Transport Minister Commissions Review of Airport Deal & Former Premier Responds

In search of a better deal, Transport Minister Walter Roban announced that Government has commissioned a review of the Airport Redevelopment Plan, in partnership with the Attorney General’s Chambers.

The multi-million dollar deal carries a 30-year lease at the LF Wade International Airport, in a Public Private Partnership entered into by the former Government with the Canadian Commercial Corporation and Canada’s largest public construction and infrastructure development company, Aecon.

In keeping with their election platform and their 100-day pledge, the Minister said: “The Government wants to further scrutinize the agreement because, as I said, we wish to get a better deal for the people of Bermuda. The review is being conducted by the Bermuda Airport Authority.

“The Authority has already engaged P3 experts LeighFisher to assist in the analysis of the Project Agreement. LeighFisher is a global management consulting firm offering infrastructure advisory and consulting services to aviation, surface transport, infrastructure and government markets.”

He noted that Skyport operates the airport, “and constructs the new terminal building, and maintains and operates it as part of the Agreement”.

“The structure of this arrangement calls for the designing, building, financing, operating and maintaining of the airport buildings and lands for 30 years,” said Mr Roban.

As for the procurement portion of the deal, and the implementation phase in progress now, he said the contract itself has “many volumes that make up the closing documents of the Agreement that is being reviewed”.

“It is large, detailed, and complex, and it will take time to fully examine it to provide the Government with the recommendations required for a decision.

“The Agreement is requiring Bermuda to give up more than two billion in dollars of revenue over the next 30 years. We believe the country cannot afford what the former government signed us up for,” he said: “As this transaction is under review, all options will be considered.” And he said the Government remains confident that a better deal can be achieved.

Recapping the chain of events that led to the airport deal, he stressed that as the Opposition, the Progressive Labour Party (PLP) expressed their “dissatisfaction with this arrangement”. And as Government, the Minister said “that dissatisfaction remains”. He also noted that the decision to construct a new airport “was not part of the last Government’s election platform, and appeared to come out of nowhere”.

“The former Government started this process without an RFP, not following Financial Instructions which are in place to protect the public purse, and which is standard for best practice,” said Minister Roban.

“Bermudians want a new airport and we do agree that this will be important to carry out.” But he said: “What many people experienced with this particular proposal was a process and arrangement we were being forced to accept as the project was not opened to other bidders. When a significant amount of people expressed their disapproval, they were ignored.

“It is not forgotten that the PLP in Opposition, and others, raised points and concern about information that questioned the circumstances under which this agreement was made, some of which were revealed by documents obtained through official freedom of information requests made in Canada.

“The refusals by the former Government to fully abide by requests made by the Public Accounts Committee, even under the threat of Summons, appeared to show little respect for our legislative system of accountability,” he said.

“The conduct and contempt shown by the former Finance Minister to Parliament, refusing to answer questions, and misleading by omission, did nothing to ease the concern and unpopularity shown by the Bermudian people for this Agreement.

“Despite the public opposition, shameful events which saw Members of Parliament sneaking in the House of Assembly under darkness, police officers surrounding the Sessions House and the pepper spraying of peaceful citizens; the former Government did not pause to reflect on the wisdom of entering into this Agreement.

“Whatever disclosure concessions the previous Government agreed to, were not done so voluntarily, but done under pressure,” Minister Roban said.

“With such an unfortunate and unpleasant sequence of events behind us this new Government is determined to chart a different path.”

When contacted by Bermuda Real for a response to the Minister’s statement, former Premier and One Bermuda Alliance (OBA) leader, Michael Dunkley said: “The PLP in their 100-day pledge did commit to ‘review the privatization contract between Aecon and the Bermuda Government for the LF Wade International Airport to see if Bermuda can get a better deal’.” 

But he said: “With over 90 days of the 100 elapsed, and the Government scrambling to check as many of the 21 promises in the pledge as possible, this falls short.”

He was quick to note: “The announcement today (Monday) is not a review but the hiring of a consultant to do a review.

“I will not answer the numerous political misinformation comments in the release other than to say that the illegal blocking of the ‘People’s House’ by then Opposition MPs and supporters speaks volumes to how desperate they were to derail this critical project and to divide people,” Mr Dunkley said.

“While LeighFisher are a reputable global management consulting firm, in making this announcement, and in the interest of transparency, the Deputy Premier should have disclosed the terms fo the contract such as was it a sole source contract, what is the fee involved and the length of time for the consultancy work to take place.

“For the record, we believe the deal negotiated was the best deal for Bermuda to build a new airport terminal based on the circumstances we found ourselves facing; an economy spluttering, crippling government debt and yearly government deficits,” he added.

“Due diligence was done on this project from the beginning; by our engagement with the UK Government, through to the end, with the review by the ‘Blue Ribbon Panel’ BRP). It should also be noted a value for money assessment was done and major financiers have supported this project.”

He also noted that the report by the BRP found “the transaction to be commercially sound and reasonable, likely to meet the Government’s stated objectives of long term sustainability, increased traffic volume and revenue, while effectively providing for the structural needs of the airport”.

“We also found that the terms are within the parameters for similar P3 Airport projects and in some cases this project exceeds those norms positively,” said Mr Dunkley.

“The BRP also said ‘the risks and costs associated with a public tender process in this instance were significant and supported the alternative of a negotiated process’. They went on to say ‘it is the overall view of the Panel that it is a good deal, it’s not perfect, but it is a good deal’.

“The deal was endorsed by many including the BTA, BHA, Chamber of Commerce and ABIR,” he said.

“Any Government has the right and ability to review a contract of policy. However, in this matter the PLP opposed the project from the beginning and often spread misinformation and employed Trump like tactics to divide people and confuse the issue. It was not about what is best for Bermuda but about how to get elected.

“Sadly, this is often the world of politics today,” Mr Dunkley said. “We must do better than this and now as the Government they must lead for the good of all of Bermuda.”

On that note, he said: “We look forward to the results of the review.”

• Photos Courtesy of DCI