PLP On Airport Deal, Promises & More

September 19, 2020

The Progressive Labour Party [PLP] recently held a press conference, with comments from Jamahl Simmons and Lawrence Scott.

Jamahl Simmons remarks:

Good afternoon,

Soon, our Party platform will be released, a platform that will lay out our vision for the next term….a vision to lead our country out of the economic crisis based on the foundation of strong leadership we demonstrated during this global health crisis.

Soon you will be asked to examine and weigh our vision alongside the vision and proposals of the other political entities.

There are some who would argue that there is no difference between the parties and that promises made during the election season cannot be believed or taken seriously.

During our term we have kept our promises and delivered on our promises…and while much remains to be done to improve the lives of every Bermudian, we understand the needs of Bermudians and are making steady progress.

We promised to expand access to college education and roll back the OBA’s cuts to scholarships and training programmes. Today several hundred Bermudians have directly benefited from our delivery on that promise.

We promised to break down the barriers to entrepreneurship and we delivered on that promise providing tax cuts for first time entrepreneurs and given more Bermudian small and medium sized businesses the opportunity to get the money they needed to get started when others turned them away.

We promised to institute cost of living increases every year for seniors pensions and we delivered, ensuring that our seniors would not have to go years without an increase as they had done under the OBA.

We promised to begin making our tax system fairer and we delivered by slashing payroll taxes for our lowest paid workers, delivering the largest payroll tax cut in history.

We promised to introduce STEAM education in our schools to better prepare our children for the 21st century global economy. We promised to clean up the mould in our schools and bring our facilities into the 21st century, with new learning opportunities and new teaching tools for our teachers and students with the introduction of wifi in all our schools for the first time.

We delivered and are delivering.

We promised to increase the Child DayCare allowance to ease the burden on hard working families struggling to make ends meet and We delivered.

We have more work to do, but, it is clear that we are trying to fulfil our promises and commitments to you.

I welcome you to contrast that with our opponents.

They promised to create 2,000 new jobs. They lost 2,000 and oversaw an economy that saw Bermudian jobs shrink while non-Bermudian jobs grew.

They promised to reduce the debt. They doubled the debt.

They promised to stand up for the women of Bermuda while trying to slash access to mammograms…this in a country with one of the highest rates of Breast Cancer in the world.

They promised to do politics differently and they did, giving us the first Premier in history to resign in disgrace in the Jetgate corruption scandal.

They promised to be good fiscal managers – they gave us Carolina Bay a deal that could cost Bermudians over 100 million dollars.

They promised to be good fiscal managers and gave us the airport deal another gift that keeps on giving…a gift based on a contract they didn’t read, a contract that couldn’t be broken, a contract that will likely be a drain on the public purse for decades to come and a contract that saw peaceful protesters pepper sprayed.

Now MP Lawrence Scott will talk a little bit more about how this dodgy airport deal impacts on each and every one of us.

Lawrence Scott’s remarks:

Thank you, MP Simmons.

I would like to share a few positive developments regarding the airport, however I believe it might be helpful to go over the facts as they stand right now.

As many of you know, in August, the Bermuda government had to transfer $5.77m to a bank in New York set up by AECON/Skyport to satisfy the minimum revenue guarantee present in the contract signed by the then OBA government.

We’re now estimating that an additional significant payment is due in October. That notification will be issued in early October and will be due shortly thereafter.

As has previously been noted, the biggest reason that we are liable for these payments is a lack of a ROBUST force majeure clause in the contract.To be clear there is an FM clause in the current contract, it just doesn’t trigger a waiver of the guaranteed minimum regulated Revenue requirement.

Force majeure is a legal term that, basically, means if there is an act of God, like a flood, a major storm, a tsunami, or a pandemic, with a more robust FM clause we would have been able to receive forgiveness on the key requirements of the contract, including the minimum revenue guarantees. This is an extremely common clause in most contracts.

However, the current Project Agreement as it currently stands leaves us with only limited options, with transferring millions of dollars to an overseas bank account being one of them.

In 2019, when we were recording record air arrivals, passenger arrival numbers were approximately 5% above the Regulated Revenue Guarantee threshold. Based on ICAO [international governing body] projections commercial air. This United Nations Agency forecast does not have Commercial Air arrivals returning to 2019 levels for another four years.

Now that you are up to date, I would like to highlight a few positive developments regarding the airport.

Despite the unusual decision to not include a variation clause in the contract. The Airport Authority has already been able to renegotiate aspects of the Project Agreement which include but are not limited too:

  • Canopy for the Passenger Terminal Building – The original agreement or design did not include protection from the rain for passengers getting into or out of their cars. You will notice that a canopy has since been incorporated in the amended Terminal Design
  • Negotiated Skyport away from their original decision to charge Taxi Drivers for picking up and dropping off passengers at the Terminal
  • Air Service Development, The Airport Authority negotiated with Skyport and other Stakeholders to actively and financially participate in the country’s first official Air Service Development Program. Whose main purpose is increasing air arrivals and exploring new routes to and from the island.

While the recent hurricane put a damper on September air arrivals, we continue to see airlines come back. I’m pleased to say that airlift has shown a consistent month over month increase since the resumption of Commercial Air Service.

Last and certainly not least of all, although we are unable to avoid paying the MRG we have begun talks with Skyport to reduce the payment amounts by transferring only the funds that Aecon will draw down on [needed for debt payments] vs projected debt numbers. This we believe has the potential to save the Bermuda taxpayers millions of dollars this year alone

Thank you very much.

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