Blue Ribbon Panel Says Airport Is A ‘Good Deal’

February 8, 2017

[Updated] The Blue Ribbon Panel announced today [Feb 8] that they feel the airport redevelopment plan is a “good deal” and “commercially sound.”

Speaking at a press conference, Chairman Malcolm Butterfield said, “In summary, the Blue Ribbon Panel has found that this transaction is commercially sound and reasonable and likely to meet the Government’s stated objectives of long-term sustainability, increased traffic volume and revenue, while effectively providing for the structural needs for the airport.”

“It is the overall panel’s view that it is a good deal,” added Mr Butterfield. “It is not perfect, but it’s a good deal.”

Last month, Finance Minister Bob Richards announced that a team of local professionals will serve on the Blue Ribbon Panel to review the Airport Redevelopment Project.

The panel, which is chaired by Mr. Butterfield, a retired managing director at KPMG, also included Mr. Craig Simmons, Economics Senior Lecturer at the Bermuda College, Mr. Gil Tucker, retired Chairman of Ernst & Young Ltd., Mr. Barclay Simmons, a Managing Partner of ASW Law and chairman of Butterfield Bank, Mr. Anthony Joaquin, retired partner of Ernst & Young and Chairman of HSBC Bermuda and Ms. Caroline Foulger retired partner of Price Waterhouse Coopers.

The press conference has just concluded, and we will update with more information as able, and in the meantime the live video replay is below.

27-minute live video replay of the Blue Ribbon Panel’s press conference this afternoon:

Update 4.52pm: The 34-page report from the Blue Ribbon Panel follows below [PDF here]:

Update 5.47pm: Minster of Finance Bob Richards said, “I am pleased to hear that the Blue Ribbon Panel has confirmed that the Airport Redevelopment Project is a commercially sound and reasonable project for Bermuda.

“The panel has determined that the project reduces financial risk to the Government of Bermuda and allows Bermuda to share in the benefits of a new airport with no new Government debt.

“In addition, the Government is pleased that this panel of distinguished Bermudians has concluded that all of the entrustment questions have been answered.

“What should now be abundantly clear is that this project is commercially sound, and that more than enough information has been provided in documents, and through the Government’s expert financial advisors, to allow members of Parliament to evaluate the project.”

“We accept that the intricacies of this transaction have been difficult to communicate. It is highly unusual for such public infrastructure projects to be so widely debated.

“I would like to thank the Blue Ribbon Panel for their hard work in providing an additional independent evaluation of the Airport Redevelopment Project. The Government of Bermuda is grateful for the insight they’ve provided. My hope is that their conclusion will provide an additional level of comfort for Bermudians.

“I would also like to thank the Canadian Commercial Corporation and Aecon for having been ready to answer any questions the Blue Ribbon Panel had about the project. The panel had full access to all documentation pertaining to the project, as well as access to senior representatives of our independent, third-party financial advisors to answer their questions.

“The Government has been working on this important infrastructure project for the last two and a half years, with yet another independent evaluation of the project concluding this is a good deal for Bermuda. It is time to move forward with it. We are confident that this is the right deal for Bermuda – and at the right time.”

Update: The PLP said, “The Progressive Labour Party is not surprised by the conclusion reached by the Blue Ribbon Panel. We stated from the beginning that the Terms of Reference of this panel would not lend themselves to any other outcome, which is why the Minister of Finance then proclaimed that he was sure the panel would, ‘come to the same conclusion that I came to’.

“The Blue Ribbon Panel does not answer the question that every MP should want to know, how much money will Aecon earn from Bermuda’s most prized public asset, our Airport. It is estimated that Aecon’s shareholders will receive a minimum of $300 Million in dividends over 30 years before Bermuda gets any revenue sharing.

“The fact that the Government refuses to disclose the financial model and will not answer this question that we have asked repeatedly means they have something to hide.”

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  1. San George says:

    Train has already left the station – what’s point of all of this?

    • Onion says:

      To make it clear how dishonest the PLP have been this whole time. This is their version of Benghazi.

    • So its not comercially sound now, does anyone think these hand picked would say otherewise.
      F!@$ing JOKE.

      • jt says:

        Did anyone expect O.J. to say anything different?
        F!@$ing JOKE…er.

      • wahoo says:

        Nobody even knows what you are trying to say.

      • OJays says:

        Did anyone think Onion Juice would be content with this answer regardless of who was on the panel?

        However, he / she would have given two thumbs up with the PLP airport which was forecast to cost 2X more and no plan on how we would pay for it. With every single government project that they put out to tender (much smaller projects I might add) they went millions or tens of millions over budget. Some example Berkely, Dame Lois Bldg, Port Royal, Cruise ship pier and so on. Port Royal went millions over budget and much of that project involved moving dirt around! Imagine the cost if they actually built something! So OJ exactly what do you propose we do!

        Let me guess – borrow? Okay so lets say we do that. Ever borrowed money to buy a house? If you have, you would know that even with a 20% deposit meaning you borrow 80% – by the time you pay off that loan it actually costs you 2X the amount
        borrowed!!!!! What will your true cost be. Crunch the numbers and get back to us. Surely you have had time to come up with a plan between marches!

        In fact any PLP minister, backbencher, BIU member, anyone (we know you are reading this), please explain how you realistically expect to pay for it?! You have had almost two years to come up with a plan and I haven’t heard anything? Well except for that bonehead / Trumplike idea of getting the international business to pay for it. If you have a great finance plan, please expect why you didn’t exercise the same when you privatized the hospital? Why was the hospital a good idea but not the airport! Many millions were raised for the hospitals thru donations from companies, families, trusts and generous philanthropists. Many pieces of equipment, time and labor donated by companies , doctors, St. Johns, the pink ladies, Do you honestly think you will get people to donate free time to work at the airport? Do you think people, families, companies will buy airport equipment! LOL. If you do I have a bridge in San Francisco to sell you!

        • The Truth Hurts says:

          Not St Johns. I think you probably meant – the group behind the barn , pink ladies and candy stripers. I believe it the Hospital Auxiliary or something like that? much of what they earn through the Barn, the Hospital Coffee Shop and Gift Shop goes to buying Ambulances and equipment.

          By the way, we don’t say it enough; thank you to the many men, women and students that give of their time to assist.

        • aceboy says:

          Exactly. They fully support the PLP to build the airport with basically no information at all. Just the *Brilliance of Burt* is all they need.

          The panel at the recent Town Hall was composed of two clueless ministers and a PR person. They are a party of sound bites and misinformation.

          • aceboy says:

            The PLP PR Mill is working overtime again it appears. I am regaled with a sponsored ad video, over and over, whenever I click on a YouTube link all about the airport deal. It is very slick and clearly made by non Bermudians. The casual reference in the beginning to “the Bermudians” instead of just “Bermudians” says it all.

            It’s right in the first 5 seconds of the video. I haven’t watched the whole thing, only the five seconds before I can skip it.

      • James says:

        OJ – The hand picked crowd you are referring to, are almost all professional accountants that look like you. What else could you ask for?

        • U.B.P. surrogates look like me too, and your point is?

          • Wahoo says:

            I think the term surrogates is racist. I would not blame one of them for suing you since punching you would be illegal.

        • U.B.P. Surrogates look like me, Ben Carson and Black Trump Surrogates look like me.
          Believe it or not there were sellouts on the Plantations that looked like me.
          Your point is?

        • If you want a certain segment of people to buy into something, use people who can relate to the segment of people.
          Smart concept I would say myself,

      • 32n64w says:

        As usual, you’ve completely ignored the facts in favour of lies and disinformation.

      • aceboy says:

        OJ. What does the term discounted cash flows mean? Give it to us in layman’s terms so we can all understand. Don’t cut and paste from a google search. Just off the top of your head.

        • ct says:

          Hi,discounted cash flow recognises that a dollar is worth more today than it is next year because you could invest that dollar this year and have it be worth more later. Let’s look at an example of how you calculate a discounted cash flow. Say you played and won the lottery and you had a choice of whether to get a lump sum now or annual payments for the next 10 yrs. Let’s also assume a discount rate of 3% — this represents what you could earn each year on a dollar. So, say the lottery people tell you that you could have $1000 now or you could have $100 per year for the next 10 years. Which would you take? If you took the annual pay out, you would have to discount each of those annual cash flows back to today’s value of money using the 3% discount rate and the number of years in advance that you would have received that $100. Hopefully, this example shows you that the second option of getting $100 per year for 10 yrs would net you less in today’s money than the $1000 now. Hopefully, that clarifies?

          • aceboy says:

            lol. You answered on behalf of OJ. I wanted to see if he had a clue. I was expecting him to say that the discount is what Aceon got or something silly like that.

        • aceboy says:

          No response from OJ yet.

          Frankly this type of question needs to be asked by reporters of the protestors tomorrow. Let’s find out exactly how much knowledge about this deal they have and whether or not they understand the financial aspect of it at all.

          We’ve seen the likes of OJ claim that a qualified audit is a good thing because it is undertaken by a qualified person.

          Let’s hear from the protestors which valuation method should be the best one for this project and why, for example.

  2. heyy there says:

    Burt is gna be vaxxx !

  3. Toodle-oo says:

    Still won’t be enough for the no , no , no’s
    The goal posts will simply be moved yet again .

  4. Warlord says:

    I.e. let’s sit back with some popcorn and see what the PC and BIU/PLP have to say about these finding.
    PS I am looking forward to what brother Chris has to say

    • Triangle Drifter says:

      The BIU cannot keep its own financials in order & up to date. How can anyone in the BIU form an educated opinion as complex as this terminal deal?

    • wahoo says:

      It is not Chris’ concern for crying out loud he is a union head not a politician…He is lucky they even invited him to an interview.

      • Real Deal says:

        He dose not have to be politician he is a Bermudian looking out for politician even for the ones that cant see state

        • Real Deal says:

          Back in the day when Bermudian had houses to build people did not say i am not a contraction worker or i am not a landscaper. they just came to help any why they could with what they had.

    • Jahstice says:

      Chris will have a hissy.

    • Navin Johnson says:

      would not understand him anyway….

  5. Vote for Me says:

    There will clearly be lots of comments about the panel’s conclusion.

    1 – where is the report that indicates their analysis?
    2 – given their professional backgrounds, would they recommend the deal to a client if they were still in private practice?
    3 – what is the underlying value of the contract – to what extent does the government have to either make payments to Aecon or absorb costs that would otherwise be borne by the airport
    4 – do you believe the underlying assumptions about future passenger flow are reasonable?
    5 – of the current revenues and expenses that currently exist, what is the net impact of the deal to the government receipts? A net positive or a net negative?

  6. wahoo says:

    Well Mr. Butterfield and Mr. Simmons come across as very knowledgeable I, get the impression that they have spent a great deal of time on this and been very fair in who they have invited to the discussion. I am much more at ease now that I have listened to this.

  7. Jam Bermuda says:

    AINT NO STOPPING US NOW….we’re on the move!

  8. Oh please says:

    Good deal, for who.

  9. Paid Blogger says:

    Certainly would be very interested to see who the PLP will nominate as “their Blue Ribbon Panel”??
    The elected panel is certainly one that has vast experience and credibility to review the Airport deal.

    Lets hope the other side agree with this and we can move forward for ALL of Bermuda

  10. Jus' Askin' says:

    :-D :-D :-D

  11. jt says:

    So Burgess, can we expect to see this panel in front of PAC? No? Why not pray tell?

  12. Datbye says:

    This is such a joke, come on lets be real about this, they picked them anyone really thinks that they was going to be against this.

    • Politricks says:

      I knew this would be the reaction to a positive report.

      These individuals are respected in their various fields whcih are primarily if not all finance related. They have all been involved in numerous complex deals, amalagmations etc. heck, one of them even oversaw the hospital PPP development. So he was good for the PLP project but now has no integrity for this PPP development?

      I can easily say that I would put more faith in the opinion of these individuals as opposed to ones of a reverend, union leaders, a radio talk show host, that have absolutely no experience in such deals and a political party that oversaw the decimation of our national finances.

      I have a feeling, however, no matter the experts opinion on this project you and others will not accept a different view.

      • trump supporter says:

        Maybe they want some of the past administration mps on the board. You know the ones that screwed up every project they done.

    • Short Point says:

      Ya Datbyea- let’s get real about it. For the most part, the panel is comprised of past Bermudian Partners of the worlds best accounting firms. They were legally bound in their profession to be ethically and financially honest. Do you think any of them have changed since then? Or is the panel not racially diverse enough for you?

    • 32n64w says:

      Your thoughtless remark does a grave disservice to the professionalism and decades of experience this panel brought together for the ultimate benefit of fellow Bermudians. Disgusting.

    • Zevon says:

      But you’ll believe an amateur handwritten presentation by a random nonentity retired accountant….

  13. Jahstice says:

    Get on with building de airport right after Fridays session in de House!

    • Micro says:

      I’m sure that is the plan. Just as soon as the bill is passed construction will begin within the next two weeks.

  14. Jadon says:

    Totally shocked they think it’s a good deal… nottttt lol. OBA/UBP trying everything and anything to convince the people this is a good deal. Lol you will blind your supporters but not the oppositions.

  15. Alvin Williams says:

    The so-called Blue Ribbon panel set up by the finance minister was nothing more than a mechanism by which he hope to lend legitimacy to the plan to sell off a major Bermuda asset our national airport.

    • bdaboy says:

      “…. the plan to sell off a major Bermuda asset our national airport.”

      What plan is this? Why do you just make stuff up? Is it the only way you can continue playing the victim?
      I guess it would have been acceptable to you to just give away $800M.

    • Joe Bloggs says:

      And TCD and KEMH and …

    • Bullseye says:

      Read the report then adjust your ludicrously inaccurate comment. “plan to sell off a major Bermuda asset our national airport.” A lie doesnt become true just because you say it over and over and over.

    • Bermy Swing Voter says:

      Why do you undermine your credibility like that?

  16. CT says:

    “t is estimated that Aecon’s shareholders will receive a minimum of $300 Million in dividends over 30 years before Bermuda gets any revenue sharing.” PLP

    This is factually incorrect. What it seems that Burt is doing is confusing IRR with annual return on equity so he is multiplying 15.9% by $69m by 30 yrs. An IRR is a return OVER THE PERIOD OF INVESTMENT NOT ANNUAL. Upon reaching an IRR of 15.9%, the Bermuda govt will share in revenues 50/50. Under base case model, this is estimated to happen in year 10. So, we will be sharing 50% of all revenues each year after that. (I asked the Ministry of Finance for that info, and they gave it to me. It wasn’t hard.)

    • aceboy says:

      Let’s not let the truth get in the way of a good story by the PLP.

    • Joe Bloggs says:

      The difference is that you believe what the civil servants in the Ministry of Finance tell you. Others do not.

    • Vote for Me says:

      CT – ask the Ministry of Finance whether the IRR is calculated (per the terms of the agreement) before or after debt service. The measure is typically calculated on equity but that may not obtain in this instance. Better yet, ask the Ministry of Finance to provide a sample calculation of how the IRR will be calculated and when the government participation is expected to ‘kick in’.

  17. flikel says:

    I am not expressing an opinion on whether Bermuda should or should not proceed with this deal.

    I question why the Finance Minister did not allow the PLP to appoint one or two people to this Blue Ribbon panel? This panel has achieved nothing as their ‘independence’ is being questioned; a bi-partisan panel should have been appointed instead.
    The protests will continue and will only get stronger. To silence the critics and gain more support, I believe the Finance Minister should have allowed PLP appointments to this panel.

    • Earth watch police says:

      Yeah they should have appointed genivive and Laverne lol.

    • Politricks says:

      Politicizing the Panel would be the exact opposite of being independent.

      The only reason these individuals integrity are being questioned is because they didn’t give the answer you and others desperately want.

  18. bdaboy says:

    “I question why the Finance Minister did not allow the PLP to appoint one or two people to this Blue Ribbon panel?”

    were all the panel members affiliated with the OBA? I don’t see where it says that.
    Does the PLP have any finance professionals they could have appointed?

    • Vote for Me says:

      The most obvious appointee from an independence perspective would have been Larry Burchall. Whilst he has publicly stated his opposition to the airport, he has probably demonstrated the most consistent objective financial analysis of the project. His public comments have opposed both the PLP and OBA in the past, which perhaps enhances his level of independence.

  19. Joe Bloggs says:

    The PLP does not answer the questions that every Bermudian should want to know, how much money does Bermuda Emissions Control earn from TCD inspections and who owns Bermuda Emissions Control?

    The fact that the PLP Government refused to disclose the financial details and would not answer any questions that were asked repeatedly means they have something to hide.

    It is estimated BY DAVID BURT that Aecon’s shareholders will receive a minimum of $300 Million in dividends over 30 years before Bermuda gets any revenue sharing. No one else has come up with that number.

  20. Vote for Me says:

    As they say… the devil is in the details.

    for the panels report, the answers to questions 4, 5, 6, 7, 10 and 17 require more detail.

    If we honestly consider the tremendous political, personal and professional pressure that the panel was under, some of their carefully chosen comments should have been expected.

    Question 7 appears to be the most critical. If all of the analysis turns out to be incorrect, there will likely be a downgrade in Bermuda’s credit rating that will negatively impact international business and cause them to consider relocating.

    That issue alone should give cause for everyone to pause and fully consider the assumptions etc. that are included in the airport analysis.

    Simple question – is Bermuda’s economic future worth the risk of a new airport.

  21. Sandpiper says:

    This panel was HAND PICKED BY THE OBA. What do you expect them to come back with????
    Educate yourselves to the real facts BDA