Minister Responds To PLP On Airport Project

November 29, 2016

[Updated] “There is no satisfying the Opposition on this project,” Deputy Premier and Minister of Finance Bob Richards said, adding that they “are opposed to it for empty political reasons.”

Bob Richards Bermuda November 29 2016

The Minister’s statement follows after Opposition Leader and Shadow Minister of Finance David Burt called for the Auditor General to review the airport redevelopment contract in advance,” saying ““given that it will commit the country to a binding 30-year financial agreement, the watchdog of public funds should be able to review this deal in advance.”

Minister Richards full statement follows below:

“The Opposition appears to be working on the theory that if you repeat a falsehood often enough, people will believe it. Their latest press release is a good example of that principle. Let’s deal with their points in turn:

1. Government has promised, and continues to do so, that it will release all the documents of the transaction after it is consummated: i.e. after financial close. That hasn’t happened yet as matters are still being negotiated. We cannot release things that are not yet agreed.

2. The chairman of the Public Accounts Committee issued summonses without the prior notification or agreement of his committee members. Those summonses were therefore invalid. There was also information that was subject to signed non-disclosure obligations and therefore could not be released without the express permission of the other two signatories to the agreement. We take our obligations under signed contracts seriously, as people would expect.

3. There was no violation of Financial Instructions. We received written permission from the Accountant General to waive the need for an RFP. That waiver was published in the Royal Gazette.

4. Government has been forthright with the publication of its statements about the project, having conducted many public meetings. This agreement is one between two governments, Bermuda and Canada – through CCC. CCC are the prime contractor and it was CCC’s decision to award the prime subcontractor role to Aecon. The Bermuda government did not make that choice.

5. The Opposition is looking for another assessor of Value For Money because it does not like the conclusion reached by Steer Davies Cleave – that the Government has indeed received value for money in this transaction. Steer Davies Cleave is a large international firm with offices around the world that provide this type of advice to governments and industry. They are experts on project management, not accountants. The Auditor General does not have the appropriate skill set for this assignment. The Auditor General’s role is to provide an audit opinion on public accounts on an ex post facto basis, not provide the type of service that the Opposition is conjuring up.

6. This is a complex transaction, but Government has provided more information on it than any transaction in Bermuda’s history.

7. There is no satisfying the Opposition on this project. They are opposed to it for empty political reasons. It is shameful that they are prepared to put naked politics before the interests of the country and job opportunities for hundreds of unemployed Bermudians.”

Update 12.34pm: Opposition Leader David Burt responded to the Minister’s comments, and his response follows in full below:

1. Government has promised, and continues to do so, that it will release all the documents of the transaction after it is consummated: i.e. after financial close. That hasn’t happened yet as matters are still being negotiated. We cannot release things that are not yet agreed.

PLP Response: The Minister is asking Parliament to give its approval to a 30 year privatisation agreement that is still being negotiated and which members of Parliament will not see before they vote. This flies in the face of Good Governance and ignores the fundamental premise of parliament, to scrutinise the work of the Government.

2. The chairman of the Public Accounts Committee issued summonses without the prior notification or agreement of his committee members. Those summonses were therefore invalid. There was also information that was subject to signed non-disclosure obligations and therefore could not be released without the express permission of the other two signatories to the agreement. We take our obligations under signed contracts seriously, as people would expect.

PLP Response: This is false; the summons issued on May 26th 2016 requesting Schedule A of the Airport Development agreement was approved unanimously by the Public Accounts Committee in a public session.

Replay of this video is available on Youtube.

3. There was no violation of Financial Instructions. We received written permission from the Accountant General to waive the need for an RFP. That waiver was published in the Royal Gazette.

PLP Response: In his memo dated March 7th 2016 the Accountant General informed the Financial Secretary that his approval was not for the construction phase of the project, as the Minister of Finance did not inform him that the originators of the deal, Aecon, were sole sourced for the construction and concession agreement. The Accountant General stated in that memo, “However, based on my interpretation at the time that there was no contractor selected, I was not providing permission through the construction phase of this project.”

4. Government has been forthright with the publication of its statements about the project, having conducted many public meetings. This agreement is one between two governments, Bermuda and Canada – through CCC. CCC are the prime contractor and it was CCC’s decision to award the prime subcontractor role to Aecon. The Bermuda government did not make that choice

PLP Response: This is a blatant falsehood and is not supported by the facts. CCC stated in documents that have been released in the public domain, “In the case of the redevelopment of the L.F. Wade International Airport in Bermuda, CC was introduced to the potential opportunity by Aecon, a Canadian Company”. For the Minister to continue to argue this point when both Aecon & CCC disagree shows that he is grasping at straws.

5. The Opposition is looking for another assessor of Value For Money because it does not like the conclusion reached by Steer Davies Cleave – that the Government has indeed received value for money in this transaction. Steer Davies Cleave is a large international firm with offices around the world that provide this type of advice to governments and industry. They are experts on project management, not accountants. The Auditor General does not have the appropriate skill set for this assignment. The Auditor General’s role is to provide an audit opinion on public accounts on an ex post facto basis, not provide the type of service that the Opposition is conjuring up.

PLP Response: The Government ignores the fact that Steer Davies and Cleave [SDC] used the Government’s numbers for their value for money assessment. These figures, as many members of the public has pointed out, do not take into account the financial impact to government for the project due to hundreds of millions of lost revenue. Additionally, SDC raised concerns about this figures provided stating the following: “Moreover, the high capital costs have been based on Master plan assumptions developed in 2008, with a scope different to that agreed for the chosen option. This means the estimates are not accurate enough for a direct comparison.”

It is also surprising that the Government does not think the Auditor General would be able to provide an independent review if asked to do so. The PLP has confidence in the Auditor General’s ability to complete this request if asked. At a minimum MPs and, by extension, the people of Bermuda should be able to hear from the ultimate watchdog for public finances before a 30-year privatisation contract is completed.

6. This is a complex transaction, but Government has provided more information on it than any transaction in Bermuda’s history.

PLP Response: This is an untendered deal which has violated the Good Governance Act. At a minimum Parliament should know the impact that the hundreds of millions of revenue that will be transferred to Aecon will have on the Government’s budgets for the next 30 years.

7. There is no satisfying the Opposition on this project. They are opposed to it for empty political reasons. It is shameful that they are prepared to put naked politics before the interests of the country and job opportunities for hundreds of unemployed Bermudians.

PLP Response: The Opposition will be satisfied if the OBA agrees to request the Auditor General to review the project and provide an unbiased view of the impact to Government Finances prior to any vote in Parliament.

The memo from the Accountant General to the Financial Secretary follows below [PDF here]:

airplane click here copy (1)

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Comments (21)

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  1. watching says:

    How can the minister support the view that we should sign off on a agreement through Parliament when he himself states in point 1 that the agreement is still negotiated?

    • Terry says:

      And your point is what.

      Reply please.

      • This Dreamer needs to negotiate my next contract for me so no matter what happens I will win.

      • Kathy says:

        I still smell a RAT in the kitchen:

        “1. Government has promised, and continues to do so, that it will release all the documents of the transaction after it is consummated: i.e. after financial close. That hasn’t happened yet as matters are still being negotiated. We cannot release things that are not yet agreed.”

        How can we, the people of Bermuda, agree to details of a 30 year deal before we commit to it, if we can’t see it?

        Absolutely shameful, that we cannot see what is going on until after the deal has been struck!

        Bob, you have to do better than that for the people of Bermuda (on both sides of the fence)!

  2. SUPPORT NO PARTY says:

    Can Bob Richard, Michael Dunkley or Fahy look the camera in the face and tell all of Bermuda that they are not benefiting off this weird and unusually bad deal in any way?

    • Tom1 says:

      You say it’s a bad deal, but I still have yet to hear a better alternative. Until you or the PLP come up with one, stop moaning!

      • Kathy says:

        How can we come up with a better alternative when we cannot see the details behind the deal until AFTER the deal is done?

    • Like what? says:

      LOL–

      Like what a “pathway” to Canadian citizenship for when we collectively run this country into the ground they have someplace to go???

      LOL–

    • sandgrownan says:

      We all benefit.

    • truth teller says:

      Wonder who benefitted on ALL the PLP OVERRUNS.

    • Toleratate says:

      And you’re assuming what exactly…. I agree that it seems Bermuda is full of politicians who can’t even look in a mirror from reading the COI….
      SMH

    • Jus' Wonderin' says:

      Why is it unusually bad and weird?

    • Just the Tip says:

      I’d like to hear why you think that this is a bad deal, what facts show you that it is?

      And then as for the question you are asking those three the answer is that they are benefiting from it, its anew airport a benefit for every one who will be travelling, there will be jobs for Bermudians which means that when the elections come round they can praise it and get back into power.

      I think the real question you want them to answer is “Can they confirm that they are not directly or indirectly benifiting financial from this deal” …even then i’m sure they got wiggle room.

      • Johnny says:

        the new airport owners are not required to hire Bermudians. Yes most of the current airport employees have a choice whether they wish to continue working there, but any new jobs are not guaranteed to go to Bermudians.

        BTW i think it is a bad deal because we are taking one of our biggest sources of revenue and giving it away (OK yes, we will get a 30 year old airport). Call me naive, but if we are struggling to repay our debt while we still own the airport, how will we cope without one of our biggest sources of revenue?

    • jt says:

      Would it satisfy you if they did?

    • M.C. Beauchamp says:

      And can you claim that you can read a balance sheet?

  3. Miguelito says:

    @ support no party…They ARE benefitting. We’ll all have ourselves a new and functional airport. What’s wrong with that, in that the existing one is apparently beyond repair?

  4. Airbus A 380 says:

    Mr Minister. Please don’t waste the time nor effort to reply to the empty opposition who bleat in the wind like lost sheep or more so like Lemmings that follow for no valid reason other than to just oppose. Look what they managed in their years of total disarray

  5. Rhonnda Oliver says:

    Just a thought about the hundreds of millions of revenue that’ll go missing because of this project. Without this project, we’ll likely be spending it on airport upkeep.

    • Kathy says:

      What about the hundreds of millions of revenue that will be going to Canada instead of staying in Bermuda to create jobs (even if it is maintenance of our old airport)!

  6. Gray Matter says:

    Opposition is using the Airport as their political football. So, unfortunately, nothing anyone says or can show or prove, other than the PLP, is right. Everything is false and a lie, except what PLP say is true. Everything positive and beneficial to all of us, is everyone else lying, lying, lying, except for the PLP. It’s a childish and empty game. Opposition is prepared to tear the island apart to get back into power. This, in my opinion negates everything they say. They have the bit between their teeth and they want politial power, no matter what. This is a very scary situation to me. And I believe to anyone who wants our island to continue to recover from the piss poor previous adminstration. Their hand in the cookie jar they simply cleaned it out – took all the money out of the public purse and turned our island into the broken economy, the OBA were elected to try and save. PLP converted a thriving island with a world class reputation for good governance and NO UNEMPLOYMENT FOR YEARS AND YEARS AND YEARS, and crushed it, with Bermudians and Investors leaving by the thousands. What a sad legacy that all of us have had to endure. Opposition was a FAIL while holding the reins. And now, with all their energy only ever being spent on how terrible every single thing the OBA does and how fabulous PLP is, it’s transparently obvious they have no solutions to anything, just hate for everything. Thats their mandate. Pretty sad to say the least.