Local taxpayers will be spared the $2.4 million tab it will cost to move the airport mail facility to the General Post Office in Hamilton.
On top of that, the cost of modifying the building will run taxpayers somewhere between $1.8 million and $2.3 million to complete over a period of 12 to 18 months, plus the cost of rent to be paid to the airport developers in the interim.
In one of three Ministerial Statements out of a total of ten delivered in the House of Assembly on Friday, Public Works Minister Colonel David Burch, updated MPs and unveiled the latest details on the controversial multi-million dollar airport redevelopment contract with Aecon.
“To say the airport contract is the gift that keeps on giving would be an understatement,” said Col Burch. In fact, he said: “It’s a sad tale.” He described the current airport situation as “a comedy of errors”, and he briefed his parliamentary colleagues on what other options were considered by the new Government.
“I believe that it is important to ensure that my colleagues, and the public at large, understand just how we got into this situation and why it is important to give you all of the details and time lines concerning how a Government Department housed in a government building could be charged rent (and possibly penalties) by a 100 percent foreign owned company,” said the Minister.
As a result, he said a lease was signed for New Venture House, on Mill Creek Road, on Thursday. Modifications to the building are now underway. Monthly rental costs for the building for New Venture House are estimated to be $25,000 a month plus service charges.
Col Burch also chastised the former administration for failing to mention the additional costs to taxpayers during the most recent Budget Debate.
“I understand the public will wonder how the repeated phrase that ‘the airport development will not be a burden on the tax payer’ has been transformed into Government paying for essential unbudgeted items from the public purse,” he said.
“This matter was first brought to my attention at a joint meeting with key stakeholders on 11 August 2017 – since that time we have worked diligently to secure the best result from this sorry situation,” he added.
He also moved to clarify statements made in the House two weeks ago, by the Minister of Government Reform, Lovitta Foggo, who has responsibility for the post offices.
After outlining the alternative options in his five-page statement, he said: “I can report that the lease for New Venture House was signed yesterday and the fit out works are progressing. I expect the move to occur before the end of this month and I shall keep this Honourable House advised of the outcome of this sorry tale and the ultimate costs to the Bermudian taxpayer.”
He noted that “Aecon has the contractual right to start charging rent right now – that is what their contract states”. The deadline to move has already passed, which was September 30th.
“Although, they have not provided an indication of their market rental expectations. We have done our own calculations, based on recent market evidence at Southside, [$15 per square foot for warehouse space and $25 per square foot for office space] so a monthly charge of $17,700, plus service charge, would be a reasonable estimate within our viewpoint.
“Obviously, the Minister of Finance would prefer to avoid any penalties as a result of the Airport Mail Processing Centre remaining in their current location on 31st December 2017,” said Col Burch. Under the airport lease, it should have relocated by September 30 or rent would be charged at market rates and penalties could be applied.
Ms Foggo told MPs earlier that keeping the joint air mail and customs post at the airport was too expensive. She noted that a $600,000 penalty plus monthly rent would have to be paid if the two services remained past the end of the year. She also said that the move to Mill Creek Road would cost taxpayers roughly $360,000.