OBA Leader On Premier’s Comments & Skyport

[Updated] Bermuda’s airport “has been used by the PLP as a political wedge to divide Bermudians,” Opposition Leader Cole Simons said, adding that ”Bermuda and the Burt Government should and must celebrate, and embrace the introduction of CC&L as they may bring greater potential for future inward investment opportunities for Bermuda.”

Background

The OBA Leader’s comments follow after it was announced that the Canadian company CC&L will purchase 49.9% of Skyport for $128.5 million.

Following the announcement, Premier Burt said, “In 2017 Aecon invested only $65 million of equity into the no-bid privatisation of Bermuda’s airport. Today, with this sale, the value of that equity is now $257 million, an increase of $192 million – which should shock every taxpayer. Aecon’s investment is four times what it was worth just six years ago, while taxpayers were obligated to give Skyport $50 million in revenue guarantees.”

“Sadly, due to the bad deal passed by the former Government that was opposed by a majority of the voters in Bermuda, the elected Government sits on the sidelines while foreign companies profit at the expense of Bermuda’s taxpayers,” the Premier said.

The announcement about the sale said that “to date, over $425 million of private capital investments have been made in the Airport Redevelopment Project” and noted that “there will be no operational, management, or staff changes at the airport as a result of the transaction.”

When the deal was announced in 2017 Aecon said, “Financing for the project has been arranged by Aecon, and includes a US$285 million fixed coupon US private placement, amortized over a 25-year term, and approximately US$70 million of shareholder equity to be contributed in the latter part of construction.”

OBA Leader’s Comments

“The Premier says he is ‘disappointed’ that taxpayers have to sit idly by while foreigners ‘sell our airport,” Mr. Simons noted, with the Opposition Leader alleging that “Bermuda’s Premier continues to deceive to the public.

“The truth is:

• The airport has, is, and always will belong to the people of Bermuda.

• The airport has not been sold.

• The Premier knows this, but apparently can’t resist misleading the Bermuda public.

“When it comes to this transaction, let’s be very clear. Aecon Limited is the sole shareholder of Skyport Limited, in its capacity as a manager and operator of Bermuda’s Airport. It is Aecon Limited which has sold 49.1% of its holding in Skyport Limited, to Connor, Clark & Lunn Infrastructure [CC&L].

“2. The Premier says that Government should not have had to pay on the minimum revenue guarantee because it was a ‘terrible deal.’

“The facts are:

• The agreement worked exactly as it was supposed to; it prevented a default on the debt, because of the Covid-19 anomaly, which was on no one’s radar.

• If the Bermuda government had financed this world-class airport and the airport closure during the pandemic, it would have resulted in the government having to increase the public debt by over $300 million. In addition, the government would have had to pay airport workers salaries and benefits, while the airport was closed.

• Now, if we compare the current airport structure, to that of a government financed airport, the $50 million paid to Skyport Limited to date, could be seen as a modest amount.

• It was Skyport Limited, and not our government that paid those salaries when the airport was closed, and when it earned virtually no revenue.

“3. The Premier says that the majority of Bermudians opposed the airport deal.

“Another misrepresentation – He cannot back this up with proof,” Mr Simons said, adding that the “protesters, who included Premier Burt” that “blockaded Parliament” did not “represent the majority of Bermudians who are law abiding citizens.”

“4. Once again, the Premier is thrifty with the truth when he says that he worked so hard to get a better deal.

“The truth is:

• He never once put forward an alternative proposal to the CCC/Aecon deal when the One Bermuda Alliance was in Government. The only thing he did was attack and try to block the transaction.

• Most airports around the world are managed and operated by private airport authorities. Why? Because they have better proven track records than governments in managing airports, and airport operations. Such examples of well-known airport operators are the Greater Toronto Airport Authority, the Port Authority of New York, Heathrow Airport Holdings Ltd., Dubai Airport Company, and the Airport Authority of Hong Kong.

“5. The Premier could better serve the people of Bermuda if he ceased his deflection game and offered Bermudians the news that a definitive and fully financed deal has finally been reached to renovate and reopen the Fairmont Southampton Hotel, and the Elbow Beach Hotel, to increase passengers transiting the airport, rather than bashing ‘water under the bridge.’ When those hotels are back on line and we have more tourists, perhaps government can get its $50 million back from Skyport.

“For too long, Bermuda’s L. F. Wade International airport has been used by the PLP as a political wedge to divide Bermudians.

“Quite frankly, as most Bermudians know – investments in large infrastructure assets are what the country desperately needs. It is what we have all been waiting for to generate long-term financial success, and CC&L can play a vital role in supporting Bermuda in achieving this endeavor.

“Clearly, CC&L is a very solid company. It is one of Canada’s largest privately owned asset management firms that targets high quality traditional and energy infrastructure projects. and its newly acquired interest in Skyport and Bermuda shows its confidence in Bermuda, and the award-winning L.F Wade Airport and its facilities.

“Bermuda and the Burt Government should and must celebrate, and embrace the introduction of Connor, Clark & Lunn Infrastructure, as they may bring greater potential for future inward investment opportunities for Bermuda.”

Bernews asked the Government for comment and will update if able, and you can also read the Premier’s previously released statement on the matter here.

Response

Update 7.37pm: “Private Profits over taxpayer sacrifice is clearly the Opposition Leader’s true feelings about this week’s Skyport deal,” said Minister Wayne Furbert. “And today’s statement issued by the Opposition Leader should be cause for concern for the people of Bermuda.

“The Opposition Leader should be reminded that in addition to the $50 million paid to Skyport since the pandemic, the taxpayer is still paying Skyport’s energy bills & additional firefighters, while Skyport collected over $50 million per year in airport revenues, with not one dime of that revenue going to the taxpayer.”

Minister Furbert continued, “Tone deaf sentiments like, ‘the $50 million paid to Skyport Limited to date, could be seen as a modest amount’, are truly extraordinary and woefully out of touch while Bermuda deals with the impact of 40-year high global inflation. Aecon quadrupled the value of their money in 6 years, received $128.5, and in 14 days, Skyport will send the taxpayers another bill asking for more taxpayer cash due to the contract that was approved by the Opposition Leader when he sat in Cabinet.

“I am not surprised that the Opposition wants to rewrite history, but the fact remains that a majority of Bermudians opposed the no-bid privatisation of the airport, and Wednesday’s news is clear evidence of the reason why. This deal was always set up so that Bermuda’s taxpayers lost while overseas private profits won – and just like Morgan’s Point – today the Opposition OBA said they would do it all over again.”

A Government spokesperson concluded, “Premier David Burt was clear and pointed in his recent statement. The media should refer to the Premier’s remarks as it relates to this matter.”

#Aecon #AeconSale #Airport #BermudaPolitics #SkyportSale

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