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Premier needs to answer questions over infrastructure fund – OBA

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Craig Cannonier, the One Bermuda Alliance spokesman for works and engineering. (Photograph by Akil Simmons)

David Burt needs to answer questions on why an investment fund was suddenly shut down from helping new business projects, the Opposition has insisted.

Craig Cannonier, the One Bermuda Alliance spokesman for works and engineering, said people had been “left out of pocket” by the move to close the Bermuda Infrastructure Fund from financing new enterprises.

The BIF was created in 2017 by a consortium of reinsurance companies in partnership with the Government.

Questions about its future surfaced last month after a second round of funding for one recipient – the telecommunications company Horizon – was unexpectedly withdrawn, forcing it into receivership.

The finance ministry has confirmed the BIF, a fund set up to make “significant investments“ in Bermuda’s infrastructure, has stopped financially helping new projects.

Mr Cannonier told The Royal Gazette: “We don’t know what’s going on with this fund. Why are they cancelling it now and putting people out of pocket? What fees has the Government had to pay?

“The Premier has not given us any detail on any of this. He just attacks rather than try to provide clarity. He is a man who cannot manage his affairs.

“He needs to tell us, exactly, what has happened to this fund – the Premier said this would be a $100 million fund.” The fund raised $89 million from private investors, mainly international businesses.

Mr Cannonier said Mr Burt should be clear about what has happened with the BIF.

“One of the hallmarks of our Premier’s campaigning over the years has been transparency.

“Last week when the Premier was asked for an update on the infrastructure fund along with a list of questions at least a month ago his reply was anything but transparent.

“What our leader has successfully done is trigger even more concern and questions.

“The fund, I must say, has had challenges in the past. When the OBA originally looked at the potential of such a fund the then minister of finance Bob Richards had several concerns.

“One of those being fees – primarily, what would Government have to pay in fee’s?

“So, when the Premier finally replied, he spoke of everything but the questions that had been asked.

“The sad thing is after the Premier promoted the fund with great fanfare years ago it has now been revealed that the infrastructure fund has ceased operations, – now the public has paid the price.

Gilbert “Artie” Darrell, founder of Horizon Communications (File photograph)

“What I am sure of is there are more questions to come. Like, how much was actually invested in different projects and how much in fees has government paid to date?”

When the Premier, who is also the Minister of Finance, announced the launch of the fund in November 2017, he said that it hoped to raise a minimum of $100 million in commitments from Bermudian-based insurance companies.

He added that the Government would guarantee a fee of $1 million per year to Fortress Investment Group, the fund’s New York-based management company.

Last week, the Government said it had “invested” $3 million into the fund, but did not clarify if these payments were for management fees.

The Royal Gazette understands that funding was provided to minicar rental company Rugged Rentals in addition to Horizon, but it is not known if the fund has invested in any infrastructure projects in the past five years.

The Government has not responded to repeated requests from this newspaper for an itemised list of projects and their value.

Business executives first approached the Government with a proposal for the fund when the OBA was in office in 2017, but were turned down over a refusal to use taxpayer revenue to pay management fees.

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Published January 17, 2023 at 7:43 am (Updated January 17, 2023 at 7:43 am)

Premier needs to answer questions over infrastructure fund – OBA

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