*' ■
iThis does not mean that theAntilles authorities would out ofdisillu­
sionment cease their efforts toattract industries .Thus for example
after many setbacks aproject forbuilding aship repair yard at
Curagao nowhasbrighter prospects .
Itisclear from tho above that theAntilles Government cannot afford
nottoseise genuine opportunities inthetertiary sector ,particularly
inthofield oftourism . *
1«General aspects oftourism
(a)83"joofworld tourism isregional ,inother words 83%ofrecorded move­
ments are inrespect oftravel within the continent where thetourist .
lives ,forexample between thocountries ofEurope orbetween the *
United States andCanada (Annex l)^»
Ί
economic study ofWorld Tourism (1972 )bytheInternational Union ofOfficial
Travel Organizations (IU0T0 ).

-3- ■ .νπι/1400/·...-:·:
In1969 Canada ,theUnited States andthetenmain industrialized
1
countries ofEurope accounted assource countries forapproximately
71$ofinterregional.tourism (seeAnnexes IandII).
v »
Considering interregional tourism alone ,i.e. between continents ,
(26.5 million tourists in19^9 »including 18.9 million from these
twelve countries ),Canada andtheUnited States produoed 60$ofthe
traffic .Moreover these twocountries arenotonly themost
-important twosuppliers oftourists in .absolute figures butare
also thekeenest oninterregional journeys (number ofinterregional
passengers per 1.000inhabitants )(Annex Il)„-
(b)Tourism intheCaribbean
.Itcanbeseen from Annexes Iand IIIthat Latin .America andthe
.Caribbeep have managed to .attract only afraction ofworld tourism
although their share ,hasbeen increasing atahigher rate than that
.ofworld tov^ism .,-Thedrop recorded in1^70 forthewhole ofthe
Caribbean wascaused bythedecline intourist traffic to
theVirgin Islands .
Given that atleast 3&f0oftourists going totheCaribbean co:;efrom
theUnited States andCanada,' -itnaybe .concluded from Annexes II
•andIIIthat despite their relative proximity only 10$oftheinter­
regional tourists froji )those twocountries chose theCaribbean .
This isbecause theCaribbean tourist trade isintheluxury class ,
asis shown bytheTable inAnnex IV.
. • t , 1
It .follows that in1970 thecost ofholidays abroad foranAmerican
m ,
onaverage exceeded thecost ofholidays taken in*.theUnited States ,
without taking into account transport costs ,by:
33$when taken inEurope '
22$when taken intheMiddle East ■' 1
39$when taken inAfrica "V?
1&fowhen taken inAsia/Australia
160%when taken inLatin America /theCaribbean .

-9- VIII/1400/74-2
Some conclucions ontourism inthe Caribbean
From the above it .may beconcluded that :
i.for some time tocome the Caribbean will have toseek its ,
tourists inthe United States and Canada not only because of
theproximity ofthe United States and Canada ,but also
"because ofthetendency towards interregional travel which is
evidently greater inthese countries than elsewhere ;
ii.the customers for such tourism will -bepeople whoareatthe
leact well –to-do and who^being accustonod tocomfort -will
object tonon-direct flights ;
iii.because these customers arewell-to-do, fluctuations •inthe
American economy will have less effect onAmerican interreg­
ional tourist traffic tothe Caribbean than onthat toEurope ;
iv.the inorease inthe cost offuel and inair fares will have
little effect onthe development ofAmerican tourism tothe
Caribbean because -oftherelatively short distance involved
and also bocau.se thetraffic ismade upofcustomers who are
less affected bytransport cost' increases .
These conclusions might seen false when compared ■with information
given atarecent meeting ofthe Caribbean Travel Association in ■
liirtinique .According tothis information ,inPuerto Rico andthe
Bahamas for example the governments have hadtotalce .over hotels
which were -infinancial difficulties ,the .hotels inJamaica are
going through avery difficult' period ,etc.. •
sItisclear that world 'inflation andparticularly the increase in
oilprices (.electricity ,desalinated water ),have hadtheeffect of
■enormously increasing the expenses ofrunning -hotels inthe Cari­
bbean ,while ithashardly "been -possible toincrease the scale of
charges .Instead ofaiming atmore efficient operation ,somehave
hotels/made themistake oftrying toreduce expenses byeconomizing
onservice ,food anddrinks ,aniobviously disastrous policy.'

-aQ~ vin/i.;oo/
Itshould also "benoted that everywhere intheCaribbean ,where tourism
hasdeclined sthere were other reasons than just theprice offuel ,
inflation ,etc.
Thofacts'"aro that ,for examplo inPuerto Rico endthe.Virgin Islands ,
the American tourist Jisnot warmly welcomed and thouncertain politioal
situation inGrenada in .the high tourist season has obviously .had a
disastrous effect ontourism not only inC-renada but also inthe
neighbouring islands . There was also the recent confusion concerning
1theinter-island air links "provided "byLIAT andthe impossibility
ofobtaining firm bookings for journeys between the international air­
ports ofBarbados and Antigua with the Windward orLeeward Islands .
Ittherefore seer.s possible toreckon onafavourable development of
tourism tothe Caribbean but concentrated onislands which have a
reputation for giving agood welcome ,which arestable socially and
politically and are served byinternational airlines .
The Dutch group interested insetting upinBonaire considers that it
will beable tocope with the problem ofincreased operating costs by
efficiency ,which has perhaps sofax been given little consideration in
the Caribbean . -
Thoarchitectural design ofthe planned hotels' will permit excellent
service with astaffing rate ofonly one service staff member per room
(asagainst the 1.5andeven 2.0considered necessary upuntil now).
Additionally ,instead ofimporting from theUnited States allthefruit
and vegetables consumed inthohotels 't^e group plans tocultivate all
the produce itwill need onthe old Aruba-Amb wana plantation .Itis
even believed that this ,plantation may moot the needs ofthe whole
island ! • ' .•
"Leeward Islands Air Transport "

-11« VIII/1400/74-3
2*'Towns' !;potential ofBanai^e
2With ailarea of288 kin.Bonaire isthe second largest ofthe islands
2 2oftheNetherlands Antilles (Curacao :444 km;Aruba 193 )•
\
Poor andpractically without any means ofsupport ,Bonaire *sinhabitant
used togoand work inAruba and,more commonly ,inCuragao during the
period when therefineries inthese islands attracted manpower from all
over the Caribbean area and from the north ofthe Latin American
continent .Rationalization and mechanization inthe refineries around
1960 produced alarge number ofdismissals and compelled many inhabi­
tants ofBonaire toreturn totheir native island ,thus creating
structural unemployment amounting -according toofficial figures '"«*to
540persons outofatotal population of8213 (1January 1974 )* "but
which inactual fact (ifpart-time workers aretaken into account )must
beappreciably higher ,
inorder
When,/tocombat unemployment ,Curagao andAruba turned totourism ,
Bonaire did not take part inthis new enterprise .This was "because
Curagao and Aruba had anexperienced administration andprivate -sector
.ready toact -andalso th'ebasic "infrastructure (port ,airport ,roads ,
.water ,electricity ,etc,)vital tothe'development oftourism but
lacking inBonaire , Moreover ,this infrastructure inCuragao and
Aruba has constantly "been improved instep with the development of
tourism . Thus ,when Curagao and Aruba were already being served by
Booing 747's,Bonaire was notyet able toaccept 1)0-9*3 ,
However ,Bonaire has asimple ,restful beauty ofits own,'Ithasfine
beaches andi'tsinhabitants' arefriendly andhard-working .
Itisbecause ofthis favourable situation that thelengthening -ofthe
.runwr^y tomake ,itsuitable for DC-9'shas already been able tobring
about areal -change ,offortune (seepage .2above ), Seizing ,the c-
opportunity offered ,although aware ofthe inconvenience ofhaving to
change planes atCuragao,' the new owners ofthe Bonaire Hotel have
aimed their advertising atyoung ,sports-minded customers nottoo
sensitive tothe inconveniences .They have appealed toskin-diving
enthusiasts ,for whom Bonaire offers exceptional conditions .

Meanwhile ,Dutch aidhasnot "been limited .totheinitial extension of
the runway *Ithas since approved anumber ofother investments thus
*providing virtually complete infrastructure .-
Drinking 'water ' ,
Thoexisting capacity' of500 &P®?- -daywill "beincreased bythroe
units each producing 500 per day * Talcing into account increased
consumption bytheinhabitants andindustrial 'development ,the capacity
oftheplant will therefore "besufficient tocover the consumption of
atleast 1000 hotel rooms .
Electricity ' .\
Theinstalled capacity oftho power station issufficient tomeet the
increased demand ofthepopulation ,newindustries and 1000hotel
rooms .
The telephone exchango has rocently been modernised .Itnow has
enough free lines tobeable tomeet the demand ofnewhotels .Direct
connections between thehotel rooms andthe United States arepossible .
Roads
Bonaire hasagood road network (normal roads andtourist roads ).
■» .
HoBpital
. . • . • « • /
Theexisting hospital will berenovated and improved . . "
• i
Marina ':. ,r...•
Amarina isbeing built alongside the Bonaire hotel .Itwill shortly
bocompleted ,when itwill berun onlease bythehighest bidder .

13-: VIII/1400/74-E
3.Social aspects ofthe development oftourism inBonair e
On -the assumption that each hotel room represents 1.0direct job and
1.2indirect Jobs (services ,shops ),theconstruction of1000hotel
rooms would represent -2200 newjobs between now and 1980 .This
means that thero would .nolonger beunemployrrent inBonaire andthat in
fact Bonaire would offer more than 150° vacancies tothe inhabitants
ofCurasao and Arubsu Asmany natives ofBonaire still work inthose
islands ,particularly inthehotel sector ,.itishoped that many of
them will seize the opportunity ofreturning toBonaire and thus
forming anucleus ofBonaire professionals .^
Kowever ,to -ensure that the young andthe out-of-work, firstly in
Bonaire andthen inCura$ao ,are able tofind employment inthebudding
hotel industry inBonaire ,the EDF has considered thepossibility of
providing Community aidforthetraining ofthestaff .This problem
isstill atthe staga ofexamination .
Regarding thetechnical personnel required for operating thefuturo
Bonaire airport ,theAntilles government isconsidering requesting the
'Commission toprovide courses for -thefurther training ofsuch staff .
4.General aspects i • / . .'
The Government ofthe Netherlands .Antilles ,has stated that isispre-- •
pared under the Agreement .011.International Civil AirTraffic (Chicago .
conventions )toopen negotiations onairtraffic with each ofthe
Kember States which sodesires .
5*Conditions for jT^uaranteeing success v
Itwasthesetting upo'f"infrastr&cturo x(sQo -page 11)and -hasproduced the
existing hotel projects /Itshould also bo
noted that allthose responsible forthese hotel projects are unanimous
iri-stating that they have'' norequirements as'regards infrastructure "
:other than that :concerning the runway *There aretherefore grounds for •
believing that the extension and widening ofthe runway :will finally .
trigger offthefull tourist development ofthe .island .Houjcsrer ,...to,

-14- VIII/1400/7.'-3
remove any doubt ofsuccess ithas been arranged that the Bonaire Palace
Hotol Group will undertake todeposit ,aguarantee ofUS 3350 0C0 assoon as
financing isprovided forthe work onthe runway .The Government will receive
this sunif-within six months ofwork commencing onextending the runwry -
the hotel works have not started .
There isalso -.-aSpecial Condition laid down intheFinancing Agreement (soe
page 21under XV)which' cakes execution ofthis project dependent upon the
completion ofatleast one major hotel project .This condition does not affect
theundertaking given bythe Palace Hotel Group .
Itshould further bementioned that the Antilles Government has stated that
inthe event ofdefault bytheinvestors ,ithas considered building the
la3t-named hotel itself bycalling forassistance ,possibly from the European
Investment Bank . •
Pinnjicial ?.^d budgetary as-ects
Bonaire airport isadepartment oftheadministration oftheisland ;■itdoes not
therefore have the status -ofanautonomous body .Itishowever desirable that the
financial situation oftheairport should betransparent }clear and sound ,if
only toenable theairport toraise loans directly tomeet thetwo-fold require­
ment for additional investments and reinvestments *Itistherefore planned toset
upanautonomous 'Bonaire airport authority byanalog with thepolicy followed at
Curasao and Arjiba .
Asregard the envisaged future operations oftheairport ,these cannot babased
y
ontheoperating results obtained for'theexisting runway ,which has been used
only byaircraft coming from orleaving for Curacao and Aruba .The only estimate
'' '
itispossible togive isthus based purely onassumptions .Ithas thus been
assumed for example that theisland will have 570 rooms in1977 wad 1000in1933 .
Ithas been assumed that in1977 "fcheisland will bevisited by42700tourists
andby107 000in'I9S3 .Ithasalso been assumed that the average length of
stay will increase from 3.7 days in1977 "to5«0 day3 in1933 •
Proceeding onthebasis ofthese factors tothesetting upoftheforecast operating
account for theairport ,the scale ofcharges andtaxes recently recommended

-15- VIII/I400/74-3
byDutch experts forthe Curacao airport &as been adopted and adapted
for the Bonaire airport .Ithas however "been assumed that theair­
port tax,which already amounts toAnt.f»6(2.78 u.a.)forpasse­
ngers leaving foradestination outside theNetherlands Antilles ,,will
bef^ixed atAnt.f.8(3*71 u.a.)by1980.
Sfeaforecast opsrEfcatig accotcrfc for -airport is-.therefore asfollows :
1977 1978 1979 19S0 T981 .1982 1983 1984
Operating income 443.8 925.3 1014.6 1216.1 1268.3 1341.3 1467.8 1502.7
Operating expenditure "" 729.4 806.4 894.0 980.7 1060.2 1155.2 1256.1 1363.2
Gross operating results -285.6 118.9 120.6 235.4 208.1 186.1 211.7 139.5
Financial charges on
loansî
new investments 11.0 22.0 33.0 44.0 55.0 66.0 77.0
remvestments 18.3 79.3 79.3 79.3
Cash flow -285.6 ■107.9 98.6 202./, 145.8■51.8 66.4 ■'16.8
Accumulated results -285.6 -177.7 -79-1 123.3 269.1 320.9 -387.3' 370.5
Theliquid assets available forannual operation would beinsufficient for
2repayment ofaloan ,even onvery advantageous' terms .
The somewhat irregular movement ofestimated operating income iscaused by:
theassumed increase inthdairport taxin1980 ,theconstruction atan
irregular rate ofnewhotel rooms and acertain extension ofthe average
length ofstay .This last factor ,although favourable from thepoint of
view ofhotel operation ,.will have anadverse effect ontheoperation of
the airport .
2The funds available under thethird EDFfor the Dutch area inthr >form of
loans onspecial terms ,have been used upbyfinancing theproject All/304/71
–Extension ofthe Curacao airport .

16- ; VIII/1400/7/.-3 •
There isnodoubt that ifin1980 or1$84 there arerespectively 855or
1000hotel rooms atBonaire ,which seems alilcely possibility ,theairport 1s
operating results will beimproved .Itwould moreover bedesirable forthe
autonomous airport which will beset uptobegiven alittle more financial
scope than that implied inthe estimated operating account# This will bo
especially necessary since the precarious financial situation ofthe island 's
authorities will not enable them for some time tocome togive assistance to
the airport"' authority .Bonaire 'soperating budget ismoreover subsidised
bytheAntilles Government ,inother words byAruba and Curasao .
1Contribution toBonaire 'sbudget from thenational budget
!1970I ■1971 " ;| 1972 !!' 1973 ;
I -------- :1974
Définitive
amount 3595 000
Estiiaate
(" IT.A.
budget ) 3000 000 3000 000 3500 000
Estimate
( .Bonaire
budget )
1■3221 026 3378047 |3436 029 5153 703
1 .- ■ .Without talcing account ofacontribution ofAnt.f.55000for promoting
tourism . ''

17-
ι-VIII/1500/74-E
(c)Technical aspects
(a)Pescripti onofthe '•project ;;^''::'^-i:;:^ 7
The work ,provided for under -this project represent aspecific
phase ofailoverall short andlong–tern plan forextending "the
tourist faoiHiifcs' of .Softed^© . ■ . .*
This phase comprises enlargement ofthe existing runway inorder
toopen theairj>ort toDC–8and Boeing 707type aircraft .
Theproject comprises thefollowing operations *
i. enlargement and reinforcement ofthe existing runway inclu­
ding hard shoulders ,overruns andthenecessary drainage
ii.lighting ,signals andenclosures
iii.extension ofthe parking area infront ofthe terminal .
Theproject also provides for the following :
i. drawing uptheproject for carrying outthe work and
prepaying the tender documents .-
ii.the cost ofsupervising the work .1.
ii.

Enlar^oncnt and reinforcement ofthe existing runway
The length ofthe existing runway will "beincreased from 1750to
2560 manditswidth ,which isatpresent 30la.'will "beincreased to
45η·
_ ■" ·.,.'' :.·;:'ν;· ;· ■■ 2Theexisting runway ,which has anarea of52500 m,will "berein­
forced "bylaying anadditional surface ,in.order togive itthe load-
bearing capacity toaccept DC-8 and Boeing 707type aircraft .
The lengthening and widening will increase thearea ofthe runway "by
2 ... :approximately 62J00 m. Theexisting runway will "belengthened at
'itseastern end and widenod "by7*50 moneither side .
Hard shoulders and overruns are planned with anarea ofapproximately
242000 ra•'Thehard shoulders ,which will he7»50 a,wide will "be
laid oneither side oftheasphalted runway .Overruns 60–inlong ■
will also be "built ateach end ofthe enlarged runway .
Where the runway isto "beenlarged ,the composition ofthe "base layers
andthe surface will "be-'determined bythequality ofthe ground which
ismainly
Theconstruction planned forthedifferent parts ofthe runway should
beasfollows :

-19- ■Ylll/1400/74-5
Enlargement ofthe
12eraof "bituminous concrete
. .;■'5cmofbinding course
50cmof "base course
Reinforcenont ofthe existing runway
,3enof "bituminous concrete .
Hard shoulders and overruns
4eraofbituminous ooncrete
3cmof "binding course
30cmof "base course '
.2*-Drainage ,lighting endsignalling works
Insofar aspossible the existing facilities will
"be.incorporated into the new project . .
3.Extension ofthe parkin ,?area andthe enclosure
Thoso operations eyestill to "bospecified intho plan of
Gxootriion .
(Td)Tochnical specifications '. •-■•••• '•••
The -specifications tpresented "byth© Governnejat ofthe Netherlands
Antilles ,consists'of apreliminary long-term overall plan for
the exfconc ionoftheairport drawn up "bythefirm 2IAC0 (Nether­
lands Airport Consultants ),talcing into account theextension

~20- 7ΐιι/ν.οο/~Λ.:η
oftheother iolinst facilities ofBonaire .Shoes specifications wore financed
from theAntilles budget in1968 andfinalized in1974 hytheAntilles
Adnini stration •
(o)Cost ofthepro,ject
Thetotal sumestimated fortheworks provided forunder this project ,
including thecosts ofthedetailed execution study andofrepairing
the works ,price variations andtechnical contingencies ,amounts to
Ant# f.7320000 (approximately 3390000u.a»).
This sumis "broken down asfollows :
1.Construction
Installation ofcontractor 'splant and
equipment ,removal ofthelatter ,insu-
rance ,etc. Ant.ft 230 000
Removal ofTuidergrovrth .earthworks ,eto#ft1450 000
Foundations ■ '660 000
Surfacing ■ ''d 2860000
Drainage ,eto..»» -•120 000
Lighting ,signalling 1,..etc#it
:350 000
Enclosure ' ;.-'V»» 110 000
Extension -totho car parkΜ 20000
v- -Anti' f.5800 000
Technical contingencies andprice
changes ,approximately 20fo " 1.200000
;•,* . .VV . •<Ant.f>.7000 000
2.Cost orthe study • Ant.f••,170 000 approximate ].y
79000 u*?»
3«Supervision Ant.f. 130 000
•Technical contingencies andprioe
changes ,approximately 15$ " 20000
Αητ·
approximatel ;
Total sum : Ant.f.7320 000 3390 000 u.c
esta»bots-ca ua»uf.

-21- viii/1400/74-3
(d)Execution oftheproject
The works will "bocarried out "bythe contractor' inasingle lot
aftet anopen international invitation totender .
(e)Tine schedule
■ • •
Thetimetable for carrying outtheproject ,each period to "becounted
from the signing oftheFinancing Agreement ,isasfollows :
Study andpreparation ofinvitation totender : 6months
Issue ofinvitation totender and notification : 6months
Duration ofworks : t8months .
This financing decision will "bereferred "back tothe EDF Committee for
re-esanination ifthetine "being taken tocarry outtheproject proves
likely -given thestated time schedule and expenditure –tojeopardize
the successful completion oftheproject ortoinvolve considerable
excess expenditure .
SPECIAL COÏÏDÏTIOITS
Thefollowing special conditions will toincluded intheFinancing Agree­
ment :
the Government ofthe Netherlands Antilles and the .Bonaire .Administra­
tion shall undertake toset upanautonomous airport inBonaire "before
completion ofthe works provided forbytheproject ; ■
-after publication ofthe calls for tender ,deliberation cannot
take place until itisadequately proven tothe satisfaction of
the Commission that the construction ofatleast 400 hotel rooms
isassured ,orthat inany case -within areasonable period of
time inrelation tothe building ofthe runway -the island
will have available atotal ofabout 600 hotel rooms inall .

V,COÌTCLUSIOH AED PROPOSilL POR AD3CISI01T
Lengthening and widening the Bonaire .runway .inorder ■tomake itsuitable
for DC--3andBoeing 707type aircraft *?illcomplete theinfrastructure ■'
vital for -arealistic deTtelopaoat oftourism ontha island .
Having regard tothefavourable Opinion delivered "bythe European Deve­
lopment Fund Committee atitsmeeting of . .andhaving
regard tothe supporting arguments set out above ,itisproposed that the
Commission take the fallowing decision : -
Financing .decision ■'
The Commission has decided : ' '
toapprove under the conditions laid down inthe proposal "before it,
the .project doscrihed hereunder ?
Registration Ho Title oftheproject Connitraent proposed asagrant
Al'j/309/74 Improvements tothe .Local currency Equivalent inu.a.
Bonaire runway .–– . –.-----–
••" •'Ant.:f.7320000'3390000 (round
total )
togrant commitment authorisations for atotal sumofAnt.f.7320 000
equivalent toapproximately 3320000'u.a.(rotmdad off).
■· · '' " ·
Φ ■ ' ·
toinstruct the Chief Authorizing Officer ofthe European Development
Fund toarmngt ?fed *jsay.modi^icmtioas "thefift p<rava rceoessary to
ensure the smooth -execution -of .theproject -irnder the ,"best economio
and technical conditions . ■,

Annex I
Total
ofv.'hich :
–inter-regiona ]
•régional •.
ofvihich :
–inEurope
–inLatin
America /
-CaribbeanWorld tourist arrivals
1965
115*51966 1 1$67
^cT.8 ""jm.s
unlcnpwn
imkno T-m
£7-6
2.798.8
3.1VIII/1.4£0/74-E
(millions )
J 1S63 IL 19^9 I 1970 I 1971
139.7 1M.1 169.0 1181,0
unknown
unknown .26.5
127.6unknown
unknovjnunknoKn
miknown
IO5.4
•4.1115.1 ■
4.8 r126.2
5.1136,3
urJknown

'tT -T-VTttVI11/1400/7^-3
Coimtry
Canada
USA
Switzerlsnd
Great Britain
Swedcn ■
Frcuic©
Netherlands
9rit?ay
Belgivja/Lnrerib ovx£
Itr.l2 r
Austria./•Population
innillionô
20.8
201.2
6.1
55.3
7.9
49.9
12.7
60.2
10.0
52.3
7.4Number ofinter-rogior>al
touriste from each
country per 1000 ii^aabi -
toirteNumber ofinter-regionaltourists (inthoucandB )
73.1
70.7
22.5
21.3
16.3
12.8
12.7
9.2
8.9
•'4.7
3.21518.3
14213.0
138.8
1177.7
132.8
636.8
162.1
551.9
88.3
250.5
23.0

;u-I.VÏ"_m ■viii/1.400/74-E
m . ,,, n 1(inthousands )Tourism totheCaribbeanrefio n x
1966 1931 Î9S8 I I1570 1971 1972 1973 Ί
Caribbean : 165O.O 1960.0 2210.0 2675.0 3332.0 3297.0 3403.0 ;3^56.0
Iofwhich :
-Puerto Rico 912.0 1068.0 1088.0 1095«0 1173.0
-US .Virgin
IslancLs 756.8 1O66 e0 .818.0 729.C 851.0
-Netherlands
Antilles33.3 103.6 113.6 179.6 177.0 217.0 244.0 203.0
(in%ofthe Caribbean 5,0 5.3 5.4 6.7 5.3 6.6 8.3 7.3
Iofwhich :
I ■ *
Curaçao '§4<5 55.8 63.2 101.5 90.8 101,6 108,4 108.2 ;!122.2
Aruba 25.5 -26.4 31.9 52.0 59,0 15iO 85.8 88.6 95 »2
Eonaire 5'9 6.4 7.5 8.6 6.5 7.4 5.6 8.1 10.9
StMartin
ï~ ~~7-4 .15-0 I6.0 17.4 20.3 33,5 44.3 77.9 52.4
Annual Reports ofthe Caribbean Travel Association ,etc.

A/inJX 17 VIII/l.^CC /74-j ;
Average amount ofmoney spent byeach -tourist (excluding transport >costs )inUS$atcurrent pricesn 1965 I 1966 1967I i960 1969 1970 I 1231 1
!Europe;81.5 81.3 80.0 81.8 80.8 85.6
!United States 106.7 IO0.0 > • 110.4 U7 .5 ; 1.21.5 t. ,,123.2 .
ICaribbean /Latin America 322.2 316.1 317.1 302-4 312.5 333.3
IAfrica 200.0 207.7 200.0 170.6 180.0 178.3
IAsia ^Australia 228.6 '232.0 ι 241.4 223.5 211,6 226.4
IHear East
J96.2 93.1 86,4 ]100.0 100.0 100.0 .
Throughout the world v 95.5 95.6 96.2 98.9 99.9 1C5.9 ' .110.0

COMMISSION
OP THE
EUROPEAN COMMUNITIES
financing' proposal
Third EDF
jTITLE ofproject ■iI
!
Development ofthe Bonaire runway ;
I – ;
|TYPE OFPROJECT j
j
• |Economic infrastructure investment
(Article 19(1)ofthe second
Yaounde Convention ),
|RECIPIENT STATE jNetherlands Antilles
! '
!AUTHORITY SUBMITTING THEPROJECT j
1
i
I
I
L_ IThe Netherlands Government ■by-
letter No2815 of21May 1973 from
the Netherlands Permanent
Representation
=REGISTRATION NUMBER OFTHE PROJECT,AN/309/74 . j
1
j'•COMMITMENT PROPOSED ASAGRANT[ ' - t
t -r„ n ^ ^ .. IInlocal currency |Equivalent inu.d
i– ■■ - 1 – .–– 1
Ant.f.7320000 !3390,000 (round .
•total ) |
Reference documents :
VIII/137(71 )–F Memo onmeasures proposed "bytheCommunity inthe
Netherlands Antilles -
VIIl/328(71 )–F Memo ontheeconomic development oftheNetherlands
Antilles
i
lhis proposal replaces that examined bythe EDF Committee atits97th
meeting on25February 1975 (Doc.VIII/1400/74).

VIII/210/75-E
I.THEPROJECT -,
Thepurpose ofthis project istowiden and .extend therunway onSonaire
tomake itsuitable for DC–8andBoeing 707 "type aircraft ./ .
II.BACKGROUND OFTHEPROJECT ' ; ' " v ";
Bonaire airport hasalready been thesubject ofaCommunity scheme financed
from thethird EEFbywhich theCommission approved (financing proposal for
project AN/300/70-Document VIIl/l -45(7T)-F)thefinancing ofthe
construction ofanewairterminal with acontrol tower andaparking apron ,
aproject which iscurrently being carried out .
Asexplained intheabovementioned document thedryclimate andthefact
that there isusually' nolayer offertile soil have caused theisland to
concentrate onfishing ,attracting industries and ,most important ofall,<
tourism.' v -v. -.. ..-.c
\
Thus theaecision tofinance thenew airterminal was aimed atpromoting
theisland ,stourist industry .This newairterminal ,which wasplanned
toreplace asmall building with anarea of60m,wasmoreover
complementary toascheme financed byDutch aidforlengthening the :
existing runway to1750metres to 'make itsuitable forDC~9 "type aircraft ,
afacility which itwasconsidered would give theinitial impetus to v.'
developing tourism .- : .'■''f• • ; ■■■'.•i' :<,,-v. . :
Although theNetherlands Antilles Government hadwanted arunway of •
approximately 2600mtobeconstructed /suitable forDC-8 andBoeing 707 :
type aircraft ,theauthorities responsible forDutch aidtotheAntilles
considered the -lengthening oftherunway to1750masaprovisional
measure ,tobefollowed byalarger scheme ifthedevelopment oftourism
produced encouraging results .Thelengthening oftherunway to
1750metres made itpossible foraerial links iobeestablished , .
including route flights to'HewYork (with two'refuelling stops ),which'
would beable tobring inasizeable number oftourists .

~2- VIII/210/75-E
Nowsince therunway has Deer ,lengthened .Bonaire hasseen anencouraging
growth oftourism .Because theisland ,was nov;served byDC-9 type
aircraft "belonging tothenational airline theBonaire Hotel ,with 74rooms
the island 'slargest hotel ,wastaken over bynewowners whobymeans of
cleverly directed publicity have managed toobtain more than satisfactory
bookings .However ,noDC-9 aircraft other than those ofthenational
airline which provide thelink between Curasao ,Aruba andBonaire have
landed attheairfield since therunway waslengthened ,which means that
theanticipated direct international links have notmaterialized .There
arevarious reasons fortheexpectations notbeing met .
Tobegin with ,theairlines which carry passengers between North America ,
Central America andLatin America nolonger use DC–9type aircraft on
those routes .Consequently ,thepossibility isautomatically excluded
oftheir making stops inBonaire andthere remains only thepossibility ,
which moreover ismore realistic ,ofDC-9 charter aircraft .
Nov;aviation hasdeveloped insuch away that DC-9 aircraft arevirtually
nolonger used forintercontinental flights .Because ofthis inthe
United States -theprime market fortourism totheCaribbean -the DC–9
isnowmentally associated with theinter –city aircraft providing transport
between themain American towns .Consequently this type ofaircraft
1isnotmuch favoured forholiday flights ,particularly over tnesea .
Theroute flight between NewYork andBonaire would moreover include one
andprobably tworefuelling stops while inrecent years people have
become increasingly accustomed tolong-distance flights without stops .
Atpresent flights over the sealasting more than five hours byaircraft
with only twoengines arenolonger accepted .

VIII/210/75-E
Finally ,.theincreased price offuel hasintensified ,"thecharacteristic
differences between thevarious types ofaircraft . Thus ,although as
early as1970 itwasdistinctly cheaper torunaDC–8rather than aDC-9 .
forthe Hew York-Bonaire flight ,thebreak-even point today forthe New
York-Bonaire flight atthe same fare would bereached if115$ the
seating capacity xvere filled inthe case ofaDC–9and inthe case of
aDC–8! <i;.... -r .. ..., . ,
Itfollows that theprice ofacharter .,seat inaDC–9has tobevery much
higher than that ofacharter seatiii aDC-8 . However ,it .isobvious
.that travel agencies will refuse tooffer atrip which isconsidered less
comfortable atahigher price than that ofidentical trips offered by
other agencies . .. . > .■ ... r ....r.. ... ,
 
Because they are conscious ofthis aspect all investors interested inthe
construction ofhotels onBonaire are making the execution oftheir projects
dependent onthepossibility ofdirect flights byDC-8 orBoeing 707
between ilew York andBonaire ,which they consider asvital .: ._ , . ,.
Inrecent years ,given that they had the DC-9 runway,.the Bonaire
authorities -have approached anumber of .international tourist organizations
asking them .toshow aninterest in .Bonaire ....Without exception thereply ^
they received wasthat Bonaire was undoubtedly anattractive tourist
centre andthat they would bedelighted toorganize ,tours toBonaire once ..,
theisland *srunway could accept DC-8 and Boeing 707aircraft .. , \
When the Bonaire authorities approached investors inhotels andhotel
operators they usually received the same reply . ..Nevertheless ,there are •.
.-/currently anumber ofserious andrealistic hotel projects ,being carried
out. ...
Themain project involves theBonaire Hotel ,whose owners (agroup of
private individuals )have already started building a78-room extension ,
bringing thecapacity ofthehotel to150rooms ,and an-initial group of -
40condominiums ,.each able toaccommodate sixpersons ."'"Intwoyears the

VIII/210/75-E
owners hope tostart building asecond group of40condominiums and at'the •'
same time thecentral facilities for anew 200-room hotel ,followed "bythe '
final phase consisting 'ofthe completion ofthehotel andathird group of
condominiums.' *Thehotel owners have ,however ,stated that they cannot "iVi
carry out the second phase oftheir extension projects orincrease the
capacity ofthehotel beyond 150 rooms and 40'condominiums unless ihe ;
customers nolonger have tomake their journey via Curagao ,inother words
unless they canflydirectly toBonaire byDC-8 orBooing "JQl.
The same attitude was metwith atthePalace Hotel Bonaire ,owned byagroup
ofthree Venezuelan' businessmen which hasacquired along building lease for
thesite ofthe Sorobon Hotel project andisconsidering building a '•
250-room .hotel onit. The members of .this group ,who intend tohave their
hotel run byawell-known hotel chain ,have also stated that their project
will berealized only if 'the Bonaire airfield ismade suitable for DC-8
orBoeing 707aircraft."' "' v '' '''' ' '■•
Athird project ^by"farthelargest -oftheremaining ones ,isthat ofa
- 1group ofDutch firms . The group has acquired the long building lease for
thecoastal strip at'Lacwith aTview to"building' four 200-room hotels .:"
The group also hopes' tobeable totake over' thelease forthe Sorobon '
project andthus beable tobuild afifth 200-room 'hotel ."
The programme ,which will cost' atotal ofPI.100million (29.8 million '
u.a.)andwhich "is'afull–scale project toToe'completed before 1930 , '
comprises the construction of:
(i)alow-rise hotel' made upofacentral building anddetached buildings
''providing 200 rooms :to'becompleted atthe same time asthe runway' :
extension iscompleted ; ' '" *
!..Lr
Turnover ofthelargest firm :',PI.700million (approximately
208million u.a.);orders inhand :more than PI.1000million "
(approximately 293million u.a.).

-5- VIII/210/75-E
(ii)a200-room prestige hotel tobecompleted four tosixmonths after
thelow-rise hotel ;.,, .Ai , ..
(iii)possibly asecond 20Q-room hotel (SoroLon project);' ,
(iv)acondominium complex with 200appartments ;
(v)ahotel with acountry club atmosphere ,also of200 rooms .
Aprovisional contract has been signed between theauthorities endthe
limited company that isbeing set up.••Inthis ,agreement the Dutch group
has made the execution ofitsprojects subject tothe conclusion of
management contracts with hotel-operating companies ofhigh reputation
and has made itan -essential condition that the Bonaire runway beextended
toaccept DC-.8 and Boeing 707aircraft . The group ,which isnot asking
for any government aid orguarantee ,has,however ,requested that the v
Bonaire authorities ,with thetourist potential ofthe island inmind ,
should agree todraw upadevelopment plan for the island which will enable
the natural sites and beauty ofthe island tobeprotected from the
consequences ofanyuncontrolled tourist development but which will still
permit orderly development . The group ishappy with the infrastructure
which will shortly beprovided (except asregards theairport )buthas
asked that the public authorities constantly adapt this infrastructure
tothepossible needs ofanexpanding tourist industry .
Although this has not ;been included intheprovisional contract ,the
group has also applied for along-term lease onthe old Arub a-Arabwana
plantation ,where itintends togrow thevegetables forthehotel
restaurants ,using ,after purification ,thehotels *waste water (from
kitchen andshowers ). Even ifthewater is100/ossi'e ,itiscustomary
nottouse thepurified water inthe weeks leading uptotheharvest .

-6- VIII/210/75-E
\
TheAntilles authorities realized that very rapid development ofto\rrism
would give rise tolabour problems which can only besolved bystagger in;
requirements over aperiod oftime ,and accordingly they have chosen
voluntarily tolimit therate atwhich theprojects arecarried out and
even the size ofthe investment schemes .. : >
This iswhyithas been stipulated that :
(i)building permits will notbegranted forthelimited company 's''
'''third ,fourth andfifth hotel projects until itissure that at ;
least 5Qf?oofthemanagement staff ,"\Qffoofthebar,' restaurant and
kitchen staff and SCffoofthedomestic staff will beavailable on
the' spot tooperate thehotels oftheproject inquestion ;
(ii)percentages will normally also apply with regard totheoperation'
ofthelimited company ^first twoprojects ; '
(iii)moreover ,and'therefore inaddition tothepercentages mentioned ,
'""itwill bepossible to'take 'onforeign' staff only ifAntilles '
staff are not'available ;''*■■■<.••' ,
(iv).thelimited !company will berequired topresent aqualitative and
quantitative breakdown ofthestaff required for operating each
\
individual project ,toinform theauthorities ofthe planned
training methods' and'to'cooperate actively intraining strff of ""
allcategories' .' r...... ■
1 •• i. - •» •• •
Atthe same time the Bonaire authorities will undertake tocontribute
themselves totraining thefuture staff .'' '''■

-7r VIII/2IO/75-E
III .ASSESSMENT OPTHEPROJECT
A. Social and economic aspects
Introduction •
Itwould Toedesirable ,asexplained "in -Memo NoVIII/328(71 )–2?onthe
economic development oftheNetherlands .Antilles ,fortheefforts to
develop theAntilles economy tobedirected firstly tothedevelopment of
theprimary andsecondary sectors .
Thedryclimate andthefact that there areno'natural resources have ,
however ,sofarprevented successive governments from effectively
developing theprimary sector .Nevertheless ,theconstruction ofaplant
forpurifying waste ,water ,financed bybilateral Dutch aid ,will shortly
provide .Curasao with irrigation forthecultivation ofcrops forlocal
consumption .Moreover aproject todevelop theirrigation
infrastructure ofanoldplantation onCuragao iscurrently being examined
bytheCommission .Thefinal study onfinancing theproject from the
funds ofapossible fourth EDEi 1will ;shortly ,belaunched .Iftheproject
iscarried out ,itwould bepossible tocultivate relatively large
quantities ofmarket gardening crops . . , t. r
Asregards development ofthesecondary sector ,thefact that there are
norawmaterials andsmall oreven non-existent local andregional
markets arelimiting factors .Added tothis ,axiyhope ofbeing able to
attract industries exporting toEurope within theframework ofthe .
Association wasdestroyed because ofthestipulations asregards the .
definition oftheorigin ofproducts . .; ,
•' ' • . A - • •• I
This does notmean that theAntilles authorities would out of
disillusionment cease their efforts toattract industries .,Thus for
example ,after many setbacks aproject forbuilding aship repair yard
atCurasao nowholds outbrighter prospects .

-8- VIII/210/75-E
Moreover ,itmay now "behoped that ,thanks tothefact that under the
Lornd Convention therequirements with regard tothedefinition oforigin
will bereduced ,itwill finally bepossible toattract export industries
Meanwhile the Netherlands Antilles Government isfaced with anextremely
worrying economic situation .'The increase inthecost' ofliving index ,:
duetoimported inflation,' amounted to21%for1974 ?this percentage even
exceeded 35%i*1 foodstuffs sector .Thebalance ofpayments has
considerably deteriorated and adisastrous deficit isexpected for 1975 ♦
Furthermore ,some industrial firms (Texas Instruments ,Rockwell )have
been obliged tolayoff alarge number of 'staff ;ontheother hand ,
activity inthebuilding sector has decreased 'considerably .1Toprevent
the collapse ofanalready vulnerable economy andtoavoid the social
consequences which would inevitably result ,itisvital that special r
measures are taken .
Anumber ofdemonstrations have taken place inCuracao inthepast few
months ;thesocial ,situation istense andboth ;theauthorities andthe
population atlarge exoinastate ofalert . '; '■ ■ ■
Inthis oonte^rt itsoems togowithout saying that the Netherlands
Antilles Government does not want towait passively for the possible
completion ofprojects involving the primary and secondary sectors end
which areinsome cases still entirely hypothetical •onthe contrary ,
the Government considers itessential toseize with open arms anyreal
investment opportunity ,even ifthis involves thetertiary sector and
tourism inparticular . •Quite rightly itconsiders that ,inview ofthis
the promotion ofprojects involving the productive sectors isnot •
compromised inany way. The maintenance ofsocial stability ,which is
really threatened,' bycreating new' jobs assoon aspossible isa
prerequisite forattracting industrial investments . 5" '

-9- VIII/210/75-E
1.Bonaire *^iourisjt ^o^ent^al
2 ' .With anarea of288 km,Bonaire isthe second largest ofthe islands of
2 2theNetherlands Antilles (Curasao :444 km;Airuba 193 km).
Poor andpractically without any -means ofsupport ,Bonaire 'sinhabitants
used togoand work inAruba and,more commonly ,inCuragao during the
period when therefineries inthese islands attracted manpower from all .,
over the Caribbean area and from the north ofthe Latin American
continent . Rationalization and mechanization inthe refineries around
i960 produced ,alarge number ofdismissals and compelled many inhabitants
ofBonaire toreturn totheir native island ,thus creating structural
unemployment amounting ,according toofficial figures ,to54-0 persons out
ofatotal population of8213 (1January 1974 )1"butwhich inactual fact
(ifpart–time workers aretaken into account )must beappreciably higher .
When ,tocombat unemployment ,Curagao and Aruba turned totourism ,Bonaire
did not take part inthis new enterprise . .This was because Curasao and .r
Aruba had anexperienced administration andprivate sector which were
ready toactandalso thebasic infrastructure (port ,airport ,roads ,
water ,electricity ,etc.)vital tothedevelopment oftourism butlacking
inBonaire .Moreover ,this infrastructure inCuracao and Aruba has
I
constantly been improved instep with the development oftourism . Thus
4when Curasao and Aruba were already being served byBoeing 747s ,Bonaire
was notyet able toaccept DC-9s .
Andyet Bonaire has asimple ,restful beauty ofits own.Ithasfine
beaches anditsinhabitants andfriendly andhard–working ." •'•
Itisbecause ofthis favourable situation that thelengthening ofthe 1
runway tomake itsuitable for DC–9shasalready been able tobring about
areal change offortune (seepage -2). Seizing theopportunity offered ,
although aware oftheinconvenience ofhaving tochange planes at
Curacao ,the new owners oftheBonaire Hotel have aimed their advertising
atyoung ,sports –minded customers not too sensitive tothe inconveniences .

VIII/210/75-E
■They have appealed toskin-diving enthusiasts ,forwhom Bonaire offers
exceptional conditions . ,
..• •; \
Meanwhile ,Dutch aidhasnotbeen limited totheinitial extension ofthe
runway .Ithas since approved anumber ofother investments thus •
providing avirtually complete infrastructure .
Drinking water ■
Theexisting capacity of$00 perdaywill "beincreased bythree units
each producing 500 Periday ..Talcing into account increased consumption
bytheinhabitants andindustrial development /-thecapacity oftheplant
will therefore besufficient tocover the consumption ofatleast 1000
hotel rooms .- . j
Electricity ' -
Theinstalled capacity of .thepower station issufficient tomeet the
increased demand ofthe'population ,""newindustries and1.000 hotel
rooms . .'' '■ ■ ■*
v
Telephones
Thetelephone exchange liasrecently been modernized .Itnowhasenough
free lines tobeable tomeet the demand ofnew hotels . Direct
connections between thehotel rooms andtheUnited States arepossible .
' k >
Roads
Bonaire hasagood road network (normal roads andtourist roads ).
Ilospital
Theexisting hospital will berenovated andimproved .
Karma •' "
Amarina isbeing built alongside theBonaire Hotel ,. Itwill shortly
becompleted ,when itwill berunonlease bythehighest bidder ..

-11- VIII/210/75-E
2.Propose dguidelines ■ . >• ■
Bonaire isunlike anyoftheother islands which constitute theNetherlands
Antilles ,hutitsvast expanses ofwater ,arid soil ,rare trees bent "bythe
wind ,solitude and changing light offer thetourist acomplete change of
scenery .
Both the island authorities and the hotel promoters and operators ,
realizing that Bonaire 1stourist attractions lie inits calm andrural
"beauty andinthe very simplicity ofitsdaily life ,areparticularly
concerned with safeguarding these qualities .
Thus thehotel promoters ,planning toset uplake–side establishments ,have
hcid torealize that motor boats will beprohibited there andthat there will
therefore not beany water skiing onthe doorstep .
Onthe other hand ornithologists throughout the world have been harassing
the island authorities toprotect the colonies ofpinlc flamingos ,whose
existence will bethreatened byany disturbance . Theauthorities are,
moreover ,perfectly aware that the pink flamingos are one ofthe island *s
special attractions .
All these factors will ofcourse determine the character oftourism in
Bonaire ,which isatpresent already mainly sports –orientated . The
present Bonaire Hotel clearly intends topromote comfortable butrelatively
cheap accommodation bybuilding ,for example ,120 condominiums ,each
capable oftaking sixpersons (basic services ).
Although the group ofDutch promoters considers that aprestige hotel must
beincluded initslarge –scale programme (800to 1000 rooms ),itisclear
that itsproject ,which includes ablock offlats (which implies minimum
service )andasports hotel ,isaimed atatourist whoisvery different
from theluxury-class casino –type tourist . The group decided this even

-12- VIII/210/75-E
though itisaware that inthis part ofthe world ,where most tourists in'
theyears tocome will still bemainly from the United States ,itwould be
inconceivable for there tobenocasino .Itshould not beforgotten that
the spectacular side ofthe casino ,its glamorous luxury ,holds adefinite
attraction for the masses . ' . ,
Given that thedistances "involved are much shorter >tourist publicity
should beconcentrated onthe United States ,Canada andVenezuela .
Nevertheless ,the Dutch group hopes that itwill also beable toattract
holiday-makers from the countries ofthe European Community with all-
inclusive charter flights . Owing tothe atmosphere created bysports -
orientated holidays ,inapeaceful andsimple setting (which itintends to
preserve ),Bonaire could bemore successful inthis field than anyother
island inthe Caribbean .•.
ι
The idea ofgrowing onthe spot thefruit andvegetables required bythe
hotels ,unlike what has happened in'most ofthe other Caribbean islands
where these products are imported from the United States ,should prove
^equally successful . The Aruba Ambwana plantation could easily supply
the necessary fruit andvegetables forall thehotels andallthe island *s
inhabitants . The importance ofthis activity inthe primary sector ,which ,
given the required size oftheoutlet ,cannot start until thetertiary
sector has been developed ,isnot somuch duetothefact that itwill
create jobs . What isparticularly important istheforeign currency
savings which will result and theresulting ,reduction ofthehotels 1
running costs ;afavourable effect onthe level ofprices forhotel rooms
maytherefore beexpected . * ' i
Finally ,itshould beadded that the Dutch group plans toset upinother
fields activities which come under thetourist industry . Thus the
possibility ofbuilding sailing boats and other pleasure boats with hulls
made from synthetic materials inBonaire itself has also been studied .
Theundertaking inquestion could ,.ifproduction isreduced ,carry out
maintenance andrepairs orperhaps become awater sports centre .

-13- VIIX/210/75-E
Thepossibility hasalso been considered ofsetting uplocal craft industries
"based ontheproduction ofsouvenirs ,etc.Inthesame connection mention
should 'bemade ofthepossibility ofsetting upmaintenance services -
either independent orlinked tothehotels -such asworkshops forcarpenters
plumbers ,rugmakers etc./'" -r ? •• :!
3.^ocial_aspects__of th£development £f_t£urism_in Bonair<e
Ontheassumption that each hotel room represents 1.0direct joband1.2
indirect jobs (services ,shops ),theconstruction of1000hotel rooms
would represent 2200newjobs "between nowand1980 . 'This means that there
would nolonger "beunemployment inBonaire andthat infact Bonaire would
offer more than 1500vacancies totheinhabitants ofCura$ao andAruba .
Asmany natives ofBonaire still work inthose islands ,particularly in
thehotel sector ,itishoped that nany ofthem will seize theopportunity
ofreturning toBonaire ,thus forming anucleus ofBonaire professionals .
However ,toensure that theyoung andtheout-of-work, firstly inBonaire
andthen inCuragao ,areable tofind employment inthe "budding hotel
industry inBonaire ,theEDFhasconsidered thepossibility ofproviding
Community aidfortraining thestaff .This problem isstill' atthe
examination stage . '
Regarding thetechnical personnel required foroperating thefuture Bonaire
airport ,theAntilles government isconsidering requesting theCommission •
toprovide courses forthefurther training ofsuch staff .
4# General aspects , .
TheGovernment oftheNetherlands Antilles hasstated that itisprepared
under theAgreement onInternational Civil AirTraffic (Chicago conventions )
toopen negotiations onairtraffic with each oftheMember States which
so .desires ,without discriminating between them , .<1

-14- VIII/210/75-E
;5»::CondjitJLons_f£r_gu ar the succes£ _of_the_o£erat_i£n
(a)Probable development oftourism intheCaribbean .
Although insome Caribbean islands thehotel sector isgoing through
adifficult period ,this situation does not seem tobeduesolely to
the increase inprices andtofluctuations inthe United States 1
,,economy .Political tension .(Grenada ),anunfriendly welcome (for .
American tourists inparticular (Black power ?Porto Rico ,Virgin
Islands ),confusion andineffectual reservations toorfrom interna -
•_ tional airports inthe Caribbean arejust asimportant inexplaining
,thedifficulties faced byhotel operators , >
Inacountry where political stability prevails ,where there isawarm
welcome ,where there aredirect airlinks and where moderation prevails
over luxury ,itseems that there arestill real opportunities for
prosperous hotel industries ...Thearchitectural design ofthehotels
planned bythe Dutch group will ,for example ,permit greater efficiency
andtherefore economies ofstaff . Thus fortheprestige ,hotel itis
planned toprovide one member ofstaff for each room ,whereas itwas
commonly admitted before that 1.5 and even 2persons would beneeded
per room .
Leaving aside this empirical approach involving more orless short-
term forecasts ,one,orvery likely two market analyses will beunder­
taken byexperts inthe hotel industry .
Both the Palace Group and the Dutch promoters intend toentrust hotel
chains with running the planned hotels . The Dutch group has even ,
according tothe terms ofthe agreement concluded with theAntilles
.•Government ,made the implementation ofitsprojects conditional upon
itshotels inBonaire being run byahotel chain ofhigh standing .

15- VIII/210/75-E
The agreement signed with thePalace Group also includes thecondition
that areputable hotel chain must "befound runthehotel ;ifthis
condition isnot met,thehotel will not "be "built .Obviously the •
above -mentioned operating company will in "both cases undertake an
in-depth study ofthecurrent market anditslikely developments
"before taking adecision * ...
Execution oftheproject
Itisthesetting upofinfrastructure (seepage 10)that hasproduced
thecurrently existing hotel projects *.Itshould also "benoted that
allthose responsible forthese hotel projects are unanimous instating
that they have norequirements asregards infrastructure "other than
that concerning the runway . There aretherefore grounds forbelieving
that the extension and widening ofthe runway will finally trigger off
thefull tourist development oftheisland .
But toremove any doubt ofsuccess ,ithas been arranged that the .,
Bonaire Palace Hotel Group will undertake todeposit aguarantee of
US$350 000assoon asfinancing isprovided forthework onthe runway .
The Government will receive this sumif,within six months ofwork .
commencing onextending the runway ,thehotel works have notstarted .
There isalso aSpecial Condition laid down intheFinancing Agreement
(seepage 23under IV)which makes execution ofthis project dependent
upon the completion ofatleast one major hotel project .This
condition does notaffect 1theundertaking given bythePalace Hotel •
Group . <-J--- 1""• ■
Itsnould further bementioned that the Antilles Government has stated
that inthe event ofdefault bytheinvestors ,itwas considering i5't
building thelast-named hotel itself bycalling forassistance ,/'"V:'
possibly from the European Investment Bank ..; si;J 1-*vv:"

-16- VIII/210/75-E
(c).Toconclude : .•...... .
the Antilles authorities have received assurances from the private
::Bector that itwill "beprepared toundertake work inBonaire provided
.that the runway isdeveloped . ■'Highly advanced and serious projects
already exist . Those who might put upthe funds are,however ,
reticent because they want to "bevirtually IQOfo sure that thehotels
are actually going tohe "built -;
the commitment entered into "bythe Commission toearmark the funds
fc ■.required for developing the runway should atlast enable theauthorities
•'!"toescape from this vicious circle .Actual disbursement ofthe funds
■':•will however depend onaspecial condition requiring aguarantee from
theprivate sector before the schemes are financed and actual
:expenditure iscommitted . ,; ■, ''
B. Financial and 'budgetary'' aspects _
Bonaire airport isadepartment ofthe island 'sadministration ;itdoes
not therefore have the status ofanautonomous body .Itishowever
'desirable thai theairport 'sfinancial situation should betransparent ,
clear and sound ,ifonly toenable theairport toraise loans directly to
meet the two-fold requirement ofadditional investments and reinvestments .
Itistherefore plajrmed toset upanautonomous Bonaire airport authority '
byanalogy with thepolicy followed atCuragao and Aruba .
Asregards thefuture aiiport 'sestimated working account ,this cannot be
tased ontheoperating results obtained fortheexisting runway ,which has
been used only byaircraft coming from orleaving for Cura?ao and Aruba .
The only estimate itispossible' togive isthus based purely onassumptions .
Ithas thus been assumed for example that the island will have 570 rooms in
1977 end 1000in1983 .'■Ithas :been assumed that in1977 "theisland will
bevisited by42700tourists andby107 000in1983 .Ithas also been
assumed that the average length ofstay will increase from 3.7 days in'1977
\ ■I
to5.0 days in1983 .

-17 mi/210/75-E
Inestablishing onthebasis ofthese factors the .airports estimated
working account ,thescale ofcharges andtaxes recently recommended by
Dutch experts forthe Curasao airport have been adopted and adapted forthe .
Bonaire airport *Ithas however been assumed that theairport tax,which
already amounts toAnt.f.6(2.78 u.a.)forpassengers leaving fora
destination outside theNetherlands Antilles ,will befixed atAnt.f.8
••(3.71 u.a.)byI98O . s..•■ .
Theairport 'sestimated working account istherefore asfollows ; •
1977 ■1978 ; *1979 1980 1981 1982 .1983 .1984
Operating income 443.8 925.3 1014.6 1216.1 1268.3 1341.3 1467.8 1502.7
Operating expenditure -729.4 806.4' 894.O >980.7 1060.2 1155.2 ,1256.1 1363.2
Gross operating results -285.6 118.9..-120.6. -.235.4 208.1 186.1 .211.7 139.5-
Financial charges on ;'; •■' ; " M<M ;
loans : ......... ....
\ newinvestments -A11.0 22.0 33.0 44-0 55«0 :66.0 '77.0
'/ reinvestments -*- –" - 18.3 79-3 79.3 79.3
Cash flow -285.6 107.9 '98.6 202.4 145.8 51.8 66.4 -16.8
Accumulated results ■-285.6 -177.7 <-79.1;-'123.3 269.I 320.9 '387.3 370.5
Theliquid assets available for annual operation would beinsufficient for
ρrepayment ofaloan ,even onvery advantageous terms ., '• r,h ■
The somewhat irregular movement ofestimated operating income iscaused by:
,the assumed increase intheairport taxin1980 ,theconstruction atan
irregular rate ofnewhotel rooms and acertain extension ofthe average
length ofstay .This last factor ,although favourable from thepoint of
view ofhotel operation ,will have anadverse effect onthe operation of
the airport .
2The funds available under the third EDF for the Dutch area inthe form of
loans onspecial terms ,have been used upbyfinancing theproject
AU/3O4/7I-Extension oftheCuracao airport .

-18- VIII/210/75-E
There isnodoubt that ifin1980 or1984 there arerespectively 855or ':
1000hotel rooms atBonaire ,which seems alilcely possibility ,the !' 1
''airport 'soeprating results will "beimproved.' Itwould moreover "be
desirable forthe autonomous airport which will heset uptohegiven a
little more financial 'scope than that implied intheestimated operating
account .This will "beespecially necessary since theprecarious financial "
situation ofthe' island 'sauthorities will not enable them for some time to
come togive assistance totheairport authority .'Bonaire 'soperating
''budget ismoreover subsidized bytheAntilles Government ,inother words
byAruba and Curagao ,/ ,
• .Contribution toBonaire 'sbudget from thenational budget ^" '■ •
1
Definitive ■
amount '
Estimate
(IT.A.budget )
Estimate
(Bonaire budget )1970 \ 1971 1972 ~f 1973 : II ..1974 .-,,
3595 000
i1 ■ 11
i
î
3000 000
3378 0471 ^..
3500 000
3436 029i
5153 7033000,000
3221 026
,,v-Referring towhat hasbeen stated above (pages 7and 8),attention must be
drawn tothefinancial •situation oftheITetherland Antilles ,whose develop­
ment has not been atall encouraging and which isatpresent extremely
precarious .Given that inflation increased from 13%in1973 to25%in
1974 »afigure of37*5 /'must beexpected for 1975 >'the ;Central Bank of •
theNetherlands Antilles forecasts that thebalance ofpayments ,which was
still more orless inequilibrium in1974 ,will show adeficit ofapproxi­
mately Ant.f.225million (+104million u.a.)in1975 «
Without taking account ofacontribution ofAnt.f.
tourism .55000 for promoting
»

-19- VIII/210/75-E
Adeficit ofthis order means that thegold andforeign currency reserves
will bepractically exhausted within a.year.' '
This isbasically duetothefact that theAntilles economy hasnoprimary
sector andthat thesecondary 'sector isnegligible.' TheAntilles are
therefore obliged toimport goods ,andhence inflation ..-Expected trade
balance deficit for1975 !Ant.f..770million (+357million u.a.);in
1974 this figure rose toAnt.f.570million (+264million u.a.). ■,
Avery common measure insuch circumstances ,i.eMdevaluation ofthe
Antilles currency ,cannot provide asolution .Thefact that theprice of
imported goods would increase would hardly lead toafall indemand ,partly
■because aquantitative increase ofthegoods produced onthe spot cannot
beanticipated ,andpartly because theincrease -intheprices ofimported . .
goods would involve areduction inpurchasing power ,which would immediately
beopposed bythemilitant trade unions .The final result would bean
increase inwages andanincrease intheprice ofservices which aresold
mainly toforeigners (i.e. ,theactivities ofthetertiary sector ,such as
drystorage ,:refineries ,.insurance ,tourism ).': '•»'"
Inthe short term itisobvious that itwill notbepossible tofind a
wonder cure .Only measures toalleviate thecrisis situation can.be taken .
•Such measures 'could include thelaunching ofpublic works programmes ,the
encouragement ofbuilding intheprivate sector andthe short-term' creation
ofstable jobs . ••••*• >'■- r;'.
Inthepresent circumstances itdoes not ,seem advisable toincrease the
cost ofthepublic debt ,which isalready considerable .. •
C. ■■Technical aspects
..(a)Description ofthepro.ject •y : .1/ «. 'v*; .*,
Theworks provided forunder this project represent aspecific phase of
anoverall short andlong-term plan forextending Bonaire 'stourist
facilities .

-20- VIII/210/75-2
This phc.se comprises enlargement cithe existing runway inorder to
open theairport toDC-8 andBoeing 707 "type aircraft .
The project comprises the following works :
(i)enlargement andreinforcement oftheexisting runway including
hard shoulders ,overruns and the necessary drainage ;
(ii)lighting ,signals andenclosures ;
(iii)extension oftheparking area infront oftheterminal .
The project also provides for the following :
(i)drawing uptheproject forexecuting the works andtheinvitation
totender dossiers ;
(ii)thecost ofsupervising the works .
1. 'Enlargement andreinforcement ofthe existing runway
The length ofthe existing runway will heincreased from 1750 to
2560 mandits width ,which i3atpresent 30m,will beincreased to
45 m.
2The existing runway ,whicn nas anarea of52500 m,will bereinforced
bylaying anadditional surface inorder togive itthe loadbearing
capacity toaccept DC-8 andBooing 707 type aircraft .
The lengthening and widening will increase the area ofthe runway by
2approximately 62700 m. Th6 existing runway will belengthened at
its eastern end and widened by7-50 moneither side .
Hard shoulders and overruns are planned with anarea ofapproximately
242 COO m. The hard shoulders ,-which will be7-50 mwide will belaid
oneither side ofthe asphalted runway . Overruns 60mlong will also
bebuilt ateach end ofthe enlarged runway .

-21- VIII/210/75-E
Where therunway istobeenlarged thecomposition ofthe "base layers
andthesurface will "bedetermined "bythequality oftheground ,which
.ismainly coralline . • ..
Theconstruction planned forthedifferent parts oftherunway should
"beasfollows :
Enlargement ofthe runway
12cmof "bituminous concrete
• • ~ ■*
5cmofbinding course
50cmof "base course ' . --'"
Reinforcement oftheexisting runway ' I ■■
3cmofbituminous concrete r-' '
Hard shoulders and overruns ' : -
4cmofbituminous concrete
3cmofbinding course .•
30cmofbase course -• ... - '■ '
2.Drainage ,lighting and signalling works •' "
Insofaraspossible theexisting facilities ,will beincorporated
into thenowproject .
3. 'Extension oftheparking area andthe enclosure ''
These works arestill tobespecified intheexecution plan .

«-22- VIII/210/75-E
(ID)Technical dossier
Thedossier ,presented "bythe Government ofthe Netherlands Antilles ,
r consists ofapreliminary overall long-term plan fortheextension of
theairport ,drawn upbythefirm MCO (Netherlands Airport Consultants ),
taking into account the extension ofBonaire 'sother tourist facilities .
This dossier was financed from theAntilles "budget in1968 andfinalized
in1974 "by "theAntilles Administration .
(c)Costof thepro.ject
Thetotal sum estimated forthe works provided forunder this project ,
including the costs ofthedetailed execution study and ofrepairing
the works ,price variations andtechnical contingencies ,amounts to
Ant.f..7320 000 (approximately 3390 000u.a.).
This sums isbroken down asfollows : ■ •
1. Construction
Installation ofcontractor 'splant and
equipment ,removal ofthelatter , '' ,
,insurance ,etc. Ant.f. 230 000
Removal ofundergrowth ,earthworks ,etc, " 1450 000
Foundations 660 000
Surfacing ■-' " 2860000
Drainage ,etc.
•Lighting ,signalling ,,etc.
Enclosure
Extension tothe carpark
...Technical contingencies and
changes ,approximately 20fo
2..Cost ofthe study
3. Supervision
Technical contingencies and
changes ,approximately 15%
Total sumípnce
pnce•• 660 000
1 2860 000
120 000
• 350 000
• 110 000
« 20000
Ant.f.5800 000
.» 1200 000
Ant.f.7000 000
Ant.,f. 170 .000 approximately
79000u.a.N
Ant.'f ..130 000
"' ■ ,20000
Ant 'f ISO000approximatelyAnt.t.1^0000 6900Q
Ant.f,7320 000 approximately
.««_=__== ^ 000_u.a .

-23- VIII/210/75-E
(d)Execution oftheProject
Theworks will becarried out "bythecontractor inasingle lotafter
anopen international invitation totender . • '
(e)Time schedule
Thetimetable forcarrying outtheproject ,each period to "becounted
from thesigning oftheFinancing Agreement ,isasfollows :
''•Study andpreparation ofinvitation totender : .6months
Issue ofinvitation totender andnotification : .6months •
Duration ofworks : 18months .
This financing decision will "bereferred "back totheEDFCommittee for
re-examination ifthetime "being taken tocarry outtheproject proves
likely -given thestated time schedule andexpenditure -tojeopardize
(thesuccessful completion oftheproject ortoinvolve considerable
excess expenditure . •-
' 7
IV.SPECIAL C0ÈDITI0N5'V."; ' '7. :•< '' ' . -r
- • t
Thefollowing special conditions will beincluded intheFinancing
; 1
Agreement ; ■ ;> C,;1 ■ *
(i)theGovernment oftheNetherlands Antilles andtheBonaire Administra­
tion shall undertake tosetupanautonomous airport authority in
Bonaire before completion oftheworks provided forbytheproject ;
(ii)the'Government oftheNetherlands Antilles shall declare itswilling­
.ness toopen negotiations onairtraffic based ontheAgreement on
International Civil AirTraffic (Chicago conventions )with each ofthe
Member States which sodesires ; - ■
(iii)after issue and "publication oftheinvitation totender nocontract
shall beawarded until the Commission issatisfied that there is
sufficient evidence toprove that atleast one200-room hotel will
bebuilt . .

-24- VIII/210/75-E
V . CONCLUSION MTD PgQPOSAL_FOR_FpiAycn:G :
Lengthening and .widening the Bonaire runway ,inorder tomake itsuitable
for DC-8 andBoeing707 type aircraft will complete theinfrastructure
vital forreal development oftourism onthe island .,
Having regard tothe favourable Opinion delivered bythe European Develop­
ment Fond Committee atits meeting of . andhaving regard to
the supporting arguments set out above ,itisproposed that the Commission
take the following decision :- „ :
Financing decision ■'
The Commission has decided :' ■'' :.
toapprove under the conditions laid down inthe proposal before it,
theproject described hereunder :
Régi stration No [Title oftheproject I Commitment proposed asagrant
AH/309/74 Improvements tothe
Bonaire runway : •'
!
ijLocal currency |Equivalent mu.a.
Ant.f.7320000 j3390000 (round
jtotal )
• '1 i
togrant commitment authorizations for atotal sumof/mt.f.7320 000,
.equivalent toapproximately 3390 000u.a.(round total ); ■'
toinstruct the Chief Authorizing Officer ofthe European Development ;
:Fund tomake anyadaptation arrangements that prove necessary toensure
the smooth execution oftheproject under thebest economic and !
technical conditions .