28 Minute Video: Minister Richards On Airport

November 21, 2016

“After careful consideration, much consultation with leading experts, the Government is satisfied that the CCC solution is not only the best solution to a pressing problem, but will bring many advantages,” Finance Minister Bob Richards said today.

The Minister held a press conference to provide an update on the airport development project, saying that “we have now fulfilled the requirements of the Entrustment Letter established by the Foreign Commonwealth Office and laid out the Full Business Case as proposed by Deloitte.”

28-minute live stream replay of the Minister’s press conference:

The Minister’s full statement is below:

Parliament is to soon consider legislation consequential to the Government’s plan to invite a substantial capital injection into the island, that will lift our economy, create desperately needed jobs and new opportunities for entrepreneurs and provide us with a new strategic asset – a new, first class airport terminal building.

The needs of the airport have long been known.

But the solution has been hampered by Bermuda’s debt burden and an annual fiscal deficit – both of which the Government has been addressing.

We don’t have the money to simply hire someone to build it. And it is not prudent to go deeper in debt by borrowing more money

The UK Government, you may recall, provided an Entrustment Letter as we proceeded with discussions with the Canadian Commercial Corporation – a crown corporation of Canada – and their designated contractor Aecon, to see if we could come to terms to make a new airport terminal a reality.

Consulting firm Deloitte was contracted jointly by the Bermuda and UK Governments to conduct an independent appraisal of the method of procurement for the redevelopment of Bermuda’s airport using the CCC.

  • a. 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.
  • b. The engagement 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.

We are using an incremental process of procurement for this project.

And while the Bermuda Government is not obliged to follow “Green Book” standards, we accepted the Green Book guidance as some of the highest in the world with regard to public sector procurement. So we used the findings of the Deloitte report to enhance the due diligence of the project.

Last week Monday, I provided Parliament with an Overview of the Airport Redevelopment Transaction for Members of Parliament.

It was the first fulsome, public description of the transaction that would bring Bermuda its first purpose built airport. It was also released directly to the press on Wednesday.

Friday, we further released to the press the requested Overall Business Case – Entrustment Report and an independent assessment on Value for Money Report.

In so doing, we have now fulfilled the requirements of the Entrustment Letter established by the Foreign Commonwealth Office and laid out the Full Business Case as proposed by Deloitte.

The VFM assessment highlights how the Airport Redevelopment Project compares with similar P3 deals and concludes that overall, the Project achieves value for money for the people of Bermuda.

The Summary provides the highlights of the comprehensive Overall Business Case -Entrustment Report that fulfils the entrustment requirements established by the Foreign Commonwealth Office and addresses the gaps identified in the Deloitte report.

These reports made public last week have provided a thorough and detailed analysis and concludes the government is taking the best course of action, under our current circumstances. This is verified by the independent assessor.

In a nut shell, this work:

  • a. demonstrates that the Project is supported by a robust case for change;
  • b. describes the analysis undertaken by the Government to optimize value for money;
  • c. shows that the Project is commercially viable;
  • d. outlines the Government’s view that the Project is financially affordable; and,
  • e. provides evidence that the Project can be delivered successfully.

The reports further show that this transaction provides value for money and all of the gaps identified by the Deloitte report have been addressed

Bermudians should know that after careful consideration, much consultation with leading experts, the Government is satisfied that the CCC solution is not only the best solution to a pressing problem, but will bring many advantages that will be useful to the long term future of Bermuda and Bermudians.

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Comments (17)

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  1. How come we heard corruption when P.L.P was in, but now its just a Fuzzy report?

    • James H says:

      Cos unlike the plp there is nobody taking a huge cut to make them set for life on the backs of the poor folks who were stupid enough to vote for them.

      • drunken ursula says:

        James you can’t be for real??? what PLP members been setup for life, proof ?

    • Jus' Askin' says:

      We could finance and build our own airport 

      OBA’s approach to this airport deal proves They Do Not Care about BERMUDIANS 

      Why is the Finance Minister in front of this?
      Seems like he has vested interest in this deal 

      OBA is looking out for whom?

      Everyone agrees Bermuda needs an upgraded airport

      We need to get rid of this deal and OBA and it’s members be made to pay the penalty for such a DUMB DEAL  

      Chasing around for Pay Roll Tax & Social Insurance Monies but allowing this new airport to pay NONE for Years 

      RICH GETTING RICHER……..

      ROAD to ELECTION 2017

  2. sage says:

    Mwa mwa mwa mwaaa…

  3. What went wrong says:

    So we give up 41 million in revenue and 11 million in expenses, and this is a good deal?

    Someone, please sign me up!

    • Sad says:

      The people passing this will not be alive when the Bermuda children have to pay for their mistakes. So who cares now!!! That’s the idea floating around.

    • Build a Better Bermuda says:

      It is interesting to continually read how the airport revenues are continually increasing everytime someone say what they are. Course, as I read the prior reports also state that the Project Co will owed a certain percentage on the investment from the airport profits, but if profits exceed that amount, the excess will be slips between Project Co and the Quango. It is funny how people seem to think that we are just going to get an airport built without having to give up something, but to date, I haven’t heard a single idea that can show that what we would give up would be less than this. AECON is taking a risk to build this, odds are they are going to hit overrruns (so long as government isn’t responsible for them we won’t have to pay them), it works to their interest to run the airport to turn a profit, but they don’t control the fees, they won’t own the airport or air space. Is this an ideal, no, but ideals are nothing more than dogmatic illusion dangled in front of those who are happy to be fooled. We live in a real world, and real solutions are required, and they don’t come free. Anybody that tells you otherwise is lying, and Minister Richards hasn’t said that this was going to be a free ride, just the best one in a bad situation.

    • reddamtibi says:

      Helicopter Bob says so damn it!!

  4. Wow! says:

    Did you ask the sage commission because so far everything they’ve suggested was put to pot

  5. Riley says:

    I think Minister Richards makes shallow decision after shallow decision. Back in the 80s our current airport handled nearly double the numbers it presently does, so there is no reason to believe it cannot now. What it needs is infrastructure TLC and enough personnel to maintain and run the place sensibly. Instead we get a short term make work vanity project by a government desperate to pretend they are creating real jobs. In reality, all they are doing is giving the shop away and yet again Bermudians suffer with their smug arrogance.

    • Build a Better Bermuda says:

      Please get your head out the sand, what was handled in the early 80′s was far cry from what and how airports are handled today. Even by the 80′s standards, our airport was out of date then. You can TLC a dead horse all you want, but isn’t going to come back to life; and you can hire as many people as you want to flog it, but it still won’t move. All we’d be doing is throwing more money away. Infrastructure TLC isn’t going to solve structural mismatching, lead pipes, out dated and long forgotten electrical, rusting rebar and crumbling concrete.

  6. Jus' Askin' says:

    When will OBA stop with the LIES?

  7. unus sed leo says:

    brand new airport… no bridge to get tuit.

    • Build a Better Bermuda says:

      So find someone who willing to build it, and see if they will do it without any ROI