An estimated $242 million is expected to be generated in direct spend for Bermuda’s economy as a result of the America’s Cup.

This is according to a Potential Economic Impact Assessment, the results of which were announced yesterday.

The report, prepared in October last year by the America’s Cup Bid Committee, was released by them ahead of a meeting by the Public Accounts Committee.

Members of the PAC — chaired by Shadow Minister of Finance and Opposition Deputy Leader David Burt — raised concerns yesterday about the assessment, including the lack of formal financial instruction in the funding of the America’s Cup Event Authority.

Any organisation receiving Government funds should have a set of financial procedures in place that are at least equivalent to Government’s formal financial instructions.

Mr Burt asked the permanent secretary for the Ministry of Economic Development, William Francis: “What is under the purview of this committee in ensuring that financial instructions are adhered to and that value for money, and the Government’s purse, is being protected?”

Mr Francis said that had they waited for the formal document, the May 1 deadline set by Oracle Team USA for the completion of its Dockyard base would not have been met.

“Decisions had to be made and work had to be done. If not, with all the euphoria around Bermuda, as a country we would have failed within a few months if we had not got that job done,” he added.

The PEI report was based on the economic impact to previous America’s Cup host venues, as well as other data.

The report suggests that $242 million could be generated from expenditure by the ACEA, the America’s Cup Race Management and teams in the run-up to the event, and from additional visitors to the Island as well as other participant spending.

Government would need to spend in the region of $77 million, including the AC Village delivery expenses in Dockyard ($10.4 million), event operating expenses ($12.29 million), and AC Village capital improvements ($14.34 million).

The Host Venue Agreement also provides $15 million in cash sponsorship, as well as a $25 million sponsorship guarantee to the ACEA.

The largest economic benefit for Bermuda would be via spending by the ACEA and race teams — an estimated $94 million.

Some $60 million would be generated by “legacy tourism benefits” as a result of the exposure the Island would receive before, during and after the event.

Mr Burt picked up on this point during the PAC meeting, saying that previous America’s Cup hosts had not included legacy tourism in their impact reports. “I find hard to understand how that becomes considered under the economic impact of the America’s Cup itself,” he said.

The Bermuda Tourism Authority came up with a $20 million figure benefit, raised through exposure from hosting the event and a further $40 million from additional visitors up to three years after the event.

No details were in the report as to how this was calculated.

An estimated $24 million would come from the AC village in Dockyard, according to the report, with $14.5 million from cruise ship visitors.

Super yachts are anticipated to account for $12.8 million.

“The PEI is less extensive than a detailed economic impact assessment, which is normally commissioned after an event and this study should not be treated as such,” said Mike Winfield, the CEO of the ACBDA. “It is also important to note that this information was compiled during the bid process and since that time it has been announced that Bermuda will host the America’s Cup Qualifier series in its entirety.

“It is anticipated that this will provide additional economic impact as teams, sponsors, visitors, media, etc will be in Bermuda for a longer period than first assumed.”

The Potential Economic Impact report has been posted online at www.acbda.bm

• For a full version of the PEI document, click on the PDF file under “Related Media”.