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Official Hansard Reports and Index 2016/17 SESSION of the BERMUDA HOUSE OF ASSEMBLY OFFICIAL HANSARD REPORT May 2017 Sittings 17 and 18 of the 2016/17 Session (pages 1599-1828) Hon. K. H. Randolph Horton, JP, MP Speaker Disclaimer: The electronic version of the Official Hansard Report is for informational purposes only. The printed version remains the official record. Official Hansard Report 12 May 2017 1599 BERMUDA HOUSE OF ASSEMBLY OFFICIAL HANSARD REPORT 12 MAY 2017 10:03AM Sitting Number 17 of the 2016/17 Session [Hon. K. H. Randolph Horton, Speaker, in the Chair] The Speaker: Thank you, Minister. PRAYERS PETITIONS [Prayers read by Hon. K. H. Randolph Horton, Speak- The Speaker: The Chair will recognise the Honoura- er] ble Member R. W. Scott. CONFIRMATION OF MINUTES Mr. R. Wayne Scott: Thank you. Good morning, Mr. [15, 17 and 20 March 2017] Speaker. The Speaker: Members, you will have received The Speaker: Good morning. Minutes of the 15th, 17th, and 20th of March. And un- less there are any corrections, those Minutes will be WORLDWIDE CHURCH OF GOD (BERMUDA) ACT approved. 1994 As there are none, the Minutes for the 15th, 17th, and 20th of March 2017 are confirmed. Mr. R. Wayne Scott: Mr. Speaker, I move for leave to introduce the following Petition: [Minutes of 15, 17, and 20 March 2017 confirmed] The Petition by the Worldwide Church of God Bermuda requesting that legislation may be enacted MESSAGES FROM THE GOVERNOR to amend its incorporating Act, the Worldwide Church of God (Bermuda) Act 1994, which is the principal Act, to the Worldwide Church of God (Bermuda) Act 2017 The Speaker: There are none. as set out in the Bill. And that is a change of name ANNOUNCEMENTS BY THE SPEAKER and amendment. I ask that the said Petition be referred to the OR MEMBER PRESIDING Joint Select Committee on Private Bills for considera- tion and report. The Speaker: There are none. The Speaker: All right. Thank you, Honourable Mem- MESSAGES FROM THE SENATE ber. The Speaker: There are none. STATEMENTS BY MINISTERS AND JUNIOR MINISTERS PAPERS AND OTHER COMMUNICATIONS TO THE HOUSE The Speaker: The Chair will first recognise the Hon- ourable Minister E. T. Richards, the Minister of Fi- The Speaker: Yes. The Chair will recognise the Hon- nance. You have the floor. ourable Minister of Education, Minister Cole Simons. You have the floor. Hon. E. T. (Bob) Richards: Thank you, Mr. Speaker. BERMUDA COLLEGE FINANCIAL STATEMENT The Speaker: Do Members have this? FOR THE YEAR ENDING MARCH 31, 2015 Some Hon. Members: No. Hon. N. H. Cole Simons: Mr. Speaker, I have the honour to attach and submit for the information of the The Speaker: Okay. Honourable Minister, if you Honourable House of Assembly the Bermuda College would hold just for a second, please. Financial Statement for the Year Ending March 31st, 2015. Hon. E. T. (Bob) Richards: All right. Bermuda House of Assembly 1600 12 May 2017 Official Hansard Report The Speaker: Thank you. The Speaker: Thank you. Will you please make sure the other State- Just hold a second, Minister, if you do not ment also is done once it is ready? mind. Can we correct that? Page 2 is missing. [Pause] [Pause] The Speaker: I thank you. The Speaker: Please bear with us, Honourable Mem- The Chair will recognise the Honourable Min- bers. ister of Finance. Minister E. T. Richards, you have the floor. [Pause] GOVERNMENT GUARANTEE DESARROLLOS The Speaker: It is nice to see everybody back, those HOTELCO BERMUDA LTD. that I see. Hon. E. T. (Bob) Richards: Mr. Speaker, in accord- [Pause] ance with section 2AA(3) of the Government Loans Act 1978, I rise this morning to inform the Honourable The Speaker: All right, Minister. Thank you. Thank House of the pending execution of a government you for your patience. guarantee on behalf of Hotelco Bermuda Holding Ltd., part of the Desarrollos Hotelco Group, in relation to Hon. E. T. (Bob) Richards: Thank you, Mr. Speaker. loans to finance the development costs and related I will continue. expenses associated with the construction of the pro- We reiterate our belief that there are many posed St. Regis Luxury Hotel, Casino, Spa and Golf factors surrounding the decline in our pre-eminent Resort in St. George’s. This is indeed a historic pro- industry. ject for the tourism industry, the St. George's commu- nity, and Bermuda as a whole. [Inaudible interjections] Mr. Speaker, Honourable Members may recall that the Government of Bermuda has a Master Devel- The Speaker: Just a minute, just a minute. We have opment Agreement (MDA) with Hotelco Bermuda not settled down yet, Minister. Holding Ltd., a part of the Desarrollos Hotelco Group. Thank you, Honourable Members. Following intense negotiations, a ground-breaking th ceremony was held on May 4 , 2017. Hon. E. T. (Bob) Richards: One of the key factors is Mr. Speaker, Government has supported the the investment piece—the ability to promote a value financing of this project by committing to provide a proposition for investors in Bermuda hospitality. The guarantee of up to $25 million for an estimated project financial closing for this project is real-world success cost of $150 million. This support is tangible evidence in that objective. of Government’s commitment to the redevelopment of This project will provide jobs for Bermudians the tourism sector. We reiterate our belief that there in the construction phase, as well as jobs for Bermu- are many factors surrounding the decline in our once dians once the facility becomes operational. pre-eminent industry. One of the key factors is the Mr. Speaker, the guarantee provides that the investment piece—the ability to promote a value government cannot be legally required to fund more proposition for investors in Bermuda hospitality. The than $25 million to repay the lender if Hotelco Bermu- financial closing of this project— da Holding Ltd. is unable to perform their obligations to the lender. The financing being guaranteed is pro- The Speaker: Just a minute, Minister. vided under a loan facility maturing in 15 years. Honourable Members, I cannot hear it. I have Mr. Speaker, I am pleased that a local finan- not been in this position for quite some time now. And cial institution has shown confidence in the project I need to focus in, so please— and the tourism sector, and Government is delighted that they could assist in making this happen. Hon. E. David Burt: Mr. Speaker, as a point of order. Mr. Speaker, it is generally not the policy of the Ministry of Finance to issue guarantees to the pri- The Speaker: Yes. vate sector unless the matter is of national im- portance. However, until recently the Island has not POINT OF ORDER seen a new hotel development for some time, and the Government strongly supports this project and the Hon. E. David Burt: The Statements which have economic benefits that it will bring to Bermuda. With been provided for Members are missing page 2 of the the hosting of the America’s Cup, we must do even Minister’s Statement. more to attract local and foreign capital to our shores to develop our tourism product. At a Tourism Summit Bermuda House of Assembly Official Hansard Report 12 May 2017 1601 held a few years ago in Bermuda, it was noted that The Speaker: Just hold a minute, Members, please. our competitors are doing a great deal to attract fi- nancing for hotel projects. Some Governments are [Pause] going so far as to guarantee the debt in order to final- ise the acquisition of the required financing for the The Speaker: All right, Minister. Please carry on. project. This is exactly what we have done in order to ensure that this development materialises. Hon. N. H. Cole Simons: Okay, I will start again. Mr. Speaker, it is also important to note that This morning I rise before the Honourable the Government will be compensated for providing the House to lay the 2014/15 Audited Financial State- guarantee. Also of significance is the fact that initially ments for the Bermuda College, as stipulated by the the developer will be investing their own equity capital Bermuda College Act 1974. Honourable Members, the in the project, thereby delaying the exposure of Gov- college and the Office of the Auditor General have ernment. been working diligently to bring the audited financial Mr. Speaker, to be clear, the Government statements up to date. As such, I am pleased to share guarantee is in relation to the bank loans and not the that the Financial Statements for the year ending developer’s equity; therefore, the Government’s actual March 31st, 2015 are now completed for tabling today. contingent liability exists only in line with the bank’s Mr. Speaker, the 2014/15 audited financials loan. The funding arrangements for the project are as were unqualified. Therefore, in the opinion of the Audi- follows: tor General, the statements present fairly the financial • The first $30 million of the project cost will be positon of Bermuda College and the results of its op- funded with equity capital (of the developers); erations, changes in its assets and cash flows, in ac- • The next $120 million will be funded evenly cordance with public sector accounting standards for between equity and bank loans; government non-profit organisations generally accept- • Sixty per cent, or $90 million, will be funded ed in Bermuda and Canada. with equity capital; Mr. Speaker, the 2014/15 Financial State- • Thirty per cent, or $60 million, will be funded ments indicate that the Bermuda College has total with a bank loan; assets worth $28,247,000 and total liabilities of • The Government’s guarantee is limited to $25 $22,135,633.
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