- Gaps in Deloitte Report have been addressed
- Evidence of Value For Money
- Requirements of the UK Entrustment have been fulfilled
Parliament is to soon consider legislation consequential to the Government’s plan to invite a substantial capital injection into the island…. that will lift our economy, create desperately needed jobs and new opportunities for entrepreneurs and provide us with a new strategic asset – a new, first class airport terminal building.
The needs of the airport have long been known.
But the solution has been hampered by Bermuda’s debt burden and an annual fiscal deficit – both of which the Government has been addressing.
We don’t have the money to simply hire someone to build it. And it is not prudent to go deeper in debt by borrowing more money
The UK Government, you may recall, provided an Entrustment Letter as we proceeded with discussions with the Canadian Commercial Corporation – a crown corporation of Canada - and their designated contractor Aecon, to see if we could come to terms to make a new airport terminal a reality.
Consulting firm Deloitte was contracted jointly by the Bermuda and UK Governments to conduct an independent appraisal of the method of procurement for the redevelopment of Bermuda’s airport using the CCC.
- The purpose of this engagement was to evaluate the business case, value for money and affordability of the existing proposal and to provide a high-level cost effectiveness opinion for the proposal being put forward.
- The engagement also assessed whether the existing analysis and documentation on the proposed Bermuda Airport Development was sufficient to support an investment decision based upon HM Treasury’s Green Book guidance for the evaluation of public sector spending proposals.
It is important to note that HM Treasury’s Green Book’s prescriptions assume a competitive bid process.
We are using an incremental process of procurement for this project.
And while the Bermuda Government is not obliged to follow “Green Book” standards, we accepted the Green Book guidance as some of the highest in the world with regard to public sector procurement. So we used the findings of the Deloitte report to enhance the due diligence of the project.
Last week Monday, I provided Parliament with an Overview of the Airport Redevelopment Transaction for Members of Parliament.
It was the first fulsome, public description of the transaction that would bring Bermuda its first purpose built airport. It was also released directly to the press on Wednesday.
Friday, we further released to the press the requested Overall Business Case - Entrustment Report and an independent assessment on Value for Money Report.
In so doing, we have now fulfilled the requirements of the Entrustment Letter established by the Foreign Commonwealth Office and laid out the Full Business Case as proposed by Deloitte.
The VFM assessment highlights how the Airport Redevelopment Project compares with similar P3 deals and concludes that overall, the Project achieves value for money for the people of Bermuda.
The Summary provides the highlights of the comprehensive Overall Business Case -Entrustment Report that fulfils the entrustment requirements established by the Foreign Commonwealth Office and addresses the gaps identified in the Deloitte report.
These reports made public last week have provided a thorough and detailed analysis and concludes the government is taking the best course of action, under our current circumstances. This is verified by the independent assessor.
In a nut shell, this work:
- demonstrates that the Project is supported by a robust case for change;
- describes the analysis undertaken by the Government to optimize value for money;
- shows that the Project is commercially viable;
- outlines the Government’s view that the Project is financially affordable; and,
- provides evidence that the Project can be delivered successfully.
The reports further show that this transaction provides value for money and all of the gaps identified by the Deloitte report have been addressed
Bermudians should know that after careful consideration, much consultation with leading experts, the Government is satisfied that the CCC solution is not only the best solution to a pressing problem, but will bring many advantages that will be useful to the long term future of Bermuda and Bermudians.