UK - Bermuda "very close" to agreement on airport project

Bermuda’s Finance Minister Bob Richards at a post Budget Statement this afternoon

A controversial plan to rehabilitate Bermuda’s airport is being backed by the UK Government, we can report.

Finance Minister Bob Richards listed the estimated $250 million project as a near certainty in his Budget Statement outlining Government’s fiscal strategy for the upcoming financial year.

Bermuda and the UK have differed over whether Whitehall’s permission – given in an Entrustment Letter – is needed for contracting with the Canadian Commercial Corporation which has agreed to facilitate the project.

As a British colony, Bermuda must have permission for any decision involving foreign affairs. Whitehall takes the position that the airport deal is a foreign affairs matter because CCC is owned by the Government of Canada.

Government asked the UK for the entrustment letter in July last year. Whitehall presented the Letter to the Government in November, listing a number of conditions for the project to go ahead. But Government balked at agreeing to the conditions and the two have been in talks since.

Yesterday, Deputy Governor Ginny Ferson had this to say when asked for an update.

“The UK Government and the Government of Bermuda continue to work closely on this to ensure that Bermuda achieves an airport development to meet its needs and gives full value for money. We understand that the Minister of Finance will say more on this soon.”

Following a post budget press conference this afternoon, Richards told Politica that an agreement has been reached on the entrustment letter.

“We’ve agreed on the way forward. The entrustment issue is off the table,” he said.

Ms Ferson added a little more detail this afternoon. “My understanding is that the original entrustment letter may now be replaced by a new version which is under discussion and very close to agreement.”

The development means that a major potential obstacle to Government’s airport rebuilding plans has been removed.

But controversy over the issue is likely to continue for the foreseeable future.

Opposition Leader Marc Bean offered this reaction to the news : “This decision is just a continuation of a long-standing relationship between the UK Govt and the UBP/OBA, a relationship that is based on collusion and a lack of accountability.”

A 2011 MOU with CCC for the redevelopment of the Cayman Island’s airport was nixed after the UK raised objections about the procurement process.

The territory then opted for a more modest project procured under conventional methods.

In selecting CCC to handle the airport rehabilitation without putting the project to tender, Government waived normal protocols designed to ensure that the taxpayer gets value for money – a decision which has come under scrutiny by the Opposition Progressive Labour Party and the Public Accounts Committee.

Government is keen on moving ahead with the $250 million redevelopment project under a private public partnership structure with CCC which will ensure completion with no upfront financing required from Bermuda. The plan is for CCC to recoup its investment from future revenue streams from the airport itself before handing over the facility in 30 years.

The proposed deal has been criticized by the Opposition Progressive Labour Party as “privatization through the back door” that would cost the island $1 billion in foregone revenue.

Richards has defended the proposal saying a new airport is badly needed, cannot be paid for under conventional procurement methods due to the island’s debt position and that the project would be a boost to the economy.

He expects that the project will inject about $255 million into the economy over the next three to four years.

This article belongs to Politica ! The original article can be found here: UK – Bermuda “very close” to agreement on airport project