Premier: Returns Could Have Benefited Bermuda
“It is disappointing that Bermuda’s elected Government and Bermuda’s taxpayers have to sit idly by while foreign companies sell our airport for their own profit,” Premier and Minister of Finance David Burt said, adding that “the only thing the taxpayers will get from today’s sale is a bill on March 31st from Skyport demanding their next minimum revenue guarantee payment.”
This follows the news today that Aecon has entered into an agreement with a Toronto-based firm to sell a 49.9% stake in Skyport for US $128.5 million.
Premier Burt stated, “It is disappointing that Bermuda’s elected Government and Bermuda’s taxpayers have to sit idly by while foreign companies sell our airport for their own profit.
“During Covid, the taxpayers of Bermuda had to write cheques to Skyport amounting to $50 million in minimum revenue guarantees because of the OBA’s terrible no-bid deal. The fact that taxpayers were required to pay to protect Skyport’s valuations was bad enough, but today – the news gets much worse for Bermudians.
“At a time when Bermudians are challenged to make ends meet, at a time when the Government is doing all it can to reduce taxes for workers to cope with global inflation, and at a time when the Government is working so hard to balance Bermuda’s budget, today’s news will anger many.
“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.
“The Government was informed by email at 3:59pm of this sale of equity by Skyport. Many Bermudians, including the Cabinet, learned about it from the international press. 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.
“This is why we in the PLP worked so hard to get a fairer deal for Bermuda when we were in Opposition. This is why Bermudians from all walks of life protested this privatisation and were tragically subjected to pepper spray as the OBA was determined to approve this terrible deal.
“And today, while Bermuda’s taxpayers are still paying Skyport’s energy bills, still paying minimum revenue guarantees to Skyport, and the Government had to spend $4 million of extra funds for firefighters to keep Bermuda’s airport open with no assistance from Skyport, Aecon is laughing all the way to the bank.
“This is why elections and issues matter. I would ask every taxpayer to think what could have happened if the PLP prevailed with our plea many years ago and Bermudians were the investors in our own airport rather than a foreign company that received a 30-year no-bid contract, who today has quadrupled their investment in just six years.
“If we had prevailed, those extraordinary returns could have benefited Bermuda’s taxpayers – benefiting our economy. Sadly, the only thing the taxpayers will get from today’s sale is a bill on March 31st from Skyport demanding their next minimum revenue guarantee payment.”
So you would have built an airport by borrowing $400 million dollars and then sold it? Nonsense.
We have an airport for free. The airport would not make enough money to cover the interest on the debt and the lump sum borrowed back with the PLP plan. We would also have to cover 100% of the cost of the airport through the two years of COVID.. premier is an absolute clown. Airport deal was and is a good deal.. he conveniently likes to ignore the costs, just likes talking about revenue. Am sick of Bermudians being treated like we are too dumb to understand,
If our Premier is so concerned why not just call the company up and place a better bid to gain control?
We all know the answer! Ya made us broke, overspent, borrowed all you can, and you know there is no better option.
Without a doubt, there are shadow parties that benefit from their participation in such deals; seeking hard and deep enough will reveal the truth in such matters if justice is needed, and really wants to know. How else would such an act be agreed to that literally deprives and robs the country of an important resource? Devil in the deep blue sea … seems the Canadian’s secret group has eyes to control as much as possible on this Island ..Seek and ye shall find.
Burt has laid out an excellent summation of why this deal was not bad. If the PLP had built the airport, taxpayers would be paying far more to cover the costs. The minimum revenue amount would not be an issue if the BTA did their job, at a cost of around $25 million a year. What about the cost to the taxpayer of the mini hospital? Or the $135 million a year on interest only on debt with nothing apart from a cruise ship pier to show for it?
A load of rubbish and worrying he is also the Minister of Finance, guaranteeing tax money to Gencom, a private foreign owned company, so where’s the difference?
Needs to do better at his job and stop the daily electioneering.
the plp will play that tune all day ” the Airport guarantee” but they are part of the reason why travel is down , they have failed to get gambling up and going they continue to meddle in Tourism (which by the way they absolutely suck at ) in the early 2000′s they use to spend 65 million on tourism every year . What about the Hospital Mr. Burt tell your faithful how much you are paying the Canadian company who built it …that makes the airport look like a steal…how much you now spending on the horror house Bermudiana Beach .this to will flop just like the first project on the same site.Burt your boring and to be honest dont know what to do …but lets get elected so we screw it up even more
I disagree, PLP are not part of the reason travel is down…they are the only reason travel is down. Travel is up everywhere else, way up! Our competitors are not only doing well but they are breaking records! The minister of transport needs to resign and retire from politics altogether. The PLP needs acknowledge that their dismantling and need to control the BTA and the Casino Gaming Commission were bad ideas and not gone well. The premier needs to resign because none of the projects he has backed and controlled have been successful. Can anyone name a single project during his time in office that has been successful? Just one? Oh wait, there was the claim that the TA process and fee was going to make money…we just arent sure who exactly and how much. What did that process that the Premier and Minter of Health implement and refuse to relax really cost Bermuda. Mr. Burt, if you are going to point a finger and place blame, you might need to look in the mirror.
“It is disappointing that Bermuda’s elected Government and Bermuda’s taxpayers have to sit idly by while foreign companies sell our airport for their own profit,” Premier and Minister of Finance David Burt said”
Why does the PLP Government have to “sit idly by”? Why was not our PLP Government bidding to buy a stake of Skyport?
“due to the bad deal passed by the former Government ”
The Government previous to this PLP Government was also a PLP Government
This is exactly what the PLP and its team of idiots have been doing for years. Selling Bermuda assets to foreigners. What makes you any different Burt?
Yeah, maybe this Airport deal is costing taxpayers dearly and for a long time to come.
Your track record has been far from steller!
Under your PLP government, we have a hospital that cant meet the demands of the sick with ONLY 90 BEDS, a pie in the sky casino idea which will never get off the ground until the PLP get there hands out of the pot. Zero involvement in the BELCO polution fallout while Bermudian lives are put at a serious health risk. I can bet that had the OBA or any other named government been in power and the PLP were in opposition, all hell would have broken loose. But here you all are quiet as field mice. You talk of foreigner ownership? Whats going to happen to the Southampton Princess deal that you all are remaining quiet about? Bermudians aren’t as dumb as you think.
Stop talking out your backside man!
Let’s not forget it was the PLP under this current Premier that allowed for the sale of BELCO to foreign investors! Who is leading BELCO company now?
Was it not the PLP that broke the 60/40 (Bermuda vs Foreign) investment rule that allowed the former Bank of Bermuda to be taken over by a foreign bank? Remind us again who was in charge of the BOB again?
Maybe we should be working with them Vs against them and maybe they would have offered BDA the option to buy back the 49%. Always blaming someone else. Yep OBA should have predicted covid. Work on fixing things you can control and stop wasting time on those you can’t just for a sound bite.
You just know the failure-in-chief, no results Burt would leap on this politically. But his comments don’t even stand the slightest scrutiny.
It’s frightening that this clown is the finance minister. But, he’s just playing politics.
I thought the egomeir went over the airport contract.. I guess we would’ve been better off friends and family building the airport
Bro. This mouthpiece keeps barking on about the airport. I’ve not seen or heard him do anything positive for Bermuda’s growth in a bermy long time. I’m kind of tired of him.
Burt’s counterfactual doesn’t make any sense, unless he is saying that his government would have happily sold 49% to someone. It’s fiction.
He’s also still whining about the minimum revenue guarantees that could have been avoided if he, as Finance Minister, had purchased pandemic insurance. His failure.
Burt’s misleading and scurrilous misrepresentation of the costs of the airport are amazing, and he is the Minister of Finance. Had the PLP built the airport, and they had plans to do in the mid 2000′s at an estimated cost of $500million, 1) the cost would have risen to around $1billion as a Government contract, and 2) the money would have to be borrowed. Borrowed money is not free, so how much would the taxpayer be paying on $1billion, plus the running costs? He needs to stop the false information and tell the truth for a change.
Why isn’t this fake outrage also directed against Belco, bought by a Canadian company, and gradually poisoning many Bermudians with their pollution? Possibly because that sale went through under the PLP and he can’t blame the OBA?
Gotta be the OBA’s fault; right?
The Government comments are quite sobering if we remove the emotion from most of the responses.
Based on the $128.5m investment and if we accept that the expected return for the new investor is between 12% and 15%, the expected annual profitability of the airport is between $20m and $25m. And under the current contract, the annual MAG is in excess of $50m. On that basis, the government minimum annual guarantee is generating the desired annual return.
The summary is that the Bermuda taxpayer is paying the annual profit that Skyport needs to demonstrate profitability. What a good deal for Skyport. Yes it took a big risk with the construction and it has paid off handsomely.
And the best part for Skyport is that they still own 50% to profit off of when they sell the final 50%.
Interestingly, based on this valuation, Skyport would sell the remaining 50% for $130m, which is the same amount that the Government proposes to guarantee for Morgans Point completion.
What a dilemma – $130m to regain control of the airport or $130m to complete Morgans Point.
Just imagine the option if government had the $200m from Morgans point to spend right now!!
*Just imagine the option if government had the $200m from Morgans point to spend right now!!*
Yeah , right ! Because that 200M (165m?) is such a significant part of our overall debt , now over $3bn , entirely caused by the PLP .
Your unbridled partisanship is showing .
If the PLP Government put as much lip service and effort into fixing our low hotel occupancy and bringing more visitors to the island that they put into the blame OBA game, we would no longer be paying a minimum revenue guarantee. The deal has been done how long now, stop gribbling and do something about it.
Great response and100% accurate!
Ummm…Isn’t it scary how someone like that can be in charge? Burt can’t blame private companies for this. This is the product of a failed economic plan, of which he is the leader, that has snowballed. If he wants to place blame, he needs to look squarely in the mirror.