Post Office Mail Processing Centre Relocation

September 22, 2017 | 46 Comments

2017 Minister LOVITTA_FOGGO Bermuda[Updated with video] In the House of Assembly today [Sept 22], Minister of Government Reform Lovitta Foggo provided an overview of the relocation of the Post Office Mail Processing Centre from the airport to Mills Creek

Minister Foggo said the Bermuda Post Office Mail Processing Centre [BMPC] is in the process of vacating its publically owned premises at the airport to relocate to a privately owned facility at Mills Creek, with the move required “as a result of an Agreement entered into by the former Government.”

“This arrangement regarding the relocation of operations has unintended consequences,” Minister Foggo said. ”The move has the potential to jeopardize the reputation of Bermuda’s postal service international standing and impact revenue collection.

“The future requirement of having to move airmail to a non-airport facility before sorting and distribution will increase receipt time and decrease efficiency, thereby negatively impacting service standards.

“Further, the move significantly affects the Department of Customs and the border control work that they are required to manage.

“The Customs Department is co-located with BMPC at the L.F. Wade International Airport,” the Minister said. ”The Customs Department has legislative jurisdiction over all incoming mail into Bermuda and remains the first line of interdiction.

“The strategic alignment of the two agencies provides for a seamless handover of mail from one agency to the other with limited security risks and enhanced efficiency of operations.

“As a result of the Agreement entered into by the former Government, development costs must now be expended on leasehold improvements that are required at the new privately owned Mills Creek facility to accommodate the segregation of the two agencies.

“Given the unique operating requirements of the two agencies, Customs and the BMPC, the Ministry of Public Works deemed that the best alternative was the Mills Creek facility. The rental expense will be $30,000 per month.”

The Minister said that it is expected that the Ministry of Public Works will enter into a formal lease in the coming days, and noted that last week a Supplementary Estimate was tabled which included $290,000 to “fund the relocation of the Post Office mail facility from the airport to avoid penalties and having to pay rent to AECON.”

“Given the timelines associated with the development project it is unlikely that the move will take place before 30th September, 2017 as per the Agreement. Every effort will be made however to work with Skyport to avoid penalties,” Minister Foggo said.

The Minister’s full statement follows below:

Mr. Speaker, I rise today to advise this Honourable House of the planned relocation of the Bermuda Post Office Mail Processing Centre and the circumstances surrounding its move.

Mr. Speaker, Members of this Honourable House will be aware that the Bermuda Post Office Mail Processing Centre or BMPC, is in the process of vacating its publically owned premises at the L.F. Wade International Airport to relocate to a privately owned facility at Mills Creek.

The move, Mr. Speaker, is required as a result of an Agreement entered into by the former Government, specifically, between the Bermuda Airport Authority and Project Co.

Simply put Mr. Speaker, based on the deal made, the BMPC now resides on leased premises.

Mr. Speaker, to offer a bit of background with respect to the necessity to relocate, I wish to provide the following from the Official Agreement.

“In accordance with Schedule 2, Section 14.3 [d] of the Agreement, the Authority shall arrange alternative premises for the Bermuda Post Office and will use its best efforts to cause the Bermuda post office to vacate the space currently occupied by the Bermuda post office on the Leased Premises by September 30, 2017.

“If the Bermuda Post Office does not vacate the space currently occupied by the Bermuda Post Office on the Leased Premises by September 30, 2017, the Authority will:

  • (iii) pay rent to Project Co for the space that continues to be occupied by the Bermuda post office commencing October 1, 2017, such rent being based on the fair market rent for comparable premises and;
  • (iv) continue to use best efforts to cause the Bermuda post office to vacate the space currently occupied by the Bermuda post office.

Further Mr. Speaker, if the BPO continues to occupy space on the Leased Premises after December 31, 2017, then:

  • The Authority will pay Project Co $600,000 as a single liquidated sum as full compensation and the Bermuda post office will be permitted to remain in its current premises for the Term without further payment of rent or occupancy cost, subject to the Bermuda post office entering into a sublease with Project Co.

Mr. Speaker, this arrangement regarding the relocation of operations has unintended consequences.

The move has the potential to jeopardize the reputation of Bermuda’s postal service international standing and impact revenue collection.

In accordance with its international service agreement revenue is directly related to meeting specific service standards.

The future requirement of having to move airmail to a non-airport facility before sorting and distribution will increase receipt time and decrease efficiency, thereby negatively impacting service standards.

Further, the move significantly affects the Department of Customs and the border control work that they are required to manage.

Members should be aware that the Customs Department is co-located with BMPC at the L.F. Wade International Airport.

Honourable members should also know that the Customs Department has legislative jurisdiction over all incoming mail into Bermuda and remains the first line of interdiction.

Mr. Speaker, The Customs Department is responsible for collecting and protecting the revenue and for enforcing import and export prohibitions and restrictions.

In fact their primary purpose at the BMPC is to monitor and control the cross-border movement of mail.

Members of our Customs Department therefore X-ray and screen inbound mail, prior to release to the Bermuda Post Office.

The strategic alignment of the two agencies provides for a seamless handover of mail from one agency to the other with limited security risks and enhanced efficiency of operations.

Mr. Speaker, as a result of the Agreement entered into by the former Government, development costs must now be expended on leasehold improvements that are required at the new privately owned Mills Creek facility to accommodate the segregation of the two agencies.

Such segregation is in accordance with the requirements of the standard operating procedures for the Department of Customs to carry out their duties in a secure environment.

Mr. Speaker, several sites including Government owned facilities were considered in a bid to minimize the costs associated with the required move. This is a cost that should technically be represented as a line item when tallying the cost of the development of the new airport.

Nevertheless Mr. Speaker, given the unique operating requirements of the two agencies, Customs and the BMPC, the Ministry of Public Works deemed that the best alternative was the Mills Creek facility. The rental expense will be $30,000 per month.

Mr. Speaker, it is expected that the Ministry of Public Works will enter into a formal lease in the coming days.

The Ministry of Public Works will also manage the leasehold improvements and associated processes. The development project commenced this week and is expected to take no more than four weeks to complete, inclusive of the relocation activities.

Honourable members will recall Supplementary Estimate No. 1 for 2017/18 which was tabled in this Honourable House on Friday, September 15th, the estimate includes $290,000 to fund the relocation of the Post Office mail facility from the airport to avoid penalties and having to pay rent to AECON.

Mr. Speaker, given the timelines associated with the development project it is unlikely that the move will take place before 30th September, 2017 as per the Agreement. Every effort will be made however to work with Skyport to avoid penalties.

Therefore it is anticipated that Bermuda Airport Authority, the agency responsible for managing the Government’s contract with Skyport, will formally communicate the anticipated delay to Skyport and the two entities will work to mutually agree an outcome such that the financial penalties as set out in the Project Agreement are not triggered. No more than a 30-day extension will be requested.

I can assure Honourable Members and the public however that every effort is being made to expedite the move.

Thank you Mr. Speaker.

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Comments (46)

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  1. john says:

    why is this an issue for Government Reform?

      • Smoke & Mirrors says:

        Yup you arte right! I smell a RAT! lets dissect.

        1) The move has the potential to jeopardize the reputation of Bermuda’s postal service international standing and impact revenue collection.- HOW? If you are going to make a statement like this you should say how! because I could just as easily say. the move has the potential; to improve the reputation of Bermuda’s postal service.

        2) Do we have a reputation that we should worry about? I know in other countries like the US, they have a motto that says something like they will deliver thru sleet and snow and rain. I had to collect my own mail for 3 weeks before!

        3)She says…Members of our Customs Department therefore X-ray and screen inbound mail, prior to release to the Bermuda Post Office. So…help me understand why the XR-ay machine cant be moved?
        4) She also says…The future requirement of having to move airmail to a non-airport facility before sorting and distribution will increase receipt time and decrease efficiency, thereby negatively impacting service standards….WTF . How? FedEx and UPS can move packages from the airport and deliver them in a day, with far less staff. Ms Foggo, Don’t confuse CAN’T with WON’T!

        I could go on and on but she has cheerleaders and they follow her like sheep! So I won’t bother. Its Friday, gonna have a rum!

      • bdaboy says:

        “I smell a RAT.”

        You’re smelling your upper lip.

  2. Politricks says:

    With all the buildings currently owned by Government (With both past administrations seeking to sell), why do we need to rent a private building? Is there not one in stock that can be used for this purpose?

    What about all those Southside premises? Are they all full?

    PS: The mail system isn’t that great.

  3. Truth is killin' me... says:

    Just make sure you put it in a dry spot. I’ll be pissed if Mills Creek gets flooded and I receive wet, soggy mail!!

    • Um pissed off that we have to pay $30,000 a month and Government has buildings, now I wonder wich Friend or Family will benefit from this lucrative deal.
      Things that make you go Hmmmmmmmm.

      • Anon Ymous says:

        You do know that PLP are now in Government and it is they who get to choose which F or F get the fat rent payments, right? Thanks for pointing that out though.

      • OMGWTF says:

        OJ, your hatred for Bermudians blinds you and reveals your absolute stupidity.

      • Zevon says:

        Are you also wondering which F&F benefit from the $600,000 being spent on minibuses?

      • Reuben says:

        You have a very short memory

      • Jus' Wonderin' says:

        Sounds like the hospital plan for the new wing ya dummy

  4. Triangle Drifter says:

    Who made the decision that it was necessary to move out of the airport facility? Surely it was not the Minister at the time. That sort of decision comes from the civil servants at the PO management level.

  5. Rocky5 says:

    Govt. was not paying rent at the Airport Mail facility? I think the Minister might be omitting some important information here. It’s my understanding that the NEW facility is very new and in far better condition and will be more efficient (especially for the staff). Also I believe Customs are ALREADY at the new location making it even MORE efficient, not less….

    • Reuben says:

      I guess we need to wait for a response from the OBA then, but this wouldn’t surprise me.

  6. sandgrownan says:

    ““The future requirement of having to move airmail to a non-airport facility before sorting and distribution will increase receipt time and decrease efficiency, thereby negatively impacting service standards.”

    Give me a break. How much worse could it possibly be??

  7. Francis Gross says:

    UH? Why cant they go to the post office in town? Laziness!!!

  8. Rhonda says:

    If the Airport “lands” wasn’t being privatized according to the former OBA MoF.. why would we have to pay rent for our own building on our own land.

  9. Maria Jacobs says:

    $30,000 a month!!!!! Government needs to seriously look into this!!!

  10. Warrior says:

    Why not one of those empty buildings on Southside – Lovitta. White’s would have been the best place.

    • wondering says:

      White’s?

      That is already being used to house the archives and has already suffered a mold infestation!

    • Rocky5 says:

      White’s has Govt. Archives. Most other Bldgs at Southside have no a/c, not built to withstand Cat 4 hurricanes & PLP plan to put Hotel/Casino & Marina at Marginal Wharf

    • Say Whaat? says:

      First, it’s MP Foggo. Second, read where it says that the FORMER government made this decision.

      • Reuben says:

        Actually could you point out where the Minister said the former government made the decision, I see where she says that they made the agreement that cause the move but it’s not clear to me if the former or current has made the decision on where to move them.

        • Infidelguy says:

          You’re absolutely right. She didn’t say that it was the former government’s decision to move the mail facility to Mills Creek. What she said was that the move was required “as a result of an Agreement entered into by the former Government.”

          I am taking this to mean the agreement entered into between the former government and AECON/CCC for the entire airport project not for the move of the mail processing facility. MP Foggo needs to clarify because that statement is unclear and I think is misleading a lot of people about the facts.

    • Reuben says:

      Not knocking the idea but the Government doesn’t own White’s so can’t use that, I think there is issue with mold and asbestos (sp) with some of the buildings that Government does control. But surely there is Government building that could have been used, this something the OBA will need to explain.

  11. SoFar Bie says:

    Great the creek in mills creek floods after a downpour , now the mail will take forever to be delivered.

  12. AnitaP says:

    The old White’s building is already occupied.

  13. swing voter says:

    Think about it. That facility was the pits anyway. There are other buildings bordering the airport that could be used but the choice was made on Mills Creek. Customs can still inspect inbound mail in the freight shed, just like the stuff shipped by DHL…..and public mail is not overly busy anyway…..Politics at play.

    • Ringmaster says:

      Mail has dropped off considerably and BPS is running at a loss. Why not put out an RFP and see if the private sector can’t do a better and cheaper job?

  14. Real Deal says:

    There is a New Land Master for those grounds now get out or pay up. Go-cart/motor-Sport are next. So how is this going to work? Department of Customs cant do their Job of intercepting packages before they leave the air port grounds? and holy crap we are in September now I have been in the BMPC building and it is no small operation in there. how can you move all of that in a few months?

  15. BustedTheEconomyStartinNew says:

    Let the mini buses deliver the mail, between school runs, on the downtime. Get the Government bus drivers that are being paid not to work to sort the mail, at the new bus+mail depot, no rent. Problems fixed.

  16. Alvin Williams says:

    What else has the former OBA government sold out in it’s secret deal with the Canadians?
    No doubt they didn’t think they would be no longer in control of the government; now we will find out just how badly they have sold out Bermuda’s interests.

    • Ringmaster says:

      Alvin, mail is 1970′s. Very little mail is used in 2017 apart from junk mail.
      The mail service loses 10′s of millions of dollars so really it should be axed and all mail sent to GPO Hamilton and people collect from there, assuming anyone is on the counter.

  17. kevin says:

    Guess this is where we are heading
    seriously all of those empty buildings at southside we are going to go 12 miles away and spend 360k
    it was only time they cant control themselves …congrats Bda you voted in a group thats going to make your dollar worth as much as a Jamaican dollar
    lets see the facts
    minibuses 600k to friends and family i am willing to bet
    new mail facility to friends and family 360k

    knew it was coming …..just didnt expect it this fast

    you asked for it you got it

    see you on the rocks in 5 years

    • rene says:

      Former government decision mate. Where is the report and analysis of comparative alternative sites? Does it exist or is this a back room deal with no substance. Minister Foggo before you sign off on a lease have you looked at the facts to support this decision.

  18. OMGWTF says:

    “Former government decision mate.”

    Oh good, let’s talk about former government ‘actions’, shall we?

    You plp drones really don’t think very far ahead.

  19. Reuben says:

    Has it been confirmed that this was the OBA? Meaning the choosing of this new facility over other government buildings? I find it odd that Minister didn’t say that, or did I just miss reading it in her statement?

  20. Infidelguy says:

    Has anyone in the government sat down and done an analysis between what it would cost to keep the mail facility where it currently is and pay Project Co. the rent (at fair market value) plus the onetime payment of $600,000; and what it is going to cost to make this move to a privately owned facility and pay a rent of $30,000 per month?

    On its face it appears to make more sense to keep the facility where it is because in the long run it’s less costly to us……. the tax payers!

    We need to stop complicating everything with petty partisan politics because it’s destroying the country!

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