Burt: Airport deal will not be cancelled
The contract on the controversial airport deal will not be scrapped, the Premier announced yesterday.
But David Burt pledged that the Government would work through the “bad deal and do all that we can do to realise some good for the people of whom we serve”.
Mr Burt said the price tag for cancellation of the deal to rebuild LF Wade International Airport was “a minimum” of $196 million and that it would be “fiscally irresponsible” to axe the contract.
Mr Burt added: “In fact, it would be just as fiscally irresponsible as it was for the former OBA government to enter into this contract in the first place.”
He was speaking as he unveiled a review of the contract ordered by the Government.
The 25-page review was prepared by LeighFisher for the Bermuda Airport Authority and is now available on the Government's website.
Mr Burt said the deal struck “stands as a stain on the relationship between a government and the people it is meant to serve”.
He added that the review was ordered to see whether or not Bermuda could get a better deal on the contract signed with the Canadian Commercial Corporation and developers Aecon.
Mr Burt added: “That was the intent of the report, that is what was stated inside of our election platform, and that was what the reviewers were meant to execute.”
The review outlined two scenarios for consideration — “optimising” of the current contract through “incremental enhancements of key elements”, and termination of the contract.
LeighFisher said the termination provisions within the contract were “typical for P3 projects”. The report warned that the “unintended consequences of termination” would include loss of jobs, economic damage and instability, international reputational risk, the threat of credit ranking downgrades, and a negative impact to tourism.
LeighFisher said that the contract's lack of variation provisions was “extremely unusual”.
It added: “The only way to make substantive changes to its terms and conditions is to terminate the agreement.”
Mr Burt said the lack of clauses in the deal to allow for changes was the “most shocking” element unveiled by the review.
He added: “This is one shameful and degrading failure by the OBA, and maybe the most heinous aspect of the entire agreement.”
The review identified six “optimisation elements” that could be pursued to obtain “incremental enhancements for a better deal”, which would represent about $15 million worth of enhancements for Bermuda.
Mr Burt said that the review was the “initial examination” of the deal.
He added: “We will not rest until we achieve the best possible outcomes from this situation.”
Mr Burt said: “The Government remains convinced that this is a bad deal for the country.
“We are going to make sure that we hold true to our platform promise to make sure that the people of this country get a good deal.
“We do not believe that this is the best deal that we can get.”
• For the full airport review, click on the PDF link under “Related Media”