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House: DeSilva hits out at Skyport

Tourism and transport minister Zane DeSilva (File photograph)

Taxpayers could be landed with a tab that should be paid by the airport, the Minister of Tourism and Transport claimed yesterday.

Zane DeSilva accused airport operator Skyport of passing some of its financial burdens on to members of the public.

He told the House of Assembly that the company running the airport now got all revenues from passengers’ ticket fees and airline fees for landing, cargo and fuel. MPs heard the Government had until recently provided airline incentives, either directly or indirectly, through minimum revenue guarantees, which meant cash payments were made to airlines that ensured them an agreed profit margin.

These were designed to help airlines start a new service or expand an existing route over a set timeframe. Mr DeSilva said the Government currently did not provide the guarantees.

He explained: “First and foremost, as a part of the airport deal, and since March 2017, Aecon and Skyport are now responsible for the marketing, business development and planning to increase the volume of air traffic and passengers to maximise airport revenues.

“It is important to note that Skyport receives 100 per cent of the airport revenues from what each passenger pays in ticket fees and what each airline pays in landing, cargo and fuel throughput fees. This is a deliberate term of the airport deal which means that revenue that used to come to the Government of Bermuda now goes wholly and solely to Skyport.”

Mr DeSilva told MPs: “When MRGs were the responsibility of the Government of Bermuda, the responsibility to pay for them was, as you would expect, the Government’s.

“Honourable Members and the public may be surprised to learn that in spite of now having this responsibility, Skyport has determined that it should not be responsible for making payments under the MRGs.

“It appears that Skyport is content to have the authority but not the responsibility. The airport deal seems to have empowered Skyport to pass this burden on to the Bermudian taxpayer.”

Mr DeSilva added: “This government was elected with a mandate to relieve the burdens of the hardworking, taxpaying families in this country.

“In a deal that has deprived them of a vital, national asset — as well as the significant revenues that it generates — it is unthinkable that we would sit idly by while taxpayers are forced to bear a financial responsibility that rightly rests with Skyport.”

Controversial plans to redevelop the island’s airport under a public-private partnership led to protesters blockading the House of Assembly in December 2016.

An agreement was approved the following February and David Burt, the Premier, who was then the Opposition leader, asked the Senate to block the deal. But it was backed by a combination of One Bermuda Alliance and independent senators.

Bermuda Skyport took over management of the airport in March 2017 under a 30-year concession agreement.

After the Progressive Labour Party won power last July, the Government commissioned a $187,000 review of the contract from international consultants LeighFisher.

Mr Burt later said the cost to axe the airport agreement only months into the project would have been a minimum of $196 million and that it would be “fiscally irresponsible” to do so.

LF Wade International Airport was in September voted the most improved flight terminal serving under two million passengers by the Airport Service Quality programme run by Airports Council International, a global organisation with a membership of almost 2,000 airports.

Aaron Adderley, the president of Skyport, said: “Skyport values the partnerships we have with Government, the Bermuda Airport Authority, Bermuda Tourism Authority, Bermuda Business Development Agency, Bermuda Hotel Association and the entire tourism industry team.

“We believe our joint efforts and continued collaboration are essential to achieving our mutual goal of enhanced air service to Bermuda.”

To read Zane DeSilva’s statement in full, click on the PDF link under “Related Media”