“We’ve Had To Pay A Total Of Over $20M”

April 27, 2021 | 24 Comments

[Updated] “Thanks to the OBA passing the bad airport deal, they forced the government into a contractual obligation,” PLP MP Neville Tyrrell said, adding that ”we’ve had to pay a total of over $20m into a bank account of a wealthy international company since the onset of the pandemic.”

PLP MP Neville Tyrrell

Mr Tyrrell said, “It’s shocking that the OBA’s Shadow Minister of Legal Affairs didn’t actually read the bad deal that his party foisted upon the taxpayers of Bermuda.

“Thanks to the OBA passing the bad airport deal, they forced the government into a contractual obligation to make these minimum guarantees. Bermuda, we’ve had to pay a total of over $20m into a bank account of a wealthy international company since the onset of the pandemic. That’s $20M that could have been invested in Bermudians.

“This was not an overpayment by the government – it was an overbilling by Skyport. There are no legal means of objecting to overbilling in this bad OBA contract. We are obliged to pay their bill because of the deal that the OBA subjected us to.

“If we had followed MP Pearman’s advice and refused to pay the bill, Skyport would have had every right to take the Government to court, and they would have won because the bad terms are clear. If we had followed MP Pearman’s advice, we would still have to pay the $4 million and we would be on the hook for penalty fees and legal fees.

“This was a bad deal and it’s one that we’re paying for in bad times, and will continue to pay for in both good and bad times for decades to come, because the former Government gave a no-bid privatisation contract to an overseas company that will cost Bermuda’s taxpayers hundreds of millions of dollars to get out of.”

We asked the OBA and the Shadow Minister of Legal Affairs for comment and will update as able.

Minister of Transport Lawrence Scott 

In a separate statement, Minister of Transport Lawrence Scott confirmed “that the payment made to the Airport was made as per the terms and conditions outlined in the Project Agreement.

The Minister stated, “The Ministry is presented with an invoice every quarter to pay, and we have no option other than to pay it. If we do not pay the invoice, the country would have defaulted on their obligation under the agreement. That is not how we operate at the Ministry of Transport.

“Yes, the Project Agreement negotiated by the former Government, has been structured in such a manner that ensures Skyport/AeCon [at any given time] have more than they need. Unfortunately, it is only at the end of the calendar year when they are audited by an external and independent firm that their accounts are reconciled and we have been reimbursed for the over-billed amount.

“What is important for me to note is that the only real mistake here is the fact that we are having to make any payments at all. The entire country remembers that this Government opposed this no-bid privatisation of this prized asset. However, we will continue to operate under the terms and conditions of the agreement our country is obligated to.”

OBA MP Scott Pearman

Update: Shadow Minister Scott Pearman responded to MP Neville Tyrrell and Minister Lawrence Scott, saying, “he PLP spin machine seems to be malfunctioning. First, MP Foggo tells ZBM the PLP made a $4M overpayment to Skyport ‘above what is necessary.’

“Next, PLP MP Tyrrell tells Bernews that actually ‘it was not an overpayment by the Government – it was an overbilling by Skyport.’ Then Minister Scott gives a further version of events, namely that “the payment made to the Airport was made as per the terms and conditions outlined in the Project Agreement.”

“There is much confusion here, which is concerning. Let us hope Minister Scott is right and his PLP colleagues are mistaken. The Government’s confusion shows why the Opposition is right to ask questions. The OBA will continue to hold the Government to account, even when our questions are met by attacks and falsehoods.”

Skyport

Update: A Skyport spokesperson said, “The Minimum Revenue Guarantee is a mechanism built into the Airport Redevelopment Project Agreement that is designed to protect project lenders by ensuring that debt payments are met in severe revenue decline scenarios. Once the debt is paid off, the guarantee falls away completely.

“Given the vulnerability of tourism and air passenger traffic in general over the past few decades, as seen in other cases, parties looking to make significant investments in Bermuda’s travel and tourism sector require some assurances to help protect those investments. The development of the publicly owned new passenger terminal facility by the private sector in what industry experts have described as a fair and balanced deal, is no exception.

“While the minimum revenue targets were set considerably low to guard against the risk of the guarantee ever being triggered, the economic shock of the global pandemic has led to an unprecedented 85 percent drop in traffic, necessitating payments by the Government to protect the project’s lenders.

“Both Government and Skyport have been duly following the prescribed Minimum Revenue Guarantee mechanics in the Project Agreement, which involve periodic contributions to the Minimum Revenue Guarantee Reserve Account followed by periodic reconciliations. The Account is accessible only by the project’s lenders. The process is unfolding in full compliance with the Project Agreement and importantly, occurs in the context of the successful delivery of a Bermuda owned, world class, new passenger terminal facility.

“Skyport remains committed to working with the Government and industry stakeholders to bring about a recovery in air passenger traffic that will soon see the airport become financially self-sustainable once again.

“For more information on the Airport Redevelopment Project Agreement, please visit the airport website here.”

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Comments (24)

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  1. sandgrownan says:

    Scott and Tyrrell really aren’t too bright.

    • Lol says:

      You should focus on the 6 seat party clown. You and the UBPoba don’t have a clue……you will still lose the next election.

      • saud says:

        …and if they don’t, will you finally admit that you’re nothing but a hate filled racist?

      • wahoo says:

        The election of the plp had nothing to do with their ability or track record. Glad you didn’t try to argue that Scott and Tyrrell are indeed bright but rather took the easy route and parroted every other simpleton in the green party.

      • Now Ya Nice says:

        So the people in charge that just admitted to paying Millions of dollars extra by mistake have a clue. The same clue that built Sandy’s 360 and paid twice, the same group that built Grand Atlantic, The same group that destroyed the Shelly Bay Beach development out of spite leaving the residents with nothing? They have a clue? Lol. Don’t confuse good politicians with good government.

      • kevin says:

        You know what …lets talk about the 5million we pay every year on the hospital contract and the over budget construction of the hospital …green machine wants to keep that quiet …..dont you

  2. Let's Keep It Real says:

    Here they go again. Trying to wiggle their way out of why they are not fiscal responsible. Last week on TV DB made the statement when asked about South P and Gencom, by trying to use an illustration about Morgan’s Point property. Yet in that same interview tried to lump praise for St. Regis. Let’s not forget this to was initiated under the OBA watch.

    What major job creations has this current government created since they have returned in office.

    Stop trying to take credit for things you haven’t initiated and when it comes to criticism, divert to pointing your finger at the other political party.

  3. saud says:

    LOL, how pathetic are the plp.

    Is it the OBAs fault that the PLP like to pay for everything twice?

  4. I See says:

    Mr Tyrrell said, “It’s shocking that the OBA’s Shadow Minister of Legal Affairs didn’t actually read the bad deal that his party foisted upon the taxpayers of Bermuda.

    More or less shocking than PLP being bad at math.

  5. chart says:

    Hey Neville, how much we paying for Ewart’s glam hospital? Not much difference in those deals.

  6. Yahoo says:

    Tyrell and Scott are both irrelevant.

  7. George Smith says:

    So Skyport mistakenly or otherwise could present an inaccurate invoice to the tune of several million dollars to the Govt. (the tax payers) and the Govt. have to wait until the end of Skyport’s financial year/audits for Skyport themselves to determine whether the invoice was accurate or not and to credit the Govt. accordingly? I hope that credit contains interest for the duration of the overcharge period?

    • LOL - the real one says:

      Before the Brits dissolved the government in the Turks & Caicos, the Ministery of Finance would pretty much blindly pay any invoice submitted without a Purchase Order Number or an Authorization Number.

      This is nothing new for Bermuda.

  8. Warrior says:

    PLP needs to ask EB to refund the funds he was paid re loss of business. Now he going to court. REFUND!

    • Actually not says:

      By paying the one whose name shall not be spoken the Government has actually let him off on all prosecution as why would they compensate him and then prosecute him? The judge will summarize this and dismiss in 1 day

  9. Bermyman says:

    There would be no revenue guarantee payment if the PLP had done a better job with tourism this past year! – See how asinine this argument is.

  10. Insider says:

    There was no mistake. No overpayment. The terms and the conditions in the agreement were followed, rigorously, to the letter.

  11. Ringmaster says:

    Bermuda pays around $15 million a month in interest alone to the bank accounts of wealthy foreign banks because the PLP has borrowed so much money with no assets to show for it. So since the pandemic that’s around $200M that could have been invested in Bermudians. There, corrected it for you.

  12. Noel Ashford says:

    Wow – how daft are the PLP… Had their not been Covid would we be paying? I know some of your supporters may be fooled this easy but not everyone is so daft guys – the airport is all we could afford after your incompetent party leveraged us far past our means us under Mr. platinum era the good DR times. Stop assuming we are stupid.

  13. Dunn juice says:

    Did you include the extra 4 millions overpaid

  14. observer says:

    We have to pay for the airport terminal construction somehow! AECON did not build it out of the goodness of their heart. The situation is unfortunate but better that financing the project ourselves. Using a local construction firm which would have guaranteed led to cost overruns and delays as they have no expertise and experience building anything like this. Keep in mind the PLP had budgeted over $350 million for the new airport and this deal was far less then that.

  15. Charlly x says:

    Wow n peanut gallery goes wild again poltical football with a can ! It’s not our fault it’s theirs ! Meanwhile taxpayers for years to come will be paying off debts for both sides miscalculations ! I don’t care who you vote for because at the end of the fiscal year we all pay . Until you cheerleaders call out both the Red and the Green we’re all Stuck with doo doo on our shoes ! Put the Heat on Elected officials to do what’s right simple ! You/we voted for them n you/we can Fire them ! The problems we have are All on the island n belong to Us ! Not one party or the other ! They are Ours ! The good the bad n the Ugly!!!!!

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