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Credibility gap

The day is surely not far off when the public will stop believing a word the Government says.The latest example of Government dissembling came in the House of Assembly on Friday night when Opposition MP Maxwell Burgess claimed the Bermuda Homes for People project was in trouble.

The day is surely not far off when the public will stop believing a word the Government says.

The latest example of Government dissembling came in the House of Assembly on Friday night when Opposition MP Maxwell Burgess claimed the Bermuda Homes for People project was in trouble.

Premier Alex Scott and Housing Minister Ashfield DeVent accused Mr. Burgess of spreading rumours and innuendo and challenged him to produce the evidence.

So Mr. Burgess did, pulling the KPMG report saying BHP was technically insolvent out of his pocket like a magician pulling a rabbit out of a hat.

Less than 36 hours later, Mr. DeVent and Attorney General Larry Mussenden were holding a press conference ? at 11 a.m. on a Sunday morning, no less ? to say that well, yes, there were problems and the BLDC was in talks to take over the project.

What a difference a day makes. Anyone who thinks that all of this happened between Friday night and Sunday morning is dreaming.

Instead, it would appear that Government was trying to postpone making any kind of public announcement until it had a nicely wrapped present to hand to the public that would give the appearance that everything was normal.

The question the public should ask is how many other problems, both little and large, are being kept from them.

How could something that seemed so good seemingly go so wrong? That?s the inevitable question about the Bermuda Homes for People project. There are still a good many questions that remain unanswered about this saga.

The first ones concern developer Clifford Schorer, who brought this project to the table, said he was not taking a dime for it and yet somehow has now presented the organisation with a bill for more than $700,000.

The second concerns the project and its financial plan and the additional infrastructure problems that were then put on it. As it stood, it was designed to be non-profit, and almost by definition, that meant that its margins were going to be narrow.

It is quite likely if the prices for the low cost homes for purchase were set higher, then the project would be more viable in the long term. As some letter writers have pointed out, a good many middle class families who feel priced out of the open market were also excluded from the low cost homes planned for Harbourside.

Indeed, a household income cap of $85,000 ? for a six-person family ? is not a lot of money in today?s Bermuda. A family with a household income of $100,000 ? two parents each earning $50,000 ? could afford a home priced at $350,000, however. And that in turn would put demand in the rental market for lower income end of the market.

Still, that was not the model Bermuda Homes for People proposed or the one that Government accepted. But having accepted it, Government then dropped a number of extra infrastructure projects on BHP, the costs of which wiped out what little margin the organisation had to play with.

These included repairs to the sewage system, shoring up land, pollution remediation, a fire hydrant system and the removal of asbestos.

These projects would cost at least $1.5 million but could go much higher. Still, the effect would be to wipe out BHP?s projected $2 million surplus.

It can be argued that BHP should have anticipated at least some of these costs; after all, you don?t build a house without including the cost of a driveway or a cesspit. But others, especially the asbestos removal will have come as a surprise and Government deserves some of the blame for landing BHP with the bill.

At this point, it would appear that the BLDC will take the project back, although it could choose not to if it does not think it is viable.

Government would then have to step in and do it itself; after all, it fully endorsed the scheme to start with and, if BHP is insolvent, it must hold some of the accountability for the promises that were made to home buyers.

Of course, given the Government?s record with large public projects, that is hardly an edifying prospect.