Comments on: Minister: “Substantial Advantages” To Project

By: Encyclopedia

Encyclopedia — Thu, 21 Jan 2016 13:53:57 +0000

Yeah the new airport is going to bring the entire east coast of US to your door and they are going to fly in to see the “wonderful airport”?

I bet a lot of hidden and fishy things going on, as is always the case with any large project without an RFP.

By: Build a Better Bermuda

Build a Better Bermuda — Thu, 21 Jan 2016 13:25:08 +0000

Services contract, they will be expected to maintain to a certifiable standard as the airport will be required to maintain its accreditation for flight handling

By: Build a Better Bermuda

Build a Better Bermuda — Thu, 21 Jan 2016 13:21:39 +0000

The CCC is answerable to those hedge funds, not us

By: Build a Better Bermuda

Build a Better Bermuda — Thu, 21 Jan 2016 13:20:33 +0000

Correction, we are on the hook for any shortfall that the revenues may not achieve for the designated payment that the revenues are expected to pay for.

By: Navin Pooty Tang Johnson

Navin Pooty Tang Johnson — Thu, 21 Jan 2016 12:21:27 +0000

Coincidence that all of the PLP toadies want every project put out to tender? the majority of projects under the PLP came in nowhere near the tendered bid as overruns ran into the hundreds of millions but all of that is forgotten…

By: Sunfish

Sunfish — Thu, 21 Jan 2016 10:54:51 +0000

The information on the airport project is out there for all to ponder and comment on.

You all seem to forget the lack of such from 1998 to 2012!

Build the thing ,get the people working!

By: Make a new plan Stan

Make a new plan Stan — Thu, 21 Jan 2016 10:52:59 +0000

I’m not sure about whether this is a good deal for Bermuda or not BUT I would love to get off the airplane without having to worry about the weather or those STUPID steps

By: Build a Better Bermuda

Build a Better Bermuda — Thu, 21 Jan 2016 00:23:28 +0000

Little hard to cost us $400m if we are only on the hook for what would have been paid to build it, if there is a short fall on payment, we are only on the hook for that shortfall. Every year/month/day, whatever the final financial agreement states, $’x’ is expected to be paid from the revenues to CCC for the building. So if during one payment period the revenue is only $’y’ that I short of $’x’ by $’z', we would only be on the hook for $’z’ and not $’x’. At no time would we ever owe more than ‘x’ for a single payment, so unless there is something that say that there is an expected interest return of more than 100%, would we be owing some $400m in 15 years, as the contract payment for over 30 years for around $250m

By: Just a matter of time

Just a matter of time — Wed, 20 Jan 2016 22:24:36 +0000

A guarantee against cost overruns simply translates to some hidden hedge in favour of CCC. And this guarantee translates to $100 $150 and over $200 departure tax fees for us to get a pretty airport. Mark my words these increases are coming. Just another OBA smoke and mirror tactic. Pay no attention to the Minister behind the curtain. By the way I did my own informal survey (has any been done by the way?) with some overseas guests I had recently. I apologized to them for our terribly run down airport. They looked at me like I just dropped from the sky. ‘Terrible how?’ was their reply. Smh.

By: vang

vang — Wed, 20 Jan 2016 22:20:09 +0000

Build it NOW please

By: mixitup

mixitup — Wed, 20 Jan 2016 20:09:02 +0000

Is this “cover of revenue shortfalls” for the entire 30+ years? If so what would be the incentive for this company to aggressively generate revenue? Why would I work overtime if I knew that if I fell short on my obligations, someone will fill that gap? Additionally, gov’t has already handed over 30 years worth of Departure Tax, Landing Fees, Rents, Parking fees and what ever else this Airport could generate which totals over 1/2 Billion to this company….Are we transfering the Minimum Rev. Guaratees we now pay the Airlines over to them also? Or will we continue to pay that too?? This is a GOLDEN deal for them… The title of this should ‘Be Substantial Advantages but many DisAdvantages!’ I bet you there was a much better deal out there…Oh right, we never checked did we?

By: Blown Tire

Blown Tire — Wed, 20 Jan 2016 19:10:24 +0000

Flikel, like I posited earlier….It is a SCAM!

You will see $10 to 20$ mil per year of debt come on to the govt’s balance sheet tied directly to this deal and the lost revenue that results from pledging our airport (and its revenues) to another party! Bermuda is in deep denial about its economy. At the center of this denial is our Govt.’s refusal to accept our inability to turn tourism – the world’s most competitive business bar NONE – around. Tourism has shrunken from 75% of the economy in the 1960′s to 5%…yes 5%!! of the economy today!! Given the amount of competition, the cost of operations in Bermy, and Bermuda’s small size, the ability of the country to attract more than 300 thousand tourists per year is almost zero!

The Airport project is front and center evidence of warped unrealistic thinking on the possibilities for tourism in Bermuda. We are desperate and our desperation is on full display with this way offside airport re-development project.

By: Coffee

Coffee — Wed, 20 Jan 2016 18:53:36 +0000

More self serving lies .

By: archie

archie — Wed, 20 Jan 2016 18:07:24 +0000

Not directly – altough we are giving revenue guarantees and we are paying for the power – but we will pay. We will pay in terms of airport departure taxes, the price of coffee, parking….

By: archie

archie — Wed, 20 Jan 2016 18:06:18 +0000

we are on the hook for revenue guarantees tho – for 30 years!

By: jt

jt — Wed, 20 Jan 2016 18:01:51 +0000

If they are running the airport where is there any incentive for them to do so efficiently?

By: LiarLiar

LiarLiar — Wed, 20 Jan 2016 17:45:32 +0000

In all fairness the payroll tax exemption is only for the construction phase of the project. This makes sense as the additional tax would make the project more expensive and thus the revenue guarantee even higher.

In relation to the revenue guarantee I would like to see the projections going forward and how they compare to current revenue levels.

By: flikel

flikel — Wed, 20 Jan 2016 17:37:14 +0000

One really has to smile at this entire fiasco. Supporters argue the airport does not make any money…hence why this is a good deal. It is good deal that our money loosing airport is being revamped with no cost to the Govt.

But Govt has to cover revenue shortfalls…yikes. If our money loosing airport continues to loose money, Govt will have to foot the entire bill for this project!

By: flikel

flikel — Wed, 20 Jan 2016 17:18:30 +0000

The Government has to cover the developers for revenue shortfalls? As well as pay utility bills? Forgo the employer portion of payroll tax?

It is a fallacy to think that Govt or the taxpayers are not on the hook for anything. If revenue is poor and Govt has to pay the developers for the lack of revenue….Govt could really be on the hook for the entire thing.

By: Blown Tire

Blown Tire — Wed, 20 Jan 2016 17:16:31 +0000

Anyone who thinks this is not debt to Bermuda must be illiterate or just old fashioned “dumb”. We are pledging an asset to someone for 30 year against debt that they are borrowing ($300 mil easlily. Why would you give someone your asset so that they can borrow money against it?? Why? Because as any banker knows they borrower is a “fronter” who is borrowing the funds on behalf of the asset owner for a fee! This is known as fronting. The debt is truly ours and we will see it come on to oour balance sheet in parcels ($10- 20 mil per year ??)over the next decade. Stop believing the ignorant and the deniers….we are still borrowing !300 mil per year. Debt crisis for Bermy looms! Do a Google search…Puerto Rico Debt Crisis….read the first 4 articles thoroughly…..and imagine your future!

By: Blown Tire

Blown Tire — Wed, 20 Jan 2016 17:00:47 +0000

Hmmmm like I told you all last year this is a scam!
Let tally up the real cost: they pay no payroll tax, we pay for their electricity usage, if the revenues drop from falling volumes (almost guaranteed to happen in the next US recession or a downturn in IB here) we have to pay them the shortfall (they can’t take any risk cause they are from a much bigger more sophisticated country).This deal will see Bermuda close to 400 million deeper indebt in 15 years. Debt crisis for Bermy looms.

By: Double S

Double S — Wed, 20 Jan 2016 16:48:30 +0000

Well the PLP spent $3mn taxpayer dollars to architects to come up with potential designs and costs of the development of a new airport.

Their cheapest option was just under $500bn while the most expensive was just shy of $1bn. The estimates came from HNTB, a United States civil engineering firm and Woodbourne Associates.

So $250mn doesn’t sound so unreasonable at this point, especially when it has been noted that the previous mandatory cost ‘overruns’ and shoddy construction (see Dockyard Pier) will not be borne by the taxpayer in this instance.

By: Matthew

Matthew — Wed, 20 Jan 2016 16:39:10 +0000

It wouldn’t e their short fall at this Airport is being leased. They are erecting the airport on the governments behalf if you want to look at it. Do we have the money for this no so they are investing in an infrastructure to make back a profit the way any business does. Try not paying your mortgage to the bank and see how fast they foreclose your house and sell it off to someone else.

By: Jus' Askin'

Jus' Askin' — Wed, 20 Jan 2016 16:20:08 +0000

We will pay in the future, that I can Guarantee

By: Jus' Askin'

Jus' Askin' — Wed, 20 Jan 2016 16:18:46 +0000

Rising Oil prices will

By: archie

archie — Wed, 20 Jan 2016 16:03:00 +0000

penalty to who? The taxpayer for covering a private firm’s shortfall, really?

By: archie

archie — Wed, 20 Jan 2016 16:01:41 +0000

does not answer my questions

By: Matthew

Matthew — Wed, 20 Jan 2016 15:27:16 +0000

JT they will get their cash back on a set price. Lets say 23 million a year in revenue and they spend 20 million of the revenue on the running of the airport. That would mean they get a 3 million in profit to go back into their pot. However if they fall short of the set amount for the year lets say for the sake of things that the set amount is 20 million and the airport falls short of this like 2 million than the government has to pay that 2 million as kind of a penalty if you want to look at it that way.

By: Old Age Person

Old Age Person — Wed, 20 Jan 2016 15:26:22 +0000

I think you are missing the point. We are not paying anything.

By: archie

archie — Wed, 20 Jan 2016 15:22:40 +0000

They are utilising hedge funding – that came out at a public meeting. OK, CCC is the investor, points still stand.

By: rhonda

rhonda — Wed, 20 Jan 2016 14:20:41 +0000

Smdh

By: SANDGROWNAN

SANDGROWNAN — Wed, 20 Jan 2016 14:14:02 +0000

Didn’t take years for shoddy workmanship to appear at the cruise ship dock did it?

By: Build a Better Bermuda

Build a Better Bermuda — Wed, 20 Jan 2016 13:56:47 +0000

But we won’t be on the hook for overruns, CCC will, that is the point of this contract. It will be on CCC/Aecon’s interest to make sure that it comes in online and budget. They will have a build to contract that they will have to meet as well, which is what is being developed right now. This contract is what will layout the expectation and standards that the build will have to meet, things like what systems will be installed (jetways, baggage handling…), HVAC capacity, lighting levels, power, backup power, data services, paint colours, lounges, airline desk capacity, international accreditation,… When you look at other recent airport builds and ours, we are right around where the cost would be expected for what we are trying to achieve, and it will all be on CCC/Aecon to achieve it for the price contracted. The only thing that would change the price on the contract, would be additions/changes/interference from government, outside of what the contract scopes.

By: Build a Better Bermuda

Build a Better Bermuda — Wed, 20 Jan 2016 13:38:54 +0000

Aecon isn’t the investor, they are the contractor. The investor is in fact the Canadian Government through the CCC, set up provide business opportunities to Canadian companies overseas, and I don’t think they utilize hedge funding. Now any company doing business he would have to have a local entity, so Aecon would have to partner or set up a local company. What we would see is that most likely, the majority of the materials and specialized skills required for the construction would be provided from Canadian manufactures, while Bermuda and Bermudians would provide the general labour force. Likely labour force on site during its peek to final phase would probably be around the 300 – 400 people.

By: jt

jt — Wed, 20 Jan 2016 13:38:30 +0000

I’m in favour of the concept, as many are, but we should wait to see specific parameters relating to how Aecon is to recoup their cash before anyone should offer full support.

By: Juice

Juice — Wed, 20 Jan 2016 13:10:53 +0000

I know we don’t all agree that this airport deal is the right way to go, but at least we did obtain guarantees against cost over runs, shoddy workmanship and time delays. For the life of me, i could never understand why these things were never covered in so many other capital projects. Anyway, now that its definitely happening, I hope for the best, because hoping for failure of this project is hoping for the failure of Bermuda.

By: bluebird

bluebird — Wed, 20 Jan 2016 13:06:44 +0000

@ archie,
That is why Government is not doing this project and I understand that this will be the smallest job that this company has done.
The Minister of Finance is looking ahead not behind.

By: bluebird

bluebird — Wed, 20 Jan 2016 13:02:24 +0000

Mr Richards,thank you for being the minister of finance,God only knows we do need you.

By: archie

archie — Wed, 20 Jan 2016 12:58:43 +0000

Agreed – and is there a limit to how much Govt will make up the shortfall? Or are we (the taxpayer) just giving them a blank check? Not much of an incentive is it?

By: Jus' Askin'

Jus' Askin' — Wed, 20 Jan 2016 12:48:51 +0000

It really is Not

“…obtaining guarantees against cost over-runs, shoddy workmanship and time delays…”

No cost over-runs can only be guaranteed if we are paying WAY over the ACTUAL cost to build it. If I know a project cost $100 million to build and the client is willing to pay $375 million for it, I would guarantee no cost over-runs as well

Shoddy workmanship may show years down the line, so that guarantee means nothing to me.

Weather will determine time delays, not any guarantee

By: archie

archie — Wed, 20 Jan 2016 12:47:54 +0000

I am stil not convinced. We don’t know if other companies could have provided a better deal; do we know that we actually need a $200m airport – afterall, air arrivals are pretty stagnant; Aecon is not the only investor, there are hedge funds involvded – what is the guaranted rate of return being promised and what happens if we do not meet it? Aecon sold its share in its much publicsed Quito airport – could/would that happen here and are there safeguards in place if that happens? Are there any projections for airport revenue (if so, what are they); are there projections for air arrivals – is that something that can be done? If so, what are they – as they are going to be the primary source of revenue; are we going to get new bridges instead of the so-called temporary bridges that exist now or will exist soon (and at what cost?)
And let’s face it, it will not add hundreds of jobs all at once, they will be in phases so there may be scores at any one time. What will happen to the old airport – Governments do not have a good track record of doing anything with old buildings. What is the total cost after repayment of the debt (remember, private companies borrow at a higher rate of interest than Governments), so many questions …..

By: Justin

Justin — Wed, 20 Jan 2016 12:36:30 +0000

Under this agreement if the new airport doesn’t make money, are the Bermudian taxpayers going to make up the difference? Sounds good otherwise considering the airport hasn’t actually made money for a long time.

By: Widget

Widget — Wed, 20 Jan 2016 12:24:03 +0000

Sorry. Win win.

By: Widget

Widget — Wed, 20 Jan 2016 12:22:16 +0000

This project is a wi win for Bermuda. Let’s keep the course and build it.