Mr. Speaker as the Minister with responsibility for the West End Development Corporation more colloquially known as WEDCO, I have the privilege to lay before this Honourable House the Corporation’s Annual Report for the year 2021.
Mr. Speaker, the 2020/2021 financial year was unprecedented. COVID-19 was ubiquitous. Protective measures were put in place – lockdowns, shelter-in-place orders, and alphabetical days for groceries. All in the name of protecting not only our healthcare system – but our family, friends and neighbors. Though some may say the Government went too far and others may say the Government did not go far enough during this time – but what can be said is that each and every one of us was impacted, be it individual or business. An impact that WEDCO felt as reflected in this Annual Report that is before honourable members today.
Mr. Speaker, this 2021 Annual Report details significant financial challenges arising from the global COVID-19 pandemic that began in March of 2020. WEDCO’s business model is heavily reliant on the Tourism industry, in particular the Cruise market and with the ceasing of visitor arrivals, the pandemic hit the Corporation exceptionally hard. As the 2020 calendar year progressed, it became apparent that the impact of the pandemic necessitated budgetary revisions to maintain the bare essentials of the operation.
Mr. Speaker, I must pause here to commend WEDCO’s Board led by our colleague from Constituency #26 - Neville Tyrrell and management team led by General Manager Andrew Dias whom through these challenging times ushered in pivotal policies and decisions that not only reduced the operating expenditure of the Corporation but did so while retaining 100% of the staff by working with our Union partners to implement a ban on overtime and a 10% reduction in pay for a one (1) year period to ensure that all employees could retain their jobs while avoiding the need to reduce staff numbers.
In addition to this, management renegotiated existing service contracts and worked with service providers to reduce their scope of work. Management also deferred any discretionary plant upgrades and reduced capital expenditure, while only electing to spend on items that were deemed critical to maintaining existing reduced services.
Mr. Speaker, Honourable members are reminded that accompanying the primary revenue generated by visitor arrivals, WEDCO also has a secondary income stream through the leasing of residential and commercial properties under its remit. The protective restrictions imposed to curtail the COVID-19 pandemic – as mentioned above – had a severe impact on the commercial tenants as many were ordered to close between April – May 2020, mainly the restaurants and nightlife.
Though a phased approach to reopening began in early June, the lack of air and cruise arrivals compounded by rising inflation rates for products caused unprecedented strain on business owners. Therefore, to alleviate this pressure, management allowed a three-month deferral for rent payments. When it became apparent that this would not suffice, WEDCO created a COVID concession policy, overhauled the budget and asked tenants to contact staff for help if required. Many tenants availed themselves of this process which brought much needed reassurance throughout the uncertain times.
Although Mr. Speaker, these concessions did indeed bring stability to tenants, WEDCO itself was forced to absorb the loss in revenue as reflected in this Report. The fiscal year 2020/21 saw the Corporation’s rental revenue reduced by $2.5m, dock revenues decreasing by $3m along with associated revenue shortfalls in sources such as water and sewage. In addition, the Corporation’s net receivables were reduced to $1.25m from $1.6m.
Mr. Speaker, to protect the organisation from insolvency, management reduced expenses by $4M while the Government provided an operation grant of $1.25M. With this taken into account, fortunately the Corporation was able to decrease its long-term debt by $1.4m. Again, this is amazing work for such unprecedented times and credit must be given when due.
It is evident the Corporation had a challenging year in the 2020/2021 fiscal year as it sought to maintain operational solvency while still servicing the needs of tenants and other stakeholders. Although through this economic strife, WEDCO was able to complete various emergency infrastructure repairs to the Tipnor House, Dockyard Terrace Number 9 and Sail Loft Tank Interior Wall amongst others. The Corporation was ever mindful of cost containment as it strived to maintain and increase revenues despite the economic climate.
Mr. Speaker at present, efforts remain on target to ensure the West End is Bermuda’s premier destination and entertainment port. WEDCO continues to develop strategic partnerships within both the private and public sectors to ensure the sustainability of the Corporation as it moves forward with its development initiatives inclusive of the previously announced amalgamation with the Bermuda Land Development Company – with the ultimate goal of becoming fully self-sufficient.
Thank you