‘Govt Must Address The Numerous Deficiencies’

July 24, 2015

“It is critical that the largest capital project in Bermuda’s history is executed correctly,” Shadow Minister of Finance David Burt said, adding that the additions to the entrustment letter “make it clear that the OBA government must address the numerous deficiencies that were identified” by the Deloitte report.

Earlier this week, Finance Minister Bob Richards said that the Government received the entrustment letter from the British Government for the airport redevelopment project which “removes any potential legal barrier to Bermuda’s engaging with the Canadian Commercial Corporation.”

The letter said that the UK and Bermuda Governments “must agree on what measures are required to address the deficiencies that are identified by Deloitte in their assessment report,” and the Bermuda Government “must publish a written and evidence-based assurance that the required measures have been taken, before the Contract can be concluded.”

Mr Burt said, “Having received the revised Letter of Entrustment, the Progressive Labour Party offers the following comment. While largely similar to the last Letter of Entrustment [PDF], there are 2 key additions:

  • [6b] The United Kingdom Government and the Government of Bermuda must agree on what measures are required to address the deficiencies that are identified by Deloitte in their assessment report[s].
  • [6c] The Government of Bermuda must publish a written and evidence-based assurance that the required measures have been taken, before the Contract can be concluded.

“These additions make it clear that the OBA government must address the numerous deficiencies that were identified by Deloitte in their independent report,” Mr Burt said.

“That report was very critical of the OBA Government’s approach to the airport redevelopment and highlighted “key” and “integral” steps missing from the economic case:

“Key, integral steps are not present in the case. These include an economic assessment of a defined list of options to identify the most economically advantageous solution for Bermuda, and some specific Green Book and wider best practice considerations, such as use of a Public Sector Comparator, and optimism bias assessment.

Under Green Book guidance, this analysis is expected to be performed by Government prior to engaging with potential suppliers such that the most economically advantageous solution for the Government is identified in isolation from private sector influence.”

“The Deloitte report examined the commercial case and poured cold water on the OBA’s claim that their current approach can guarantee value for money,” continued Mr. Burt.

“Deloitte went on to recommend that the Government independently assess some of the claims made by CCC, especially the claim that a sole-source procurement is the only viable option:

“However, we identified key gaps in evidencing that the sole-sourced procurement approach that was selected will offer the best VFM [Value for Money], and in the Government approach to delivering VFM through commercial negotiations.”

“It should be noted that the conclusion in favour of a sole-source procurement [notably citing lack of investor interest] is made by CCC, and Government may want to perform independent analysis on procurement strategy to satisfy itself on the validity of this analysis”

“The available evidence is in large part from earlier stages in project development. There is a potential gap in the evidence to support the sole-source procurement strategy opted for from June 2014, as compared to previous evidence suggesting a competed PPP procurement process could be viable”

Mr Burt said, “Deloitte also examined the financial case and found that many items were developed by CCC and may not take into account the full costs to be borne by the Government of Bermuda:

“While there has been a great deal of work on the affordability of the project, it has been developed by CCC as opposed to the Government. — CCC’s affordability components fail to encapsulate all costs to be borne by the Government during and after the project.”

“It is critical that the largest capital project in Bermuda’s history is executed correctly,” the Shadow Minister stated.

“We as a country cannot afford to get this wrong, especially as the OBA is planning on giving Aecon the rights to control our air terminal for the next 35 years.

“From the outset of this project, we have urged the Government to put the airport project out to competitive tender to ensure that Bermuda gets the best deal possible.

“Further, we agree with the independent Deloitte report which states that the Government must use a “Public Sector Comparator” to ensure that the public-private partnership [PPP] that they have agreed to makes the most long-term economic sense for Bermuda.

“We look forward to reading the “written and evidenced base assurance” that is required by this latest Letter of Entrustment and it is our expectation that the alternate options required by the Deloitte report will be published in that document so the Bermudian people can determine whether or not the OBA’s sole-sourced PPP is the best option for Bermuda.

“We encourage all taxpayers to read the independent Deloitte report which is available on parliament.bm, as it echoes many of the concerns raised by the Progressive Labour Party since the OBA announced that they had agreed a sole-sourced Public Private Partnership to build a new airport terminal.

“The Progressive Labour Party will hold a public meeting in August to ensure that members of the public are fully informed of what is contained in the Deloitte report.

“In closing, it is our hope that Minister Bob Richards will allow debate on the independent Deloitte report in Parliament so that the people’s representatives can fully discuss the largest capital project in Bermuda’s history.

“For 2 months he has refused to debate this report and we believe that this project is far too important not to debate all aspects in Parliament,” concluded Mr Burt.

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  1. pot stirer says:

    HMMMMMM PLP worries about deficiencies! Imagaine that. Look up over runs and deficiencies and a plp logo appears!
    Happy cup match

    • get real says:

      Great, now what about the airport. If the PLP got it wrong, should the OBA be allowed to get it wrong as well.

      • Bermyman says:

        No they should not, but asking the PLP to watch over deficiencies in capital projects is like asking a fox to watch over the chicken coup. They have no credibility to comment on such matters

        • Careful everyone, as well as you Bermyman; the Opposition are out in full force! Unfortunately, “they don’t have a pot to pissss into nor a window to toss it out of.”

      • Build a Better Bermuda says:

        Where have we seen them getting this wrong? The Minister announced they were planning to build the airport to a PPP format, and was looking for a way in which to finance it such that it would not burden the government books. To date, one company has presented a solution. The Minister and all other relevant parties have have spent over a year working out the details and due diligence.

    • Coffee says:

      As Pot Stirrer benignly alludes , the more the PLP stirs , the more this OBA airport deal stinks !

  2. Attention of Shadow Minister of Finance David Burt. Sir, what makes you feel the Finance Minister Bob Richards is or maybe incompetent in arranging / finalizing this vitally important project?
    Personally, I have extreme confidence in the One Bermuda Alliance and the Minister in, “dotting all the i’s as well as crossing all the t’s” before any shovels dig into the grounds…

  3. Zevon says:

    So Mr Burt is able to read and regurgitate a paragraph from a letter. What a brilliant brilliant man he is. Fantastic insight again from such a brilliant man.

    • Build a Better Bermuda says:

      One of the points he seems to missed is that Minister Richards has been involved in the drafting of this letter with the OT office, so he knows and has completely agreed to what the letter has laid out. The deficiencies are known to Minister Richards, he commissioned Deloitte to identify them.

  4. Terry says:

    Just more crap being spewed.
    Every day.
    It is getting old guys..
    Is this fool talking about an airport thing or overall governance.

    Oh silly me.

    CCC et al.

    Who voted for these fools.

    Trolls the lot.

  5. aceboy says:

    What Burt is saying is that we don’t want another Berkley, or Heritage Wharf, or Lois Brown Evans Building, or Grand Atlantic or Port Royal to happen again.

    • Yes, let us not forget the over cost paid on several projects,(some not put out to the public) by the former Progressive Labour Party Government :-(

      • Build a Better Bermuda says:

        All done on fair and transparent bidding processes to ensure we received value for our money.

    • Navin Sven Johnson says:

      Or horspital

    • 32n64w says:

      Bingo.

      Where was the PLP’s concern for best practice and value for money previously? Deloitte were engaged to provide an independent analysis of the process and Government have agreed to proceed accordingly. Unlike the PLP who continually ignored civil service recommendations choosing their insiders to benefit from the public purse over the advice of professionals costing Bermudians dearly and contributing materially to the $2,000,000,000 debt burden they’ve saddled us and future generations with.

      Mr. Burt’s comments are especially rich considering his company benefited handsomely from the no-bid TCD tagging project. Amazing how the PLP collectively suffer from short term memory loss so often and so severely.

      Hypocrisy knows no bounds within Alaska Hall.

    • I and I says:

      This would be far worst than those examples you gave aceboy!!!!!!

      • aceboy says:

        Well then we better add a few more, for flavour.

        How about the BHC scandal, or the willy nilly SDOs, or the Uighur fiasco, or the admissions of lying to simply win an election, or the collusion with a certain “Team” to get them elected in a municipal election who then hand a 262 year lease to a buddy….stuff like that.

        I think Burt is saying this too.

        We cannot have any more of that stuff.

  6. justin says:

    ‘Like’ if you’d like to see the OBA build us a new airport or ‘dislike’ if you’d rather see the PLP build us a new airport!

  7. had enough says:

    You all may be to young to remember the numerous project overruns by the UBP Gov’t.
    You all talk as if Bermuda began with the last gov’t.

    EG. REcall the significant $ overruns when the current airport was upgraded./ renovated.
    Remember the leaks in the roof and the never-ending $ spent.

    If you all want perfection – wait until you get to heaven – cause it is not going to happen here on earth

    • Build a Better Bermuda says:

      Thus the reason for commissioning it to CCC, they will be on the hook, not the tax payer. Additionally, I have never limited my criticism of government projects to the PLP term. I have always maintained that government projects will be subject to cost overruns, no matter the government; it is just too cumbersome a beast without the adequate ability to effectively manage a big construction project. They can barely manage small ones, politics and bureaucracy always get in the way.

      • I was going to “take a back seat” today in reference to the airport but, here I am :-)
        At “Build a Better Bermuda” no-matter how much you or I may show certain people what is right from wrong we’ll encounter opposition… Therefore, I’ll watch the boat races today while the diehard supporters of the P.L.P who appear to come on screen weekends in their attempts to deter people from thinking for themselves.
        Weekend warriors find a semblance of accomplishments / security in running their mouths,(all to no avail) :-(

  8. I and I says:

    Yes indeed had enough!Was National Stadium ever finished?

    • Build a Better Bermuda says:

      Little like the Bernard Park plans, was being done piece meal; question is whether it will ever be finished or sidelined as the Bernard Park national sports complex eventually was.

    • aceboy says:

      I forgot that one….Burt is also saying that we should ensure value and we should not, for example, ignore the advice of everyone and build a concrete pool at our National Stadium that is more expensive and has significantly less utility that a recommended pool.

  9. Huh says:

    Dear Mr Burt, cost of new hosppital $450,000,000. Projected cost of new airport $200,000,000. PLP plan for new Airport estimated $400,000,000. Projected OBA savings $200,000,000 over PLP. PLP development of Berkeley – DISASTER. PLP – Dame Lois 2 blind trusts, fake Dr Brown cheques, TCD/Docyard Cruise Terminal/Port Royal. Just glad PLP are opposition

  10. Triangle Drifter says:

    Just what is needed, a good laugh on a gloomy day.

    Where was Burt when the PLP presided over all of those overruns listed above? He nor his colleagues are in no position to criticize the handling of the new terminal.

    • Paul Revere says:

      @ Triangle Drifter
      and that my boy is the problem

      So because the former government were not held accountable by the then UBP/OBA, we should just allow the present government to make the same mistakes, no questions asked.

      You PPL are funny, because you are just as blinded by all that RED KOOLAID you been sipping.

      Just because Bob the builder said it, we must believe it. He has been proven to be wrong on more than one occasion of late.

      Howz that, looks like someone bowling bunmpers, better duck for cover

  11. navin johnson says:

    I cannot help myself but every time I see or hear Mr Burt it always seems like he is reading a script that someone has written for him

    • Triangle Drifter says:

      He is far from being the best tool one could have in the toolbox but he is the best the PLP have, which is a shame.

      It really would be nice to have a viable opposition.

      Bob the builder is doing the best that he can. Much is expected of him, especially from PLP supporters, who seem to think that he & the OBA have a magic wand to wave what they would like to be the PLP forgotten years away.

  12. Jeremy Deacon says:

    The Letter of Entrustment says that the areas identified by the Deloitte report must be addressed.

    • Build a Better Bermuda says:

      Funny, Minister Richards said that too, when they got the report from Deloitte.

  13. Just a matter of time says:

    Constantly using and referring to past so called deficiencies by the former administration does not automatically convert into good governance for the current administration. Sheer arrogance is reigning supreme now with such scapegoating with this Govt. The OBA’s handling of this airport project has been poor. Period. The only focus for the OBA appears to simply defend their firm no bid selection of CCC tooth and nail. That in itself should raise warning flags. Is the airport going to be bigger to allow for more planes? By how many more? Yes we’ll have those passenger ramps but is that it? We don’t know the full details. I swear it’s more of a pride thing than anything else as to why they insist on pushing this terrible plan. Like I’ve said in past posts, I never remember the airport in my travels for some long lasting memory. Our sister islands which are currently doing better than us are not overly twisted about building an airport to the likes of the JFKs and ATLs. They concentrate on their product. We need to concentrate more on our product to create jobs. Not an overly expensive airport.

    How the heck do you enter into one of the the largest construction projects in Bermuda’s history on a no bid basis? How? Is CCC the only company on the planet with this type of business model of providing upfront costs? Is there no other way? We may never know. These things are truly lost and can’t be seen with the blindness of arrogance and zeal by the OBA and its supporters. Some people on this board agree with every single move by this Govt no matter what even if it turns out wrong eg Jetgate. I may be a PLP supporter but I won’t hestitate to call out foolish decisions by any administration. Right is right and wrong is wrong. The OBA are dead wrong on this one. God help us all with this Govt’s ongoing arrogance and dismissiveness.

  14. Just a matter of time says:

    @TD and others. Here we go again. When the truth hurts and lands or if they hear something they don’t like, proceed to attack the intelligence of PLP individuals instead. An aged old tactic towards PLP and their supporters that’s been happening from the very beginning of party politics by the UBP and now OBA. Yet a large number of us have educational qualifications, professional credentials and experience that will run circles around their critics.

    • Triangle Drifter says:

      Yup, & the PLPs educational qualifications, professional credentials (same thing) & experience sure did us well from 1998 to 2012 didn’t they!

      We went from no real debt worth speaking of to over $2b. We now have a debt service cost of near a half mil per DAY. We have a civil service that is 50% larger than it was in 1998 & it serves a much smaller population. Go figure that one out.

      Oh yeah, that PLP experiment was a great idea. Look where all of those qualifications & experience got us. Look around the ranks of the PLP today. See anyone with a real business success history, or do you see a bunch of professional politicians?

      • This says it all, do take note: “1998 to 2012″ and be honest with yourself.
        “We went from no real debt worth speaking of to over $2billion. We now have a debt service cost of near a half million per day. We have a civil service that is 50% larger than it was in 1998 and it serves a much smaller population…Go figure that one out.”
        Triangle Drifter, no-one could have presented the cause of our(Bermudas) predicament any clearer than what you’ve written!