PLP: ‘We Cannot Allow OBA To Privatise Airport’

August 26, 2015

[Updated with video] The airport deal is a “bad deal for Bermuda” and “we cannot allow the OBA to privatise our airport for 35 years and ship hundreds of millions of profit to Canada,” Shadow Minister of Finance David Burt said today.

In November 2014, Finance Minister Bob Richards announced that Government reached an agreement with Canadian Commercial Corporation [CCC] for the construction of a new purpose built airport terminal building, and earlier this week Minister Bob Richards announced that they have signed an interim agreement which sets out the project’s final and definitive agreements.

Update: 27-minute video of today’s press conference

Shadow Minister of Finance David Burt and Shadow Minister of Transport Lawrence Scott held a press conference today, with Mr Burt saying, “It is with great alarm that I address the people of this country today on the latest actions of the OBA government to push forward an airport project that will see our airport terminal privatized to a Canadian company for 35 years without a tender.”

“There are other checks and balances on this kind of tone deaf exercise of power. Those watchdogs have a responsibility to the people of Bermuda to be vigilant in the oversight of the largest single commitment of Bermudian taxpayer funds in our history. The silence of those watchdogs is deafening, and today I publicly call on the Auditor General to examine this agreement which has been signed to confirm that it complies with Financial Instructions,” Mr Burt added.

PLP august 26 2015

Shadow Minister of Transport Lawrence Scott said, “The Minister of Finance is misleading the people when he says that this [CCC] is the only way to go in regards to the airport development. I can give numerous examples of airports built using the Airport Authority model.

“Keeping in mind that the Airport Authority Model not only ticks all the boxes that the Minster has said he wants but also ticks an all too important one that the Minster conveniently seems to overlook or forget and that’s the box that says, “Must remain controlled by the Bermudian People”.

Shadow Minister of Transport Lawrence Scott’s full comments are below:

The Minister of Finance is misleading the people when he says that this [CCC] is the only way to go in regards to the airport development. I can give numerous examples of airports built using the Airport Authority model. Keeping in mind that the Airport Authority Model not only ticks all the boxes that the Minister has said he wants but also ticks an all too important one that the Minster conveniently seems to overlook or forget and that’s the box that says, “Must remain controlled by the Bermudian People”.

What is also alarming is that the Minster on national television said that he does not know the numbers. The Bermudian people should be worried on multiple levels if the Minster doesn’t know the actual numbers and the developer doesn’t know the actual numbers. How can he sign off multiple contracts and/or agreements increasingly committing the country to a deal that 75% of voters oppose and independent columnist call, “ludicrous”.

How can Cabinet and the OBA as a whole allow for the Minsters of Finance and Tourism and Transport allow for us to get to “phase two” without knowing the important details of this project? Also if he doesn’t know the numbers then how can they criticize those that do?

As we all know number crunching is not the Minster of Finance strongest skill as he was the one the borrowed 800 million dollars which was supposed to sustain the country for 3 years but he underestimated. He also said interest rates were going to rise and interest rates fell costing the country millions.

On the other hand the Minister of Transport seemingly can’t keep the buses running as under his tenure we have seen a significant number of buses out of service, and those that were in service are invested with roaches, and visitors and Bermudians alike are reportedly being treated like cattle on our ferries.

Minister of Transport says that our current airport leaves a bad impression on those visiting the island. Yet there are no exit surveys that ask visitors saying they won’t return the island due to the state of our airport.

If the Minister of Finance believes CCC is the only way to go then how does he explain Bahamas Airport Redevelopment project in 2011; Jamaica Norman Manley Airport which is currently in the last phases of development. Most recently Antigua and Barbuda who opened their new airport this week all by using the Airport Authority Model?

If this deal is bad for Bermuda and bad for Bermudians, who does this deal benefit?

Shadow Finance Minister David Burt’s full comments are below:

The role of the Opposition is to hold the Government to account. Our role is a vital role in the governance of this country. My role as Shadow Minister of Finance is to ensure that the people’s money is being spent properly. Therefore it is with great alarm that I address the people of this country today on the latest actions of the OBA government to push forward an airport project that will see our airport terminal privatized to a Canadian company for 35 years without a tender.

I think it is clear now that this is a personal political project of the Minister of Finance – one that he and the OBA Cabinet continue to pursue despite 75% of Bermuda’s voters being opposed to the deal.

So where are we now? What happens next? The Minister of Finance says that we now get down to details. We now turn to terms and conditions. That may be what he says, but I suspect that much of what comes next has been agreed and CCC and Aecon have the assurances they want from this government.

In fact, I believe that the Minister intends to ignore the UK Government’s requirements and the recommendations of the Deloitte report and do whatever his Canadian friends demand. Why else would he sign this deal without examining the alternative arrangements which that report suggested?

Many Bermudians have asked what can be done to stop what Larry Burchall has called “ludicrous” and what the Deloitte report terms as not “value for money”.

The Progressive Labour Party will continue to give voice to the clear arguments against this bad deal. Other independent voices in the community like the Peoples Campaign continue to keep this issue top of mind. Political and economic commentator Larry Burchall has been taken to task for his assessment of the numbers that are Ministry of Finance generated but his position is being denigrated by those who supported every statement he made against the PLP and our management of Bermuda’s economy.

What remains in this discussion is for other independent voices to speak up and speak out, as in 2015 it cannot be acceptable for the largest capital project in our country’s history to be commenced without a competitive tender process.

The business community, whose taxes will be raised to fill the void left by the loss of revenue this bad deal creates, has been silent to date. I intend to meet with leaders of Bermuda’s business sector to communicate to them directly what we say is bad about this deal and why it is important that this process be subject to a competitive tender.

There are other checks and balances on this kind of tone deaf exercise of power. Those watchdogs have a responsibility to the people of Bermuda to be vigilant in the oversight of the largest single commitment of Bermudian taxpayer funds in our history. The silence of those watchdogs is deafening, and today I publicly call on the Auditor General to examine this agreement which has been signed to confirm that it complies with Financial Instructions.

The OBA spin doctors have devised a campaign that deems everything opposing their policies as misinformation. I challenge the Minister and his political operatives to defy the reality of the shocking neglect of established procurement processes. I challenge them to state why Bermuda shouldn’t meet the highest standard of public procurement. They will not because they cannot.

I’m sure that all of Bermuda was shocked to hear Bob Richards say no one including him knows “The Numbers”. That is certainly not his usual script; he usually has all the answers.

But that excuse, which artfully ducked the key question in this whole bad deal, is just not credible. The company that built the CN Tower doesn’t sign agreements without knowing precisely what they stand to gain from a project. They know the numbers and to quote Larry Burchall, “that’s why they’re here”.

They are here because despite opposition from 3 in 4 voters the OBA has agreed to privatise our airport for 35 years to Aecon. Despite the PLP tightening rules to ensure that projects are properly tendered the OBA has ignored the Good Governance Act and has signed this agreement without a tender process. This is a deal that will see this company extract at least $2 billion dollars of revenue and gross profits that will exceed $620 million!

At a time when the OBA is cutting programs that affect the most vulnerable in our community, the OBA Cabinet has set Bermuda upon a course that is contrary to our financial interests. It is shocking and frightening that the Minister of Finance would tell this country that this is the only way.

His very own documents from his Ministry of Finance as mentioned in the Deloitte report say the exact opposite – and I quote:
“The documentation we have viewed does not set out how the Government of Bermuda analysed the costs and benefits of a sole-source procurement strategy against those of the anticipated competitive RFP process for a PPP, except at a high, conceptual level.As a result, there is no robust evidence indicating that a sole-source PPP would offer more VFM than a competitive procurement strategy for a similar concession.”

It goes on to say “It should be noted that the conclusion in favour of a solesource 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.”

These comments from the independent report are an indictment upon the Minister of Finance, and call me to question whether he is up to the job. For any person to commit the people of this country to spending millions without examining the alternatives is a shocking dereliction of duty.

Before I close, I have a number of questions for the media that you may want to pose to the Minister of Finance:

  • 1] How much money has the OBA committed to giving Aecon in this latest agreement? We know that this deal contains penalty clauses; the taxpayer deserves to know how much they are spending as we understand the figure is significant.
  • 2] Logic would dictate that we should examine the alternatives before signing a contract with Aecon; therefore why has the OBA committed Bermuda to spending money with Aecon before examining the alternatives as has been recommended by the Deloitte Report?
  • 3] When does the OBA Government intend on fulfilling the terms of the Letter of Entrustment that they agreed to, as that letter requires the OBA to “publish a written and evidence-based assurance that the required measures have been taken”?
  • 4] Did the OBA receive permission from the Accountant General to sign this 2nd agreement with CCC/Aecon? The first permission contained conditions, were these conditions met?

In conclusion, as it currently stands, this deal is a bad deal for Bermuda. The PLP will continue to do its job to hold the government to account. We cannot allow the OBA to privatise our airport for 35 years and ship hundreds of millions of profit to Canada. There is an alternative, there is another way, and we will continue to educate Bermudians on how Bermuda can do better.

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  1. just wondering says:

    “There are other checks and balances on this kind of tone deaf exercise of power. Those watchdogs have a responsibility to the people of Bermuda to be vigilant in the oversight of the largest single commitment of Bermudian taxpayer funds in our history.”

    I am just wondering where all those “watchdogs” were when the PLP was in power!!!???

    • TRUTH says:

      Thanks for an Active Opposition. We must ensure that any government is held to a high level of Accountability and Transparency. Reflecting back on what happen only indicated that the OBA/ubp were not a strong Opposition, and failed to do their job.

      This Airport Deal is not a good move. Mr. Burchall has highlighted this and did a good job. Please read his article, and reflect carefully on his findings.

      MP Scott and MP Burt have also did a good job informing the people.

      We must keep focus on the issue, and not individuals. Is this good for Bermuda at this time? Most of the findings and research seem to suggest it is not. (Is like what happen to our Education system, building of 2 mega high schools, and today many wished we did not, but more serious.)

      After reading the “Delottie Report”, I would encourage everyone to do so, it raises some serious concerns in regards to the Airport. IT is a report which is free of “Political bias” or favoritism, towards any party. So please make the decision based upon a factual report findings, rather than which party you vote for. This issue is too serious to be bug down in your political likes or dislikes.

      Bermudians regardless of political affiliation, all need to stand up against this Airport Deal.

      • Black Soil says:

        The PLP are a national threat to Bermuda.

      • Build a Better Bermuda says:

        Read it, it does raise issue, but also highlights that government has addressed numerous issues and has laid a case for the current deal. It also highlights that some of the gaps would only be filled in further negotiations… the stage at which we are ow moving to, so as to be able to address those issues. Let us not forget, the government commissioned this report to find what gaps they would need to address, setting the basis of the report for a higher level than they were actually required to meet, so that they could deliver a deal that would be of a higher standard than other before. I have also not fully brought into the $620m profit loss that has been thrown out there as I see it misses some factors, and is also not a signed deal at this point. One of those gaps would be that fact that this new airport will more than likely cost more to maintain and operate than the current, so while the current budget book figures may be a good starting point for determining the project value, they can not be taken as the actual numbers. We have only just begun the actual economics negotiations, so any numbers currently have to be thought of as more speculation than fact, and to treat them as solid fact is being more mischievous than intellectual in this debate.
        Finally, there are a couple of thing in this latest PLP announcement that still leaves gaps in their own credibility, first is that they say an authority would be a burden to public debt… but as a public authority, the government would still be required to back the project financially and would be on the hook for any overruns the authority could not meet. In essence, the authority debt would still be public debt, so it does not check off the requirement of zero public debt for this project. Additionally, agin the PLP tread very close to again accusing the Minister of corruption and collusion, as they constantly try to allude to CCC and Richards as friends and that he is happily giving them what they want, course they don’t have any insight into the negotiations, so this again is speculation more than fact, and falls more in line with PLP electioneering goals than actual fact. The only additional party to to the negotiations outside of government and CCC is the UK government, and so far they have been satisfied enough with what has gone on to allow it to progress further.

    • RU Kidding says:

      You can’t be serious right.

      Take a look at the Auditor General’s website and see how many reports were published under the PLP.

      That’s where the watchdogs were and apparently they are gone.

      • They only watch those who they suspect, its like the experiment that 60 Minutes showed a few years ago, where they had Black actors and white actors enter shops, guess who was followed and guess who wasn’t followed and did the stealing.
        Same S!@#, same Principle.

        • Russ says:

          Actually, men with beards garner the most suspicion. Whether it’s TSA or simply retail shopping the obvious observation ensues.

    • Boss says:

      Allow Bermudians to have a free Canadian password & citizenship out of this deal & Canadians can own the airport & the Bermuda import dock. Sounds like a fair deal to me

  2. hmmm says:

    PLP are pathetic. Why is everything all about running to the media.

    The PLP DO NOT have a better way. We have covered that off already. They don’t even understand how to do a project appraisal as evidenced on a number of occasions in the media.

    • Build a Better Bermuda says:

      I don’t know why they keep harping on about stopping the OBA from privatizing the airport… the PLP did that years ago.

  3. NCM says:

    Blah blah blah… Talking heads. Nothing more. The PLP already privatized several functions at the airport. BAS ring any bells? How about that lawsuit a former Transport Minister brought upon the Government which cost taxpayers millions of dollars. The Finance Minister has said they don’t know what the final figures will be so all this is simply speculation and further attempts to mislead the public. They couldn’t stop the St. George’s Hotel so move on to the next battle – the airport.

    • NCM says:

      And wasn’t it the Senator Burt who said in 2011: “It will surprise no one when I say that governments are not known to be the most efficient organisations. It is my hope that, as the government looks to open up the budget process and looks to medium-term planning, that we take a serious look at what government services may be able to be provided by the private sector in a more efficient manner. It is my belief that, as this Government considers all of the available options, there may be room for some government services to be privatised.” Hypocrisy much?

  4. hmmm says:

    Ah , my error, this is rant and fluff to misdirect from the positive economic news and the BEDC small business positive news that came out today.

    PLP = EPIC FAIL

  5. mike says:

    Yeah… Because the emission testing facility is not private.

  6. James says:

    The PLP wants folks to believe the airport is some goldmine. It’s not. In fact, he airport lost money last year, as it has virtually every year for some time now. The $600 million claim of “profit” is hogwash.

    • shameless says:

      Don’t let facts get in the way of a good story.

    • LOLOLOLOLOLOLOL says:

      Help me here then please. IF the airport is loosing money and only generates around 3m a year, then why is CCC going to build us a free airport and keep the finances for 35 years then hand it back to us?

      it just sounds like they are getting the short end of the stick here and as a company as big as them, this would be an unwise move. Unless, there is something else in the deal that we the public are unaware of.

      • Russ says:

        You missed the obvious … private enterprise operates far more effectively than government.

    • Impressive says:

      Maybe, but putting your political bias aside.. Do you or don’t you find it a little worrying to say the least that the Minister of Finance says he doesn’t know the exact figures with regards to the airport deal.

      As an accountant, and with a working experience with how things work in the Corporate world, I find it very hard to believe that these companies Aecon and CCC don’t know the numbers either..

      Would any company enter into a multi million dollar contract if the haven’t evaluated all of the numbers in detail??

      I find it very misleading, which speaks to a greater issue..

  7. Bullseye says:

    The PLP planned to build a Taj Majal of an airport. They know it is needed. In this deal we get an airport now without paying for it at a time when we can’t pay for it.

    600 million over 35 years. Arent we missing $800 million now? Where’s your crosshairs on that one Burt?

    • Onion says:

      The PLP’s plan to build a $400 million airport borrowing at 6% for 100 years would mean a $2.8 billion dollar financing package plus all the other operational expenses that the PLP are ignoring means another $2 billion so the PLP’s math says they want to spend $5 billion on the airport instead!

  8. no thank you! says:

    Dear PLP,

    Please just leave it alone.

    If you had such a agrat plan–why hasn;t it been executed and why now.

    We are fatigued by all the histrionics.

    You voters are watching this and elections are made or busted by empty shrill commentary.

    Just get out of the way and let progress happen.

  9. jt says:

    The airport is largely privatized now. How’d that happen?

  10. NCM says:

    Bob Richards said in April of this year: ““The airport is one of the biggest assets we have in Bermuda and the airport is the single unit consisting of assets and services. The assets themselves are, at replacement value, worth about $4 billion. Billion with a B. Services consist of air traffic control, electronic equipment maintenance, Bermuda Weather Service, as well as security services and baggage screening. All of these services are already outsourced.

    “In addition to that, there’s the Department of Airport Operations staff. That’s what the airport consists of. This arrangement will have a concession agreement and what a concession agreement is that a company, in this case Aecon Group, will sign a lease. At this point, the lease appears to be 35 years and a management contract.

    “The private sector involvement in management does not mean privatization. There will be a considerable government oversight built into that contract. The $4 billion of assets will remain the property of the people of Bermuda.

    “This will not be privatization as government will continue to own the assets and will have oversight of the management team. That will be, that oversight won’t be casual. It will be built into the concession agreement to be part of the contract.”

    Sounds like the Finance Minister already expects to set up an authority/quango to oversee the airport.

  11. shameless says:

    So we’re shipping millions of dollars in revenue to CCC to pay for it versus millions of dollars overseas to pay off our creditors to build it ourselves, which the PLP is proposing. What exactly is the difference?

  12. Navin Johnson says:

    Profits at the airport? how about the annual loss of $200,000,000.00 to borrow just to pay civil service salaries ? The PLP knows ZERO and has ZERO credibility here, there or anywhere ….and yet they drone on and offer nothing…

    • LOLOLOLOLOLOLOL says:

      Hmmmmmmmm,I see what you are saying. Help me though, if the airport is operating at a loss (as proved from last years figures) then how does CCC intend to make their money back after the 35 year lease or whatever has expired? Wouldn’t they be in the hole? As previously quoted from both sides of the fence “the airport generates around 3m of revenue every year.” That’s around 106m at the end of 35 years. But like I said, last year it was a loss. And exactly how much money will they spend to build this new Airport? Im assuming more than 100m. That would mean they are going into this project with an intention of loosing money as this is a bad deal for them. Correct me if I am wrong here please.

  13. serengeti says:

    The PLP had no problem privatizing Bermuda’s tax revenues for decades when they borrowed billions of dollars from overseas bankers.

    The airport is not being ‘privatized’. Move on.

    • know dat says:

      Decades?

      14 years

      guess OBA supporters don’t do math.

  14. Bermyman says:

    Misinformation from the PLP, you cannot fee the public nonsense and false financial analysis and then somehow expect us the believe you are credible and capable of running a country. The airport currently costs the country, in order for it to be replaced at some point in the near future we will need to spend vast sums of money we do not have. The PLP want to stop an elected Government from doing their Job. Burt still in denial that they lost the election, get over it!

    This will create jobs, it is over $250m in direct foreign investment, and that is why the PLP are crying. They do not want success, they do not want jobs and they do not want economic recovery for Bermuda. – It is very obvious.

  15. kangoocar says:

    Oh good grief, here we go again!!! The first sentence of this article should have stated ” the plp are bad for Bermuda and we cannot ever let them control the purse strings ever again!” This everyday verbal diarrhea from them needs to stop for the betterment of ALL of Bermuda!!! I would take these plp miss fits more seriously about their concerns of giving our airport away to foreigners for the next 35 yrs if they actually had showed the same concern about themselves giving away our entire financial future to all the FORIEGHN lenders we are now on the hook to!!! We will be answering to foreighners for the next 50+ yrs because of the plp incompetence!!!
    By the way, does anyone know if the shallow minister Scott works for the airport or Jet Blue?? Often when I fly out I see him behind the Jet Blue counter in the departure lounge upstairs, I don’t us Jet Blue but often see him there???

  16. pot stirer says:

    Wonder wers mr burts party??
    Don’t have much support brother, go dig up the tcd privatization, the cement plant in dock yard, the ferries, Berkeley school, the wharf in dockyard that has already been repaired. I’m sure there’s more im just tired of typing.

  17. North rock says:

    When do these jokers start to realize that the only people listening are the diehards. Burt, tell the rest of your pals that even the diehards don’t pay any attention…and the rest of us realize just how non existent your credibility is.

    You talk pretty and you have that lovely scowl on your face….go read a few books on public finance….you might learn something.

  18. Kevin says:

    Burt needs to just simply stop , the whining , the scare mongering…..we have to move forward and forward we will go ….with or without the PLP. they did nothing for our future and are determined to try and railroad progress…..

  19. feel the love says:

    For most of the airports history it was not run by the Bermuda government. Bermuda has owned it for barely 20 years and it looks like a dump (not the actual dump next to it). I don’t remember people complain when the US ran the airport for 50 years.
    It needs to be replaced.

    • North rock says:

      A very good point….

    • LOLOLOLOLOLOLOL says:

      Were you around for those 50 years? after speaking to a lot of the older generations, they have said they spoke out against the US’s ownership during that time.

      So where did your fact come from? Or was it an assumption?

  20. ladilalalaland says:

    Hate to say it, but on this occasion I think HM’s loyal Opposition are in fact right. This could be just the beginning of a major sell off – watch 60/40 very carefully, cause Bob and friends will be taking the lid off that next. No more than the Bank of Bermuda sell out, it will not be good for Bermuda.

  21. Dick H*** says:

    The great economist of the People Liars Party already got us into DEBT. I do not claim to be an economist but a question to Mr Burt and Mr Larry Burchall. I question both your abilities? I have an airport. It cost me X to run and maintain. At a loss. Simple maths I budget 10.00 dollars. My income from said is 8.00 dollars. It cost me 11.00 to run and operate. Would this not be a loss? I have NEVER heard of this airport or any any other airport in the world for that matter as a cash cow. But then if I can get one for free at no cost to me for a term lease then it reverts back to me seems like business sense to me. But then I am just a lemming following my intrepid People Liars Party who can do NO wrong. BS

  22. Guess the elected mouth for this weeks tirade of pure Bull Manure is Mr Burft. Guess Flip Flop got tired of eating shoe leather

  23. Miguelito says:

    PLP, please stop trying to throw the spanner into the mix for crying out loud. Nobody is buying you BS.

  24. Hoolieh says:

    The PLP are inept. They are NOT qualified to run this country!

    Smiths

  25. Cromwell says:

    Unfortunately the OBA is in many ways just like the PLP so they will not privatize the airport but that’s what needs to be done and the shares should be given to Bermudians.

    Get the airport and its operations off the government books and debts into [private Bermudian hands.

    The OBA is weak and not able to do the right thing to reduce the national debt.

  26. max says:

    Nah! Just thinking you’s talking the talk
    We were there you know – we been taken before and you put our kids $2 Billion in debt
    Shame on these Old Gov guys.

    Speciality is pending on out of control big budgets- with their favorite contractors, even ministers cos, on board So no surprises here.
    But now they wanna up the borrowing & get back in my wallet.
    Who. Hold up

  27. Keepin' it Real!...4Real! says:

    Bermuda has reached a point of no return.

  28. aceboy says:

    Our Shadow Finance Minister is incapable of being honest and appears to have great difficulty with simple mathematics. Hundreds of millions in profits going overseas??? Drivel.

  29. The Truth and Nothing but the Truth says:

    Strange how the PLP RUN TO THE MEDIA and England when in the past they have shown hatred and contempt for both. Cry babies at best is the PLP.
    Bermuda could of had 3 airports with the money the “USELESS PLP” screwed Bermuda out of during their reign of “TERROR” !!!

  30. Enough says:

    If anyone in the PLP had a brain cell between them then perhaps they would understand the project properly as well as all of the other benefits the OBA are bringing to the island. The same island that they brought to the brink of complete ruin.

  31. TonyC says:

    And now the BPSU are sending misleading reports to all their members outlining their position? What has this got to do with the Union, other than a clear and blatant attempt to destabilize the OBA and get the PLP back into power?

  32. Tank Rain says:

    It’s done Bruh, accept it and move on. Time to fear monger something new and counter-productive.

  33. We can’t allow OBA to privatize airport. then better yet we can not allow the plp to govern again because they already had many years of practice and F***** us all up ( less a few selected friends )

  34. Boss says:

    For every plane that lands in Bermuda brings 10 pounds of Canadian bud im perfectly fine with the deal. Or you can give us Bermudians Canadian citizenship & that would seal the deal too. Whichever one works for you works for me.