BPSU Report On Public Private Partnerships

August 28, 2015

The Bermuda Public Services Union [BPSU] has released a 21-page report to present the Union’s position on Public Private Partnerships [PPP], with the report also outlining the BPSU’s concerns surrounding Government’s plan to redevelop the L.F. Wade International Airport using a PPP.

The Report Highlights are

  • 1] History: PPPs were attractive to the Thatcher government as PPPs are another form of privatization.
  • 2] BPSU does not support that the answer to not acquiring debt on the Government’s books is forgoing revenue over a long term period.
  • 3] In the IMF/EU ‘Troika’ packages in both Portugal and Cyprus have identified PPPs as a contributory cause of the countries’ fiscal problems and required an audit and renegotiation of existing PPPs as well as a freeze on new PPPs.
  • 4] Public Services International: PPPs are used to conceal public borrowing while providing longterm state guarantees for profits to private companies.
  • 5] Shadow Minister of Finance E.T. Richards, in his reply to the 2009 Budget Statement: “Perhaps this model of PPP is an admission by Government that it is so terrible at managing large projects that it may be less expensive to pay a foreign entity hefty management fees rather than taking the operational risk of doing the job itself. This, Mr. Speaker, is a very sad and expensive admission.”
  • 6] BPSU believes that the funding of KEMH’s PPP has eroded service levels within the hospital, reduced staff benefits, and, increased health care cost for the entire Island.
  • 7] BPSU has concerns that the viability of the Airport Redevelopment deal being dependent on air traffic flows increasing at a rate of 1.6% per annum until 2045. If air arrivals fail to increase at this rate, the Union believes that there will be pressure to increase taxes to make up for the shortfall.
  • 8] Letter of Entrustment issued by the UK Government via the Foreign Commonwealth Office was amended to include conditions that will need to be met before finalizing a contract with CCC/Aecon including: “UK Government and the Government of Bermuda must agree on what measures are required to address the deficiencies that are identified by Deloitte in their assessment report[s]”.
  • 9] Deloitte Report noted these key gaps in the Airport Redevelopment Project procurement process:
    • · “……there is no robust evidence indicating that a sole-source PPP would offer more VFM (Value for Money) than a competitive procurement strategy for a similar concession.”
    • · “CCC’s affordability components fail to encapsulate all costs to be borne by the Government during and after the project.”
    • · “The documentation ….does not set out how CCC selected AECON, how their process follows best practices, or how competitive tension in the supply chain between AECON and their competed sub-contractors would benefit the Government of Bermuda.”
    • · “There was also early indication from various sources that while the market may have been challenging, there was private sector appetite and bankability for airport deals, and the Bermuda Airport was considered a possible candidate for a PPP and private financing.”

The full BPSU Report on Private Public Partnerships follows below [PDF here]:

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Comments (37)

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  1. hmmm says:

    Where were you on the hospital ?

    Where were you with TCD testing ?

    • TRUTH says:

      Mr. Burchall and the ‘Delottie Report’ highlight some significant areas of concern. Both are free of any Political Influence, and raise great concerns. We the People should be concerned and must hold the government accountable in regards to this Airport Deal.

      The Union has further highlighted some real concerns. Take time to read folks, and do not make your decision based upon political affiliation or membership to any organization.

      After reading the reports one can see that there is real concern to be acted upon. At present this Airport Deal needs to be put on Hold. Let your voice be heard, because when it comes to light, you can never say you sat quietly and did nothing.

      • Sad says:

        Sorry but the BPSU is not an apolitical organisation. They have defined their position and support of one particular political party.

        That might not apply to all of its members but te BPSU executive have made itquite clear they are no longer a neutral party in terms of local politics.

        This can be evidenced by their complete silence on the PLP initiated hospital PPP and the various government functions that were privatised/outsourced under the previous government. Also by the fact that in the above report they quote the ‘failures’ of some PPPs while not acknowledging the successful ventures. And by providing such opinions from other like minded organisations such as other unions only results in an extremely lop sided and biased manner.

        So their report above should also be taken with a gain of salt as they are beholden to a particular party.

        The Deloitte report undertaken exemplifies a prudent government who is seeking to get the best deal for the public. The deficiencies identified and made public shows the transparent nature of this government concerning this project. And the fact they re working with the Canadian and UK government to rectify these issues adds another layer of oversight and confidence to this whole matter.

        So the question remains, Betty, where was the BPSU when the PPP for the hospital was entered into, when TCD and airport services were privatised, when GlobalHue replaced a whole DoT department, when recycling pick up was privatised, when certain health functions were granted to private entities and so on and so forth?

        • Build a Better Bermuda says:

          The unions have never been neutral, they have always been an arm of the PLP aims

        • TonyC says:

          I am in the BPSU. No longer though, my monthly deduction will be going to charity. They don’t speak for me, they speak for the PLP. I remember a time when I was proud to be BPSU and would grimace at the BIU antics. Now I’m embarrassed by Hayward and what’s he’s turned the Union into.

          • Tattle Tale says:

            thank you another sane person thats not brainwashed and see’s reality

          • Onion Juice says:

            @ Tony C, so does this mean you’re gonna denounce ALL your benefits and let your charity bargain another package for you or are you gonna be like the other Suck Rock Scabs and sponge off the Union.

            • Hmmm says:

              Suck rock scabs….really. Nice way to speak to a worker. For many years people have paid dues. They have paid your way, now you call them names. Shameful behavior OJ.

        • tobp says:

          What is amazing is that they are using the hospital which they never said anything about in the first place as grounds for why this is a bad idea.


      • Build a Better Bermuda says:

        You mean the report that the government commission so that they could have any gaps identified so as to be able to address them…

      • Onion says:

        The Union have also shown that they don’t understand how a PPP works with this document.

      • Hoolieh says:

        Yes, but that Government of Bermuda undertook that report to ensure they didn’t miss key point and to make sure they addressed major risks before any final contract is signed?

        What am I missing?


    • Carrot Top says:

      I cant be bothered to read a 20 page report on anything….a symptom of A.D.D. I guess. However, if there has ever been an open example of what should be privatized its the current project on NorthShore for the round-a -bout. This simple project has been going on a few weeks short of a year and they are far from finishing. It’s disgusting how slowly this has progressed. Someone about nine months ago mentioned to me that a large house was being built near Mosquito Hill at it would probably be complete before the roundabout. We laughed but it appears to be true. This 3 story very large home was built on new land. The house is almost complete. The roof is on, windows and doors are being installed and they are painting.

      ANYONE that thinks that W&E doing any construction project on this island is a good idea , needs to get a brain scan. I trust the BPSUs report does not try to say that privatization is not good for Bermuda! We had have had more done, MUCH MORE DONE FOR LESS!

  2. Yawn says:

    Ok–now let’s hear from the People’s Campaign—perhaps throw in a march for good measure—and then can we please just get on with it–

    Hey ya’ll how about ideas to reduce the debt overhang that confronts our children thanks to the debt fuelled spending frenzy of the last administration.

    How about a report on that–oh yes–can’t do that–that is an inconvenient truth.

    • Build a Better Bermuda says:

      The PC, weren’t they the ones who were up in arms about the government trying to suppress freedom of speech, then asked BerNews to gag comments about their comments. Don’t worry, I am sure the PLP will direct them to come out eventually.

  3. Bermyman says:

    So a very one sided view, citing obscure circumstances is all they can come up with? How many PPPs have been successful globally and in what context?

    Citing Thatcher government is poor form, they do realize Britain has one of the strongest global economies due to Thatcher’s economic policies and you guessed it; the erosion of Union powers!

    Another attempt by the combined opposition to mislead in a very non-constructive way.

    • so one sided says:

      excatly. here are a few global PPP that have been quite successful.

      Public-Private Partnership Case Studies

      Across the United States and the world, many public transportation projects have succeeded through private partnerships. Other large Public/Private Partnerships include:

      Hudson-Bergen Line, New Jersey – $ 2.2 billion total cost

      21st Century Rail Corporation was responsible for the entire Hudson/Bergen Light Rail project under a design, build, operate, and maintenance (DBOM or BOT).

      JFK AirTrain, New York – $1.9 billion total cost

      AirTrain JFK is an 8.1-mile rail system in New York City that connects John F. Kennedy International Airport (JFK) to the city’s subway, commuter trains and airport parking lots.

      E-470 Toll Road Colorado -$722 million total cost

      The first segment of the Project (approximately 5 miles) opened to traffic in June 1991 and later two additional segments of the project were built totaling 28.5 miles of highway.

      Taiwan’s High Speed Rail

      This project was one of the largest infrastructure projects in the world and one of the largest infrastructure projects ever built, using a “public-private partnership” (PPP)

      Construction of Travelling Centre Ljubljana – EUR 220 million

      Emonika City Center complex will be built in the centre of Ljubljana and will connect two parts of the city that have been separated by a railway for several decades. A new bus and railway station and a new passenger hall will substantially improve the quality of passenger services for the visitors of Ljubljana.

      DC Streets – Washington, Total Cost $69.6 million five-year contract

      O&M concession to VMS, Inc., a private highway asset management firm responsible for the maintenance of city streets, tunnels, pavements, bridges, roadside features (curbs, gutters, and retaining walls), pedestrian bridges, roadside vegetation, guard rails, barriers, impact attenuators and signs in Washington, D.C.

      The Chicago Skyway – Chicago $1.83 billion

      This PPP project was a 7.8-mile elevated toll road connecting I-94 (Dan Ryan Expressway) in Chicago to I-90 (Indiana Toll Road) at the Indiana border. The facility includes a 3.5-mile elevated mainline structure crossing the Calumet River.

      people please do your own research.

      • desmond says:

        Maybe if they didn’t do this they would b billions in debt instead of trillion

  4. Cow Polly says:

    “Perhaps this model of PPP is an admission by Government that it is so terrible at managing large projects that it may be less expensive to pay a foreign entity hefty management fees rather than taking the operational risk of doing the job itself. This, Mr. Speaker, is a very sad and expensive admission.”

    So Bob is true to his word then?

  5. TRUTH says:

    Its great to see a Union providing information for its members and public at large. This Airport Deal is something to be concern about. The Deloitte Report, Burchall’s article clearly raise great concerns. This report also highlights some significant concerns.

    • hmmm says:

      I’m concerned that you give credit to this BPSU report despite the wealth of information out there.

    • RBKing says:

      You like using the word ‘concern’, don’t you.

      • Build a Better Bermuda says:

        Straight out of the PLP key words PR playbook

  6. Ryan says:

    I have ZERO qualms with the Union objecting to public-private partnerships, but they have no credibility on this issue. Indeed, the BPSU were *silent* on the hospital scheme, which has turned into a financial nightmare for the Island.

  7. hmmm says:

    I’m curious. Do the Union member who pay their dues realize the Union is spending time money and effort on this?

    • Build a Better Bermuda says:

      Good question, they ought to find out how much their ‘neutral’ organization spent to produce a one sided political report.

  8. Starting Point says:

    The BPSU is a PLP affiliate, as such they no longer represent the worker as a neutral body. Shame really. The fact that they did not release this in response to the hospital, TCD shows they are not objective in their process. This is undeniable, we no longer have a strong union that represents us (I am a civil servant), they do not consult with us, at no time has the BPSU approached the service to get our view on this topic, never, not once. The fact that they even released this statement without first bringing it to the members is a absolute insult to the union process.

    Basically the BPSU management is a press core for the PLP. SHM

    • Build a Better Bermuda says:

      They never consulted the membership about what they wanted to be done about negotiations on furlough days either. You are quite right on exactly who it is they do consult with these days.

      • hmmm says:

        There was some controversy about the quickly announced meeting and timing of that meeting for the JH role being salaried too.

        • tobp says:

          Ok. So I’m gonna say this. And please give your opinion.

          You as members need to realize that the union work for you and not the other way around. The hierarchy of the union is bottom up not top down.

          If you all are really so tired of your president and his one sided statements and feel he does not represent you, than put him out.

          It only takes 100 votes. And don’t use the fact that no one is there to take his place brother ball and the executive will run things till a new president is appointed.

          Also. As civil servants remember you can over ride anything the delegates, executive it president puts in place.

          But you have to stop complaining and start acting. Put you John Hancock where you mouth is, read you constitution and do something.

          Allowing your dues to go to charity is not going to change anything.

          So now it is time for you all to put up or shut up. I’m sorry to be so blunt. But nothing can change to you make the change.

          I can’t as I am no longer a member but stand up and be heard.

    • No longer a union payee says:

      And that’s why I took my dues out of the BPSU and donated to charity. Until more members do this they will not get neutral representation from the leadership of Jason Hayward.

  9. bluebird says:

    It is normal for the Unions to fight for the jobs as they know our economy is still going down and we are still borrowing $220Million per year to keep them paid.
    The OBA is trying very hard to hold together a SINKING SHIP.
    They don’t want to see people out of work as it causes hardship.
    but the unions and the rest of us are going to have to swallow the bitter pill eventually.

    • Build a Better Bermuda says:

      There has never been any mention that anybody would be losing their jobs, except by the PLP. They have been the only ones who said jobs would be lost as a epresult of the airport development. Minister Richards has even gone on records as to say that anyone of the current CS at the airport who does not get employed in the new airport operation will be absorbed into another department in the government.

  10. Northshore says:

    Thank you BPSU for wasting time and money on issues you have no business in !! Jason please step down ,please step down !

    I will be sure to use the “BPSU REPORT” to start my BBQ tonight!

  11. SANDGROWNAN says:

    Factually incorrect, PPP’s really became the flavour of the month under Tony Blair not Margaret Thatcher.

    • Toughchit says:

      The first PPP in the UK was actually utilised by John Major’s Government in 1992. The Labor Oppositon then decried their use even though they were sparse and only used for small projects.

      When Labor became the government in 1997 under Tony Blair their tune changed and they became widely used for both small and large capital projects.

      The PLP used it for the hospital wing and the Unions said nothing. The OBA proposes it for the airport and now it is the worst idea that could ever be conjured up.

      So the BPSU’s statement that it was a Thatcher invention is completely false and just one more example of the continued campaign of misinformation sought against the government.

      If they can’t get the simple things right, or at least be honest, what other errors and misinformation are included in the above.

  12. hmmmmmm says:

    In a related story the Teachers Union has stated that the government seem to want to place a gag order over the average Bermudian.

    Please note. Bro. Jason is not the average Bermudian. He is the president of the BPSU. His statements influence and persuade people.

    He has been given the honor of this position. And in his capacity as President what he says has a heavier weighing than the average Bermudian.

    So with his position comes a greater responsibility over what he can and cannot say.

    This reminds me of a case years ago against Oprah. When she stated she would not eat beef because of mad cow disease. She lost the case because as a public figure her opinion has a heavier weighing.

    The same goes for Bro. Jason. He is now a public figure and with that comes a greater responsibility.

    He has to be mindful of what he says especially in public.