Little tangible progress on economic recovery plan
The Government’s Economic Recovery Plan was unveiled in March 2021 in response to “the urgent need to safeguard and secure our economic future”. Almost two years on, Gareth Finighan runs the rule over some of the projects that were supposed to give the economy a jolt, create jobs, and plough millions of dollars of investment into the island.
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The Government’s Economic Recovery Plan consists of 29 schemes identified in March, 2021 to create jobs and increase investment in the wake of the Covid-19 pandemic.
A year later, Jason Hayward, the Minister of Economy and Labour, revealed that the Government was zeroing in on four of those schemes, and that “aggressive steps are being taken to advance them”.
He added then: “The actions we must now take require boldness, determination, courage and rigorous execution.”
But according to the Government website ERP status page, which was last updated in November, 2022, many of the schemes are still in the planning and consultation stages.
The four key pillars of the ERP are; the creation of a vertical farming industry; casinos; upgrades to the Tynes Bay waste management facility; and the creation of an economic empowerment zone in East Hamilton.
Vertical farming
Although unveiled as a key plank of the ERP in March 2021, the Government first began investigating the potential of a vertical farming industry as early as 2019.
In November 2020, Wayne Furbert, the then-Minister for the Cabinet Office, said the Government was close to signing a deal with one US company after months of negotiations.
But no further details about the development emerged until September 2022, when Mr Hayward announced the scale of the project was to be enlarged to create a vertical farming “industry”. Mr Hayward said further details would be revealed “within weeks”.
A month later, Davis Burt, the Premier, claimed that a deal to develop a vertical farming industry had been signed with a US firm and was due to go before Cabinet imminently.
But those hopes were dashed shortly after that when the Bermuda Economic Development Corporation revealed that Kalera – the company that had gone into partnership with the Government – had pulled out of the deal amid financial difficulties.
Questioned about the revelation, Mr Hayward distanced himself from the initiative.
He said: “The BEDC is attached to the project and I take reports from the BEDC. I do not deal with Kalera personally.”
The Government ERP update page currently states: “At this time, the international partner for the planned large-scale vertical farm facility has undertaken a strategic review that may potentially impact plans contemplated in Bermuda. A further update will be provided pending the outcome of this strategic review.“
Casinos
Jump starting the casino industry was a major plank of the PLP’s 2020 election platform and work to set up a legislative framework for the industry has been completed.
But although David Burt, the Premier, gave repeated assurances throughout 2021 that Bermuda’s first casino would open that year, that prediction proved wildly optimistic.
In fact the first – and so far only – casino licence was not granted until October of last year, when the Bermuda Gaming Commission gave the St. Regis Hotel the green light for gambling to begin.
The Fairmont Hamilton Princess was in the final stages of the licence application process - until last week, when US firm Century Casinos, which was to run the resort’s casino, said it was pulling out of the deal.
A spokesman for the hotel added: “While we continue to believe that gaming represents an attractive amenity for Bermuda’s visitors, we have paused our search for a new operator while we await a clearer road map from the Bermuda Casino Gaming Commission on a viable path forward to seeing a casino open its doors.”
This week, The Royal Gazette asked Charmaine Smith, the chief executive officer of the Bermuda Gaming Commission if any of the parties involved were meeting to discuss a way forward. Ms Smith replied: “I have no comments at this time.”
It is still not known when the doors of Bermuda’s first casino will open. Mr Burt has acknowledged that banking issues “have hindered our efforts to further diversify our economy in Bermuda in areas such as fintech and gaming“.
Business sources have said that Bermuda banks have had difficulty getting correspondent banks on board because of concerns the Gaming Commission is insufficiently independent of government, a claim the Government strongly denies.
The St Regis still has to jump through a third phase of bureaucratic hoops before the first card can be dealt.
The Government ERP update page currently states: “The third phase is predominantly operational in nature and will include, but is not limited to, the establishment of the casino’s compliance committee, the finalisation of internal controls to ensure compliance with the statutory framework, the recruitment and training of employees, and the purchase, shipping and installation of gaming equipment and systems.
“The casino's opening date entirely depends on the casino operator meeting all legislative requirements to open and is subject to the commission’s review and approval.”
Tynes Bay waste treatment facility
There are no details on progress of this initiative on the Government ERP update page because it is not listed among the 29 initiatives.
However, in September 2022, David Burch, the Minister of Public Works, said that $150 million of investment had been allocated to upgrade the facility.
But Colonel Burch warned that supply chain issues were hampering progress and that band-aid solutions costing $22 million had begun to keep the plant operational in the short term.
Colonel Burch told MPs: “The ministry has been notified by vendors connected to the refurbishment programme that there are significant delays in product delivery times attributed to global supply chain issues resulting from the fallout of the Covid-19 pandemic and ensuing economic climate, thusly, affecting the commencement of the refurbishment works.
“Delivery times for specialised equipment have been extended by some 12 weeks and in certain instances – up to 42 weeks. The delay has a cascading effect, which pushes the initial five-year plan, back farther to an unspecified date.”
The Opposition has questioned why renovations to the plant come under the ERP umbrella.
The One Bermuda Alliance also pointed out that $14 million of the $22 million short-term investment will be paid out to foreign contractors.
To that criticism, Colonel Burch replied: “Why would I be concerned?
“It’s a foreign plant. We are going back to the same people who built the plant. We don’t have the expertise in Bermuda to fix the plant.”
East Hamilton economic empowerment zone
Although listed as a key initiative when the ERP was launched in 2021, plans to transform the northeastern district of Hamilton into an economic empowerment zone have been on the drawing board for years.
The Government ERP update page currently states that the new EEZ “will result in both a direct physical and economic link between Front Street to North Street, while providing the framework for complementary economic development benefits between the two neighbouring areas”.
The page adds that the creation of an EEZ consists of three phases, the first two of which are identifying businesses in the proposed EEZ and then surveying those businesses.
That survey was completed at the end of September – with only 76 of 120 businesses responding to the survey.
The update concludes: “Currently preparing a report of the survey results per the Economic Development Act.”
The opposition One Bermuda Alliance has rubbished government claims that initiatives to strengthen the economy are working.
Cole Simons, the leader of the OBA, said reversing Bermuda’s declining population should be the Government’s top priority, but it had failed to tackle the problem.
Mr Simons said: “In their 2021 Economy Recovery Plan, they boasted 29 initiatives. Sadly, while our economy is failing, 80 per cent of these projects have not materialised.
“When it comes to consummating these very lucrative plans, the Government has demonstrated that they have significant challenges in closing and delivering on them.”
Mr Simons said that the ERP was “too aspirational, too ambitious, and is a classic example, once again, of over-promising and drastically under-delivering”.
The opposition leader acknowledged progress had been made on one ERP project – emergency stabilisation initiatives at the Tynes Bay waste management plant – but to the benefit of foreign firms rather than island companies.
He said that $16 million of the $22 million earmarked for the project was to be paid out to foreign firms, with only $6 million remaining on the island.
Mr Simons added: “What is the status of the Youth Employment Strategy and permanent employment for our young people?
“What about the progress on the sub-sea communications sector? There has been no real progress on Bermuda’s national digital bank, medical tourism, the energy regulatory sandbox, the electric charging infrastructure for public vehicles, the national space strategy, or the fish processing plant?
“And note, not one casino has opened.”
Mr Simons also taunted David Burt, the Premier, over continued delays in the redevelopment of the Fairmont Southampton Hotel, which he described as “a key deliverable” in boosting the economy.
He said: “Despite claims that the deal is closed, there has been no update about when shovels will finally break ground. Will it be 2023, or 2024?”
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