‘Government Moving Ahead With Dubious Deal’

August 24, 2015

“Despite the deficiencies identified in the Deloitte report of the Bermuda Airport Redevelopment, and despite the UK government’s second letter of entrustment that stipulated that conditions must be met before proceeding with this project, the OBA government is moving ahead with this dubious deal,” the PLP said.

“Despite the fact that independent commentators have asked the OBA to pause and reconsider moving forward with this project, the OBA government is moving ahead with this dubious deal.

“By privatizing the airport, the Bermuda Government stands to lose approximately 2 billion dollars in revenue over the next thirty years, and $620 million in profit, as stated by an independent commentator. With our current level of debt, can Bermuda afford to lose this income?

“With all of the signs pointing to an airport deal that doesn’t benefit Bermudians and doesn’t benefit Bermuda, why does the OBA seem unwilling to listen to reason and reasses this project?

“The UK Letter of entrustment clearly stipulates -

  • “[6b] The United Kingdom 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],
  • “[6c] The Government of Bermuda must publish a written and evidence-based assurance that the required measures have been taken, before the Contract can be concluded.

Two-hour video of the PLP Town Hall Meeting on the Airport Development on August 20

The PLP continued, “Deloitte was very critical of the process undertaken by the OBA and identified numerous gaps-

“Key, integral steps are not present in the case. These include an economic assessment of a defined list of options to identify the most economically advantageous solution for Bermuda, and some specific Green Book and wider best practice considerations, such as use of a Public Sector Comparator, and optimism bias assessment.

“Under Green Book guidance, this analysis is expected to be performed by Government prior to engaging with potential suppliers such that the most economically advantageous solution for the Government is identified in isolation from private sector influence.”

“The Deloitte report examined the commercial case and poured cold water on the OBA’s claim that their current approach can guarantee value for money. Deloitte went on to recommend that the Government independently assess some of the claims made by CCC, especially the claim that a sole-source procurement is the only viable option:

“However, we identified key gaps in evidencing that the sole-sourced procurement approach that was selected will offer the best VFM [Value for Money], and in the Government approach to delivering VFM through commercial negotiations.”

“It should be noted that the conclusion in favour of a sole-source procurement [notably citing lack of investor interest] is made by CCC, and Government may want to perform independent analysis on procurement strategy to satisfy itself on the validity of this analysis”

“The available evidence is in large part from earlier stages in project development. There is a potential gap in the evidence to support the sole-source procurement strategy opted for from June 2014, as compared to previous evidence suggesting a competed PPP procurement process could be viable”

“Deloitte also examined the financial case and found that many items were developed by CCC and may not take into account the full costs to be borne by the Government of Bermuda:

“While there has been a great deal of work on the affordability of the project, it has been developed by CCC as opposed to the Government. — CCC’s affordability components fail to encapsulate all costs to be borne by the Government during and after the project.”

“To our knowledge, there have been no measures agreed upon by the UK Government and the Government of Bermuda as in [6b] nor has a written and evidence-based assurance been published as in [6c]

“Today the Deloitte report will be debated in the Senate. The public can count on the PLP Senate team to stand strong for Bermudians, highlight the deficiencies and gaps in this project and explain why this deal is bad for Bermudians and bad for Bermuda.

“Unfortunately the Finance Minister refuses to debate the report denying Members of Parliament the opportunity to hold him accountable. For the OBA whose entire campaign was based on accountability, transparency and openness, this move to duck accountability demonstrates that they believe the rules don’t apply to them.

“Today in the Senate, the OBA will be held accountable and with the people’s support we can demand that the OBA produce an airport development plan that keeps the airport in Bermudian hands, keeps the revenue in the government’s coffers and creates jobs and opportunities for Bermudians,” the PLP concluded.

The 200-page Airport Appraisal report follows below [PDF here]:

airplane click here copy (1)

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Comments (22)

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  1. Coffee says:

    Initiating the largest friends and family deal in Bermudas history .

  2. Navin Johnson says:

    If the PLP says it is bad it must be good.

  3. aceboy says:

    By privatizing the airport, the Bermuda Government stands to lose approximately 2 billion dollars in revenue over the next thirty years, and $620 million in profit, as stated by an independent commentator.

    WHo is this independent commentator and where did he learn mathematics?

    Absolute nonsense. More PLP LIES. How can they be expected to regain the people’s trust when they continually spurt pure lies to mislead people.

    • Yahoo says:

      Agreed. Simple math – $620 million of profit over 30 years is just over $20 million a year. There is no way the Bermuda airport is capable of producing that kind of profit.

    • Triangle Drifter says:

      “Keep your eyes on the prize.” Remember that one? There is your answer. It has nothing to do with what is best for Bermuda & everything to do with the heirarchy of the PLP.

    • impressive. says:

      These numbers where presented on this very same website last week by Mr. Larry Burchall… I am not saying that what he said is the gospel, but I am baffled as to why you don’t know who the independent commentator is..

    • mj says:

      hey ace boy, did you not read the article by independent commentator Larry Burchall? maybe you can check it out than q&a the math.

    • jt says:

      I expect the plp will once again be publicly corrected on this release.
      It seems clear that both parties feel a new airport is needed.
      The more I hear the plp argue the OBA plan, and now that I’ve seen their alternate proposal, I’m glad it’s not them making it happen.

  4. Seriously? says:

    The problem with the deal from a PLP perspective is that it might actually create jobs only 1 year before an election. The numbers bandied about are complete fabrications and chosen by the PLP shadow ministers to fool people into taking their side. There will be no $620 million in profit. There is a thing called expenses on the capital and current account side. No mention of this?

    • impressive. says:

      Well it stated that there will be $2B in Revenue and $620M in Profit,, that equates to about $1.38B in expenses

  5. Alvin Williams says:

    There is no talk about who will subsidize the airlines as we are doing now;once the Canadian take over the new airport? Who will maintain the runways? One thing is for sure with an increasing departure tax; the bulk of which will be paid by travelling Bermudians; this is nothing more than a cushion that will provide further economic benefit for the Canadian investors for Bermuda’s airport and Bermudians will continue to pay for this new airport while being lock out of any potential profits for the next 35 years; This is got to be a new type of neo-Colonialism and the irony is Bermuda has not got ridden of it’s original Colonial status with the British.

  6. Tolerate says:

    aceboy, I think you are right. Throwing ALL your eggs in one basket hoping to win votes by deception and misinformation is tricky (unless they believe their math is correct).
    Once you are found out, it’s hard to gain back any trust.

  7. Outkasted says:

    So Larry Burchall is lying too!?

    • impressive. says:

      Everybody who states any thing in contrast to Minister Richards or the OBA by extention is lying apparently..

  8. ally oop says:

    Pay attention to elevations and pile drive down for support you will need Chrisson or Correa for this…perhaps dynamic or DnJ.

  9. bermy bud says:

    The plp’s would have been dubious to I suppose! Where r the solutions plp!? Always just slander!

  10. Keepin' it Real!...4Real! says:

    I suggest y’all take a gander at a few episodes of “Naked and Afraid”…to give you a little insight to your future….lmao!!
    Most commentators here really don’t grasp the notions that Bermuda is on a free fall right now…This govt.is grasping at straws, grasping at anything to slow down our descent…just like a Hustler…always on his grind…gotta make that paper…and because of the people that are talking in their sleep and don’t have a clue about Real Life…not only are they useless with resolutions, they only hinder progress. So yeah…its your own actions that’ll make or break us.