Cross Island a salvation or millstone?
Last week’s column concerning Ambrose Hill contained two errors:
1, Mr Hill did not receive corporal punishment himself but instead spoke of how corporal punishment was issued.
2, Mr Hill’s wife of 61 years is Nathalie; not Virginia.
Apologies to the Hill family.
No free lunch. A term about public-private partnerships often echoed by Bob Richards, the former Minister of Finance under the One Bermuda Alliance government.
A term that was found to be quite true about the OBA/Aecon airport deal; a deal that is fraught with caveats that have proved to be disadvantageous to the Bermudian taxpayers.
Today we will look at yet another OBA-inspired capital project that has been revealed to be a millstone around the neck of every single Bermudian — the Cross Island project.
Official Hansard records from December 16, 2015.
The Honourable E.T. “Bob” Richards:
“In accordance with section 2AA (3) of the Government Loans Act 1978, I rise this morning to inform this honourable house of the execution of an unconditional government guarantee for the West End Development Corporation payment obligations in relation to a $39 million credit facility provided by the Bank of Butterfield & Son.
“The facility is related to the reclamation of 11.2 acres of land for commercial use, including the America’s Cup at South Basin, Dockyard. The project loan term is for a period of six years from the date of initial drawdown.
“Mr Speaker, with the America’s Cup on the horizon, the Government is eager for the project to proceed and succeed, and is looking forward to working with Wedco, the ACBDA [America’s Cup Bermuda] and the developer to achieve that objective. Thank you.”
Roughly one year ago, questions were asked in this very same newspaper as to who was ultimately financing the $39 million Cross Island project that was built to facilitate the America’s Cup event.
Given this opportunity to come clean to the Bermudian people, Ray Charlton, the Wedco chairman and OBA candidate in Constituency 36, never once admitted publicly that Wedco would not be able to finance this project. Instead, we were told that Cross Island would be paid for via Wedco funds.
In some quarters there seemed to be this forlorn hope, or some would say gamble with the public purse, that Bermuda would continue to host the America’s Cup subsequently making Cross Island a permanent event centre.
Well, the sad reality is Bermuda is not hosting the next America’s Cup and the future use of Cross Island is at the proverbial crossroads. What has ultimately been revealed is nothing less than a comedy of errors.
Recently, Charlton decided to finally speak up on social media and stated: “After all end uses were terminated by the Courts, the Wedco board voted not to proceed. The Minister of Public Works directed Wedco to proceed with the government [guaranty].”
Charlton’s Facebook comments revealed a few salient and, albeit, disturbing points:
• The Wedco board knew that it could not fulfil this financial commitment
• When the court rejected the proposed end use for Cross Island, the Wedco board voted against proceeding with this project, as it believed that it was the only way that it would be viable
• The OBA, under Michael Dunkley as the Premier, essentially forced Wedco to proceed with the project
• Besides the hope that Bermuda would host another America’s Cup, the OBA had no plan for how Cross Island would be paid for
With these facts now being revealed, one must question why the lack of transparency about who was really paying for Cross Island. Immediately, some questions come to mind:
• Was the Wedco board forced to be silent?
• Why did the Michael Dunkley-led OBA “fudge” the true costs of the America’s Cup?
• How will Cross Island pay for itself?
• Have interest-only payments been made for Cross Island? And if so, how does this affect the original six-year loan term?
It is not lost on the public that Dunkley and many in his Cabinet were using AC35 as their primary hopes for re-election. With a cost of more than $100 million, AC35 has proven to be one of the most expensive election campaigns that ultimately proved to backfire politically.
Perhaps the cruellest irony of this fiasco is the OBA patting itself on the back and recommending awards for AC35. Ironically, the OBA is attempting to brag about the magical figure of some $300 million windfall for Bermuda.
Yet, somehow you, the taxpayers of Bermuda, are now ultimately left on the hook to pay $39 million for one of the most expensive pieces of land in Bermuda that now sits empty.
No free lunch, indeed.
•Christopher Famous is the government MP for Devonshire East (Constituency 11). You can reach him at WhatsApp on 599-0901 or e-mail at email@example.com
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