PLP: Airport Announcement “Raises Questions”

November 10, 2014

Today’s announcement about the airport redevelopment “provides little detail and raises many questions,” Shadow Minister of Finance David Burt said.

He questioned whether there was an international bidding process in place to select the candidate, and also asked “what guarantees have been given about the extent of Bermudian involvement since Canada Commercial Corporation’s aim is to benefit Canadian interests, not Bermudian interests.”

“While there is no money required up front, Bermuda may be giving away in excess of $25 million in revenue each year to pay for this project for many years to come,” Mr. Burt said. “Though the building may cost $200 million, depending on the length on the project, Bermuda could end up paying in excess of $400 million.”

Government’s Announcement

The Government has reached an agreement with the Canadian Commercial Corporation [CCC] to pave the way for the construction of a new purpose built airport terminal building, Finance Minister Bob Richards announced today.

The Minister said the construction phase will “produce hundreds of much-needed jobs for Bermudians,” and the “financing will rely entirely on the future revenue streams from the new airport itself.”

It is expected to cost in the “range of $200 million” the Minister said, and the building will not be in the same spot as the present one, it will be located “between the round-a-bout and Stonecrusher Corner.”

The Minister said the plan is to break ground in about a year, and the project should take about three years.

Shadow Minister David Burt’s Comments

Mr. Burt said, “It is no secret that the LF Wade International Airport needs to be upgraded or replaced; however, the development of the airport must be in the best long-term interest of Bermuda and Bermudians.

“The statement made earlier today by Minister of Finance Bob Richards at the signing of an agreement between the Government of Bermuda and the Canada Commercial Corporation provides little detail and raises many questions.

  • 1. Was there an international bidding process in place to select the candidate? If so, when did it begin? If not, why not?
  • 2. If there was no public tender process, what other governments, other than Canada, were asked to participate?
  • 3. Given Bermuda’s colonial status, did the United Kingdom Government signoff on this agreement between Bermuda and the Canadian Government?
  • 4. Who is the world class financial advisor mentioned in the statements, and why were they not revealed at the announcement?
  • 5. What guarantees have been given about the extent of Bermudian involvement since Canada Commercial Corporation’s aim is to benefit Canadian interests, not Bermudian interests?
  • 6. What is the OBA’s plan for a “Bermuda Airport Authority”, which Minister Richards accidentally revealed in his announcement today?

“Bermuda has experience with Public Private Partnerships [PPPs], and these types of agreements have their advantages and disadvantages. Although Minster Crockwell at today’s press conference applauded this announcement’s “financial creativity,” we all know there is no such thing as a free lunch.

“While there is no money required up front, Bermuda may be giving away in excess of $25 million in revenue each year to pay for this project for many years to come. Though the building may cost $200 million, depending on the length on the project, Bermuda could end up paying in excess of $400 million.

“The new Acute Care Wing at the hospital was a well regarded PPP project. That project began with a tender process to ensure the government received value for money and was able to choose from a range of designs, contractors, and financing proposals. The LF Wade International Airport is one of our most valuable assets. It is the property of the people and the people of Bermuda deserve to be fully informed about its future.

“The PPP model may be the best way forward but it is essential that the OBA Government consider all of the alternatives to ensure that the short term gain of jobs doesn’t cost us more in the future than Bermuda can bear,” added Mr. Burt.

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Comments (46)

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Articles that link to this one:

  1. Finance Minister On Airport Re-Development - Bernews.com : Bernews.com | November 21, 2014
  1. Lois Frederick says:

    I suppose they have to say something. The fact is that I feel much better with the OBA and in particular Bob Richards leading this project than the PLP and David Burt. If only the PLP had thought things through they could have been the ones who had built the airport back in 2006. What a landmark project of National importance. Instead they spent on everything else under the sun. Jobs is what it is all about now and jobs are coming.

    • Black Soil says:

      The PLP are in decline. Show mercy.

      • mixitup says:

        you’ll be eating those words on Nov. 18th

        • haha says:

          lol u still think its a game thats d funny part. aint gonna be a game when even ya kids aint got food to eat bra if d plp get back in! real talk….THEY HAVE NO SOLUTIONS!!

          • Black Soil says:

            The airport deal does raise questions. Are the PLP/Tea Party relevant to Bermuda? The PLP would have hope if Bermuda’s economy sat on billions of dollars worth of oil, and any ol’ idiot could manage.

      • Today Moving forward says:

        Excellent Questions Minister Burt!!

        • Terry says:

          Excellent questions?
          Here is one for you.
          Who paid for Beyoncé when Ewart brought her here.

    • Kunta says:

      Say good by to the name L. F. Wade !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  2. jt says:

    “No such thing as a free lunch.” When did this revelation take place for the PLP?

    • Navin Johnson says:

      The PLP had 14 years of free lunches and now Bermudians are going hungry….the hospital had nothing upfront and will cost over a $1,000,000 so Mr Burt’s point is?

      • Encyclopedia says:

        Regardless of whether you support OBA or PLP, how can you be against an open, transparent process like the RFP?

        What was the intent in not having an RFP?

  3. Educated says:

    Hmmm, what happens if heaven forbid there is an airline with brake issues, the proposed building will be in direct pathway of the runway…

    I live in St. David’s, the airport and flights are a nice view when driving home from work, as I am sure the view from the airline looking over to Bailey’s Bay CC is just as beautiful. Please don’t obstruct the view!

    Lastly, ” and the “financing will rely entirely on the future revenue streams from the new airport itself.” — ummm, so can we expect more flights in and out?? I don’t see how the current flight schedule can fund $200m; mind you, I don’t currently know how much the airport is making off the current flights but there is certainly room for improvement!

    • Triangle Drifter says:

      The last time that runway was used was when Qantas flew here.

  4. Sky Pirate says:

    Quote
    *however, the development of the airport must be in the best long-term interest of Bermuda and Bermudians*

    so isn’t this development in the best interests of Bermudians and all other Air Passengers,Crew and Captains!….think before you speak man!

  5. Mark says:

    Here’s a “question”, why does the PLP have nothing of substance to add topics that are actually of general importance to the island? Making noise just for the sake of being heard is really getting old Burt.

    • Encyclopedia says:

      Wouldn’t you say the RFP would have been a “transparent” way to go? instead of the outsourcing to CCC to select a Canadian developer?

      Here, there was no RFP, which surely raises valid questions….all politics aside.

  6. Sky Pirate says:

    the proposed new air terminal for the position stated is STUPID!

    it should have been proposed for Kindley Field Road

    • Trulytruly says:

      Look at the original airport proposal on the gov.bm airport page. It is fairly extensive. I am sure they considered all potential locations. The OBA are just pushing through with an idea the PLP never bit the bullet on.

  7. Triangle Drifter says:

    A new terminal is long overdue. Bermuda is broke. Mr Burt might like to ask his colleagues why we are broke. This way we get a new terminal. Yes, somebody else gets fees that this new terminal generates. Things have to be paid for you know. Yes this way is going to cost more & take longer to pay off. This is a business arrangement not charity. It appears business is something Mr Burt & the PLP have little understanding of. If Bermuda were not in such a poor financial situation a more beneficial contract could have been arranged. We can thank Mr Burt & his group for the position that we are in.

  8. Common Cents says:

    “3. Given Bermuda’s colonial status, did the United Kingdom Government signoff on this agreement between Bermuda and the Canadian Government?”

    What led to this question being asked? The agreement is between Bermuda and a company based in Canada. I don’t believe the Canadian Government is involved at all. And why would England be interested?

    • Common Cents says:

      After Googling CCC, I see that it is a Crown Corporation but it operates at “arms length” from the Canadian Federal Government.

    • Jus' Askin' says:

      http://youtu.be/rNOD3j7pTrs

      Feel free to watch and you should pay close attention at the time of 14:48 especially ;-)

  9. Creamy says:

    So it turns out the PLP doesn’t like bold moves after all.

  10. mixitup says:

    Truly stunning, that when the opposition raises relevant questions, this group of goons tell them shut up. Now when then shoe was on the other foot they had everything to say about accountability, openness, bidding processes, financing, ra, ra, ra… Now it’s a non-issue. Simply amazing!

    • Trulytruly says:

      New to politics?

    • ya right says:

      Not everyone in Bermuda shares the same views as the people that post on these forums. If the PLP would have made the announcement, the same people that are giving the OBA praise would be scrutinizing the PLP at every angle. These individuals are partial and will always find something positive to say about the OBA and negative about the PLP.

    • Mr. Wave Crasher says:

      The PLP have to say something, that is to say (nothing as always)because they did nothing to improve the airport but change the name of the airport(not that it was an improvement) which by the way the PLP WERE VERY GOOD AT! But all the name changing did nothing to help Bermuda. Clueless then,,clueless now !!!

  11. “BOLD” enough for you? Thanks once again to the One Bermuda Alliance for “taking the bull by its horns”

  12. Sky Pirate says:

    Can anyone give me a good reason why Bermudians should not build it?

    not interested in hearing
    Bermuda is broke
    or
    It would take forever to be built.

    • @ Sky Pirate: Bermudians will be building the airport. Did you not hear what the Premier and Minister Bob Richards said? All labour etc. will be Bermudian.
      What part of “Bermuda Govt.is broke” that you fail to comprehend?

    • Cow Polly says:

      Believe Bermudians will be building it. Isn’t that what the new jobs are?

  13. Encyclopedia says:

    Where was the RFP?

    An RFP for the hotel project but not the airport? Why not??

    Is this an “inside deal” between BDA Government and CCC??

    • Evie says:

      Things that make you go mmmmmmh smdh it’s okay it’s the OBA they can walk on water

  14. Super says:

    I beleive construction of a new bridge to replace the causeway is of more national urgency then the airport

  15. Ganga mon says:

    The OBA dealing with contracts is a lot better than the PLP dealing with contracts.
    The PLP contracts ran millions $$$$$$$$$$ over budget and now our children are slaves to foreign lenders.
    Imagine what Bermuda would be like if The a Opposition was the govt.We would be a fourth world country with all that goes with that!

  16. Sargasso says:

    I am surprised at Bob Richards; No matter that the borrowing for the Airport, like that for the Hospital, will be ‘off the Balance Sheet’ the simple truth is that it is we Bermudians who will have to pay for it in the end. The Hospital will cost us a Billion dollars. The fact that it will be paid for by deductions from our paycheques under the heading of “Medical Insurance” rather than ‘Payroll Tax’ or ‘Hospital Levy’ is nothing but a smoke-screen. So too will it be with the Airport. Every time a Bermudian or visitor comes or goes there will be a surcharge placed on their travel and their pocket will be picked for this boondogle. These fees or premiums or whatever you want to call them are taxes in every way.
    The real question, in the case of both the Hospital and the Airport, is whether they will add to our productivity as an economy or fill a real need that we are willing to pay so dearly for. My answer to both is a resounding NO. A walk through the new wing of the hospital is more than enough to show any one that the place is totally excessive in every way. Bermudians may like things to be ‘quality’ but underneath that we have historically been a frugal and pragmatic people. We built strong homes but, until recently, they were not pretentious. More to the point, we usually didnt simply walk away from a perfectly good house and build a McMansion just for vanity reasons. (Even if the bank was offering us cheap money to do so.)
    I work in face-to-face contact with air visitors every day. The number who complain about the physical plant at the Airport is miniscule; in fact it is overwhelmed by orders-of-magnitude by those who love the fact that we still have our ‘original’ airport instead of some unrecognisable, anonymous piece of ersatz monumental architecture. If one were to ask visitors ( and probably locals as well) whether we should spend time and money replacing the building or retraining the Customs and Immigration staff I am pretty sure which way the vote would go.
    The OBA are desperate for a big project to give a bunch of construction companies and workers jobs. Along comes Canada and offers them a new credit card to pay for it and they just cant say no. What they should really be doing is being more creative and spending the same money in a way that will actually build our local economy and add to our earnings.
    This really is the easy way out – not what I voted for!
    Sargasso

  17. agatha christie says:

    This: “While there is no money required up front, Bermuda may be giving away in excess of $25 million in revenue each year to pay for this project for many years to come” is quite possibly true.
    But it is the same principle for the new hospital WING that cost $300m – BHB is only effectively renting that building for 30 years and has to pay rent that also covers the $300m plus the interest that accrues to the developer, plus any profit the developer makes. PPP is not a great way to go – all it does is pass the cost to the consumer (a backdoor tax) and gets borrowing off the Government;s books

    • Bermuda Hospitals Board Public Relations says:

      For the sake of clarity please note that BHB is NOT renting the new Acute Care Wing. BHB owns the land and the building.
      The following is true:
      In 2014, BHB made a lump sum payment of $40 million to Paget Health Services (PHS). After that, rather like a mortgage, annual repayments will be made to PHS for the duration of the 30-year contract. Unlike a usual
      mortgage, however:
      • the annual repayments cover the capital cost of the project, including design,
      construction, construction management, and financing the construction as well
      as building and lifecycle maintenance
      • All design and construction risk (including any cost over runs) is transferred to PHS, which is a key benefit of a Public Private Partnership (PPP)
      • BHB retains ownership of the land and new building
      • the new building must be maintained in accordance with BHB’s specifications for
      30 years Repayments are subject to deductions by BHB if the new building is not
      performing to BHB’s pre-determined specifications and standards. This transfer
      of performance risk is another key benefit of a PPP.

  18. Gotham says:

    Hopefully the name will change too: with no disrespect to the late Mr. Wade, he never had any involvement whatsoever with transport (other than owning a small fleet of taxis), let alone aviation; nor did he hold ministerial office, having failed at numerous general elections. On the other hand, the late Sir. John Cox was instrumental in negotiating both the location and the use of the runway for civil aviation; surely something like Cox The Fox Field would be more appropriate (with also no disrespect to Warbaby’s heirs).

  19. Brain Dead says:

    Another PPP to disguise the fact that the Island is simply taking on more debt. Debt financed projects do not create jobs….only a larger interest bill. We will soon owe more in yearly payments to overseas interests – interests payments, payments on the hospital (undercover debt financed deal as well), and now payments for the airport – than we spend on any single government department. And on the day that situation arrives we will be well and truly broke!

    The OBA is simply on the same path as the PLP. Neither has any ideas to help the island’s economy over the long run other than borrow and spend. We do not need a new airport when only 250k people come here yearly. Islands in the Caribbean get millions of visitors per year and their airports are not even air-conditioned!!!

    Let’s fire 1,000 government workers instead!

    • Triangle Drifter says:

      Have to admit that the terminal is underutilised. It used to handle Pan Am with a daily 747, Eastern with a daily L1011, Delta with a daily DC10 & BA with a 747. These days we get mostly much lower capacity 737s & a few slightly larger types.

      As it stands today the terminal is a dogs breakfast of renovations & additions & it looks it. We like to think of ourselves as a 5 star destination for business & leasure travel. First impressions as one arrives is very third world. No jetways for starters. Then it gets worse from there.

      Yes, a new terminal is needed. To bad we are broke so we have to go to a loan shark with lipstick on to pay for it. That $800,0000,0000 of missing money would come in handy right about now. Not having that $400,000 per day service on the debt would be useful too. Oh well….we got what we voted for. Now we are paying for our 14 year mistake.

  20. Navin Johnson says:

    The question the PLP raised is most likely “Why didn’t we think of that?

  21. swing voter says:

    tax payer is off the hook for this….but yep, it will cost more for everyone to use this facility….airlines, vendors, and every single person coming and going….its called progress, can we get used to it…again?