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PLP outline benefits of airport authority

Lawrence Scott, the Shadow Minister of Transport, has said an airport authority could be established as soon as December as an alternative to the Bermuda Government's sole-source procurement model with the Canadian Commercial Corporation.

The Progressive Labour Party MP, along with Shadow Minister of Finance David Burt, yesterday outlined the potential benefits of an authority to replace the Department of Civil Aviation, while taking a phased approach to the completion of the site.

Mr Scott said his proposed airport authority would come under international regulations, meaning that all revenues generated must be allocated for the airport.

“That way, the government has no expense, no overhead and no financial responsibility for the airport itself,” he added.

Speaking on the timing of his plan, Mr Scott told The Royal Gazette: “An airport authority could theoretically be done overnight.

“We go back to Parliament in November: if the Government brought legislation to create an airport authority, we could have that debated and passed by December.

“We would then have to put a mandate on the Bermuda Tourism Authority to increase our tourism arrivals by x per cent ... for us to be able to maintain the payments.

“Once you start taking the revenue streams that should be going to the airport that are not now going to the airport like the departure tax, you could then start seeing the real potential a lot sooner and do a phased approach.

“We could bring it up to a minimum standard over the next five years and in ten years, once our tourism arrivals have increased, we can then look at a full-scale development. That is the position that Jamaica has taken — they began in 2007 and should be finished by 2017.”

The Government has responded to repeated criticism of the airport project by warning the public of “an avalanche of misinformation” from “uninformed and, in some cases, misguided sources”.

The Government took particular issue with claims that it was “giving away $620 million in profit” with the redevelopment.

“Although it is being repeated often, it demonstrates a lack of understanding of the nature of finance,” a spokesman said.

“No one is giving away anything. Bermuda is buying a new $250 million terminal.

“Fees paid by users of the airport will go towards paying for the construction, financing, operation and maintenance of a new terminal. Bermudians would be familiar with such arrangements used in other countries, such as those levied as bridge or highway tolls.

“Much has been made about this projected new revenue of $17.7 million from the increase in the departure tax and the Airport Improvement Fee (AIF).

“Pundits have simply multiplied that figure by 35 years and come up with about $620 million. However, the concession period is for 30, not 35, years.

“The new AIF and increased departure tax were recently levied specifically as increased user fees to help finance the new airport. Otherwise this funding would not have been raised.

“Therefore, to say that this revenue is being diverted from their normal destination, ie, the Treasury, to the airport project, is false. These funds would not have been raised at all if there were no airport project.”

Governor George Fergusson, meanwhile, said that the signing of the interim contract this week was not a breach of the letter of entrustment, stating: “The letter of entrustment from the UK Government sets out arrangements for the Government of Bermuda to keep the UK Government informed of the progress of the negotiations, including the provision of a copy of the contract at least one month before it is signed.

“The contract is still being negotiated and is not expected to be completed until next year.

“The agreement on the next stage of the negotiations is not a breach of the letter of entrustment.”

David Burt, the Shadow Finance Minister, and Lawrence Scott, the Shadow Minister of Transport, at a town hall meeting discussing the airport development last week (Photograph by Akil Simmons)

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Published August 26, 2015 at 4:29 pm (Updated August 27, 2015 at 1:29 am)

PLP outline benefits of airport authority

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