Airport project to proceed in April
Ground will break next month on the LF Wade International Airport redevelopment project, as the Aecon Group has announced a “commercial and financial close”.
Finance minister Bob Richards and tourism minister Senator Michael Fahy appeared yesterday afternoon with officials from Aecon and Canadian Commercial Corporation to commemorate close on the 2½ year negotiations.
With the deal now officially agreed, the announcement marked a significant milestone, Mr Richards said.
“I’m happy to say that construction of our much needed, state of the art airport can commence.”
Yesterday’s announcement will also not result in any further details being released to the public, the minister added, in reference to the calls from the project’s opponents for all materials to be made public.
“What we have revealed so far is virtually everything, except for the financial model, which is not going to be revealed in any circumstance.”
The financial model was demanded by the Progressive Labour Party, but the minister said repeatedly that such details were not the government’s to divulge.
That rationale was backed last month by the independent Blue Ribbon Panel tasked with reviewing the deal.
Mr Richards hailed it as “one of the most important capital projects ever undertaken in our island” — calling yesterday’s announcement “an exciting and historic occasion”.
With the financial close, the Bermuda Airport Authority quango is now in place, under Mr Fahy’s administration.
As well as the terminal bringing benefits to passengers, Mr Fahy said: “There are hundreds of workers at our current facility, and we can finally promise them a terminal building that will provide them the space and accommodation that they deserve.”
Construction of the new terminal at Stone Crusher Corner is to take 40 months, as previously stated.
Aecon’s statement continues: “The new works are being constructed on the airport property well removed from the existing terminal, allowing for uninterrupted operations of the existing terminal.”
It promises a “larger, state-of-the-art, accessible terminal that can resist hurricane-force winds”.
The release said: “It will improve passenger flow, introduce new and renovated facilities, and provide additional retail offerings to better meet the needs of airport users, today and in the future.
“Key features of the project in addition to the new terminal include providing six new covered boarding bridges, new apron space for parking and refuelling or loading/unloading aircraft; modifications to taxiways to improve aircraft traffic flow; as well as energy and water efficiency features.”
The release stated that, on financial close, Bermuda Skyport Corporation Limited, a special purpose company formed and initially wholly-owned by Aecon Concessions, will take over the airport’s operations, maintenance and commercial functions, and manage and coordinate the overall delivery of the redevelopment project over a 30-year concession term.
Financing for the project has been arranged by Aecon, and includes a $285 million fixed coupon US private placement, amortised over a 25-year term, and approximately $70 million of shareholder equity to be contributed in the latter part of construction.
The construction activities of the Bermuda Airport Project will be recorded in Aecon’s Infrastructure segment, while the financing, operations, maintenance and concession activities will be recorded in Aecon’s Concessions segment.
Mr Richards is quoted on the Aecon statement as saying: “Bermuda is benefiting from a series of strategic initiatives to spur growth and prosperity.
“This transaction is one of them, but a very significant one that brings jobs for Bermudians and the knowledge that they are participating in one of the largest, and most important, infrastructure projects of our generation.
“This development helps our community to continue along a path of economic growth and prosperity.
“The benefits of this significant infrastructure project will be appreciated by Bermudians and visitors for many years to come. We look forward to a long, and mutually beneficial, relationship with our first-class partners.”
John Beck, president and CEO of Aecon Group Inc, stated: “Through Aecon’s select participation in international projects such as the Bermuda Airport redevelopment project, we continue our long history of developing and building airports globally and add to our successful roster of experience as concessionaire.
“The combination of the Government-to-Government and P3 procurement models is a unique offering brought to the table by CCC and Aecon to facilitate the delivery of a tailor made solution for Bermuda.”
Steve Nackan, president of Aecon Concessions, stated: “We are very pleased to see the project move forward and are confident it will bring substantial value to both Bermuda and Aecon.
“Working with the Canadian Commercial Corporation and the Government of Bermuda, Aecon will meet the set objectives — delivering a world-class airport, as well as providing significant economic benefits to Bermuda.
“As Bermuda’s largest infrastructure project, swift financial close on this innovative arrangement demonstrates the quality of the project, as well as Aecon’s depth of experience and track record in delivering projects around the globe.
“Aecon’s role as developer, investor, design-builder and operator highlights Aecon’s turnkey service offering and integrated business model — developed to meet the needs of our valued clients.”
Martin Zablocki, president and CEO of the Canadian Commercial Corporation, stated: “This government-to-government project embodies the value, trust and collaboration of the longstanding bilateral relationship between Canada and Bermuda.
“Knowing the positive economic impact a modernised airport can have on Bermuda, CCC is excited to play a key role in the delivery of a world-class, customised solution to meet the needs of Bermudians, for both today, and generations to come.”
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