Minister: Airport Plan Appraisal Now Completed

May 20, 2015

Today [May 20], Deputy Premier and Minister of Finance Bob Richards announced the “completion of an independent appraisal of the method of procurement for the redevelopment of the L.F. Wade International Airport using the Canadian Commercial Corporation [CCC].”

Minister Richards said, “In order to improve the value of this unique proposal, and recognizing the anxiety in the public domain with regard to the proposal, the Ministry of Finance, in conjunction with Her Majesty’s Government in London, represented by the Foreign and Commonwealth Office [FCO], engaged the services of Deloitte, following a competitive tendering process, to conduct an independent appraisal of the method of procurement for the redevelopment of Bermuda’s airport using the CCC.

“The purpose of this engagement was to evaluate the business case, value for money and affordability of the existing proposal and to provide a high-level cost effectiveness opinion for the proposal being put forward.

“The engagement was commissioned in March 2015 and also assessed whether the existing analysis and documentation on the proposed Bermuda Airport Development was sufficient to support an investment decision based upon HM Treasury’s Green Book guidance for the evaluation of public sector spending proposals.

“It is important to note that HM Treasury’s Green Book’s prescriptions assume a competitive bid process and that the Bermuda Government is not obliged to follow “Green Book” standards. However the Green Book guidance is some of the highest in the world with regard to public sector procurement, so we shall use the findings of the Deloitte report to enhance the project moving forward.

“Considering where we are in the process, we still have opportunities to close the gaps identified in the Deloitte Report before entering into any contracts. The Government is certain that the Deloitte Report will add substantial value to the project, both by improving value for money for the Government of Bermuda, and by further reducing risk.”

In closing, Minister Richards noted that following discussions with the FCO, the Deloitte Report will be tabled in the House of Assembly.

A PLP delegation is currently in the UK, where they plan to meet with the Foreign & Commonwealth Office [FCO] regarding the airport redevelopment, saying it is their view “that a competitive tender process is the only way to ensure that Bermuda gets the best deal for the privatisation of the airport, which in it’s current form, will give the Canadian company AECON the rights to over $1 billion of revenue.”

The delegation includes Opposition Leader Marc Bean, Shadow-Attorney General Michael Scott, Shadow Home Affairs Minister Walton Brown, and Shadow Tourism Minister Zane DeSilva, and their meeting with the FCO is set for today.

Update 3.22pm: Minister Richards is now holding a press conference on this, and officials from both CCC and Aecon are also present. We will have coverage of this later on.

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  1. San George says:

    Given the dramatic decline in air arrivals – we don’t need a new airport. We could use a cruise ship terminal in St. George. Place a dock in the area near Fort St. Catherine.

    • brigadooner says:

      no we don’t

    • inna says:

      And block up Murrays Anchorage?

    • damn.... says:

      CRUISE SHIP PASSENGERS DONT SPEND ANY MONEY…PLUS ST. GEORGES IS MUG…SOMMERSET!!!!!!

    • Lois Frederick says:

      So relieved you are not running things around here. CCC are the ones who are of the opinion that air arrivals will improve, there the ones committing the $255 million. With a new facility many more opportunities will present themselves, that at the moment we can’t even imagine. CCC can.

  2. Jus' Askin' says:

    “the Bermuda Government (OBA) is not obliged to follow “Green Book” standards” or any standards of being transparent ;-)

    • Rhonnie aka BlueFamiliar says:

      Maybe not, but they’re not doing too horribly in being transparent, particularly when you compare them to the previous government.

      Now, this is not to say that they shouldn’t do better than they have been, of course they should.

    • hmmm says:

      So they had Deloitte to conduct an independent appraisal of the method of procurement for the redevelopment of Bermuda’s airport using the CCC.

      “The purpose of this engagement was to evaluate the business case, value for money and affordability of the existing proposal and to provide a high-level cost effectiveness opinion for the proposal being put forward.

      “The engagement was commissioned in March 2015 and also assessed whether the existing analysis and documentation on the proposed Bermuda Airport Development was sufficient to support an investment decision based upon HM Treasury’s Green Book guidance for the evaluation of public sector spending proposals”

    • Jus' Wonderin' says:

      Just like your beloved PLP/UBP did right?! Jus’ Askin’!

      • Jus' Askin' says:

        You do know I am not for either party :-D
        I am for a “Better Bermuda for All Bermudians”

        • Jus Wonderin' says:

          Sure you are…but I’ll give you the benefit of the doubt. Still didn’t see you calling out the PLP/UBP when they were in power though.

        • Build a Better Bermuda says:

          You know that an RFP is automatically any more transparent. Frankly, having an independent review is a step towards greater transparency than having a RFP without one. In the end, the. Only thing that can garantee value on a project is a well defined Design Construction contract

    • Bermyman says:

      The whole reason why we have an ongoing public debate in this case is due to the current government’s transparency and PATI. Under the PLP we got nothing accept the Bill!

    • Spongebob says:

      You are very much entitled to you opinion and so be it. However, if there is no transparency, how is everyone talking about those emails which all have been able to find and read and how are people able to know exactly what has been spent on trips or expenses?

      Seems to be more transparent than it was in the past.

      However I see that no matter what is done, there will always be an excuse to blame.

      Spend less time blaming others for things and take ownership, correct the path and make it right.

      • Real talk (original) says:

        You mean the emails obtained from the Canadian Government under Canadian PATI legislation?

    • Huh? says:

      Well, that’s pretty much wrong based on the evidence, isn’t it?
      Government, hearing the consternation in the public chatter went to the Foreign Office, and did so obviously weeks before the idea occurred to the PLP.

      They obtained an independent opinion. They have never been apologetic for not going through a bid process because they argue that the deal is good for Bermuda. The independent opinion is intended to evaluate that, and not whether the thing should have gone out for bids.

      Don’t get me wrong. I think a new airport is a waste of time and effort, but your statement is just more space-filling non-information. You are not pushing us toward a positive result.

      Like it or not the OBA appears to be smarter, more honest and more open than the PLP were while they were in Government. That is not to say that they are the smartest, most honest or the most open, just comparatively more so. They are even smart, honest and open to the point of being acceptable and that is more than I could say of the PLP after Alex Scott left the office of premiere.

      • clearasmud says:

        If they were being transparent they would have told us before they went but it looks as if they only went because the UK would not give the nod to the deal without this review. Also the statement that we dont have to follow the Green book is misleading considering it is the UK standard and we need their blessing. Frankly I dont have any problem with the method of funding but it is hard to see the value if you have nothing to compare it with!

        • Build a Better Bermuda says:

          They did tell us there was going to be an independent review, it came up several months ago. As for standards, I deal with them regularly and there are two words that establish whether something has to be done or not necessarily, ‘should’ and ‘shall’. Finally, an RFP plays little part in being able to establish value; whether or not a project has value is determined almost entirely by its Design Construction contract and this can be easily assessed

      • Real talk (original) says:

        The Independent Valuation was carried out because the UK government was not happy about some aspects of the proposal.

        What should concern us all is:

        1. What elements of the proposal was the UK not happy with; and
        2. What are the gaps identified in the Deloitte Report that still need to be addressed?

        • Lois Frederick says:

          The valuation was asked for by the UK, as there will not be an RFP. The findings will be incorporated into the final proposal to ensure that we get a fair deal. Are you also concerned that the Canadian Government is guaranteeing the whole project too?

    • Redman says:

      @ Jus’ Askin’

      Yeah no transparency, They hid things so well that 2000 plus documents all related to the Airport & clearly accessible just got ‘leaked’ by the PLP campaign, oops I meant the Peoples Campaign. I guess that isn’t transparent enough for some! So much for hiding things in books, emails etc… lol.

  3. Kettle or pot says:

    Hope Mr,Bean don’t get kicked out of that meeting:)

    • blow in says:

      with a new airport and jobs on offer ,he might get a start in air traffic control, if he can remain calm under pressure

      • Build a Better Bermuda says:

        Drug testing is required for an ATC, and we know how he feels about that

  4. Cow Polly says:

    LOL! So the PLP are going to go marching into the FCO and 5 minutes later come out with the Deloitte report under their arms – Wasted trip don’t ya think?

    • Regina says:

      You can’t make this stuff up. Yea, big waste of time. Hope they are on their own dime!

  5. Wasteful says:

    I’d love to see the analysis which shows how building a new airport will increase our passenger arrivals, and how this will effect our revenue (especially after we pass a bulk load of it to Canada). My guess is that the additional revenue is negliable compared with the size of the investment required.

    I know the Government want to have something to show for their tenure, but surely paying off the debt left by the previous administration should be a priority, not getting in to more debt by investing heavily in to infrastructure that will not yield a high IRR. Any rational organsation would turn down this investment!

    Bermuda is an island in the middle of the Atlantic, having a smaller airport actually adds to the charm in so many ways, and it is totally expected of an island location. Having an updated airport is required, and having one with great customer service is essential, but moving the whole building from one place to another….that’s completely overkill and unneccessary.

    • Rhonnie aka BlueFamiliar says:

      I don’t think anyone said a new airport is going to increase arrivals. If they did, I’d like to know who, because that’s daft.

      And sometimes it makes far more sense to build new rather than try to renovate an old property. And in the case of the airport, it’s not like we can live without one for the amount of time to demolish the old one and rebuild on the same location.

      • Lois Frederick says:

        They are taking into account new branded hotel builds which will improve air traffic. I imagine new air routes are being explored too, including assuming responsibility for air traffic control, which is currently done out of the US. They are in the business and we are not.

    • Huh? says:

      Right there with you.
      Ironically the Bermudian brand of frugal practicality is no fun for Bermudian politicians. They want stadiums and mega-schools, and incinerator plants and colleges and more mega schools and new government buildings … and airports. They want these things somewhat independently of the needs of their constituents. They need people who are employed on election day. Beyond that what happens to those people comes down to the next overblown capital project.

      We need to get smarter. No danger of that it would seem.

    • Lois Frederick says:

      Yes, it would be interesting to see the report, which obviously has been done and is being further worked on. Do you think CCC would invest $255 million without having done extensive research along with having deep knowledge from decades of industry experience? They know that there are many opportunities to grow air arrivals through a new facility. They wouldn’t be doing otherwise, would you?

      • Tough Love says:

        “They know that there are many opportunities to grow air arrivals through a new facility. They wouldn’t be doing otherwise, would you?”

        Per Rhonnie you are daft!

        • Lois Frederick says:

          btw. the plp want a new airport built too. They only spent $800,000 on drawing up plans and that was without any real prospects of hotel development which exists now. New branded hotels are an area for potential new air arrivals. As Bob has said, CCC have been doing very deep analyses on this very subject. To a degree we in Bermuda are not familiar with. As the ones who are committing the money, they going to do all they can to assure themselves Bermuda has real potential for growth in tourism. But I know that won’t satisfy you because you.

  6. Jeremy Deacon says:

    I do wish that when Ministers make statements that refer to a report that they would release the report at the same time so that we can get a full story.
    I know they say it will be tabled in the House of Assembly but that is when?

    • inna says:

      On Friday, when the house always meets when in session.

      • Jeremy Deacon says:

        My point still stands.

        • Trulytruly says:

          Seems you are ignoring the immediate political landscape. The expression, a day in politics is a long time, comes to mind. Would you have advised the OBA to wait until Friday to make this announcement? With the plp trotting off the London and in a meeting with the FCO today and over a week of over the top accusations swirling around the island? No, Bob did the best thing he could have done. In doing so, he has blunted the attack considerably and brought the debate back reality. Even the likes of Alvin are now beginning to accept the airport project is going ahead under the OBA’s plan. As recently as yesterday he was singing quite a different tune. That alone speak volumes about the impact of today’s presenation by Bob Richards.

    • Lois Frederick says:

      Timing is everything and the timing of this press release was as good as it gets.

  7. We, that support you and the One Bermuda Alliance thank you for keeping all of us abreast. Progress is being made…

  8. eegrunce says:

    I hope they will be revaling to the public a breakdown of the cost of this trip…..but that would be too transparent.

  9. Unbelievable says:

    Bob Richards be like,”Screw you and your dang emails and protests. This airport will be built”.

  10. Lois Frederick says:

    Great timing Minister Richards!

  11. Triangle Drifter says:

    Oh nooo!!!! Say it isn’t so!! The OBA has not gone forward & gotten on with the job without PLP approval have they???? What will the PLP complain about next & stick that oh so original ‘GATE’ onto it?

    What could be next? Some meaningful cuts to the civil service maybe?

  12. stunned... says:

    the timing is just, well …scandalous! must be Eggland over there now…

  13. bluebird says:

    The PLP are TTTTTeed! OFF because they cant turn a Berkley school type of build at the airport.Just imagine a $50Million project going to $123Million and think what they could do at the airport.More dollars would disappear into thin air.

  14. bluebird says:

    Thank you Mr Richards for getting us a new airport at no cost to the TAXPAYER.And it will be more efficient because it will be run by private enterprize.NO GOVERMENT.
    aND WE WILL STILL HAVE A NEW AIRPORT after these folks have gone as they cannot take it with them.

  15. bluebird says:

    No more pay to play with the OBA.

  16. stunned... says:

    chuckle for the day – the plp delegation in the uk referred to as the “Shady Bunch”, comprised of the plp leader and his “Shallow” ministers.

  17. Kangoocar says:

    Ok folks it is now official!!! The 4 stooges/plp have once again run off half cocked with misinformation!!! This time it is to the UK, they probably now are spending their time trying to come up with some sort of a story to bring back to their sheeple?? I feel sorry for the UK representative who had to waste their time listening to their nonsense, one can only assume that Representive is having a good laugh with his mates over a pint or two concerning it!!!!!

  18. stunned... says:

    oh dear – “4 stooges/plp”, the “Shady Bunch”, “Shallow Ministers”…this is sounding too much like material for the “Not the Um Um Show” or the Non-Mariners Race! lol

  19. Alvin Williams says:

    The OBA government has given this Canadian company a golden handshake which will give and give; But since they are going to run Bermuda’s airport; the Bermuda government should no longer pay for airliners to come here and they should also pay for the up keep of the runways; a little detail that has not been discuss?

    • Lois Frederick says:

      Glad you’re finally coming around Alvin. Yes, it is going to be built, whether you or the plp like it or not. Get on board.

  20. pot stirer says:

    Question?
    Who is paying for the opposition trip to England?
    Thanks.

  21. Coffee says:

    To all of the paid UBP /OBA keyboard heavyweights … He who laughs last , laughs best !

  22. Lois Frederick says:

    That certainly cleared the air.

  23. rhonda says:

    I want to see the assessment of the tendering process. Not an assessment trying to make wrong, right.

  24. Rhonda says:

    The OBA has entered into an MOU to buy a Porsche , Hiring someone to tell us if we got a good deal on the Porsche, tells us nothing about whether a Honda is sufficient for our needs..

    • Lois Frederick says:

      If the OBA are, as you say, “buying a Porshe”, the plp must have wanted a Lamborghini Veneno. Their plans alone cost us $800,000. Look it up if you don’t believe me. And we got nothing but higher debt from that set of plans. Nothing else.