Alerts

Government confirms Report on Review of Airport Agreement is complete

Friday, February 23, 2018
The Hon. David Burt, JP, MP

OPENING/INTRODUCTION

True democracy demands transparency and transparency grows trust. The previous government was not transparent, and at every turn, an agenda, other than one for the people of this country, was being pursued. The project agreement for the redevelopment of LF Wade International Airport stands as a stain on the relationship between a government and the people it is meant to serve. From start to finish this agreement has been caught up in justifiable concern expressed in homes, clubs and churches across the Island. The People’s Campaign gave voice to the core issues presented by this bad deal and promoted a public awareness of its significance to a generation of our people.

Central to our election promises to the people of Bermuda was to look carefully and deliberately at the Agreement and to determine how we could reverse what had been done in their name but not on their behalf. The review is now complete and I am today releasing the results of that review to the public. I encourage everyone to read it and digest what has been found.

THE REVIEW

The Government carried out a review to determine whether it could: terminate the contract, and if we could not, then could we change the contract so Bermuda has more control of its own Airport. And finally, we wanted to know whether we could make the contract more beneficial for Bermudians; in short, we wanted “a better deal”.

The review was undertaken by the Bermuda Airport Authority and its global infrastructure advisor, LeighFisher.  And in the interest of complete transparency, it will be made available to the Bermuda Public today in its entirety, and can be found on the Government portal at www.gov.bm.

We encourage the Public to read it and decide what is relevant to them; however Leigh Fisher made a few findings that I wish to highlight.  

TERMINATING THE CONTRACT

Firstly, Leigh Fisher found that terminating the contract, while being legally possible, would produce commercial, political and reputational damage that far exceeded any of the benefits of termination. The process of terminating the contract can be found in Section 15(3) of the Project Agreement (which can be found on www.parliament.bm).

Some Bermudians, especially lawyers may find it interesting that the Agreement does not even have a section that addresses ‘early termination’ on the part of AECON; in other words, while the contract wholeheartedly defends AECON’s interests if the Government terminates the contract, it is woefully silent on Bermuda’s interests. While the financial consideration is the most significant aspect, terminating the contract would also send a worrying message to the world in terms of Bermuda honouring contracts with international companies.

While it is difficult to give a precise figure on how much it would cost to terminate, I did ask our Technical Officers for an approximate cost if the Government terminated the contract today; the estimate that we have been given is in that the government would have to pay AECON a minimum of  $196 million dollars.

Therefore, unfortunately, as the Minister of Finance, it would be fiscally irresponsible of me to bankrupt the Country, damage our credit rating, and sink our reputation globally by paying a penalty of millions of dollars to terminate the contract; in fact, it would be just as fiscally irresponsible as it was for the former OBA Government to enter into this contract in the first place.

More importantly, however, I refuse to deprive a child of the necessary investment in their education; I will not preside over an erosion in the benefits we owe our seniors and I cannot betray the taxpayers of this country who rightly expect to receive the services we promised to provide. Make no mistake, this review is our initial examination of this agreement. We will not rest until we achieve the best possible outcome from this situation. Why? Because on December 2nd, 2016, citizens in this country who were engaged in a lawful protest, another cornerstone of democracy, were pepper sprayed in scenes that sicken me to this day. Where the people exercise their rights, guaranteed under the Constitution, their government must respect the expression of their views. To paraphrase what I said in the Budget Statement: The people should no longer have to shout to be heard.

CHANGING THE CONTRACT

Since we cannot wisely terminate the contract, is there a way to negotiate changes? The Reviewers found that unlike other similar contracts, THIS PROJECT AGREEMENT DOES NOT ALLOW ANY CHANGES. Leigh Fisher stated, and I quote:

 “The Project Agreement does not contain a mechanism to facilitate the introduction of changes or variations to the Project. This is extremely unusual for P3 contracts particularly due to the lengthy term...”

Therefore, without a clause that sets out how to make changes, and which ones can be made, the Government cannot change the contract at all. This one shameful and degrading failure by the OBA may be the most heinous aspect of the whole Agreement.

CONCLUSION

My genuine hope in all of this was to determine the best means by which to get us out of this Agreement. I asked the Deputy Premier - Minister Walter Roban to bring the Agreement to this press conference today and these immense binders before you constitute “the Agreement”. Here are the reams of paper produced with one apparent objective: to deprive the people of Bermuda of their most significant asset. Let me be clear, we are not discouraged by this sight and these volumes of “legal-ese”. Our commitment to the people of Bermuda remains unwavering. We will work through this bad deal and do all that we can to realize some good for the people.

Feedback