Video: David Burt On $1.7 Million CIBC Contract
The $1.7 million consultancy contract for CIBC to provide advice for the new airport development is concerning as “CIBC were a back channel for Aecon” and the Minister of Finance “said that this process will reduce these consulting costs,” Shadow Finance Minister David Burt said.
Audio of Minister Bob Richards discussing the contract in the House on May 29th:
Answering questions in the House on Friday , Minister Richards said, “Bermuda agreed to pay CIBC a fixed fee payment upon the date of completion of each phase of the work as described.
- Phase 1: is to be preliminary diligence, project scoping, and airport project concept; the fee for that is $200,000.
- Phase 2: the airport development plan to the concession contract; fees for that is $500,000.
- Phase 3: financing phase to financial close is $1 million.
“First, the proposed fees for this mandate of phase and fixed up front at each phase, thereby reducing the uncertainty and risk for the Government.
“Second, based on precedent transactions, as well as the scale and complexity of the transaction, a fee level of $2 million would have been appropriate. Accordingly, the Ministry considers these fees good value for money.”
MP David Burt then asked a follow up question, “Did the Honourable Minister of Finance consult with any other organizations, or did he select CIBC on a sole source basis because the contract is in excess of $50,000?
Minister Richards replied, “The CIBC World Markets were selected on a sole source basis, based on the Minister’s 43 years in finance and investment business. When you’re in the business for 43 years, you get to know people, Wall Street people, investment people.
“You get to know people who are the best at particular things. The senior management of CIBC World Markets are no doubt the best at what they do, and that is why we selected them,” added Minister Richards.
MP David Burt speaking on Friday
Speaking outside the House on Friday, Mr Burt told Bernews, “Today we heard, with the new airport development, once again we are getting more and more revelations every week.
“This week we found out that CIBC has been contracted with the Government of Bermuda for $1.7 million. This is a consultancy contract to provide advice for the new airport development.
“What is concerning of course to the Progressive Labour Party is the fact that CIBC were a back channel for Aecon and the Minister in Parliament today confirmed that not only were CIBC the back channel, he said they were the back channel, the front channel and everything in between Aecon.
“So today we find out that the Government’s own advisors were working with Aecon to solidify this deal way back as far as May 2014,” added Mr. Burt.
“That of course is our concern. It’s also a concern that it is a fact that CIBC is the third largest institutional shareholder of Aecon and recently increased their shareholding by 70% over the past few months. That’s something that speaks to things that may be at play.
“What we would like to do and what we are continuing to reiterate, is that we’d hope that the Government will listen to the people of the country, will listen to the numerous independent commentators who have said that this deal as it’s structured is not the way to go forward and we should look to open the process up to a more competitive process to ensure that Bermuda gets the best deal.
“Right now we cannot ensure that. Right now we are finding about millions and millions of dollars being paid to various consultants when the Minister of Finance said that this process will reduce these consulting costs. We’re seeing that, we are knowing that we are going to have a PPP that’s going to see revenue in excess of $1 billion over the next 35 years go to Aecon and we don’t see any value for money inside the Bermuda proposition.
“We are going to continue to debate the airport and we are going to continue to present alternatives which will be a better deal, we believe, for the people of this country,” added Mr Burt.
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Shame that Burt has destroyed his credibility so many times over.
I wonder if he does actually have a point this time.
Keep on exposing them Burt, when you hear the U.B.P./oba cheerleaders on the defense you are hitting a nerve, and this is the same SpongeBob that cries, there is No Money, We Are Broke, what a Joke and they pulled $77 Million outta their @$$ for a sailboat race, must’ve been a secret compartment under the HOOD.
LMFAO
Yeah. It was the money they pulled out of the banks here.
Funny. Why is Bermuda in 2 billion dollars of debt? Add that up for every Bermudian and tell me how much each one will have to cough up? That is Bermudians not expats.
Keep up the blame Canada for everything. Remember, Butterfield was in the brink and which firm came in and gave them a 500 million credit line and 250 million investment? But wait, why did CIBC not take them over like everyone was saying? First it was the UK and I guess it must be Canada trying to take over. First the Bermuda airport and then the world!
I just would like to know, when do you think it would be a good time to fix the airport? I don’t care that it is not with CCC or Aecon. Just tell me intelligently when is a good time and where will the money come from? Maybe all of our @$$E$ cause that is where it is coming from eventually.
Again for the record, I am not an OBA 10 cent you know what nor a PLP anything. It blows my mind how sad this debate has become.
OMG….will they ever give it up and stop the false innuendos with the made up conspiracy theories.
Burt is lying.
CIBC Asset Management hold shares of Aecon on behalf of its clients within one of its nominee companies.
That is how asset management firms work.
Therefore, the shares under CIBC Asset Management’s name is held on behalf of their clients and as such CIBC does not hold the shares on a propriety basis.
The fact that either the Shadow Finance Minister doesn’t know how this works or he is purposefully misleading should be of a concern to anyone who hopes that one day is the actual finance minister.
It is no different than his constant referring to $1bn in revenues while simultaneously omitting the $900mn of expenses attached to that figure.
So it doesn’t matter than CIBC was paid 1.7 M just because Bob knows people?
He says he knows the reputation of CIBC World Markets through his extensive experience. They retain both a very solid reputation built on well rounded expertise.
On top of that CIBC have been the BDA Government’s advisors since 2012 or at least 2 years before this opportunity was made known to the BDA Govt by CIBC. If they brought the opportunity to the table why would they seek another financial advisor for the project?
Either way Burt is purposefully misleading with his shareholding claims as I noted above as a means to rile up emotion amongst others who would not understand and to paint a picture of some insider trading. If he is not careful he can find himself at the wrong end of a lawsuit by one of the biggest financial institutions in the world.
Can I ask why you were so silent on the Port Royal articles of late? You know the PAC meetings where the PLP said that the sole tendered contract to one of their fellow MPs, that happened to go $10mn over budget, and where the PLP stated that conflicts of interests were inevitable in Bermuda during the PAC meetings?
No it doesn’t because they are the best at what they do!
Facts please. CIBC has been paid nothing up unto this point.
Shadow Finance Minister David Burt is still, “wet behind the ears” and loves to hear himself rant and rave…He’s yet to propose any constructive alternatives…
Under EB training
So Stormin Norman, when U.B.P was opposition and they objected they were doing their job as an opposition, so now you expect the opposition to shut up and let these ******* give favors to Friends and Family.
My how times change.
Mr. Ray, I have tons of respect for you and although I don’t agree with you most of the time, I often take on your points, however, the minister is trying to justify why he is not following due process. He is wrong, whether or not CBIC are the best option, we can’t prove that unless others where evaluated. Yes Mr. Burt is young, so what?? Does that mean Mr. Richards can do what he likes without opposition because he is older???
Whine, whine, whine; please stop. These are miniscule numbers for Big Bob – he deals with Billions; must be embarrassing for him to be associated with us.
If “Big Bob” is so embarrased to be associated with us he knows where the door is. He knew the job wasn’t going to be a cakewalk when he jumped at the chance to be F.M. so he has to with what comes his way. Criticism and all. Mr. Burt is not right on everything, he is just being a good Opposition. Makes people think…..that is his job. If you don’t think and weigh the pros and cons, poor you.
OBA don’t care what the people want
so what you’re saying is the People want the PLP to be the government? If so then why did the PLP get voted out?
I am talking about the airport m8
The road to Election 2017 will be very interesting
“very interesting” because you love to spread hatefulness and encourage Bermudians to not get along. Shame on you
Your name alone “Yet another PLP conspiracy theory” is Very Interesting because You really are spreading Hatefulness and Encouraging Bermudians to not get along. SHAME ON YOU, SHAME ON YOU !!!
Show me once where I’ve encouraged such a thing!!!
Shame on You for trying lie on me though
I am the original advocate for a “Better Bermuda for All Bermudians” and for voters to hold their own parties accountable! People turning their heads when wrong was being done is what got us into this mess.
Are You Pro-OBA or Anti-PLP?
So Bob gives out a 1.7M contract on a sole source basis because he “knows people”. What the heck is going on? Bermuda surely is another world.
The arrogance that he displays week in and week out in his decisions and in his answers in the House of Assembly will surely be he and the government’s undoing. I cannot imagine that Premier Dunkley is ok with this, and if he is, then that shows that this is not just a Bob problem, but it is a Government problem, an OBA problem.
Thanks again for the smoke and falsehood Alaska Hall
You might like his attitude, but the man knows what he’s talking about and what he’s doing, and there absolutely nothing wrong with using your contacts. It’s called networking, and is done a great deal throughtout business.
We do it everyday. Need something done? First people you think of are the ones you already know and trust.
@watching you are 100% correct. It appears that good governance does not apply to the finance minister when he “knows” somebody. This can’t be right! The OBA campaigned on good governance and a contractor general as their answer to doing things better but now it seems these things are not important!
yet again Burt shows himself to be an ill-informed amateur.
Thank you Mr Richards for giving us a NEW AIRPORT at no cost to the TAX PAYER,and not blowing up our $2Billion dollar DEBT as the PLP/BIU would want to do.
Remember the school Barclay out to bid at $50Million and ended up at $123Million dollars,and then all the parents had to folk out @$1000.00 for a new computer that was never used in the school system..
And that was just the start.
Oooooh how soon some forget, “bluebird”. And what you’d mention is only the tip of the iceberg!
“Barclay”? Typo?
Classic distortions of the truth. Third largest investor! Increased shareholdings by 70%! Both highlighted in a way that sounds so much more juicy than reality and burt knows it. Who does he think he is fooling?
Holding shares for investors does not mean that CIBC owns the shares. Third largest investor at 1.6% of investors money. 70% increase, wow, increasing the holdings by what, 0.7%, of individual investors money not CIBC’s. burt is sounding more and more like Peter crying wolf, or Little Red Riding Hood maybe. The more burt comes out with his “clever” distortions of the truth the less credibility he has and as a newbie to Finance, he is doing himself no favours. Carry on please.
The only valid point he can argue, is not putting it out to an RFP and for him to do that only reflects more on his own party’s mishandling’s of capital projects while using RFPs.
Stunned silence in the House on Friday, when he discovers after his questions are asked, that CIBC have been paid nothing up to this point for the airport consultation. Stunned silence the week prior when he simply refused to believe the shockingly low charges, negotiated by the OBA Govt. for the$750 million borrowed. He has so much to learn. I suggest he watches and listens carefully and carries on making himself look completely out of his depth.
When I read things like this I find what bothers me most is the possibility that Burt and the others might actually believe what they’re saying
What’s not to believe about this story?? I can’t believe Minister Richards made that reply. Do you believe he made that reply? Do you think that reply is justified??
I love easy questions.
What not to believe abut this story? That Burt thinks Bermudians are dumb enough to believe what he points out as ‘issues’.
Do I believe he made that reply?
Yep.
Do I think the reply is justified?
Yep.
I agree completely, but it appears we live in a country where what is the right thing to do is not dependent on what is being done, but rather by who is doing it and what group they represent… Its really sad.
Seriously Burt? More lies and misrepresentations?
You can never be allowed to be our finance minister, you are not capable.
All,
Some of the comments indicate the incessant nature of some bloggers that refuse to allow themselves an open thought process.
It is a fact that the airport revenues over a 30 year period will approximate $1bn. Irrespective of the amount of expenses, it is correct to state that approximately $1bn of Bermuda Government revenue will be ‘allocated’ to a private company without a competitive bid process.
It is a fact that Min. Richards, by his own admission awarded the consulting contract to CIBC on a non competive basis based on Min Richards 43 years of experience. Does anyone question why, after all those years Min. Richards only knows of one entity that can perform the task?? Let’s assume there are at least 2 friends of Min. Ruichards that could do the job. If they had to compete Bermuda would surely get a better price!!
It is time for everyone to stop assuming. Many do understand the nature of the deal and still believe Min. Richards is wrong. Just imagine if others were making the same decision. Just imagine what precedent is being set for the next administration – sole source contracts will be the order of the day!!
“The CIBC World Markets were selected on a sole source basis, based on the Minister’s 43 years in finance and investment business. When you’re in the business for 43 years, you get to know people, Wall Street people, investment people.
“You get to know people who are the best at particular things. The senior management of CIBC World Markets are no doubt the best at what they do, and that is why we selected them,” added Minister Richards.
This is ridiculous.. I don’t care what side of the fence one sits, for a Government Minister attempt to rationalize his reasons for not following “due process” is because he has many years of experience in the business and he knows people.. I can’t believe what I am hearing.
So Mr. Driver,, you didnt stop at the stop sign.. Yes Mr. Officer, I been travelling these roads for 43 years. I know when traffic is coming and when its not coming.