Call for $88m fund to pay for East End bridges
An Opposition senator has said the $88 million Bermuda Infrastructure Fund could be used to pay for the replacement of East End bridges instead of venture capital for start-up businesses.
Dwayne Robinson, of the One Bermuda Alliance, said a recent government request for information about the construction of a new Longbird Bridge and Swing Bridge raised important questions.
He said he had earlier been given written answers to parliamentary questions that revealed the BIF had yet to complete any investments — despite being launched more than a year ago — except for a small loan to an electric vehicle rental company, which was expected to get more funds this month.
The responses showed that other projects under consideration included an indoor vertical farm and a start-up internet provider.
A request for information issued by the Ministry of Public Works on the Government’s website this month appealed for construction firms from around the world to express interest in the St George’s bridges project because the existing structures were both expected to reach the end of their useful lives in 2021.
Moving Bermuda Forward, an information document that accompanied the procurement notice, said: “The Ministry of Public Works is looking forward to bringing new members to the construction team to finance, fabricate and build these bridges.”
Mr Robinson said: “This raises some important questions — why isn’t the infrastructure fund being used instead of funding coming from an overseas company, how will funds be raised to pay for it, and will all those payments go off-island?”
The RFI said that the ministry wanted to gather “information about the marketplace” to help determine “future purchasing options or requirements”.
It explained that the ministry sought “new members to supplement the design team in regard to financing, fabricating and building two new bridges”.
Mr Robinson highlighted a ministerial statement from David Burt, the Premier and then Minister of Finance, who said in November 2017 that the Progressive Labour Party’s election platform outlined the Government’s goal to “implement the National Infrastructure Strategy Plan”.
Mr Burt said at the time: “The purpose of this plan is to identify important improvements and repairs to Bermuda’s infrastructure that will not only enhance the overall quality of life but will also create business opportunities for construction companies and jobs for Bermudian construction workers.”
Mr Robinson added last week: “Instead of being used to upgrade and repair our ageing infrastructure, such as these bridges, it is being used as venture capital for start-ups such as an electric vehicle rental business and a start-up wireless internet provider. Why have the terms changed?
“Are these the ‘business opportunities for construction companies and jobs for Bermudian construction workers’ that the Premier meant?”
A press release in May 2018 said that almost $100 million had been raised for the infrastructure fund.
However, responses earlier this month to questions from Mr Robinson showed that it started operations in April last year and had raised “approximately $88 million in capital commitments from limited partners including the Government”.
The senator, who is the Opposition’s spokesman on public works, asked if any projects had been completed and what programmes were under consideration for the 2019-20 fiscal year.
He was told the fund had signed a term sheet to invest up to $10 million with a start-up fixed wireless internet provider and was evaluating a $35 million indoor vertical agricultural centre with an accompanying solar development.
The written response, from the Ministry of Finance and tabled by PLP senator Vance Campbell, added that the fund made a small loan to a start-up miniature electric vehicle rental business in April 2018 and expected to conclude a $1.5 million investment in the company this month.
It added that Fortress Investment group, the fund manager, had been paid $175,342.47.
Management fees are payable semi-annually in advance, in an amount equal to 0.75 per cent of capital invested, with a minimum annual fee of $1 million.
If the fee is less than $500,000 semi-annually, the Government must pay the difference and that amount represents an interest in the fund.
Mr Robinson added: “The OBA did not back the fund because we did not want to have to pay up to $1 million a year in fees but now we have it, make it work for Bermuda, as it was intended, for construction projects such as the bridges, major school renovations or investment in electric buses, to benefit all of Bermuda and to create jobs for Bermudians.”
The public works ministry said queries about capital funding were the responsibility of the Ministry of Finance.
The finance ministry did not respond to a request for comment by press time.