Airport Redevelopment Project Consultations

January 27, 2016

Aecon has retained LAS Int’l Consulting and Bermuda Environmental Consulting to undertake a Scoping Study as part of the Environmental and Social Impact Assessment process for the redevelopment of Bermuda’s airport, and the public is invited to consultation to seek feedback on the social and environmental issues that need to be considered.

The consultation events will take place on February 2nd at Clearwater Middle School, February 3rd at Pennos Wharf and February 4th at the Anglican Cathedral Hall in Hamilton.

The full announcement is below:

Aecon Group Inc., a prospective partner of the Government of Bermuda in the redevelopment of the L.F. Wade International Airport, has retained LAS Int’l Consulting [LAS] and Bermuda Environmental Consulting [BEC] to undertake a Scoping Study as part of the Environmental and Social Impact Assessment [ESIA] process for the Redevelopment of the L.F. Wade International Airport.

LAS and BEC invite the public to a consultation to seek feedback on the social and environmental issues that need to be considered in the ESIA.

The consultation events will take place as follows:

  • Tuesday, 2nd February: 6:30 p.m. [doors open 6 p.m.] at Clearwater Middle school, St. David’s.
  • Wednesday, 3rd February: 6:30 p.m. [doors open 6 p.m.] at Pennos Wharf Cruise ship terminal, St. George’s.
  • Thursday, 4th February: 5:30 pm at the Anglican Cathedral Hall, Hamilton.

Graeme Smith, Technical Manager of LAS International Consulting, says: “Public engagement is an essential part of the Scoping Study. We encourage anyone who wishes to provide feedback on the airport redevelopment project to attend one of these meetings.

“This could be from a building, environmental, social or economic perspective. We will use this information to identify and assess the environmental and social impacts and benefits of the proposed redevelopment to enable a balanced decision-making process.”

Annie Glasspool, Vice President of Bermuda Environmental Consulting, says: “Consultation, particularly at this early stage of the ESIA, allows the entire community to participate in the assessment process by expressing their views and any concerns they may have and for Aecon to properly understand the potential impacts of the proposal. We welcome everyone in the community to attend and to provide feedback.”

Official notices for the meetings were published last week.

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  1. The drama is in motion.

  2. Justin says:

    Unbelievable that Bermuda/OBA has guaranteed these guys a profit by agreeing to subsidize them if they have a revenue shortfall once the new airport is built. If that’s the case we might as well take the risk ourselves (i.e. adding more to our public debt) because if tourism booms again we can make all the profits.

    • Fly Bird says:

      Can you please advise where I can find this info. on the subsidizing?

      I’m interested to read up on that…

    • jeremy deacon says:

      totally agree.

    • SMH says:

      We could have taken the risk ourselves if we still had the capital needed for the project but sadly all we’re been left with is DEBT which is why we’re having to go this route.

      • Justin says:

        Well it is interesting that you say that, because I often ask myself if we really need a $275m airport? I believe we could get something that will suit us just fine for probably half the cost. If you halve $275m you get to $137.5m. If we can dig up $70m+ for the Americas Cup then we can dig up $137.5m for a new airport.

    • Build a Better Bermuda says:

      Your suggested alternative…? Also they haven’t guaranteed them a profit just the return on the contracted amount, this way greatly reduces our risks and we would only be on the hook for the payment shortfalls from the revenues, plus we aren’t on the hook at all for construction overruns.

      • Justin says:

        Uhmmmmm, ‘return on contracted amount’? Care to explain what that is? In my simple world revenue comes before profit on an income statement, so within the revenue lies a percentage of the profit… Please explain the risk that the contractor is taking in this agreement?

        My alternative? A smaller and simpler airport for half the cost funded my increasing the debt in the short term. When tourism booms like the BTA says it will, the airport should pay for itself and once it is paid off then everything else will be profit.

        Bermuda isn’t set up to be a high-volume tourist destination like Cancun so we don’t need a massive airport. All we need is something practical with the decor a representation of Bermuda’s culture. Simple as that.

        • Build a Better Bermuda says:

          I would have thought ‘return on contracted amount’ was self explanatory. They are being contracted to build an airport for us for around $250m, thus they will receive payments from the airport revenue stream, after expenditures, over a period of around 30 years, to the total of $250m, with maybe interest. During that time, they will also be managing the airport facilities in much the same way any other property management facility does, pretty much like Black and MacDonald is doing at the hospital now, in that they will have property management staff that will contract local companies to manage the various facilities… most likely the same local companies contracted to installed them… Pretty much what is being done at the airport now.. The risk that is on the contractor is that they will only be paid the contracted $250m to build e new airport to the agreed design and specifications that will be required to meet international airport accreditations, should the be cost overruns during the construction… that is entirely on them to cover. And for a destination our size, the proposed size is about right for now with expansion into the future, or if there is an emergency with another flight having to land here during a peak time.

          • Make a new plan Stan says:

            Suppose they’re only saying it will cost 250 and build it for way less…..say 100 do they still get to run it until they make back 250? Or do they turn it back over once they have recouped costs and the interest on the smaller amount?

            • Build a Better Bermuda says:

              Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha…… sorry did I just laugh at that out loud. OK, first, if they manage to build a 7 jetway airport for $100m, then in all likelihood it would fail the accreditations they will be required to meet. Second, it would mean that Deloitte, the U.K. Government, and whoever have been contracted to ensure we receive value for money on the contract were also wrong… and given the scale of your cited difference, there would be grounds for the government to take some sort of legal actions for their failure to ensure value for money was meet.
              As it seems you aren’t familiar with construction contracting, in any contract, when you sign that contract, they are legally obligated to provide what they have been contracted to build for that value; and you are legally obligated to pay them for the value you signed the contract for. This is the case in every contract that has ever been signed. So, every contractor will want to try and bring in their work under budget, but they still have to produce the work to the contracted level, which is why it is important to have a well defined ‘build to’ contract, which is what is being hammered out now, and this is why the government has contracted an independent consultant and the U.K. government will review the ‘build to’ to ensure it provides value for money.

              • Make a new plan Stan says:

                I only asked a question……the number I used was hypothetical.

                I am quite comfortable not knowing EVERYTHING about EVERYTHING just so you know. I have learned a lot by reading people’s comments on here so I thought it would be okay if I asked.

                I read your response a couple of times for clarity but I must admit that I don’t feel like you really answered the question I asked to my mediocre level of understanding. Since you already pointed out that I definitely, hilariously (to you) clueless I don’t mind showing more of my ignorance by asking this:

                You mentioned “value for money” but I thought that AECON was paying for the whole project and assuming all risks. So it’s not really a case of you get what you pay for because the government isn’t actually paying for anything is that correct?

                Feel free to laugh out loud again if the question above is also as powerfully stupid to you as my first one.

                • Build a Better Bermuda says:

                  Apologies, your exaggerated hypothetical caught me when I needed a good laugh. The important part for government is to insure the contract provides ‘value for money’… that is to say, that when you look at the design and specs and compare it to like project here and in other juristiction, does the proposed final product value match the proposed contract cost value. As you hypothetically questioned, is no good for us to sign a contract for $250m for an airport that would only cost $100m to build. Typically, when a contractor prices a build, they have to price for a ‘fudge’ factor, or, that is to say, they have to make sure that when something goes wrong and cost more than they might have thought, they have covered themselves for this eventuality. And there will be things that will cause additional costs, especially in building something as complex as an airport here. This is something we also have to accept as the client, with a contract. The alternative is them doing it for what is referred to as ‘time and materials’, meaning that whatever it cost to build will ultimately be the final price. Trouble with this is that it doesn’t put much pressure on the contractor to make sure they stay in budget, and is a nightmare to track and manage the cost for auditing purposes and make sure someone is trying to rip off with exagerated invoices.
                  Now for the government paying, in a way we are, we are sacrificing part or most or all of a revenue stream to the contractor in compensation to them recouping the contracted cost (something that would have been done in any case). Value for money is indeed important to government, this will be our airport and it will need to meet international aviation accreditations for it to be used as such. It will also eventually be returned to government hands, so it is important to make sure that the standards that it is built to will stand the test of time and that it is fully functional when we get it back.

          • justin says:

            So the big question is if the airport doesn’t give the contractor their desired revenue, then who is going to make up the difference? You know the answer, but you are choosing to dance around it. The answer is that, we, the taxpayer is going to make up the difference. That is where the deal breaks down for me unless somehow the taxpayer gets a kickback on any excess profits? You seem to be ‘in the know, so I look forward to your answer.

            • Build a Better Bermuda says:

              ‘we would only be on the hook for the payment shortfalls from the revenues’, this was may response to the first post, so I haven’t danced around it. I have stated may times in May past articles. As for in the know, not really, I just read what is available and not just what is fed to me by those with political agendas. As for profits, well that info isn’t available yet and will be dependant on th final contracts financial arrangements. Could go a couple of ways, though I would put towards an agreement like this; the airport has 2 types of revenue streams, the commercial and the fees. Commercial being things like airline facilities rentals and service agreements and concession space rentals, and the fees being the government fees, departure tax, landing fees… and the such. As CCC/Aecon will be managing the airport for the duration of the contract, they will of course be entitled to the facilities commercial revenues, but they will also be responsible for the facilities expenditures, so that is going to cut into those revenues, possibly all of them. They will also be paid a set amount at certain times (monthly/quarterly??) for the construction contract reimbursement, so in all likelihood monies from the government fees revenues would also be used to pay the remainder of the contract costs, leaving any remaining government fees for government. However, should the combined revenues not make the construction payment, then we would be on the hook for any balance. Course this would fall well short of us paying the whole, should we try to self finance, and the odds of a government run construction contract coming in on time and budget are virtually fantasy, so we would be paying for any overruns. Of course that is me speculating and I await for the final agreement, which won’t be until around September this year.

              • justin says:

                So they have essentially guaranteed them a profit, because let no one kid you, within that $250m is profit. The idea of making them accountable for any overruns is good, but these aren’t stupid, so they’ve obviously priced the project accordingly.

                At the end of the day I think the main argument is that Bermuda doesn’t need some grand $250m airport. I heard a rumour that we are supposed to get a new causeway included in that price. Is this correct? Because then it would start to make more sense.

                • Build a Better Bermuda says:

                  It’s only profit in there for them if they actually keep overruns in budget. As I have stated before, that $250m is for I believe a 7 jetway airport, which would be about right for us as around peak we have had as many as 5 planes in at once… at this was recently. So that leaves us some room for expansion or if the is an emergency flight diversion here, which happens fairly regularly. And when you look at the price tag and compare to similar builds, the price is about right for that size. As for the causeway, I don’t believe it is included, as I would expect that price to be more around the $400m or higher. Lastly, anyone who say we can keep using our current airport obviously doesn’t pay attention when they are there, or has never seen what is behind what the customers would see, in the long run, it will cost more to keep going with the current terminal. So long as the value for money can be guaranteed, then this will be a win for us.

    • lurch says:

      So you would rather add $500m-$1bn to Bermuda’s debt then. That was the PLP’s plan. As per usual.