ReportProposal

1

Government of Bermuda

Appraisal of Bermuda Airport

Development Business Case

8 May 2015

FINAL REPORT

Deloitte, Ltd.

Corner House

20 Parliament Street

Hamilton, HM 12

Bermuda

8 May 2015

Appraisal of Bermuda Airport Development Business Case – Final

Report

Dear Anthony,

We are pleased to submit this Final Report on the business case for developing the

Bermuda Airport Development. This Final Report maps the existing analysis and

documentation on the proposed Bermuda Airport Development,

as provided by the

Government of Bermuda, to the required contents of the Five Case model in a Full Business

Case. It then presents a gap analysis of the existing documentation on the Bermuda Airport

Development against the requirements of a Full Business Case.

The Five Case model is based on HM Treasury’s Green Book guidance for the appraisal

of public sector spending proposals. Under Green Book guidance, a Full Business Case

would be required to progress to the decision point on the investment, known as the “Gate

3” investment decision. This is the decision point for executing a contract with the selected

private sector supplier.

We understand that the Government of Bermuda is not yet ready to make a Gate 3

investment decision, and has the opportunity to close the gaps we have identified before

entering in to contracting for the concession with the selected private sector supplier. We

believe that addressing the key gaps in our analysis will add substantial value to the project,

both by improving Value for Money for the Government of Bermuda, and by reducing risk.

Yours sincerely,

Jessica Mello

Deloitte Ltd.

Contents

1. Executive Summary 5

Introduction 5

Approach and Methodology 5

Mapping to the Five Cases 6

Methodology Review 6

Overall Assessment and Conclusions 6

2. Appraisal Approach 8

Introduction 8

Methodology Summary 8

Navigating this Document 10

3. Mapping to the Five Cases 11

Introduction to the “Green Book” Five Case Model 11

Mapping Available Data to the Five Case Model 14

Initial Gap Analysis 19

4. Methodology Review 21

Assessment Criteria 21

Case-by-Case Assessment 22

5. Overall Assessment and Conclusions 39

Full Gap Analysis Assessment 39

Conclusions 44

Appendix 1 – Scope of this Report 47

Scope of Services and Timeline 47

Approach 47

Deliverables 47

Limitations and Assumptions 48

Appendix 2 – Project Plan 49

Appendix 3 – Summary of Available Data 50

Appendix 4 – Five Case Model Mapping Summary 69

Appendix 5 – Assumptions 70

Appendix 6 – FBC Assessment Criteria 71

Strategic Case 71

Economic Case 75

Commercial Case 78

Financial Case 82

Management Case 84

Appendix 7 – Methodology Review Supporting Evidence 87

Strategic Case 88

Economic Case 118

Commercial Case 142

Financial Case 172

Management Case 183

Appendix 8 – Acronyms and Abbreviations 199

Introduction

The Government of Bermuda has developed plans to deliver a new terminal building for the Bermuda

airport. The Government has received a proposal from the Canadian Commercial Corporation (“CCC”), a

Crown Corporation of the Government of Canada, to act as the Prime Contractor to deliver the planned

new terminal building. CCC would structure back-to-back or similar contracts with private Canadian

contractors who will deliver both construction and ongoing facilities management of the Bermuda Airport

under a 35-year Design Build Finance Operate (“DBFO”) or similar concession structure.

The Government of Bermuda and Her Majesty’s Government in London (represented by the Foreign and

Commonwealth Office or “FCO”) wish to ensure that the proposal will represent Value for Money (“VFM”)

for Bermuda, and will be affordable to the Government of Bermuda, before proceeding with the proposal.

The Government of Bermuda wish to compare existing documentation and analysis to the requirements of

a Full Business Case under the HM Treasury’s Green Book (“Green Book”) guidance for appraisal of public

sector spending proposals. Under the Green Book guidance, a Full Business Case (“FBC”) is required prior

to the contracting stage of a project. Key principles of the Green Book guidance for obtaining VFM are

relevant to all public sector spending proposals, irrespective of the procurement process and approach to

market, whether competed, sole-sourced, or otherwise.

This report seeks to map the existing documents to the requirements of an FBC and identify any gaps. The

key outputs of the Final Report are therefore:

1. An outline of the reports and documentation available from the Government of Bermuda, mapped to

the requirements of the FBC under each of the Five Cases, with any major gaps identified (Section 3,

“Mapping to the Five Cases”).

2. Assessment of the reports and documentation against the FBC requirements to produce a full gap

analysis and identify any differences in methodology, or where changes may be needed (Section 4,

“Methodology Review”).

3. A conclusion on the outstanding requirements to progress to an FBC-equivalent evidence set, using

the existing documentation as a base (Section 5, “Overall Assessment and Conclusions”). Where

important gaps are identified, we have suggested examples of opportunities for the Government of

Bermuda to add value to the project or substantially reduce risk by completing additional analysis,

strengthening the business case or documenting evidence, before proceeding.

Approach and Methodology

We recognise that the studies and documents do not form a cohesive business case, and were not explicitly

developed under the Five Case model of the Green Book Strategic Outline Case (“SOC”), Outline Business

Case (“OBC”) and FBC staged process. Importantly, the Government of Bermuda is under no obligation to

align to the Green Book guidance, although it provides a strong framework for considering how to obtain

and evidence VFM.

The methodology to produce our report therefore recognises the need for a pragmatic approach to

synthesise the available information to determine the overall evidence base for a post-FBC investment

decision (“Gate 3” in Green Book terminology

1

). This includes:

1. Mapping to the Five Cases – An assessment of the available documents and data to map them to the

Green Book “Five Case” model, reflecting one-to-one, one-to-many and absent mappings. This is

1

As provided by HM Treasury, Gate 3 refers to the investment decision of a business case, whereby the decision to spend public

money has been made.

1. Executive Summary

critical in the development of a view of all the information available within the structure of each case,

and identifying any initial gaps where evidence is not documented.

2. Assessment of alignment with FBC methodology – Detailed assessment of the evidence base for each

of the Five Cases against Green Book assessment criteria to produce a full gap analysis and identify

any differences in methodology. We recognise that alternative best practice models may need to be

considered, given that the Government of Bermuda is under no obligation to follow Green Book

guidance specifically.

Whilst our work provides an assessment of coverage to the Green Book, we have not performed due

diligence or assurance of the documentation content.

Mapping to the Five Cases

The objective of this mapping activity was to align the existing evidence base to the Five Case model to

enable further assessment of the methodology used against the Green Book guidance. The full outputs of

this analysis are set out in Appendix 4 (“Five Case Model Mapping Summary”). As expected, a number of

the documents mapped to multiple expected contents of the Green Book, showing that some documents

covered a number of the areas expected in a FBC.

As shown in Appendix 4, we identified a total of 371 ‘mappings’ between the 52 data sources and the 39

sub-contents of the Five Case model. These were split as follows: 116 within the Strategic Case, 81 for the

Economic, 68 for the Commercial, 54 for the Financial, and 52 for the Management Case.

We found that each of the 39 key contents of the Green Book had at least one data source available to

assess against the Green Book methodology, although we found very little documentation related to certain

areas, such as optimism bias, accountancy treatment, and contingency arrangements.

Methodology Review

For the methodology review, each document which had been identified as mapping to any of the Strategic,

Economic, Commercial, Financial and Management Cases was assessed individually for its relevance and

alignment to Green Book methodology in that case.

To conduct the review, we developed a set of consolidated review criteria based on the Green Book

guidance for FBC, incorporating relevant preceding guidance from SOC and OBC. These criteria are

outlined in Appendix 6 (“FBC Assessment Criteria”). These consolidated criteria were then used to assess

methodology gaps for each of the Five Cases.

Full results, structured by each case, are documented in Appendix 7 (“Methodology Review Supporting

Evidence”). This considers the relevance of the document to the ‘Key Review Criteria’ for each case,

assessing the ‘Evidence Covered’ against the relevant case in each document, and any ‘Gaps Identified’.

The results of the activity were summarised into a full assessment of each of the Five Cases in Section 4

(“Methodology Review”).

Overall Assessment and Conclusions

Strategic Case

The Strategic Case is well-defined. Whilst there are some specific areas that could be refined to align to

Green Book methodology, the case is comprehensive in principle – the Strategic Case for change has been

developed over a number of years and is the most mature of the Five Cases in the Bermuda Airport

development business case.

Economic Case

Extensive underlying analysis exists and numerous different assessments of different project scopes and

technical solutions have been carried out. This indicates that a full Economic Case may be ready to be

developed, although this has not been done to date.

Key, integral steps are not present in the case. These include an economic assessment of a defined list of

options to identify the most economically advantageous solution for Bermuda, and some specific Green

Book and wider best practice considerations, such as use of a Public Sector Comparator, and optimism

bias assessment. Under Green Book guidance, this analysis is expected to be performed by Government

prior to engaging with potential suppliers such that the most economically advantageous solution for the

Government is identified in isolation from private sector influence.

As a whole, the Economic Case does not yet appear complete, based on the documents we have received

from the Government of Bermuda. Given the presence of extensive underlying analysis in the existing

documentation, there is an opportunity for the Government of Bermuda to leverage previous work to

develop a full economic analysis of the options, aligned to the Green Book or another internationally

recognised VFM methodology. It will be important to ensure that key drivers of the investment are

appropriately assessed, including the wider socio-economic benefits for the local economy, e.g. job creation

and stimulating the tourism industry.

Commercial Case

Significant evidence exists of considerations on the Commercial Case, including procurement strategy,

commercial options analysis, and approach to the procurement. However, we identified key gaps in

evidencing that the sole-sourced procurement approach that was selected will offer the best VFM, and in

the Government approach to delivering VFM through commercial negotiations. Closing the major gaps in

this case before a concession agreement is negotiated, and indeed potentially to make sure that the

Development Agreement itself is robust from both a commercial and overall VFM perspective, could add

significant value and substantially reduce risk for the Government of Bermuda.

This might include, for example, establishing the preferred procurement approach going forward from the

present date, as well as providing a value driving framework to ground the rest of the procurement process.

Typically, this would include detailed analysis on how to obtain best value from the procurement process

through best and most effective use of legal, technical, financial, transaction and programme management

support, and how negotiations will be conducted.

Financial Case

Extensive analysis exists, particularly on the affordability position for the proposed project Special Purpose

Vehicle (“SPV”), and we understand that the Government of Bermuda’s officials and advisors are focused

on completing elements of the Financial Case. In order to complete this case to an FBC-equivalent level ,

we would expect the Government and their advisors to broaden their assessment of affordability beyond

the SPV to the wider Government perspective by incorporating any retained services or responsibilities of

Government (such as overseeing the concession), continuing to test key assumptions (including

concession structure and terms), and considering specific key treatments of the project’s financials such as

accounting implications and balance sheet impact and associated factors such as government borrowing

metrics and credit ratings.

A complete Financial Case could allow the Government to assess whether the Government can afford their

obligations under the proposed concession arrangement, and to what extent it will achieve the

Government’s stated objectives for the project, including “a minimal impact on the government’s balance

sheet” (2015-2016 Budget Statement).

Management Case

Recognising the current stage of development of the project, this is the least mature of the Five Cases,

indicating that the overall business case is not yet advanced enough for implementation and delivery

considerations to be detailed. The Management Case is an important tool to be completed prior to the

investment decision being made, in order to ensure Government’s ability to deliver its responsibilities and

manage dependencies under the contract, understand wider areas of project scope, manage the supplier

effectively, and to have risk management and contingency plans in place.

One point in the Management Case which could add significant value to the Bermuda Government at the

present time is a contingency plan should the current proposed deal with CCC fall through.

Introduction

The Government of Bermuda has planned the redevelopment of Bermuda’s airport, the L.F. Wade

International Airport, to include a new terminal building. Bermuda’s airport provides a critical link to the world

for Bermuda’s residents, local and international businesses, and tourism. The airport development plans

have progressed to an advanced stage. As set out in a June 2014 Letter of Agreement, the Government of

Bermuda has received a proposal from the Canadian Commercial Corporation, a Crown Corporation of the

Government of Canada, to act as the Prime Contractor to deliver the planned new terminal building. In the

proposed delivery model, the CCC would sub-contract with private Canadian contractors who will deliver

both construction and ongoing facilities management of the Bermuda Airport under a 35-year Design Build

Finance Operate or similar concession structure. CCC has selected AECON as the proposed contractor.

The CCC’s proposed role will end after the construction phase is successfully completed, while AECON will

stay on as the operations concessionaire.

The Government of Bermuda are currently considering a June 2015 ‘Go-No-Go’ decision to proceed to

negotiate and enter into an Airport Development Agreement. This agreement would be a step closer to a full

concession agreement. Financial close of a long-term concession agreement could potentially take place a

year later, in or around September, 2016. In reaching this next ‘Go-No-Go’ milestone, the Government of

Bermuda and the FCO wish to be confident that the proposal will represent VFM for Bermuda, and will be

financially affordable and achievable for the Government of Bermuda.

Over recent years, while examining options and developing plans, a number of studies, reports and other

documents have been produced by the Government of Bermuda and their advisors, and more recently by

the CCC and their advisors. These studies and documents evaluate the strategic, economic, commercial,

financial and management aspects of the proposed development, but are standalone documents and do not

form a cohesive business case. The Government of Bermuda therefore wish to compare the existing

documentation and analysis to the requirements of a FBC under the HM Treasury’s Green Book guidance

for appraisal of public sector spending proposals. Under Green Book guidance, an FBC would be required

before entering in to a procurement contract with the private sector. Key principles of the Green Book

guidance for obtaining VFM are relevant to all public sector spending proposals, irrespective of the

procurement process and approach to market, whether competed, sole-sourced, or otherwise.

It is worth noting that the Government of Bermuda does not currently require the Green Book or other

comparable method to prepare a business case for public sector investments, and this analysis is therefore

focusing on the Green Book as a best practice rather than a policy requirement.

The Government of Bermuda have therefore commissioned Deloitte to map the existing studies, reports,

and other documents to the requirements of an FBC, and identify gaps. The Government of Bermuda and

their advisors can then fill any gaps in the business case to satisfy themselves as to whether CCC’s proposal

is the preferred way forward, is affordable, achievable, and represents VFM for the Government and the

people of Bermuda, prior to proceeding.

Methodology Summary

Our approach considered the following

2

:

1. The evidence base is comprised of a significant number of documents, produced over a period of several

years. The Green Book is not required in Bermuda and these documents were not developed under the

2

Additional high-level assumptions and constraints are detailed in Appendix 5.

2. Appraisal Approach

Five Case model. We therefore recognise that these documents might map to none, one or many of the

components of the Five Case model;

2. In addition to not being explicitly developed under the Five Case model, the process of developing the

business case did not progress in line with the Green Book SOC, OBC and FBC staged process. This

means that some expected contents of the FBC may have been covered relatively early in the project

development timeline, but not explicitly refreshed as the plan to develop the airport has evolved, and

some parts of the business case may be more mature than others; and

3. We also recognise that there is a significant degree of overlap between a number of the studies, and

these exhibit differing levels of maturity in different areas.

Taking these points together, the methodology recognised the need for a pragmatic approach to synthesise

the available information to determine the overall evidence base for a Gate 3 investment decision. It needs

to be explicitly recognised, however, that by its very nature the evidence available is not fully consistent with

the expectations of a FBC. The following methodology was therefore developed based on Green Book

guidance documents for the assessment of business cases

3

, recognising these constraints:

Methodology for Business Case Appraisal

The key outputs of the Draft Report and Final Report are therefore:

 An outline of the reports and documentation available from the Government of Bermuda, mapped to the

requirements of the FBC under each of the Five Cases, with any major gaps identified (Section 3,

“Mapping to the Five Cases”).

 An assessment of the reports and documentation against the FBC requirements to produce a full gap

analysis and identify any differences in methodology, or where changes may be needed (Section 4,

“Methodology Review”).

3

For example, “Green Book Supplementary Guidance on Delivering Public Value from Spending Proposals”, 2013, which is drawn

upon throughout this analysis.

 A summary conclusion on the outstanding requirements to progress to an FBC-equivalent evidence set,

considering existing documentation, taken as a whole, against the requirements for a Gate 3 investment

decision. This is typically required before proceeding with contracting arrangements (Section 5, “Overall

Assessment and Conclusions”). Where specific gaps are identified, we provide examples of opportunities

for the Government of Bermuda to add value to the project or substantially reduce risk by completing

additional analysis, strengthening the business case or documenting evidence.

Navigating this Document

The key outputs from this methodology are contained in this document as follows:

 Section 3 – “Mapping to the Five Cases”: This section provides an introduction to the Five Case model

and Green Book methodology, summarises the mapping of the evidence base (reports and

documentation) received, and highlights the major gaps identified in an initial gap analysis. This

assessment is supported by:

– Appendix 3 – “Summary of Available Data”: This outlines the data received, and how it aligns to

the Five Case model.

– Appendix 4 – “Five Case Model Mapping Summary”: This is the detailed analysis that maps the

available data by each case, supporting the analysis performed in Section 3.

 Section 4 – “Methodology Review”: This section assesses the data available for each case, based on

the mapping activity in Section 3, identifying gaps and differences in methodology. This assessment is

supported by:

– Appendix 6 – “FBC Assessment Criteria”: This summarises the assessment criteria used to assess

the evidence by each case. This recognises that under the Green Book business case

methodology, the FBC would typically be assessed with reference to the continued veracity of

evidence documented in the OBC and, to a lesser extent, the SOC. Recognising that this is not

relevant to assess whether the evidence aligns to an “FBC-equivalent” at this stage, given that the

Green Book methodology and process has not been followed, a consolidated set of assessment

criteria for SOC, OBC and FBC are designed, based on Green Book guidance.

– Appendix 7 – “Methodology Review Supporting Evidence”: This appendix contains additional

supporting evidence and analysis where not appropriate for the main body of the Methodology

Review in Section 4.

 Section 5 – “Overall Assessment and Conclusions”: This section summarises the findings in Section 3

and 4, and provides a conclusion on the extent to which the existing documentation, taken as a whole,

aligns to the Green Book expectations, whilst recognising that a substantively different process has been

followed. This section outlines key areas where additional work could be carried out to bring the business

case to an FBC-equivalent level.

Introduction to the “Green Book” Five Case Model

Overall Approach

HM Treasury’s Green Book was developed to ensure VFM for public expenditure. The content provides a

method for developing the business case. This method is broken down into three stages, the SBC, the OBC,

and the FBC. Each of these cases is tested using the Five Case Model. The Five Cases provide a framework

for thinking about how best to structure and deliver a project. They comprise of the: Strategic, Economic,

Commercial, Financial, and Management Cases.

The above helps policy makers follow the necessary steps to make informed, responsible, and effective

decisions that are VFM. Put more simply, they answer the following questions comprehensively, throughout

the project lifecycle:

 Where are we now?

 Where do we want to be?

 How are we going to get there?

Importance of a Business Case

HM Treasury recognise the following key rational for a robust business case

4

:

“Policies, strategies, programmes and projects will only achieve their spending objectives and deliver

benefits if they have been scoped robustly and planned realistically from the outset and the associated risks

taken into account.”

The business case, both as a product and a process, provides decision makers, stakeholders and the public

with a management tool for evidence based and transparent decision making and a framework for the

delivery, management and performance monitoring of the resultant scheme.

4

“Green Book Supplementary Guidance on Delivering Public Value from Spending Proposals”, 2013,p.8

3. Mapping to the Five Cases

Three-Stage Iterative Process for Developing a Business Case

The process of developing a business case is iterative, developed in three stages. The initial stage is the

high level SOC, which evolves in to the OBC and then to the FBC. The following table sets out the features

of each stage.

Three-stage iterative process for developing a business case

Stage

Strategic

Outline Case

Full Business

Case

Outline

Business

Case

Key Features

Why do it?

• Considers issues such as needs, objectives,

risks, costs and benefits at a high level

• Typically used in larger programmes

• Outcome may influence redefining the

programme

• To ensure early consultation with

stakeholders

• To assess prospects for achieving VFM

• To consider achievability and next stages

• To rule out undesirable options & avoid

wasted effort later in the programme lifecycle

• Detailed assessment of costs, benefits and

risks

• Usually considers procurement options

• Typically employed before engaging the

market to deliver a solution

• To estimate VFM & affordability before going

too far e.g. engaging the market

• To refine estimates of benefits/costs

• To consider achievability and next stages e.g.

procurement strategy

• Reconfirmation of costs, benefits and risks

• Final test of the VFM & affordability of actual

market bids or OBC options

• To reassess and confirm VFM & affordability

before e.g. committing to a contract/

programme

• To confirm estimates of benefits/ costs

• To confirm implementation arrangements

• To document the procurement process prior

to contract award.

Decision Gates

The process to develop a business case outlined in the Green Book includes five decision gates. Each

“Gate” requires the business case to have been developed to a certain level before that decision can be

made, helping to safeguard VFM through the project development process.

Decision Gates and Alignment with the Three Stages of the Business Case

Stage 2 –

Planning

Stage 0 – Business Planning

Strategic Outline Plan (SOP)

Step 1: Ascertaining strategic fit

Phase 0: Determining strategic

context

Stage 1 –

Scoping

Gate 1

Business

Justification

Strategic Outline Case (SOC)

Step 2: Making the case for change

Step 3: Exploring the preferred way

forward

Phase 1: Preparing the SOC

Gate 2

Procurement

Strategy

Outline Business Case (OBC)

Step 4: Determining potential VFM

Step 5: Preparing for potential deal

Step 6: Ascertaining affordability

and funding requirement

Step 7: Planning for successful

delivery

Phase 2: Preparing the OBC

Stage 5 –

Evaluation

Stage 3 –

Procurement

Full Business Case (FBC)

Step 8: Procuring the VFM solution

Step 9: Contracting for the deal

Step 10: Ensuring successful

delivery

Phase 3: Preparing the FBC

Stage 4 –

Implementation

Gate 4

‘Go

Live’

Gate 3

Investment

Decision

Gate 5

Benefits

Realisation

Programme and Project

Management

Benefits Realisation (Planning,

Modelling and Profiling)

FBC Five Case Contents

The method for developing the Five Cases is set out in the Green Book, and is flexible and scalable for

different sizes and types of projects. Each answers a different major question to support the case for making

the proposed investment.

The Strategic Case ensures the project demonstrates a robust case for change, which is in line with the

subject area and the public sector at large. The Economic Case tests the public value of the project. The

Commercial Case deals with marketability, procurement strategy, and commercial viability. Projects’

affordability is examined under the Financial Case. Lastly, the Management Case focuses on how

achievable the project is by the proposed stakeholders.

The Five Cases

Mapping Available Data to the Five Case Model

Our first analysis involved mapping the contents expected under Green Book guidance to the available data

on the L.F. Wade Airport (the “Airport”) redevelopment. In all, we received 52 ‘data’ items from both the

Department of Airport Operations (“DAO”) and the Ministry of Finance, ranging from full reports and analysis

to short briefing notes and statements. To align these to the expected contents of each of the Five Cases,

we mapped each item to the “Mapped Contents” below, taken from the Green Book Supplementary

Guidance:

Mapping Contents Overview

Mapped Contents

Expected Sub-Contents

5

Strategic Case

Organisational Overview

 Strategic vision, goals, business aims and service objectives

 Current activities and services, including key stakeholders and

customers

 Organisational structure, staff numbers, business turnover and

geographical position

 Existing financial and funding arrangements

Current Business Strategies

 How the proposed scheme fits within, supports, and promotes the

strategy

5

Drawn from “Green Book Supplementary Guidance on Delivering Public Value from Spending Proposals”, 2013

 Definition of options

 Economic cost/benefit analysis and risk

assessment of options

 Assessment of Cap Ex and Op Ex funding required

for the preferred option

 Assessment against available funding

 Procurement strategy, stages and timetable

 Overview of commercial model

 Governance arrangements

 Implementation plan, dependencies & key risks

 Benefits realisation plan

Does the project support

the organisation’s strategic

objectives?

Does the preferred option

represent best value for

money?

Is the preferred option

affordable?

Is the commercial model

viable?

Is the preferred option

achievable?

 The case for action

 Investment objectives

 Demonstration of strategic fit and synergies

Strategic Case

Economic Case

Financial Case

Commercial Case

Management Case

Key Question

Five Cases

Key Components

Mapped Contents

Expected Sub-Contents

5

 Scheme's ability to achieve business goals, strategic aims, and

plans of organisation

 Business goals of the organisation

Spending Objectives

 Defining spending objectives in terms of desired outcomes –

objectives should be specific, measurable, achievable, relevant, and

time-constrained (“SMART”)

 Customer focused and distinguishable from means of provision –

focus on achievement of outcomes and not inputs to a potential

project

Existing Arrangements

 Explains how services are currently organised, provided and

supplied

 Details about stakeholders, customers and associated throughput

and turnover

 Snapshot of 'where we are now' and the basis for 'do nothing'

Business Needs (current and

future)

 Identifies difference between 'where we are now' and 'where we

want to be'

 Highlights problems, difficulties and inadequacies associated with

status quo

 Confirmation of continued need for business operations

 Projections of nature and level of demand for future services

 Summary of user requirements, clearly distinguishing between

current and future

Potential Scope

 Scope of the project from the standpoint of the business, in terms of

affected business areas, functionality, and organisation

 Sets boundaries and limitations of the project

 Options within this scope will be assessed within the Economic

Case

Benefits and Risks

 Cash releasing benefits, financial but non-cash releasing benefits,

quantifiable, and non-quantifiable benefits

 Benefits and risks should be direct and indirect to the organisation

Constraints and

Dependencies

 Constraints, actions or developments required of others (i.e.

externally imposed) if the ultimate success of the project is

dependent on them

Economic Case

Critical Success Factors

 Strategic fit and business needs

 Potential VFM

 Potential achievability

 Supply-side capacity and capability

 Potential affordability

Long Listed Options

 As wide a range of options as possible that meet: spending

objectives, potential scope, and benefits criteria, to create a Long

List of Options

 Baseline option included

Short Listed Options

 Include 'do nothing' option as a benchmark

 Reference project or outline public sector comparator

 Two other realistic options based on realistic 'second choices'

 This narrowed list is the Short List of Options

Do Nothing Option

 Included as the minimal or 'status quo' for reference

Economic Appraisals of Costs

and Benefits

 Capital costs, revenue costs, fixed, variable, and step costs,

opportunity costs, sunk costs, full economic costs, attributable costs,

organisational development, avoided costs, contingent liabilities

 Cash releasing benefits (“CRB”), financial but non-cash-releasing

benefits (“non-CRB”), quantifiable benefits (“QB”), non-quantifiable

benefits (non-QB)

Distributional Analysis

 Capturing the effects on: age, gender, ethnic group, health, skill or

location

Optimism Bias Adjustment

 Explicit empirically-based adjustments to counteract optimism bias

in the appraisal

Risk Assessment

 Assesses impact and likelihood of each risk with a score (excludes

risks that can be measured financially)

Mapped Contents

Expected Sub-Contents

5

Sensitivity Analysis

 Tests the vulnerability of options to unavoidable future uncertainties

 Tests robustness of the ranking of options

Commercial Case

Procurement Strategy

 Focuses on how required services, supplies or works can best be

procured (for example, whether open procurement)

 Must follow regulations within the given jurisdiction

 Criteria should cover: specification stage, selection stage, and

award stage

Service Requirements

 Summarises required services and outputs and the potential

implementation timescales required. This will include:

– Scope of procurement

– Required service streams

– Specifications of required outputs and requirements to be met

– Stakeholders and customers

– Procurement options

– Potential developments and further phases

Charging Mechanism

 Consideration of mechanism to incentivise service provider to

continue providing VFM over time

 Reflects optimum balance between risk and return

 Split into pre-delivery, operational, and extension phases

Risk Transfer

 Risk is allocated to party best able to manage it

 Optimal allocation over maximisation of risk transfer

Key Contractual

Arrangements

 Duration of the contract and break clauses

 Roles and responsibilities of service provider and procuring authority

 Charging mechanism, prices, tariffs, incentive payments

 Change control

 Remedies in the event of failure

 Treatment of intellectual property rights

 Compliance with regulations

 Operational and contract administration elements of terms and

conditions

 Arrangements for dispute resolution

 Agreed allocation of risk

Personnel Implications

 Whether any Transfer of Undertakings/Employment Protection

applies

 Terms regarding subsequent transfers at market testing intervals

 Descriptions of terms regarding Trade Union recognition

 Requirements for broadly comparable pensions for staff upon

transfer

 Codes of practice in place for well-being and staff management

Accountancy Treatment

 States in whose balance sheet (public/private) the assets

underpinning the service will be accounted for

 Explicitly declares the relevant accountancy standards

Financial Case

Public Capital and Revenue

Requirements

 Capital and revenue consequences of the preferred option over the

life span of service

 How this compares with the original capital ceiling for the scheme

 Any shortfall in capital and revenue requirements

Impact on Balance Sheet

 Assets that are an integral part of spending, should have their

accounting treatment examined

 Independent opinion from the organisation’s auditors

Impact on Income and

Expenditure Account

 Assessed in current position and likely outcome should be fully

recorded by a qualified accountant who understands the project and

business

Overall Funding and

Affordability

 Balance sheet organised with necessary components

 Balance sheet of organisation in healthy state

 Organisation is solvent and not over-trading

 Cash flow of the organisation is sound

 Necessary allowance made for risks

Mapped Contents

Expected Sub-Contents

5

Commissioner Support

 Agreement obtained from the purchasers for the scheme in written

form

 Letter should: demonstrate commissioners are actively involved,

form acceptance of strategic aims, confirm financial costs, state

margins of leeway, demonstrate suitable contingency arrangements

in place, and provided by the appropriate individual

Management Case

Project Management

Methodology

 Project management structure

 Reporting arrangements in relation to program

 All other management and governance arrangements

 Key roles and responsibilities – including appointed personnel and

any vacancies

Project Management Plans

 Describes how, when, and by whom a specific milestone or set of

targets will be achieved

 Detailed analysis of how identified targets, milestones, deliverables,

and products will be delivered to timescales, costs and quality

Use of Specialist Advisers

 Where skills and capabilities are in short supply, these are used

 Indicates how and when this advice will be utilised along with

expected costs

Change and Contract

Management Arrangements

 Change management strategy linked to benefits realisation

 Change management framework to manage change

 Outline plan to explain what is delivered and when in terms of

underlying activities

Benefits Realisation

 Arrangements for identification of potential benefits, their planning

modelling and tracking

 Ultimate responsibility for delivery of benefits identified

 Register indicating how benefits are to be realised

Risk Management

 Identify risks in advance and minimise them

 Processes to monitor risks and access to reliable up-to-date

information about risks

 Balance of control to mitigate against adverse risks if they

materialise

 Decision-making processes supported by framework for risk

analysis and evaluation

Monitoring During

Implementation

 Specify arrangements for monitoring during implementation

(including who, when, how and detail of costs)

Post Implementation

Evaluation Arrangements

 Specify post implementation evaluation arrangements (including

who, when, how, and costs)

Contingency Arrangements

 Detail on the contingency plan with arrangements and provision for

risk management

The full outputs of this analysis are set out in Appendix 3 (“Summary of Available Data”). The analysis shows

that there were many studies, reports and other documents that were relevant to more than one of the Five

Cases. This reflects that many of the documents were comprehensive, and covered multiple parts of the

business case methodology.

It should be noted that the objective of this mapping exercise was to align the evidence base to the Five

Case model for further assessment of methodology. It was not intended to provide a qualitative or

quantitative assessment of the ‘completeness’ of the evidence base. In particular, it is noted that a single

detailed document might provide a fuller and more rigorous evidence base than many less-detailed

documents, and therefore the number of alignments itself does not provide a definitive source of comparison.

That said, the number of documents identified as mapping to the expected contents of the Green Book Five

Cases may indicate the relative completeness of different cases. As shown in Appendix 4, we identified a

total of 371 ‘mappings’ between the 52 data sources and the 39 sub-contents of the Five Case model. As

demonstrated in the chart above, we noted a significant number of data sources that mapped to the Strategic

Case (116 ‘mappings’). This declined case-by-case, with only 52 data sources mapping to the Management

Case. Overall this chart tells us that there were 116 ‘hits’ within the Strategic Case, 81 for the Economic, 68

for the Commercial, 54 for the Financial, and 52 for the Management Case.

0

20

40

60

80

100

120

140

Number of Data Sources by Case

Strategic Economic Commercial Financial Management

Clearly not all documents can be equally weighted, and this in itself does not allow us to conclude, for

example, that the Management Case is not fully complete. However, this provides an interesting correlation

with the Green Book guidance on how the Five Cases are typically expected to develop through the SOC,

OBC and FBC stages, as set out in the following chart from HM Treasury’s guidance.

6

This shows the expected development of each of the Five Cases through SOC, OBC and FBC. Typically the

Strategic Case and Economic Case are developed earlier than the Commercial, Financial and Management

Cases. All five cases are expected to be fully developed by the FBC and Gate 3 investment decision.

Initial Gap Analysis

Our analysis mapped the data sets to the 39 contents of the Five Case model, and this deeper level of

analysis was used to identify specific gaps within the evidence available.

The main finding of this mapping activity is that there are no instances where there is no evidence available

at all – of the 39 expected contents within the Five Cases, there was at least one data source that mapped

to each. In Section 5, the full methodology review and gap analysis, we assess the extent to which the

Green Book guidance has been satisfied, or the ‘breadth’ or ‘depth’ of coverage for any of these mappings.

Five Case Mapping Results

The summary results of the mapping exercise are set out below.

Whilst the mapping does not demonstrate the completeness of each case, it does point to several areas

which require attention in the methodology review and full gap analysis:

1. As noted above, the Strategic Case is covered by a number of documents across each expected content

area.

2. The Economic Case appears to have more than 5 data sources relating to most of the content areas, but

few documents considering Optimism Bias Adjustment.

3. Likewise, the Commercial Case has more than 5 data sources relating to most of the content areas, but

few documents considering Accountancy Treatment.

4. The Financial Case has more than 5 data sources for each of the content areas.

5. The Management Case has, relatively speaking, the lowest number of data sources across the content

areas. These include Contingency Arrangements, Post Implementation Evaluation Arrangements, and

Monitoring during Implementation and Risk Management.

6

“Green Book Supplementary Guidance on Delivering Public Value from Spending Proposals”, 2013, p.21

SOC

FBC

0

20

40

60

80

100

% Completion of the Case

The 5 Dimensions of the Case

The key finding of this initial gap analysis is that there is at least one data source available for the Bermuda

Airport Development considering each content area of the Green Book’s Five Cases. The distribution of

data points indicates that the earlier cases (Strategic and Economic) are more developed than the later

cases, and that the later cases may need further development before a Gate 3 investment decision is

supported. There are certain areas where there are notably few data sources, and they may need further

development. These include Accountancy Treatment, Impact on Balance Sheet, and Optimism Bias

Adjustment.

Assessment Criteria

As outlined in our “Appraisal Approach”, we developed a set of consolidated criteria based on the Green Book guidance for FBC, incorporating relevant preceding

guidance from SOC and OBC. These are outlined in Appendix 6 (“FBC Assessment Criteria”). These consolidated criteria were then used to assess methodology gaps

for each of the Five Cases.

For the methodology review, each document which had been identified as mapping to any of the Strategic, Economic, Commercial, Financial and Management Cases

was assessed individually in each case-by-case detailed assessment. This means that a document could be assessed for its relevance and alignment to Green Book

methodology in multiple cases. Our methodology review was produced on a document-by-document basis, with the full results structured by each case and documented

in Appendix 7 (“Methodology Review Supporting Evidence”). These consider the relevance of the document to the ‘Key Review Criteria’ for each case, assessing the

‘Evidence Covered’ and any ‘Gaps Identified’.

The results of the activity were summarised into a full assessment of each of the Five Cases. This enabled us to consider the whole body of evidence and all relevant

documents for each of the Five Cases, as detailed in the tables below. It should be recognised that there is a degree of pragmatism in this approach. We recognise that

there was not a requirement for the documentation and development of the business case to follow Green Book guidance, and there are clearly elements of the evidence

required under Green Book that do not align directly to Bermuda’s context or are excessively granular. Whilst these evidence points are a useful tool in evaluation, the

summary assessment below looks to assess the completeness of each case against the ‘Key Review Criteria’ rather than being excessively prescriptive in focus on the

‘Main Evidence Required’. Further supporting detail for each assessment is available in Appendix 7.

4. Methodology Review

Case-by-Case Assessment

Strategic Case

#

Key Review Criteria

Main Evidence Required

Evidence Covered

Gaps Identified

S1

Does the

recommended deal

provide synergy and

best fit with the

organisation’s

business strategy?

 Extracts from business and other

relevant strategies

 Reference to relevant Government

and organisational policies

 Organisational context

 Existing and future changes in needs

 Expected changes in volumes and

mix of services

 Security and confidentiality issues

 Understanding any changes in

alignment to strategy during

negotiations

 Ongoing evaluation of business

strategies and plans

 Overall there is a clear strategic

rationale for change incorporated in

documents produced over a number

of years. This includes clear

descriptions of business strategies,

context of the airport, existing and

future needs to support the

Bermudian economy and

Government policy objectives. There

is evidence of ongoing evaluation of

the case for change throughout the

process.

 Broadly speaking, no major gaps

identified, although there has been

limited consideration of security and

confidentiality issues throughout the

documentation.

 However, it should be noted that a

significant part of the most recent

evidence base for change has been

produced subsequent to or in parallel

to the agreement with the prospective

supplier. Recognising this,

Government may want to be clear

that it owns its own strategy for the

airport and ongoing evaluation of that

strategy, which is distinct from that of

any prospective concessionaire.

S2

Does the

recommended deal

still satisfy the original

spending objectives

and business needs?

 Written confirmation of agreement on

part of stakeholders and customers

 Clear statement of business

outcomes and service outputs

 Are the spending objectives set at an

appropriate level and SMART:

- specific

- measurable

- achievable

- relevant

- timely

 Statement of any security and

confidentiality issues

 Overall clear stakeholder buy-in to

the case for change, and the

objectives of spend.

 As above, it is worth noting that

Government may want to be clear on

owning its own required business

outcomes and service outputs.

 When the recommended deal is more

fully developed, the Government may

want to assess the deal against the

original spending objectives. To do

so, it might wish to incorporate these

in a single statement – this may

feature within the procurement

strategy in the Commercial Case.

S3

Does the

recommended deal

still provide all of the

required services –

 Change control arrangements

 Notification of any changes during

negotiations:

- additional services

 Whilst change control is not

addressed, there is evidence of

agreement of stakeholders.

 It is worth noting relatively limited

consideration of the potential for

subsequent change in strategic

context. Government might want to

#

Key Review Criteria

Main Evidence Required

Evidence Covered

Gaps Identified

both current and

future?

- agreement of stakeholders and

users

- business justification and Cost

Benefit Analysis

consider the need for flexibility within

the solution identified in the

Economic Case, and the provisions

of the Commercial Case.

S4

Have any outstanding

differences between

stakeholders and

customers been

satisfactorily

resolved?

 Continued stakeholder commitment

and involvement

 Communication strategy

 Clear and ongoing involvement of

key stakeholders, including the public

in the form of ministerial statements,

and an indication that the tourism

industry supports the case for

change.

 There is no defined communication

strategy for the ongoing delivery of

the project, and there has been no

documented feedback from the public

or travellers (customers).

S5

Has the assessment

of likely benefits, risks,

constraints and

dependencies been

examined in detail?

 Outline of benefits realisation plan:

- Direct and indirect to the

organisation and wider public sector

- Cash (£) and non-cash-releasing

- Ranking of benefits by key

stakeholder

 Outline of risk management strategy:

- Business risks

- Service risks

- Likely probabilities and impact

(high, medium or low)

 Assessment of internal and external

constraints

- Evidence of critical path

- Related programmes and projects

 High-level benefits are detailed in a

number of places throughout the

documentation as a whole, which

also includes high-level consideration

of risks and internal and external

constraints.

 Some of the more specific aspects of

assessing benefits, risks, constraints

and dependencies have not been

examined in detail. This includes, for

example, production of a benefits

realisation plan and ranking of

benefits by stakeholder. Given a

strong Strategic Case for change,

this is considered as an opportunity

for refinement through the

Management Case and subsequent

delivery.

Economic Case

#

Key Review Criteria

Main Evidence Required

Evidence Covered

Gaps Identified

E1

Have the Critical

Success Factors

(“CSFs”) for options

appraisal been

identified?

 Prioritised CSFs (high, medium or

low)

 Relevant performance measures

 A number of documents detail the

key drivers of Bermuda’s position in

the overall aviation market, and the

importance of the airport for

international business activities and

the tourism industry.

 Other key factors in improving airlift

and the requirements for improving

the airport, are identified throughout.

These include, for example, key

project objectives such as addressing

key challenges like storm protection.

 Additionally, the Ministerial Statement

(document 46) provides a clear

summary of some further project

objectives.

 Taken together, there are a number

of different sources which could

readily be interpreted as CSFs.

 However, although a number of

factors exist which could be

interpreted as CSFs, the

documentation as a whole does not

explicitly outline CSFs or prioritise

these for the purposes of options

assessment.

 This is to be expected given that the

documentation has not been

prepared according to Green Book

guidance.

E2

Has a sufficiently wide

range of long-list

options been

identified and

assessed, and the

short-listed options

subjected to robust

analysis? Was the

most economically

advantageous offer

selected?

 10 to 12 main options for the Long

List – full description

 Use of the options framework

- for business scope

- for potential solutions

- for service delivery

- for implementation

- for funding

 SWOT analysis of options against:

- spending objectives

- critical success factors

- benefits criteria

- evidence of likely support from key

stakeholders

 Preparation and assessment of

economic appraisals for:

 Throughout the documentation

‘options’ are defined in a number of

different ways. These include:

– Options for technical solution for

airport re-development, including

contrasting refurbishment of

existing terminal with new build,

and a range of ‘project concepts’

identified at different stages in the

development process.

– Commercial options for delivering

the project, which will be

considered under the Commercial

Case section. The objective of the

Economic Case is to identify the

best VFM for Government, and

 Taken as a whole, there is no clear or

structured assessment of all options

performed in order to appraise the

Economic Case of short-listed

options and arrive at a preferred

solution. Whilst it is clear that a wide

variety of solutions have been

identified, there may be a case for

confirming the scope of the preferred

solution and the impact of that scope

on future cases, such as the

Financial Case and affordability

considerations.

 Whilst a large number of the

documents touch on elements of the

Economic Case, these typically

#

Key Review Criteria

Main Evidence Required

Evidence Covered

Gaps Identified

- do nothing/do minimum

- revised PSC

- best and final offers and/or

- preferred bidder (if selected)

 Use of appropriate tools:

- sensitivity analysis

- risk (£) quantification

- evaluation of qualitative benefits

(rank, weight and scoring)

 Treatment of costs and benefits in

accordance with Treasury ‘Green

Book’ rules

 All assumptions recorded

 Achievable benefits streams

 Stakeholders and customers support

that preferred solution is then

assessed for delivery model and

procurement strategy

considerations in the Commercial

Case.

– Options associated with wider re-

development opportunities, such

as solar photovoltaic (“PV”) and

landside development.

 A large number of the available

documents touch on elements of the

Economic Case, including:

– Potential revenue streams and

scope options (e.g. commercial

airspace management and

renewable energy development).

– Assessment of benefits associated

with a ‘do something’ option,

including benefits associated with

reversing the trend of declining

traffic in Bermuda, and non-

monetary benefits such as support

for national goals, safety and

flexibility.

– Assessment of the economic

impact of the proposed project by

direct and indirect economic

impacts during construction.

– Identification of some risks

associated with different

commercial options.

– Assessment of NPV for the project

based on a private sector WACC.

 There is a large volume of evidence

for assumptions used at different

assess different elements of different

option sets, and it is therefore not

clear that a preferred solution has

been identified through a clear

assessment of net present value

(“NPV”), risks, and non-monetary

benefits. Key considerations include:

– In a number of instances, options

are proposed by the current

proposed supplier rather than the

Government. This means there is

no clear appraisal of options from

a Government perspective with

which to engage the market.

– This means it is not clear that

Government has determined the

optimal scope from the potential

options prior to going to market.

– Additionally, the project is

assessed from a project/SPV

rather than holistic Government

perspective. For example, whilst

the affordability analysis performed

by Leigh Fisher includes an NPV

calculation, this looks to focus on

project cash flows only and uses a

developer weighted average cost

of capital (“WACC”) rather than

Government discount rate. The

Green Book guidance uses HM

Treasury’s Social Time Preference

rate of 3.5% p.a. in real terms to

discount economic cash flows for

the NPV.

#

Key Review Criteria

Main Evidence Required

Evidence Covered

Gaps Identified

points in the development of the

project.

– The economic assessment

performed by the Bermuda

College does not consider NPV.

– The economic assessment

performed by the Bermuda

College only considers the

construction period.

– Whilst there is reference to

optimism bias, this is not

incorporated into any investment

appraisal.

 Additionally, concepts of VFM are

often assessed at theoretical levels

and not always in respect of the

Economic Case or defined options. In

particular, the CCC Project Concept

document concludes on the VFM

case with limited reference to the

preferred solution as compared to

alternative options, and in respect of

the Commercial Case (i.e. the

preferred delivery model) rather than

Economic Case (the preferred

option).

 Some analysis of socio-economic

benefits e.g. job creation, impact on

tourism industry, has been performed

in different documents. These are

key factors in the rationale for the

project and may need to be validated

in the Economic Case.

E3

Has the Public Sector

Comparator been

constructed and

assessed in

 Realistic solution capable of

implementation

 Risks identified, apportioned and

measured for all project stages:

- design

 High-level assessment of different

commercial options are considered,

including some consideration to

typical risks.

 A PSC is not clearly identified as a

delivery option for Economic Case

appraisal.

 This is expected given that the

documentation has not been

#

Key Review Criteria

Main Evidence Required

Evidence Covered

Gaps Identified

accordance with HM

Treasury guidance?

- build

- finance

- operate

Public Private Partnership (“PPP”)

costs, where available

prepared according to Green Book

guidance, and the private finance

solution has been a key project driver

from the outset.

E4

Was a wide range of

bids received from

service providers in

response to the

procurement notice?

 Assessment of earlier assumptions

 Use of evaluation criteria:

- long list of suppliers

- short list of suppliers

 Description of each bid received at

Best and Final Offer (“BAFO”)

 Method of treatment for varying bids

 Basis for selection of preferred bidder

(if applicable)

 Not Applicable: A competed

procurement process was not

conducted, so no procurement notice

was issued.

 It should be noted that there is not a

clearly-defined evaluation criteria or

methodology for the bid to assess the

VFM of the unsolicited proposal

against Government expectations.

This is considered in more detail in

the Commercial Case.

Commercial Case

#

Key Review Criteria

Main Evidence Required

Evidence Covered

Gaps Identified

C1

Has the procurement

strategy for the

successful delivery of

the required services

been considered and

prepared in sufficient

detail?

 Description of potential deal

 Market soundings

 Existing service providers

 Consideration of procurement options

including:

- use of preferred bidder

- public procurement notice

- evaluation criteria and strategy

- negotiations strategy

- Invitation to Tender (ITT)

- procurement plan and timetable

 Overall there is a significant body of

evidence considering the potential

procurement strategy, approach, and

commercial structures.

 This includes consideration of

potential commercial airport models

under a public private partnership

(PPP), including:

– Management contracts

– Lease-term concession

– Developer financing and operation

– Joint venture

– Sale of asset

 There is evidence provided to

support the viability of a PPP model

for the airport.

 There is also evidence of considering

procurement strategy, including

considerations on:

– Market engagement

– Use of financial, legal, market

valuation and project delivery

consultation

– Use of Request for Information /

Request for Quotation RFI/RFQ

process

– Open book negotiation

– ‘Fairness Review’ to help deliver

VFM

 The benefits of the proposed

procurement strategy are identified

including:

– Reduce and/or eliminate the real

risk of overruns and delays

 Whilst there is significant evidence

relating to procurement strategy, it

should be noted that:

– The available evidence is typically

quite generic and frequently

theoretical – there is very little

specific assessment of

procurement strategy in this

context, recognising the specifics

of the Bermuda airport. There is no

evidence, for example, of

incorporating market soundings

– The available evidence is in large

part from earlier stages in project

development. There is a potential

gap in the evidence to support the

sole-source procurement strategy

opted for from June 2014, as

compared to previous evidence

suggesting a competed PPP

procurement process could be

viable

– It is not clear that some of the

recommendations of reports from

earlier stages in development were

carried forward into the

procurement strategy now

proposed

 The proposed deal itself is not very

clearly defined, particularly in respect

of key drivers of value for the

Government on the concession

agreement - this is typically required

to assess how successful a

#

Key Review Criteria

Main Evidence Required

Evidence Covered

Gaps Identified

– Reduce heavy procurement costs

– Address the urgency of job

creation by cutting the time of

procurement

– Ensure Government gets VFM

 Consideration given to the need to

establish procurement parameters

with CCC based on best practices.

procurement process has been prior

to final signing of contracts.

 Overall, there is limited evidence of

Government driving the procurement

strategy agenda and how to obtain

best value from a sole-source

arrangement, including:

– Whilst there is significant

consideration of delivering VFM,

there is not a clear negotiation

strategy for how Government will

do this under sole-source

proposal. The ‘Fairness Review’

refers to an independent

construction company, but it is not

clear how this will be used in the

negotiation of the concession

under the Letter of Agreement

(“LOA”). Expertise in airport

concessions rather than

construction may be needed too

– It should be noted that the

conclusion in favour of a sole-

source procurement (notably citing

lack of investor interest) is made

by CCC, and Government may

want to perform independent

analysis on procurement strategy

to satisfy itself on the validity of

this analysis

– In particular, Government may

want to consider how to extract

value from the procurement

process – open-book negotiation,

for example, may provide better-

value if open book accounting and

#

Key Review Criteria

Main Evidence Required

Evidence Covered

Gaps Identified

gainshare mechanisms are

enforced in the concession

agreement

– The LOA with CCC includes

provisions for Government re-

imbursement of costs, a mark-up

on termination and a first right of

refusal – it is not clear that this has

been analysed as a preferred

procurement approach, including

the implication on market demand

– Whilst sole-source procurements

have some benefits, they give rise

to additional required

considerations to access benefits

in the absence of competitive

tension

C2

Is there sufficient

scope for a potential

deal, which will meet

organisational needs

whilst offering best

VFM?

 Potential for innovation within the

provision of services and solutions

 Potential for risk transfer in Design,

Build, Finance, Operate stages

 Potential for new business and

alternative revenue streams

 Likely contract length

 A number of documents outline

potential commercial structures and

associated risk transfer.

 In terms of deal scope, CCC note

that:

– CCC have a requirement to

demonstrate project viability to

their internal Risk and

Opportunities Committee

– Government retains responsibility

for satisfying itself that agreements

contain fair and reasonable terms

and meet VFM requirements

– Government will need to satisfy

itself of market-based pricing

through a third-party audit of key

aspects of the capital budget

 Documents to define approach to risk

transfer are typically generic -

Government have not produced a

clear service requirement for market,

or defined scope (e.g. for ancillary

opportunities) for risk transfer.

 It should be noted that CCC’s internal

processes are likely to consider

CCC’s commercial position, not VFM

for Bermuda.

 It is likely that Bermudian

Government will not want to rely on

CCC’s proposals to assess VFM.

There is limited evidence of

consideration of specific mechanisms

to benchmark or assure VFM through

assessing the proposed deal.

 Therefore, Bermudian Government

may want to consider testing VFM

#

Key Review Criteria

Main Evidence Required

Evidence Covered

Gaps Identified

not only in respect of capital budget,

but also in terms of concession

structure and provisions. These might

include concession length but also:

– Pricing (revenue share, structure

and incentivisation, definition of

revenue, annual escalation

formula etc.)

– Service levels (Key Performance

Indicators (“KPIs”), enforcement,

cost effectiveness, safety etc.)

– Labour commitments within

contractual documents (levels of

staff retention, training

commitments, local supplier

obligations etc.)

– Rights to renegotiate and review

aspects of the agreement

– Regulation considerations

C3

Has the potential deal

been considered in

sufficient detail? The

how rather than what.

 Core, desirable and optional services

 Delivery time-scales (phased

improvements etc.)

 Potential payment mechanisms

 Ownership of residual assets

Service levels and performance

measures

Outlines some considerations on

scope under different commercial

structures.

 Significant detail on potential

parameters and intent of proposed

deal included within the project

concept documentation.

 There is no defined deal for

consideration. The LOA describes an

agreement to reach an agreement.

 To the extent intended scope of

services are expressed, these are

proposed by the potential supplier

rather than as defined requirements

and optimal structure and scope for

Government.

 Limited detail on concession

structure, including payment

mechanisms, applicable regulation

etc.

C4

How will business and

service change be

delivered and

implemented

 Change management plans

 Proposed mechanisms and

milestones

 Potential supplier documents include

considerations on solutions to enable

change.

 Limited evidence of Government

consideration of how to deliver value,

including through benchmarking

and/or market testing.

#

Key Review Criteria

Main Evidence Required

Evidence Covered

Gaps Identified

successfully over the

lifespan of the

contract period?

 Assessment of personnel

implications

 Assessment of known and expected

change

 Formula for handling unexpected

change:

- benchmarking

- market testing arrangements

 Considers Government retained risks

and requirements, including (for

example) delivering Governmental

permits and approvals, and

monitoring contract performance.

 Limited detail on Government ability

to deliver its dependencies and

requirements for the concession

term.

C5

Is the potential deal

likely to be acceptable

and bankable within

the private sector?

 Market research and surveys

 Use of standard contractual terms

and conditions

Benchmarks – similar projects

 Documentation considers potential

funding market for PPP, and

concludes overall on a robust market

for airport debt.

 It should be noted that the

documents supporting the bankability

of the project raise considerations for

the procurement strategy on the

relative merits of the sole-source

strategy.

C6

Was the procurement

undertaken in

accordance with best

practice?

 Overview of procurement process

- Deviations from procurement

strategy

 Use of legal and procurement advice

(internal and external advisers)

 Documentation includes CCCs

proposal to competitively tender 80%

of construction works, which “will

provide commercial tension

throughout the supply chain during

construction”.

 CCC propose Government use of

legal, financial and technical advisors

to maintain VFM considerations for

Government and help deliver project.

 It should be noted that the

procurement process has not been

undertaken for sub-contractors. It is

understood that AECON have been

selected through a non-competed

process, although believed they have

passed through CCC’s due diligence

process.

 It should be noted that it is not

unusual for a prime contractor to

compete sub-contracts, but that is not

synonymous with offering the

Government value through the

procurement process. A prime

contractor would expect to take the

risk/reward associated with its sub-

contracting arrangements. In order to

obtain VFM, Government would

therefore be interesting in extracting

value in competitive tension between

potential prime contractors rather

than between sub-contractors, unless

#

Key Review Criteria

Main Evidence Required

Evidence Covered

Gaps Identified

there are specified gain-sharing

mechanisms between the prime

contractor and Government in

respect of sub-contract

arrangements. These are not

referenced in the documentation.

 Whilst there is a clear aspiration to

use independent advisors to help

Government obtain VFM, there is

limited evidence of a road map for

how and when to use them

throughout the project development

and procurement process, rather

than on an ad hoc basis. Use of

technical, financial structuring and

wider financial, legal, and programme

management advisory support is

typically documented within the

Commercial Case prior to

commencing the procurement

process.

C7

Can the selected

service provider

deliver the required

deliverables and

services?

 Outline of the agreed deal:

- services – current and future

- delivery time-scales

- design

- build

- operate

- payment mechanisms

- performance and availability

- volume and usage

- incentives

- future change

- new business and alternative

revenue streams

- ownership of residual assets

- service levels and performance

measures

 Evidence of CCC and sub-

contractors strong expertise and

track record on comparable projects

is available.

 Documentation as a whole does not

provide details of an agreed deal

against which CCC will deliver.

Further evidence might be explored

in the future to test supplier

capabilities.

#

Key Review Criteria

Main Evidence Required

Evidence Covered

Gaps Identified

 Business, technical and cultural fit –

track record

C8

Have negotiations

resulted in a robust

and legally

enforceable contract?

 Use of specialist adviser(s)

 Use of standard terms and conditions

 Key contractual terms agreed

 It should be noted that negotiations

have not commenced, supporting the

overall conclusion that the project

status is more comparable to OBC

than FBC, albeit that the decision to

proceed would leave the Government

liable for bearing supplier costs

through negotiations, and a first right

of refusal. The Government may

want to consider the nature of the

LOA agreement and the CCC

deliverables this ties the Government

to (and associated cost).

Financial Case

#

Key Review Criteria

Main Evidence Required

Evidence Covered

Gaps Identified

F1

Is the proposed

spending affordable?

 Indicative costs

 Likely sources or organisational

funding

 Financial appraisals for

recommended deal, including full

assessment of:

- capital and current requirements

- net effect on prices

- impact on balance sheet

- income and expenditure account

 Stakeholder and customers

agreement

 Preliminary construction cost budget

is provided based on preferred

terminal design.

 Preferred design has been selected

based on design which is less capital

intensive and more affordable.

 Preferred terminal design is about

50% of 08 Master Plan design costs.

 Airfield apron, taxi-lanes, and

taxiways infrastructure listed as 40%

of 08 Master Plan design costs.

 CCC developed affordability gap in

operating phase based on air traffic

forecasts, operating cash flows and

financing costs.

 CCC’s proposed design shows an

affordability gap of $35m (compared

to $186m reduction from 08 MP).

 Sensitivity analysis performed on key

value drivers: passenger traffic,

incremental Airport Improvement

Fee, Commercial Sales Revenue,

and Salaries & Wage costs.

 CCC to use limited recourse project

finance structure, based upon

forecast revenue streams.

 Source of Funds proposed as 16%

equity from sponsors; mix of debt

from low to near investment-grade

private placement bond financing;

reserves, and export credit financing,

likely from Canada’s EDC totalling

47% debt; 25% Cashflow from Ops;

3% Escrow from AIF; 9% funding gap

covered by BDA Government.

 While there has been a great deal of

work on the affordability of the

project, it has been developed by

CCC as opposed to the Government.

 CCC’s affordability components fail to

encapsulate all costs to be borne by

the Government during and after the

project.

 Financial model requires a peer

review.

 The main element missing from the

affordability of the project is that the

perspective it has been developed

under leaves several cost

components of the Government

amiss. It is therefore not robust

enough to make an investment

decision and requires further

development.

 Cost of Debt needs to be challenged

by Government through the use of its

own advisors.

 Balance sheet analysis for

Government, including impact on

debt and credit ratings – this could

have an impact on the project

structure and preferred financing

solution.

 Clearly set out the agreed accounting

treatment of the project for the

Government.

 Specifics of the savings and

efficiencies need to be analysed and

supported by evidence.

#

Key Review Criteria

Main Evidence Required

Evidence Covered

Gaps Identified

 Benchmarking for airport charges

and fees in Bermuda (passengers,

airlines, fuel) – suggests there is

room to increase passenger and fuel

fees.

 $200 million capital cost over 4 years

is affordable based on Leigh Fisher’s

estimates.

 Airport Departure Tax revenue would

need to be dedicated to Airport and

needs to be $40/passenger.

 Base Case assumes financing is set

at 65:35 (D:E ratio), 11.78% WACC,

$40 departure tax, 30 year

concession, traffic grows 1.6% per

annum until 2045.

 Preferred terminal concept selected

on technical and aesthetic criteria

(landslide and terminal construction

costs included).

 Estimated cashflows with operating

revenue, costs, and construction

costs.

 Land side commercial real estate

study included in the 2008 HNTB

feasibility study.

 Peer review of air traffic forecasts

including recommended changes,

additions, and explanations

 Brief overview of the reasoning

behind selecting CCC as the

procurement solution.

 Financial Model and study need to be

updated, and expanded to study the

concession structure and all

Governments costs related to the

airport.

 Further evidence of stakeholder

consultation and agreement would be

useful.

Management Case

#

Key Review Criteria

Main Evidence Required

Evidence Covered

Gaps Identified

M1

Have the business

and cultural

implications of the

intended service been

fully understood and

taken into account?

 Agreed programmes for:

- change management

- business process re-engineering

 Staff-side representation

 Personnel implications

 Taken as a whole, there is relatively

limited detail; CCC’s documents do

include consideration to personnel

and related considerations.

 Recognising the stage of

development of the Management

Case, there is currently no agreed

programme. This is expected given

that there is not an agreed scope of

the project or contract against which

to construct a Management Case.

 The Government may want to

consider the need for further detail in

this area, and in particular the labour

commitments and personnel

implications in the contractual

commitments made by any supplier.

M2

Are all the

arrangements in place

for the successful

implementation and

delivery of the

required services?

 Programme Methodology (MSP)

 Project methodology (PRINCE2)

- project board and structure

- project manager and team

- project plan

- project resources and budget

 Reporting mechanisms

 Use of external advisers

- legal

- financial

- other

 Outline arrangements for:

- benefits study and realisation plan

- risk management strategy and plan

- change management strategy and

plan

- contract management

 Arrangements for evaluation:

- peer reviews

- Office of Government Commerce

(“OGC”) gateway reviews (if required)

- project implementation reviews

 From a Government perspective,

detail is provided on the benefits of

using CCC to guarantee the project is

delivered on time and on budget.

 Detail is provided on the use of

external advisors to support

successful delivery on both

Government and contractor sides.

 Overall, this part of the case is not

well-developed. There is limited detail

on the practical arrangements to

ensure the successful

implementation of the project.

Additionally, the detail that does exist

is high level and typically relates to

CCC’s delivery of the project, rather

than considering the overall

programme plan and Government

delivery responsibilities.

 Whilst an independent construction

company is anticipated to review the

VFM case of the project, it is not

clear whether this scope includes

review of project planning. More

broadly, specific detail of how project

management methodologies and

advisers will be used in the delivery

of the project are not included.

 CCC’s contribution, role, and

responsibilities outline some aspects

#

Key Review Criteria

Main Evidence Required

Evidence Covered

Gaps Identified

- post-evaluation reviews

 Contingency plans

 Contract management strategy,

including disputes resolution

procedures

 Skilled contract management team

 Agreed schedules for service

streams and outputs

of risk management and change

management, but detail is limited.

 There is very limited detail on

reporting, contingency planning and

contract management. Some of this

responsibility falls to Government,

and Government may want to play a

proactive role in defining this.

M3

How will the benefits

be delivered and

associated business

and service risks

managed throughout

the lifespan of the

service?

 Detailed benefits realisation plan

 Robust risk management strategy

Monitoring and reporting

arrangements- registers and regular

audits

 Detail is provided on high-level

benefits, and CCC provide high-level

descriptions of effective risk

management.

 There is very limited practical detail

on the management of benefits

realisation or risks. It is also worth

noting that the detail that does exist

is typically not ‘owned’ by

Government, who are in the large

part the owner of benefits from the

project.

 Further work is required to develop a

robust risk management strategy and

monitoring and reporting

arrangements.

M4

Are contingency plans

in place should the

recommended deal

fail at any stage?

 Contingency plans

 Arrangements for regular review

 Limited detail.

 There is no evidence of contingency

planning from Government should

the proposed deal fail.

Full Gap Analysis Assessment

In this section, we set out the findings of the full gap analysis and conclusions on the alignment of the methodology

and approach taken in the documentation available on the Bermuda Airport development against the key criteria

in the Green Book Five Cases model. Recognising that the Government of Bermuda is not required to use the

Green Book for public sector investment business cases, our conclusions are based on the spirit or principle of

the Green Book as a best practice. This is intended to prevent conclusions that are excessively prescriptive or

granular, and to provide an indication of substantive gaps and opportunities to add value to the process, rather

than focusing on detailed technical gaps. More detailed gaps are outlined in Section 4, supported by Appendix 7.

We understand that the equivalent of the Gate 3 investment decision is likely to be made in roughly May 2016,

prior to Financial Close of the deal with CCC, giving the Government of Bermuda a year to complete the FBC.

There would therefore appear to be ample time for the most important gaps to be addressed to complete a FBC.

It is recognised that the Government of Bermuda are looking to proceed to signing a Development Agreement

with CCC in June 2015, which will include commercial terms (including exit provisions) for the period of further

project development and negotiation with CCC prior to prospective Financial Close. There are therefore elements

of the current stage of the project that are comparable to the OBC stage, which seeks to establish the preferred

option and put in place arrangements for procurement. However, it should be recognised that our assessment is

focused on looking forward to the outstanding areas and most important gaps to support overall progress towards

a FBC-equivalent body of analysis and evidence. The question of whether the business case has been developed

to OBC stage and is sufficient to support advancing the procurement process with CCC may be a valuable

exercise, but is outside our scope of work and therefore has not been evaluated.

There are several key areas, particularly in the Commercial Case, which we believe offer opportunities for the

Government of Bermuda to add significant value to the process and substantially reduce risks in the project. The

Government of Bermuda may wish to consider when and how to address these key areas, and whether they wish

to undertake further work prior to signing a Development Agreement, but specific consideration on this roadmap

is outside the scope of this report.

A detailed analysis of each of the Five Cases by key review criteria and against the required supporting evidence

for each is set out in Appendix 7. A summary gap analysis assessment by case is included below:

Strategic Case

The Strategic Case is designed to evidence that the project is supported by “a compelling case for change that

provides holistic fit with other parts of the organisation and public sector”. Through our mapping activity we

identified 39 evidence points as containing information relevant to the Strategic Case.

Overall the case for change is clear--the airport is identified as a critical piece of infrastructure and the current

terminal does not meet Bermuda’s needs or international requirements. This is well documented and consistent

across a number of reports and documents produced since 2006.

The recommended deal looks to provide synergy and fit with Bermuda Airport’s business strategy, and address

spending objectives and business needs. We find that this criteria is discussed in detail in CCC’s proposal entitled,

“Project Concept for the Redevelopment of L.F. Wade International Airport,” dated 25th March 2015, and the

Memorandum of Understanding between the Government of Bermuda and CCC dated 10th November, 2014.

However, we note that a significant part of the most recent evidence base for change has been produced

subsequent to or in parallel to the agreement with the prospective supplier. Recognising this, Government may

want to be clear that it owns its own strategy for the airport and ongoing evaluation of that strategy, which is

distinct from that of any prospective concessionaire.

5. Overall Assessment and Conclusions

We have also seen significant evidence of continued stakeholder engagement and communication on the plans

to develop the Bermuda Airport over a number of years. We note that there has been no documented feedback

from the public (customers), which could hinder any form of future dispute resolution being carried out.

Likely benefits, risks, constraints and dependencies of the proposed deal have been examined for the Strategic

Case. These areas are present across a number of documents, with a bulk of the risk management strategy

shown in CCC’s proposal entitled, “Project Concept for the Redevelopment of L.F. Wade International Airport,”

dated 25

th

March 2015. Some more specific Green Book aspects of addressing benefits, risks, constraints and

dependencies have not been examined in detail (for example, production of a benefits realisation plan and ranking

of benefits by stakeholder). Given a strong Strategic Case for change, there is an opportunity to address and

refine these areas through the Management Case. Likewise, there could be a more thorough assessment of

security and confidentiality issues.

We find that in principle, the Strategic Case is well-defined. Whilst there are some specific areas that could be

enhanced to align to Green Book methodology, the case is comprehensive in principle – the Strategic Case for

change has been developed over a number of years and is the most mature of the five cases in the Bermuda

Airport development business case.

Economic Case

Once a ‘case for change’ has been established, the Economic Case examines whether “the intervention

represent(s) best public value”. Our initial mapping exercise showed that there were fewer documents in support

of this case compared to the Strategic Case, with 24 of 52 data sources having some alignment.

There are documents addressing many components of an Economic Case, and a number of the underlying inputs

for an Economic Case have been analysed in earlier and more recent proposed development plans. For example:

 A 2014 Traffic Review and Forecast provides a very detailed assessment of key features that would be used

in an options assessment, including understanding in detail the market enablers and how change might impact

traffic. It provides support for a ‘do something’ option in respect of increasing air traffic and reversing the trend

of declining traffic in Bermuda. However, this and other documents do not provide an options analysis or

compare and contrast different options side-by-side to arrive at the most economically advantageous option

to reverse the identified negative trend. Without an options analysis, it is difficult to establish whether the most

economically advantageous option has been selected. In the Economic Case we would expect VFM to be

assessed, taking in to account benefits and costs, the time value of money (NPV analysis), and optimism

bias, as well as an assessment of risks and non-monetary benefits.

 Revenue streams, operating costs and CAPEX costs have been assessed, primarily from the perspective of

the project/SPV, for various options over a number of years, and in financial rather than economic terms.

These analyses could potentially be very useful inputs to create an economic NPV analysis of the options to

establish the preferred option on the basis of VFM.

 A number of documents detail the key drivers of Bermuda’s position in the overall aviation market, and high

level objectives for the airport project from the Government’s point of view, such as job creation and risk

reduction. Whilst these are not specifically labelled as Critical Success Factors for the options, they could

readily be adapted as such, prioritised, and then used to inform the monetary and non-monetary benefits

assessment in the options appraisal.

The detailed methodology review and assessment also highlighted several key gaps, including:

 Most notably, there has been no long-list of options identified, short-listed and assessed for NPV, the wider

economic impact, risks, and non-monetary benefits. Whilst different variants of project scope were assessed

in sequence, these were not clearly defined and compared side-by-side to identify the preferred option as a

solution to the Strategic Case for change.

This gap makes it difficult to assess that the most economically advantageous solution has been selected. This

is particularly significant in satisfying Government that the optimal solution for Bermuda has been selected, prior

to engaging with potential suppliers. There are, for example, a number of areas of sub-scope for the new airport

development (including solar PV, fast ferry, and land-side development) that are not clearly assessed to identify

the optimal scope of the overall airport development project.

 We understand that a Public Sector Comparator is currently being generated by the Government and its

advisors. A PSC is important to understand by how much, if at all, the private procurement method will be

more economically sound than a public sector delivery method. This also has implications for the Financial

Case, which needs to consider the pros and cons, constraints and dependencies, of different financing

solutions.

 Consideration to cost overruns on capital programmes has been evidenced, but there is no explicit or

quantitative consideration of optimism bias in the documents related to the Economic Case.

As a whole, the Economic Case does not yet appear complete, based on the documents we have received from

the Government of Bermuda. As there is both theoretical discussion of VFM and extensive analysis of key value

drivers present in existing documentation, there is an opportunity for the Government of Bermuda to leverage

previous work to develop a full economic analysis of the options, aligned to the Green Book or another

internationally recognised VFM methodology.

Commercial Case

The purpose of the Commercial Case is to consider the commercial implications of the most economically

advantageous solution identified from the Economic Case, and establish and evidence that the “proposed deal is

attractive to the market place, can be procured and is commercially viable”.

Whilst sole-source procurements offer certain benefits, the absence of competitive tension may make achieving

VFM more challenging, making a robust Commercial Case potentially more important.

We found 16 data sources that supported this case. In our detailed assessment of these documents we identified

a number of clear gaps in our comparison between the Green Book guidance and the documentation on the

Bermuda Airport project. Key considerations include:

 Throughout the analysis we have found substantial evidence pointing toward a potential procurement

strategy, approach, and commercial structures. These are all key to answering whether the procurement

strategy for the successful delivery of the required services been considered and prepared in sufficient detail.

 The documentation indicates there has been a great deal of high-level analysis considering various PPP

strategies, most notably in the February 2014 Airport Development Models white paper and the earlier PPP

Opportunity Scan. It appears that these documents indicated a clear direction for the development of a

Procurement Strategy, which appeared to include a PPP (the specific model not yet identified), to be taken to

market through a competitive RFP process. There was also early indication from various sources that while

the market may have been challenging, there was private sector appetite and bankability for airport deals,

and the Bermuda Airport was considered a possible candidate for a PPP and private financing.

 In June 2014, representatives of CCC and the Government of Bermuda met, marking the start in the

documentation of a new procurement approach. The documentation we have viewed does not set out how

the Government of Bermuda analysed the costs and benefits of a sole-source procurement strategy against

those of the anticipated competitive RFP process for a PPP, except at a high, conceptual level. As a result,

there is no robust evidence indicating that a sole-source PPP would offer more VFM than a competitive

procurement strategy for a similar concession. There is therefore a potential gap in the evidence to support

the sole-source procurement strategy opted for from June 2014, as compared to previous evidence

suggesting a competed PPP procurement process could be viable. As with the Economic Case, Green Book

guidance typically expects this procurement strategy to be conducted by Government in isolation from the

private sector, including a detailed commercial options analysis to determine the optimal commercial structure

for the project, the terms and provisions with which Government are willing to engage the market, and how to

conduct the procurement in order to obtain best-value from the private sector. This might include, for example,

considering the case of responsibility for bid or project development costs. This process seeks to prevent the

potential private sector bidders from influencing the procurement process and commercial structure in a way

which does not obtain best value for Government. This approach to obtaining VFM is relevant to all public

sector spending proposals, irrespective of the procurement process and approach to market, whether it is

ultimately competed or otherwise. CCC’s proposal does assess some of the arguments for a single-source

procurement approach, for example concluding that there is a lack of investor interest for comparable projects.

Government would typically want to assess this case independently.

 The Government has signed both an LOA and an MOU with CCC. There are a number of terms within the

two agreements that may affect the economic viability of exiting negotiations with CCC and choosing an

alternative option. For example, if the Government developed a PSC at this stage and discovered it yields

better VFM than a PPP with CCC, the financial penalties for withdrawing from the CCC arrangement may

offset the benefits of the proposed PSC.

 CCC’s internal processes will naturally consider their own commercial position rather than the position of the

Government of Bermuda. While their proposed deal may aim to offer VFM, a supplier’s estimation of VFM will

not consider all components affecting the Bermuda Government. Therefore, the Bermuda Government may

wish to develop its own assessment of the VFM of CCC’s proposal.

 In a sole-source procurement approach, the lack of competitive tension and pressure on supplier pricing can

make it more difficult to achieve VFM. For this reason, buyers in sole-source arrangements typically need to

take a more pro-active approach to achieving VFM than in a competitive RFP process. For example, a buyer

in a sole-source arrangement can determine how to deliver value by benchmarking proposed concession

terms to market. Building in such mechanisms to the procurement process outlined by Government may help

obtain a close-to-market on key concession terms such as length, pricing, service levels, labour commitments,

and future rights and obligations.

 The documentation we have viewed does not set out how CCC selected AECON, how their process follows

best practices, or how competitive tension in the supply chain between AECON and their competed sub-

contractors would benefit the Government of Bermuda.

Overall the Commercial Case is the area where we believe the Government of Bermuda could add most value to

the process and substantially reduce risk by developing the case further. Two main points of development could

add immediate value:

 First, developing a Procurement Strategy, which would establish the preferred procurement approach going

forward from the present date, as well as provide a value driving framework to ground the rest of the

procurement process. Typically, this would include detailed analysis on how to obtain best value from the

procurement process through best and most effective use of legal, technical, financial, transaction and

programme management support, and how negotiations will be conducted.

 Second, (and this may be considered within the Procurement Strategy) a method to ensure the proposed

concession arrangement offers VFM and is at market. Benchmarking the proposed concession terms to

market would be one approach. This could be defined in the Procurement Strategy, for completion before the

concession agreement is negotiated with CCC. This may be similar to the Fairness Assessment mentioned

in several documents, although we would typically expect specifics on how this will be conducted and its

commercial implications to be documented to support the Commercial Case.

Financial Case

The Financial Case assesses the affordability of the project, based on the optimal scope and commercial structure

identified in the Economic and Commercial Cases. We would also emphasise that the affordability assessment

does not evidence good VFM – a below-market deal could be affordable, and visa-versa.

We understand that affordability was a key driver behind the choice for a private finance solution to fund the

project. The Financial Case asks the critical question, “Is the proposed spending affordable?” Affordability is

based on the Government’s ability to cover all its costs for the project, rather than the SPV’s ability to support

CAPEX. Understanding the expected financial position prior to entering the procurement stage also allows

Government an evidence base to satisfy itself that the procurement has achieved its financial objectives.

There were a total of 21 data sources that helped answer the question of affordability. While the support is detailed

and extensive, the extent of focus on ‘affordability’ appeared to be on making a bankable deal for the private

sector, rather than focused on the overall position of Government. Many of the key studies and models were

developed by the prospective supplier rather than Government. ‘Affordability’ in this context needs to be

understood from the overall Government, rather than project SPV perspective, and incorporate any retained

services or additional requirements of Government. These may include any items of scope within the economically

preferred option that are not being procured from the supplier, such as the solar PV farm.

There is an opportunity to improve consideration of the affordability of the project from the perspective of the

Government. In order to progress the analysis, further areas for consideration include:

 We would expect the Government to generate the analysis as to whether it is an affordable project. To the

extent that they may rely on analysis from the prospective supplier, this might need detailed testing and

challenging, and also Government consideration of the key assumptions of the concession structure and

terms (such as payment adjustments for KPIs) that might need to be stress-tested from a Government

affordability perspective. It is typical during this process to see advisors challenged existing studies and

models, to assess their robustness.

 The Government’s retained costs associated with the project may need to be assessed, included in the

analysis, and budgeted for. These may include, for example, regulation, monitoring the concession, operating

costs of Customs and Immigration in the new terminal, and associated infrastructure like the Causeway

bridge. The budgetary impact of assigning revenue such as departure tax to the concession may also need

to be assessed.

 Accounting treatment and balance sheet impact of the proposed concession arrangement for the Bermuda

Government may need to be established. This typically has implications that may need to be considered for

the preferred commercial structure and Commercial Case, and also potentially for government borrowing

metrics and credit ratings. Minimising the impact on Bermuda’s balance sheet (and by implication, on

Bermuda’s sovereign credit ratings), is one of the criteria set by the Government to give a green light to the

airport project, according to the Bermuda Government’s 2015-16 Budget Statement.

We understand that many of the above points are in process. For example, Government officials are examining

balance sheet impact and accounting treatment.

As the case seems to be actively undergoing development, it appears the Government team intends to close

gaps before Financial Close of the deal. Overall, while many elements of the Financial Case have been

developed, or continue to be in process, the case is not yet complete.

Management Case

The Management Case asks whether the project, as defined in the preceding cases, can be delivered

successfully, and helps equip the Government to achieve this. It covers areas such as programme and contract

management; the use of external advisors throughout the process; transitioning staff and operations to the new

model; evaluation and realisation of expected benefits; risk management; and contingency should the

recommended deal fail at any stage.

Through our mapping activity we identified 14 reports and documentation as containing information relevant to

the Management Case.

CCC’s Project Concept in particular touches on a number of implementation areas including the transition of staff

to the new concession arrangement, the need for risk management, and contingency plans. Being part of a

conceptual document, these are high-level analyses.

A number of documents have highlighted lessons learned from other airport concession projects and large

Bermuda capital projects, which could be used in the development of the Management Case.

Of the five cases for the Bermuda Airport business case, the Management Case is currently the least mature.

Overall, it appears that the business case for the Bermuda Airport has not yet progressed to the stage of

developing the Management Case in full, as key components of the proposal such as the concession structure

will need to be established before implementation and delivery can be fully planned.

It will be important to ensure that adequate time is allowed in the process for the Management Case to be fully

developed before Financial Close, such that the project can be successfully delivered and implemented. The

Government of Bermuda and its advisors may also need to consider the requirements of the Management Case

from a Government perspective, recognising that a number of key areas of scope may be retained by Government.

Conclusions

Strategic Case

The Strategic Case is well-defined. Whilst there are some specific areas that could be refined to align to Green

Book methodology, the case is comprehensive in principle – the Strategic Case for change has been developed

over a number of years and is the most mature of the Five Cases in the Bermuda Airport development business

case.

Economic Case

Extensive underlying analysis exists and numerous different assessments of different project scopes and

technical solutions have been carried out. This indicates that a full Economic Case may be ready to be developed,

although this has not been done to date.

Key, integral steps are not present in the case. These include an economic assessment of a defined list of options

to identify the most economically advantageous solution for Bermuda, and some specific Green Book and wider

best practice considerations, such as use of a Public Sector Comparator, and optimism bias assessment. Under

Green Book guidance, this analysis is expected to be performed by Government prior to engaging with potential

suppliers such that the most economically advantageous solution for the Government is identified in isolation from

private sector influence.

As a whole, the Economic Case does not yet appear complete, based on the documents we have received from

the Government of Bermuda. Given the presence of extensive underlying analysis in the existing documentation,

there is an opportunity for the Government of Bermuda to leverage previous work to develop a full economic

analysis of the options, aligned to the Green Book or another internationally recognised VFM methodology. It will

be important to ensure that key drivers of the investment are appropriately assessed, including the wider socio-

economic benefits for the local economy e.g. job creation and stimulating the tourism industry.

Commercial Case

Significant evidence exists of considerations on the Commercial Case, including procurement strategy,

commercial options analysis, and approach to the procurement. However, we identified key gaps in evidencing

that the sole-sourced procurement approach that was selected will offer the best VFM, and in the Government

approach to delivering VFM through commercial negotiations. Closing the major gaps in this case before a

concession agreement is negotiated, and indeed potentially to make sure that the Development Agreement itself

is robust from both a commercial and overall VFM perspective, could add significant value and substantially

reduce risk for the Government of Bermuda.

This might include, for example, establishing the preferred procurement approach going forward from the present

date, as well as providing a value driving framework to ground the rest of the procurement process. Typically, this

would include detailed analysis on how to obtain best value from the procurement process through best and most

effective use of legal, technical, financial, transaction and programme management support, and how negotiations

will be conducted.

Financial Case

Extensive analysis exists, particularly on the affordability position for the proposed project SPV, and we

understand that the Government of Bermuda’s officials and advisors are focused on completing elements of the

Financial Case. In order to complete this case to an FBC-equivalent level, we would expect the Government and

their advisors to broaden their assessment of affordability beyond the SPV to the wider Government perspective

by incorporating any retained services or responsibilities of Government (such as overseeing the concession),

continuing to test key assumptions (including concession structure and terms), and considering specific key

treatments of the project’s financials such as accounting implications and balance sheet impact and associated

factors such as government borrowing metrics and credit ratings.

A complete Financial Case could allow the Government to assess whether the Government can afford their

obligations under the proposed concession arrangement, and to what extent it will achieve the Government’s

stated objectives for the project, including “a minimal impact on the government’s balance sheet” (2015-2016

Budget Statement).

Management Case

Recognising the current stage of development of the project, this is the least mature of the Five Cases, indicating

that the overall business case is not yet advanced enough for implementation and delivery considerations to be

detailed. The Management Case is an important tool to be completed prior to the investment decision being made,

in order to ensure Government’s ability to deliver its responsibilities and manage dependencies under the contract,

understand wider areas of project scope, manage the supplier effectively, and to have risk management and

contingency plans in place.

One point in the Management Case which could add significant value to the Bermuda Government at the

present time is a contingency plan should the current proposed deal with CCC fall through.

Appendices

Appendix 1 – Scope of this Report

Scope of Services and Timeline

The purpose of this engagement is to assess whether the existing analysis and documentation on the proposed

Bermuda Airport Development is sufficient to support a go/no-go investment decision based upon HM Treasury’s

Green Book guidance for the evaluation of public sector spending proposals.

The RFP outlines the following timeline, which we will aim to achieve:

 12 business days from contract signing – Draft report submitted to GOB and FCO for comment

 20 business days from contract signing – Written and evidence based report with clear assumptions

Due to the nature of this project and its timeline, we will commence work once all the required data has been

collected. The 20 business day engagement timeline will take effect on receipt of the necessary data in order to

avoid our engagement time being spent on data collection. Confirmation of 20 day period commencement will be

sent to Financial Secretary, Anthony Manders.

Approach

Based on the above objectives, we will perform a Gap Analysis between the existing reports and documentation

on the Airport development and a Green Book-standard Full Business Case.

1. Mapping to the Five Cases

a. First, we will map existing reports and documentation provided by the client to the Five Cases –

Strategic, Economic, Financial, Commercial and Management.

b. We will identify the key elements in each Case and ascertain whether each element has been covered

in the existing documentation.

c. We will identify any major elements which are missing from the Five Cases, and comment whether they

need to be added.

2. Methodology Review

a. For each element of each Case, we will review whether the methodology used in the existing

documentation conforms to Green Book guidance.

b. If another approach was applied, we will note whether it is an internationally recognised methodology.

c. We will assess whether the existing analysis is sufficient to meet Green Book guidance for a Full

Business Case, or if the analysis needs to be re-worked.

d. We will provide comments and observations on whether the underlying assumptions used in the existing

documentation are relevant and supported by evidence. However we will not validate or provide

assurance on the assumptions. The client must retain sole responsibility for the assumptions underlying

the existing analyses.

3. Overall Assessment and Conclusion

a. Given any gaps and methodology differences identified, we will assess whether the existing

documentation satisfies the requirements in each case of the Full Business Case, or if additional work

needs to be undertaken. Such additional work will be outside the scope of this engagement.

Deliverables

As set out in the RFP, we will produce two deliverables: a Draft Report and a Final Report.

We will produce a Draft Report on Day 12 of the engagement, outlining the reports and documentation received

from the client, how these map to the Five Cases, and any major gaps identified.

We will produce a Final Report on Day 20 of the engagement, which will include the full Gap Analysis, identifying

gaps, differences in methodology, whether underlying assumptions are supported by evidence, and improvements

or changes which are needed. We will also set out whether the existing documentation is sufficient to satisfy the

requirements of each case in a Full Business Case so that a Gate 3 investment decision can be taken, and the

project can move into the contracting phase.

Limitations and Assumptions

In order to avoid any discrepancies, the following are activities out of scope:

 Legal advice on Commercial Case

 Validating assumptions

 Comments on cost data

 Technical advice

 Validating data provided to us

 Tax advice

 Accounting advice

The purpose of this appraisal is to scrutinise the existing Airport appraisal using HM Green Book. It will serve as

a guideline to help identify any gaps in the process. Work outside of such will not be provided by Deloitte as part

of this project.

The following is a list of Project Assumptions upon which Deloitte has based the scope of services, how they will

be performed, and the associated fees. Any deviation from the Project Assumptions may cause changes to the

timeline, fees and expenses, deliverables, level of effort required, or otherwise impact Deloitte’s performance of

the Services.

 The 20 business day engagement timeline will take effect on receipt of the documentation requested by

Deloitte in our initial data request list, in order to avoid engagement time being spent on data collection;

 The Client will provide the Deloitte team with access to any further reports or documentation requested in a

timely manner;

 Key contacts including the Financial Secretary, General Manager of the L.F. Wade International Airport,

staff and any other key resources will be available to participate in meetings or provide information, etc.

according to the project timelines;

 The Client will be responsible for scheduling any meetings, site visits, etc., in the time frame required in order

to achieve the project milestones;

 Deloitte will communicate with the key stakeholder group, including the Financial Secretary, General

Manager of the L.F. Wade International Airport, and the appointed FCO representative. Deloitte is not

responsible for managing relations with any additional stakeholders.

 Deloitte will submit project deliverables to the Financial Secretary for formal approval and written sign-off.

Appendix 2 – Project Plan

Appendix 3 – Summary of Available Data

The following data sources have been used in the construction of this report. Data was received from the Ministry of Finance and the Department of Aviation

Operations.

#

File Name

Title

Date

Where

Provided

Data

Type

Content Description

Five Case Model Mapping

1

3YEAR STRATEGIC

PLAN -with

UPDATES MARCH

2013

3 Year Strategic

Planning 2012/13 -

2014/15

N/A

Word

A strategic plan for the L.F. Wade airport outlining

objectives, action steps, air operations, a SWOT

analysis, and key timelines for achieving strategic

objectives to:

1. Work towards ICAO Category 1 airport

status.

2. Plan and initiate mission critical capital

projects.

3. Identify and secure revenue streams.

4. Work towards energy self-sustainability.

However, it should be noted that this 3 year plan

does not cover this proposed airport development.

Strategic Case

 Organisational Overview

 Current Business Strategies

 Spending Objectives

 Existing Arrangements

 Business Needs (current and future)

2

2013 Audit

Aerodrome

Inspection Report

12 April

2013

PDF

An aerodrome inspection report that outlines

inspection findings on infrastructure, visual aids, and

the Safety Management and Quality System,

recording five non-compliances and three

observations, according to the Convention of

International Civil Aviation.

Strategic Case

 Business Needs (current and future)

 Economic Case

 Commercial Case

 Financial Case

 Management Case

#

File Name

Title

Date

Where

Provided

Data

Type

Content Description

Five Case Model Mapping

3

141202 Topic Guide

Topic List for

Interviews

N/A

Word

List of questions put together by Mott MacDonald to

determine the Economic Impact of the new terminal

complex. Questions were administered in an

interview format. No responses included.

Strategic Case

 Spending Objectives

 Benefits and Risks

Economic Case

 Critical Success Factors

 Economic Appraisals of Costs and

Benefits

4

150121_GOVT

ORG_CHART

Government of

Bermuda

organizational Chart

- January 2015

January

2015

PDF

Outlines the entire Bermuda Government structure

as of January 2015.

Strategic Case

 Organisational Overview

5

343039 - Bermuda -

Additional data -

Issue 2

Traffic Forecast -

Additional data -

Issue 2

20 March

2015

Excel

Key GDP and related input assumptions for air

traffic forecast published (20 March, 2015) by Mott

MacDonald. Forecasting data is organised by

airline, and departure city for 2014 vs 2015.

Strategic Case

 Existing Arrangements

 Constraints and Dependencies

6

343039 - Bermuda -

Additional data

Traffic Forecast -

Additional data

5 March

2015

Excel

Key GDP and related input assumptions for air

traffic forecast published (5 March, 2015) by Mott

MacDonald. Forecasting data is organised by

airline, and departure city for 2014 vs 2015.

Strategic Case

 Existing Arrangements

 Constraints and Dependencies

7

343039 - Bermuda -

Air Traffic Forecast -

v2.0

Air Traffic Forecast

February

2015

PDF

Report on Mott MacDonald’s air traffic forecasts for

a number of scenarios based on four separate air

traffic segments (Bermudians, business visitors,

relatives, vacationers)

Strategic Case

 Existing Arrangements

 Constraints and Dependencies

Economic Case

 Do Nothing Option

 Economic Appraisals of Costs and

Benefits

 Sensitivity Analysis

#

File Name

Title

Date

Where

Provided

Data

Type

Content Description

Five Case Model Mapping

8

343039 - Bermuda

Peak and stand

forecast - Issue 2 –

20131218

Peak and Stand -

Traffic Forecast

Model Results

18

December

2014

Excel

Peak and Stand traffic forecast model results

published by Mott MacDonald. Data included in data

set 9.

Strategic Case

 Existing Arrangements

 Constraints and Dependencies

Economic Case

 Do Nothing Option

 Economic Appraisals of Costs and

Benefits

9

343039 - Bermuda -

Traffic Forecasting

Assumptions Book v3

1

Traffic Forecasting

Assumptions Book -

Working Copy

16

February

2015

PDF

Assumptions behind traffic forecasting models for

each four scenarios and the base case, and

overview of key drivers. Published by Mott

MacDonald.

Strategic Case

 Existing Arrangements

 Constraints and Dependencies

Economic Case

 Do Nothing Option

 Economic Appraisals of Costs and

Benefits

 Sensitivity Analysis

10

343039 - Bermuda -

Draft Forecast Report

- v1.1 – 20141218

Draft - Traffic review

and forecast

18

December

2014

PDF

Report on air traffic by Mott MacDonald. Provides

more context and analysis of opportunities to data

set 7, including examining overview of market,

aviation market context, how airport drives

economic growth, traffic forecast estimates, and

business development. This provides a partial view

of a future potential for Bermuda’s airport.

Strategic Case

 Current Business Strategies

 Spending Objectives

 Existing Arrangements

 Business Needs (current and future)

 Potential Scope

 Benefits and Risks

 Constraints and Dependencies

Economic Case

 Critical Success Factors

 Short Listed Options*

 Do Nothing Option

 Economic Appraisals of Costs and

Benefits

 Distributional Analysis

Commercial Case

 Service Requirements

Management Case

#

File Name

Title

Date

Where

Provided

Data

Type

Content Description

Five Case Model Mapping

 Benefits Realisation

11

acrp evaluating

terminal renewal v

replacement

Guidebook for

Evaluating Terminal

Renewal Versus

Replacement

Options

N/A

PDF

General report produced by the Airport Cooperative

Research Programme (“ACRP”) providing guidance

for evaluating terminal renewals versus terminal

replacement. This is not specific to this project.

N/A – this is not a specific evidence

point for the development of this

project.

12

ACRP Privatisation

Report

Considering and

Evaluating Airport

Privatization

N/A

PDF

Generalised, detailed report outlining evaluation and

key considerations in airport privatisation. This

extensive guidebook for policy makers considers

airport privatisation. This is not specific to this

project.

N/A – this is not a specific evidence

point for the development of this

project.

13

Airport Development

and Business Model

Workshop attendee

list 042114

Airport Development

& Business Model

Workshop Attendee

List

21 April

2014

Word

List of attendees with respective organisations who

attended Airport development and business model

workshop April 21 2014.

N/A – whilst evidence a workshop took

place, this does not demonstrate the

considerations on business model and

how they were used in the

development of the project.

14

Airport Development

Models Report

012714 no TOC

Airport Development

P3 models Report

1 February

2014

PDF

Report produced by Aaron Adderley in early-2014

summarising PPP options applicable to the airport,

assessing a high-level Economic Case and CAPEX

implications, and outlining a project development

and procurement timetable.

Strategic Case

 Current Business Strategies

 Spending Objectives

 Existing Arrangements

 Business Needs (current and future)

 Potential Scope

 Benefits and Risks

 Constraints and Dependencies

Economic Case

 Critical Success Factors

 Do Nothing Option

 Economic Appraisals of Costs and

Benefits

 Distributional Analysis

 Risk Assessment

 Sensitivity Analysis

#

File Name

Title

Date

Where

Provided

Data

Type

Content Description

Five Case Model Mapping

Commercial Case

 Procurement Strategy

 Service Requirements

 Charging Mechanism

 Risk Transfer

 Key Contractual Arrangements

Financial Case

 Public Capital and Revenue

Requirements

 Net Effect on Prices

 Impact on Income and Expenditure

Account

 Overall Funding and Affordability

Management Case

 Project Management Methodology

 Project Management Plans

 Use of Specialist Advisers

 Change and Contract Management

Arrangements

15

Airport Development

Project Concept -

Interim Draft - March

25 2015

Project Concept for

the Redevelopment

of L.F. Wade

International Airport

Bermuda

25 March

2015

PDF

An airport redevelopment concept report developed

by CCC in March 2015, covering:

1. Strategic rationale.

2. Market context.

3. Design and construction technical and

planning details.

4. Proposed commercial structure.

5. Proposed operational structure.

6. Economic / VFM analysis.

7. Financial / affordability analysis.

Strategic Case

 Organisational Overview

 Current Business Strategies

 Spending Objectives

 Existing Arrangements

 Business Needs (current and future)

 Potential Scope

 Benefits and Risks

 Constraints and Dependencies

Economic Case

 Critical Success Factors

 Long Listed Options

 Short Listed Options*

 Do Nothing Option

#

File Name

Title

Date

Where

Provided

Data

Type

Content Description

Five Case Model Mapping

 Economic Appraisals of Costs and

Benefits

 Distributional Analysis

 Risk Assessment

 Sensitivity Analysis

Commercial Case

 Procurement Strategy

 Service Requirements

 Charging Mechanism

 Risk Transfer

 Key Contractual Arrangements

 Personnel Implications

Financial Case

 Public Capital and Revenue

Requirements

 Net Effect on Prices

 Impact on Income and Expenditure

Account

 Overall Funding and Affordability

Management Case

 Project Management Methodology

 Project Management Plans

 Use of Specialist Advisers

 Change and Contract Management

Arrangements

 Benefits Realisation

 Risk Management

 Monitoring During Implementation

 Post Implementation Evaluation

Arrangements

 Contingency Arrangements

16

Airport Development

Project Concept

Annexes

Project Concept for

the Redevelopment

of L.F. Wade

25 March

2015

PDF

Attached annexes for data set 15. They include

details about CCC team, MOU, LOA, design brief,

Strategic Case

 Organisational Overview

 Current Business Strategies

#

File Name

Title

Date

Where

Provided

Data

Type

Content Description

Five Case Model Mapping

International Airport

Bermuda

concept, workshop notes, credit analysis, and cost

of debt analysis.

 Spending Objectives

 Existing Arrangements

 Business Needs (current and future)

 Potential Scope

 Benefits and Risks

 Constraints and Dependencies

Economic Case

 Critical Success Factors

 Long Listed Options

 Short Listed Options*

 Do Nothing Option

 Economic Appraisals of Costs and

Benefits

 Distributional Analysis

 Risk Assessment

 Sensitivity Analysis

Commercial Case

 Procurement Strategy

 Service Requirements

 Charging Mechanism

 Risk Transfer

 Key Contractual Arrangements

 Personnel Implications

Financial Case

 Public Capital and Revenue

Requirements

 Net Effect on Prices

 Impact on Balance Sheet

 Impact on Income and Expenditure

Account

 Overall Funding and Affordability

Management Case

 Project Management Methodology

 Project Management Plans

#

File Name

Title

Date

Where

Provided

Data

Type

Content Description

Five Case Model Mapping

 Use of Specialist Advisers

 Change and Contract Management

Arrangements

 Benefits Realisation

 Risk Management

 Monitoring During Implementation

 Post Implementation Evaluation

Arrangements

 Contingency Arrangements

17

Airport Terminal

Development EIA

Oct2014

The economic

impact of

constructing a new

Terminal Complex at

L F Wade

International Airport

June 2014

PDF

Economic Impact Assessment of the new airport

produced by the Bermuda College. Carried out in

late 2014.

Strategic Case

 Benefits and Risks

 Constraints and Dependencies

Economic Case

 Economic Appraisals of Costs and

Benefits

 Distributional Analysis

 Optimism Bias Adjustment

 Risk Assessment

 Sensitivity Analysis

Financial Case

 Impact on Balance Sheet

18

Airport Terminal

Development Only

EIA Oct 2014

Addendum:

Economic Impact of

constructing a new

Terminal Complex at

L F Wade

International Airport

July 2014

PDF

Addendum to the EIA by the Bermuda College,

including the total economic impact of the new

terminal.

Economic Case

 Economic Appraisals of Costs and

Benefits

 Distributional Analysis

 Optimism Bias Adjustment

 Risk Assessment

 Sensitivity Analysis

19

Article on

privatisation

Room in the Boom

June 2010

PDF

Article on Canadian PPP infrastructure projects,

examining examples of how PPP’s have enabled

large-scale projects. Published in ‘RICS Property

World’ in 2010. This is not specific to this project.

N/A – this is not a specific evidence

point for the development of this

project.

#

File Name

Title

Date

Where

Provided

Data

Type

Content Description

Five Case Model Mapping

20

BDA Airport Fees and

Charges

benchmarking 2015

2015 BDA Airport

Fees and Charges

Benchmarking

N/A

PDF

Overview of Bermuda’s airport fees and charges in

comparison with other regional and leading airports.

Strategic Case

 Existing Arrangements

 Constraints and Dependencies

Economic Case

 Sensitivity Analysis

Financial Case

 Net Effect on Prices

 Impact on Income and Expenditure

Account

21

BDA Capex

Affordability Analysis

FINAL 8-8-13

Capex Affordability

Analysis

7 August

2013

PDF

Capital expenditure affordability study by Leigh

Fisher in August 2013. Study was performed for

three scenarios with an additional baseline scenario,

and included considerations and lessons learned

from comparator concessions.

Strategic Case

 Existing Arrangements

Economic Case

 Sensitivity Analysis

Commercial Case

 Procurement Strategy

 Service Requirements

 Charging Mechanism

 Risk Transfer

 Key Contractual Arrangements

Financial Case

 Public Capital and Revenue

Requirements

 Net Effect on Prices

 Impact on Income and Expenditure

Account

 Overall Funding and Affordability

Management Case

 Benefits Realisation

22

BDA May8_final_edit

Terminal Feasibility

Study

8 May 2008

PPT

Terminal feasibility study progress report by HNTB

in May 2008. Outlines three separate concepts for

consideration.

Strategic Case

 Spending Objectives

 Potential Scope

Economic Case

 Long Listed Options

#

File Name

Title

Date

Where

Provided

Data

Type

Content Description

Five Case Model Mapping

 Economic Appraisals of Costs and

Benefits

Financial Case

 Public Capital and Revenue

Requirements

 Impact on Income and Expenditure

Account

23

Bda Realty Marketing

Report 11july08

Initial Land Use

Assessment Report

N/A

PDF

Land use assessment report published by Bermuda

Realty in 2008, examining revenue generation

options from airport real estate.

Strategic Case

 Potential Scope

 Constraints and Dependencies

Economic Case

 Critical Success Factors

 Long Listed Options

 Short Listed Options*

 Economic Appraisals of Costs and

Benefits

Financial Case

 Public Capital and Revenue

Requirements

 Impact on Income and Expenditure

Account

24

Bermuda Airport -

Project Structure1

Project Structure

N/A

PPT

Diagram showing the proposed project structure for

the Bermuda Airport, incorporating CCC and

AECON.

Commercial Case

 Procurement Strategy

 Charging Mechanism

 Risk Transfer

 Key Contractual Arrangements

25

Bermuda LeighFisher

Phase 1 Review 03

05 2015

Independent Peer

Review of Aviation

Activity Forecasts

March 2015

PDF

Independent peer review of aviation activity

forecasts by Leigh Fisher in March 2015. A review

of Mott MacDonald’s forecasts for the airport. This is

currently incomplete pending a further assessment

of Mott MacDonald’s completed forecast.

Strategic Case

 Existing Arrangements

 Constraints and Dependencies

Economic Case

 Critical Success Factors

 Do Nothing Option

 Economic Appraisals of Costs and

Benefits

#

File Name

Title

Date

Where

Provided

Data

Type

Content Description

Five Case Model Mapping

 Sensitivity Analysis

Financial Case

 Impact on Income and Expenditure

Account

26

Bermuda Master Plan

December 2006

Bermuda

International Airport

Master Plan

December

2006

PDF

Master Plan published by HNTB corporation in

2006. This represents a comprehensive plan

detailing each phase of the proposed project, with

coverage including:

1. Overview of existing facilities.

2. Aviation activity forecasts.

3. Assessment of facility requirements.

4. Evaluation of concepts/options.

5. Recommended option.

6. Cost benefit analysis and financial

assessment of recommended option.

7. Project delivery commercial options.

Strategic Case

 Organisational Overview

 Current Business Strategies

 Spending Objectives

 Existing Arrangements

 Business Needs (current and future)

 Potential Scope

 Benefits and Risks

 Constraints and Dependencies

Economic Case

 Critical Success Factors

 Long Listed Options

 Short Listed Options*

 Do Nothing Option

 Economic Appraisals of Costs and

Benefits

 Distributional Analysis

 Optimism Bias Adjustment

 Risk Assessment

 Sensitivity Analysis

Commercial Case

 Procurement Strategy

 Service Requirements

 Charging Mechanism

 Risk Transfer

 Key Contractual Arrangements

 Personnel Implications

Financial Case

 Public Capital and Revenue

Requirements

#

File Name

Title

Date

Where

Provided

Data

Type

Content Description

Five Case Model Mapping

 Net Effect on Prices

 Impact on Income and Expenditure

Account

 Overall Funding and Affordability

Management Case

 Project Management Methodology

 Project Management Plans

 Use of Specialist Advisers

 Change and Contract Management

Arrangements

 Benefits Realisation

 Risk Management

 Monitoring During Implementation

 Post Implementation Evaluation

Arrangements

 Contingency Arrangements

27

Bermuda

Privatisation Models

Privatization Models

White Paper

December

2008

PDF

Study of privatisation models available to the

Bermuda Government for the airport. Produced by

Jacobs Consultancy in December 2008.

Strategic Case

 Existing Arrangements

 Business Needs (current and future)

 Potential Scope

 Benefits and Risks

Commercial Case

 Procurement Strategy

 Service Requirements

 Charging Mechanism

 Risk Transfer

28

bermuda_master_pla

n_townhall_061112_v

3

Bermuda National

Tourism Master Plan

11 June

2012

PDF

Bermuda National Tourism Plan presentation given

in June 2012. Airport development is mentioned.

Strategic Case

 Business Needs (current and future)

29

Bill of Quantities

Bill Of Approximate

Quantities

N/A

PDF

Bill of approximate quantities and estimates for

airport terminal feasibility study. Produced by HNTB,

Woodburne and CG Architects in 2007.

Economic Case

 Economic Appraisals of Costs and

Benefits

Financial Case

#

File Name

Title

Date

Where

Provided

Data

Type

Content Description

Five Case Model Mapping

 Public Capital and Revenue

Requirements

 Net Effect on Prices

 Impact on Balance Sheet

 Impact on Income and Expenditure

Account

Management Case

 Contingency Arrangements

30

Budget Statement

Airport

New Airport

Terminal

N/A

PDF

Public statement in regards to the Bermuda Airport,

the objectives and criteria for the project and its

development, and the affiliation with CCC thus far.

Strategic Case

 Spending Objectives

Economic Case

 Economic Appraisals of Costs and

Benefits

 Risk Assessment

Commercial Case

 Procurement Strategy

 Risk Transfer

 Accountancy Treatment

 Financial Case

 Public Capital and Revenue

Requirements

 Impact on Balance Sheet

 Impact on Income and Expenditure

Account

 Overall Funding and Affordability

 Commissioner Support

Management Case

 Project Management Methodology

 Project Management Plans

 Use of Specialist Advisers

 Risk Management

31

CapEX FY2013

DAO Capital

Expenditure Report

6 March

2013

PDF

Airport’s capital expenditure report for year end

March 31, 2013.

Strategic Case

 Existing Arrangements

#

File Name

Title

Date

Where

Provided

Data

Type

Content Description

Five Case Model Mapping

32

Copy of Email From

Mott MacDonald (19

March 2015)

Copy of Email

(19/3/15) From Mott

MacDonald

19 March

2015

Word

Correspondence between Mott Macdonald and the

Department of Airport Operations on the Leigh

Fisher peer review, from March 2015.

N/A – this is useful context for the

current status of the project, but does

not provide specific detail aligned to the

cases.

33

DAO Energy Survey

Quote 8 Dec 14

Alternate Energy

Evaluation with

Recommendations

8

December

2006

PDF

Proposal by Onsite Engineering Services for the

evaluation of alternate energy solutions for the

Airport.

Strategic Case

 Potential Scope

34

Discussion with Price

Waterhouse re

Airport Investment by

telephone

Discussion with

Price Waterhouse re

Airport Investment

by telephone

16

November

2010

Word

Minutes from meeting between Price Waterhouse

and DAO in November, 2010. Includes

considerations on application of PPP framework.

Strategic Case

 Potential Scope

 Constraints and Dependencies

Economic Case

 Long Listed Options

 Short Listed Options

Commercial Case

 Procurement Strategy

 Key Contractual Arrangements

Financial Case

 Overall Funding and Affordability

35

Econ Impact Full

report 2003

2003 Economic

Impact Report

September

2004

PDF

Department of Tourism economic impact report from

2003. An analysis of the impact of tourism on the

Bermudian economy.

Strategic Case

 Constraints and Dependencies

Economic Case

 Critical Success Factors

36

ECONOMIC

INDICATORS

Economic Indicators

N/A

Word

Reference list for the economic indicators found in

the Master Plan and Feasibility study.

N/A – this is supporting evidence only

and does not directly contribute to the

evidence base of the project for this

analysis.

37

electricity

consumption 2

N/A

Excel

Spreadsheet showing monthly electricity

usage/costs for two units at the airport. Records

from Jan 2009 to Jul 2012.

Strategic Case

 Existing Arrangements

Financial Case

 Impact on Balance Sheet

#

File Name

Title

Date

Where

Provided

Data

Type

Content Description

Five Case Model Mapping

38

Feasibility Study -

HNTB 2008

Terminal Complex

Feasibility Study

9

September

2008

PDF

Feasibility study for new terminal published by

HNTB in September 2008.

Strategic Case

 Current Business Strategies

 Spending Objectives

 Existing Arrangements

 Business Needs (current and future)

 Potential Scope

 Benefits and Risks

Economic Case

 Critical Success Factors

 Short Listed Options*

Financial Case

 Public Capital and Revenue

Requirements

 Impact on Income and Expenditure

Account

Management Case

 Project Management Methodology

 Project Management Plans

39

Fees and Charges

January 2013

DAO Fees and

Charges

January

2013

Word

List of airport fees and charges administered by the

DAO to passengers, airlines, and aircraft.

Strategic Case

 Existing Arrangements

40

HistoricalRealGDPVa

lues

Real Historical GDP

and Growth Rates of

GDP for Baseline

Countries/Regions

18

December

2014

Excel

Spreadsheet giving real GDP and annual growth

rates for the world. Separated by regions and level

of development.

N/A – this is not a specific evidence

point for the development of this

project.

41

LeighFisher -

Bermuda - 31 July

2013 v3 3

Financial Model

July 2013

Excel

Multiple spreadsheets produced by Leigh Fisher

showing the CapEx affordability and CAPEX and

OPEX under different scenarios.

Economic Case

 Economic Appraisals of Costs and

Benefits

 Sensitivity Analysis

Financial Case

 Public Capital and Revenue

Requirements

 Net Effect on Prices

#

File Name

Title

Date

Where

Provided

Data

Type

Content Description

Five Case Model Mapping

 Impact on Balance Sheet

 Impact on Income and Expenditure

Account

 Overall Funding and Affordability

42

LF Wade

International

AirportKPMG DRAFT

PPP Opportunity

Scan

N/A

PDF

PPP Opportunity scan produced by KPMG outlining

business strategy and key objectives.

Strategic Case

 Spending Objectives

 Existing Arrangements

 Business Needs (current and future)

 Potential Scope

 Benefits and Risks

 Constraints and Dependencies

Economic Case

 Sensitivity Analysis

Commercial Case

 Procurement Strategy

 Service Requirements

 Risk Transfer

 Financial Case

 Impact on Balance Sheet

 Impact on Income and Expenditure

Account

 Overall Funding and Affordability

43

LOA - Executed Copy

Letter of Agreement

June 2014

PDF

Letter of agreement between CCC and Bermuda

Government in June 2014. Signed by both parties.

Commercial Case

 Procurement Strategy

 Service Requirements

 Charging Mechanism

 Risk Transfer

 Key Contractual Arrangements

 Personnel Implications

Management Case

 Project Management Methodology

 Project Management Plans

 Use of Specialist Advisers

#

File Name

Title

Date

Where

Provided

Data

Type

Content Description

Five Case Model Mapping

 Change and Contract Management

Arrangements

 Monitoring During Implementation

44

May8_final-_

Terminal Feasibility

Study - Progress

Review

8 May 2008

PPT

Feasibility study progress review by HNTB including

short listed options. Outlines the three major

concepts and business strategy. Duplication with

#22.

Strategic Case

 Spending Objectives

 Potential Scope

Economic Case

 Long Listed Options

 Economic Appraisals of Costs and

Benefits

Financial Case

 Public Capital and Revenue

Requirements

45

May2013 Airfield

N/A

PDF

Sketches of the existing airport layout produced in

2013.

Strategic Case

 Potential Scope

46

Ministerial

Statement_Airport

Redevelopment 2014

Ministerial

Statement

21

November

2014

Word

Statement by Bob Richards (Minister of Finance) in

regards to the Memorandum of Understanding

between the Government and CCC.

Strategic Case

 Organisational Overview

 Current Business Strategies

 Spending Objectives

 Business Needs (current and future)

 Potential Scope

 Benefits and Risks

 Constraints and Dependencies

Commercial Case

 Procurement Strategy

 Service Requirements

Memorandum of Understanding

 Risk Transfer

 Key Contractual Arrangements

 Personnel Implications

Financial Case

 Public Capital and Revenue

Requirements

#

File Name

Title

Date

Where

Provided

Data

Type

Content Description

Five Case Model Mapping

 Impact on Income and Expenditure

Account

 Overall Funding and Affordability

Management Case

 Project Management Methodology

 Project Management Plans

47

MOU Executed Copy

Memorandum of

Understanding

10

November

2014

PDF

Signed Memorandum of Understanding between the

Ministry of Finance and CCC from November 2014.

Strategic Case

 Business Needs (current and future)

 Benefits and Risks

Commercial Case

 Procurement Strategy

 Service Requirements

 Key Contractual Arrangements

 Personnel Implications

Management Case

 Project Management Methodology

48

Privatisation Review

by Roddy Bogus

Public/Private

Partnerships

N/A

PDF

Presentation by Parsons and Brinckerhoff on airport

PPPs. An informative summary not specific to

Bermuda.

N/A – this is not a specific evidence

point for the development of this

project.

49

Statement of

Operations YE March

31 2014 LM

Statement of

Operation Results

N/A

PDF

Five year trend of revenue and cost streams from

2009-2014 for the Bermuda Airport.

Strategic Case

 Business Needs (current and future)

50

Summary of

DECEMBER 2014

DUE DILLIGENCE

VISITS

Summary of

December 2014 Due

Diligence Visits

N/A

Word

Summary of December 2014 visits and meetings.

N/A – whilst evidence of this activity, it

does not provide specific evidence of

the considerations in the project

development for this analysis.

51

CCC Approach

N/A

Word

Context behind the LF Wade redevelopment by

MoF. Identifies their key motives behind the project

and discusses why CCC is the best procurement

option.

Strategic Case

 Current Business Strategies

 Spending Objectives

 Business Needs (current and future)

 Benefits and Risks

 Constraints and Dependencies

Commercial Case

#

File Name

Title

Date

Where

Provided

Data

Type

Content Description

Five Case Model Mapping

 Procurement Strategy

 Service Requirements

 Accountancy Treatment

Financial Case

 Impact on Balance Sheet

 Overall Funding and Affordability

Management Case

 Project Management Plans

 Change and Contract Management

Arrangements

52

140501 DELOITTE

Bermuda Airport G2G

structure-3

N/A

PPT

Slide deck describing the vision of the project, how

CCC is the best procurement method, and the UK’s

involvement in the decision to contract.

Strategic Case

 Current Business Strategies

 Spending Objectives

 Business Needs (current and future)

 Benefits and Risks

 Constraints and Dependencies

Commercial Case

 Procurement Strategy

 Service Requirements

 Charging Mechanism

 Risk Transfer

 Accountancy Treatment

Financial Case

 Impact on Balance Sheet

 Overall Funding and Affordability

Management Case

 Project Management Methodology

 Monitoring During Implementation

Appendix 4 – Five Case Model Mapping Summary

Serial Number

File Type

Title

Author

Date

File Name

Organizational

Overview

Current Business

Strategies

Spending Objectives

Existing Arrangements

Business Needs

(current and future)

Potential Scope

Benefits and Risks

Constraints and

Dependencies

Critical Success

Factors

Long Listed Options

Short Listed Options*

Do Nothing Option

Economic Appraisals

of Costs and Benefits

Distributional Analysis

Optimism Bias

Adjustment

Risk Assessment

Sensitivity Analysis

Procurement Strategy

Service Requirements

Charging Mechanism

Risk Transfer

Key Contractual

Arrangements

Personnel Implications

Accountancy

Public Capital and

Revenue

Requirements

Impact on Balance

Sheet

Impact on Income and

Expenditure Account

Overall Funding and

Affordability

Commissioner

Support

Project Management

Methodology

Project Management

Plans

Use of Specialist

Advisers

Change and Contract

Management

Arrangements

Benefits Realisation

Risk Management

Monitoring During

Implementation

Post Implementation

Evaluation

Arrangements

Contingency

Arrangements

1 Word 3 Year Strategic Planning 2012/13 - 2014/15 Department of Airport Operations N/A 3YEAR STRATEGIC PLAN -with UPDATES MARCH 2013     

2 PDF Aerodrome Inspection Report Department of Civil Aviation 12-Apr-13 2013 Audit 

3 Word Topic List for Interviews Mott MacDonald N/A 141202 Topic Guide    

4 PDF Government of Bermuda organizational Chart - January 2015 N/A 1-Jan-15 150121_GOVT ORG_CHART 

5 Excel Traffic Forecast - Additional data - Issue 2 Mott MacDonald 20-Mar-15 343039 - Bermuda - Additional data - Issue 2  

6 Excel Traffic Forecast - Additional data Mott MacDonald 5-Mar-15 343039 - Bermuda - Additional data  

7 PDF Air Traffic Forecast Mott MacDonald 1-Feb-15 343039 - Bermuda - Air Traffic Forecast - v2.0     

8 Excel Peak and Stand - Traffic Forecast Model Results Mott MacDonald 18-Dec-14 343039 - Bermuda Peak and stand forecast - Issue 2 - 20131218    

9 PDF Traffic Forecasting Assumptions Book - Working Copy Mott MacDonald 16-Feb-15 343039 - Bermuda - Traffic Forecasting Assumptions Book v3 1     

10 PDF Draft - Traffic review and forecast Mott MacDonald 18-Dec-14 343039 - Bermuda - Draft Forecast Report - v1.1 - 20141218              

11 PDF Guidebook for Evaluating Terminal Renewal Versus Replacement Options ACRP N/A acrp evaluating terminal renewal v replacement

12 PDF Considering and Evaluating Airport Privatization ACRP N/A ACRP Privatisation Report

13 Word Airport Development & Business Model Workshop Attendee List N/A 21-Apr-14 Airport Development and Business Model Workshop attendee list 042114

14 PDF Airport Development P3 models Report Aaron Adderley 1-Feb-14 Airport Development Models Report 012714 no TOC                         

15 PDF

Project Concept for the Redevelopment of L.F. Wade International Airport Bermuda

CCC 25-Mar-15 Airport Development Project Concept - Interim Draft - March 25 2015                                  

16 PDF

Project Concept for the Redevelopment of L.F. Wade International Airport Bermuda

CCC 25-Mar-15 Airport Development Project Concept Annexes                                  

17 PDF

The economic impact of constructing a new Terminal Complex at L F Wade International Airport

Bermuda College 1-Jun-14 Airport Terminal Development EIA Oct2014       

18 PDF

Addendum: Economic Impact of constructing a new Terminal Complex at L F Wade International Airport

Bermuda College 1-Jul-14 Airport Terminal Development Only EIA Oct 2014     

19 PDF Room in the Boom Ross Templeton 1-Jun-10 article on privatisation

20 PDF 2015 BDA Airport Fees and Charges Benchmarking N/A N/A BDA Airport Fees and Charges benchmarking 2015    

21 PDF Capex Affordability Analysis Leigh Fisher 7-Aug-13 BDA Capex Affordability Analysis FINAL 8-8-13           

22 PPT Terminal Feasibility Study HNTB 8-May-08 BDA May8_final_edit      

23 PDF Initial Land Use Assessment Report Bermuda Realty company Limited N/A Bda Realty Marketing Report 11july08      

24 PPT Project Structure N/A N/A Bermuda Airport - Project Structure1    

25 PDF Independent Peer Review of Aviation Activity Forecasts Leigh Fisher 1-Mar-15 Bermuda LeighFisher Phase 1 Review 03 05 2015       

26 PDF Bermuda International Airport Master Plan HNTB 1-Dec-06 Bermuda Master Plan December 2006                                   

27 PDF Privatization Models White Paper Jacobs Consultancy Canada 1-Dec-08 Bermuda Privatization Models        

28 PDF Bermuda National Tourism Master Plan Department of Tourism 11-Jun-12 bermuda_master_plan_townhall_061112_v3 

29 PDF Bill Of Approximate Quantities HNTB N/A Bill of Quantities     

30 PDF New Airport Terminal N/A N/A Budget Statement Airport     



        

31 PDF DAO Capital Expenditure Report DAO 6-Mar-13 CapEX FY2013 

32 Word Copy of Email (19/3/15) From Mott MacDonald N/A 19-Mar-15 Copy of E MAIL RE PHASE 1 REPORT MM TO BDA 19 3 15

33 PDF Alternate Energy Evaluation with Recommendations Onsite Engineering Services 8-Dec-14 DAO Energy Survey Quote 8 Dec 14 

34 Word Discussion with Price Waterhouse re Airport Investment by telephone N/A 16-Nov-10 Discussion with Price Waterhouse re Airport Investment by telephone       

35 PDF 2003 Economic Impact Report TMC 1-Sep-04 Econ Impact Full report 2003  

36 Word Economic Indicators N/A N/A ECONOMIC INDICATORS

37 Excel N/A N/A N/A electricity consumption 2  

38 PDF Terminal Complex Feasibility Study HNTB 9-Sep-08 Feasibility Study - HNTB 2008            

39 Word DAO Fees and Charges N/A 1-Jan-13 Fees and Charges January 2013 

40 Excel Real Historical GDP and Growth Rates of GDP for Baseline Countries/Regions N/A 18-Dec-14 HistoricalRealGDPValues

41 Excel Financial Model Leigh Fisher 1-Jul-13 LeighFisher - Bermuda - 31 July 2013 v3 3      

42 PDF PPP Opportunity Scan N/A N/A LF Wade International AirportKPMG DRAFT             

43 PDF Letter of Agreement CCC 1-Jun-14 LOA - Executed Copy           

44 PPT Terminal Feasibility Study - Progress Review HNTB 8-May-08 May8_final-_     

45 PDF N/A N/A N/A May2013 Airfield 

46 Word Ministerial Statement Ministry of Finance 21-Nov-14 Ministerial Statement_Airport Redevelopment 2014                 

47 PDF Memorandum of Understanding N/A 10-Nov-14 MOU Executed Copy       

48 PDF Public/Private Partnerships Parsons Brinckerhoff N/A Privatisation Review by Roddy Bogus

49 PDF Statement of Operation Results N/A N/A Statement of Operations YE March 31 2014 LM 

50 Word Summary of December 2014 Due Dilligence Visits N/A N/A Summary of DECEMBER 2014 DUE DILLIGENCE VISITS

51 Word N/A Ministry of Finance N/A CCC Approach            

52 PPT N/A N/A N/A 140501 DELOITTE Bermuda Airport G2G structure-3              

Economic Case

Management Case

Commercial Case

Financial Case

Strategic Case

Appendix 5 – Assumptions

The following high-level assumptions framed the completion of this report:

1. We have only been able to review documentation that has been provided to us. We are aware that there

is ongoing project activity that we have not assessed but anticipate this may address some identified

gaps.

2. The Green Book has been used as a source of best practice only, although it is recognised that it is not

a required standard or guidance in Bermuda.

3. It is recognised that the Government of Bermuda are looking to proceed to signing a Development

Agreement with CCC by the end of June 2015, which will include commercial terms (including exit

provisions) for the period of further project development and negotiation with CCC prior to prospective

Financial Close. There are therefore elements of the stage of the project that are comparable to the OBC

stage, which seeks to establish the preferred option and put in place arrangements for procurement.

However, it should be recognised that our assessment and scope of work is focused on looking forward

to the outstanding areas and most important gaps to support overall progress towards a FBC-equivalent

body of analysis and evidence, rather than assessing ‘OBC-readiness’.

4. As identified in Appendix 2, the following activities are out of scope:

 Legal advice on Commercial Case

 Validating assumptions

 Comments on cost data

 Technical advice

 Validating data provided to us

 Tax advice

 Accounting advice

Appendix 6 – FBC Assessment

Criteria

The following section provides a summary of the review criteria proposed by HM Treasury guidance for

each Case of the “Five Case” model (Strategic, Economic, Commercial, Financial and Management),

and at each business case stage (SOC, OBC and FBC)

7

.

Recognising that the business case for Bermuda airport’s development has not followed this staged

process strictly, each of these review criteria are consolidated to provide an “FBC-equivalent” set of

assessment criteria for use in the analysis in this report. The assessment criteria therefore allow the

assessment of an iterative process to a point in time snapshot.

The tables below outline the ‘mapping’ between the HM Treasury guidance and the consolidated review

criteria used. This ‘mapping’ includes a code to indicate the consolidated criteria each element of the

HM Treasury guidance is used in. The letter indicates the relevant case, and the number indicates the

consolidated review criteria (for example, “E3” refers to the third consolidated review criteria in the

Economic Case). It should be noted that the HM Treasury guidance has been incorporated directly

below, and as such will refer to some procedures and standards of practice specific to the UK. Any and

all of these evidence points that do not translate to Bermuda’s practice have been removed or amended

as appropriate in the consolidated review criteria produced.

Strategic Case

Analysis of Green Book Review Criteria

Green Book Review Criteria

Consolidated Review

Criteria

Key Review Criteria

Main Evidence Required

Mapping

Strategic Outline Case

Is the proposed scheme an

integral part of the organisation’s

business strategy?

 Extracts from business and

other relevant strategies

 Reference to relevant

Government and

organisational policies

S1

Is the proposed scheme

sufficiently large and stand alone

to form a project or could it be

more sensibly be undertaken as

part of another programme or

project?

 Relevant extracts from

business and other strategies

 Reference to scoping

documentation

 Relevant extracts from

strategy board minutes

N/A

Are the spending objectives and

underpinning business needs

defined clearly and supported by

the key stakeholders and

customers?

 SMART spending objectives

 Evidence of stakeholder and

customer involvement and

support

S2

 Clear statement of business

outcomes and service outputs

S2

7

“Green Book Supplementary Guidance on Delivering Public Value from Spending Proposals”, 2013 (Chapter 8: “Reviewing

the Business Case: SOC, OBC and FBC”)

Green Book Review Criteria

Consolidated Review

Criteria

Key Review Criteria

Main Evidence Required

Mapping

Is the scope for potential change

to current services and business

processes clearly defined?

 Statement of any security and

confidentiality issues

Have the main benefits been

clearly defined by key

stakeholders and customers,

alongside arrangements for their

realisation?

 Outline of benefits realisation

plan

 Direct and indirect to the

organisation and wider public

sector

 Cash (£) and non-cash-

releasing

 Ranking of benefits by key

stakeholder

S5

Have the main risks been

identified, alongside

arrangements for their

management and control?

 Outline of risk management

strategy

 Business risks

 Service risks

 Likely probabilities and impact

(high, medium or low)

S5

Have the key organisational

constraints and business

dependencies been identified?

 Evidence of critical path

 Related programmes and

projects

 Assessment of internal and

external constraints

S5

Outline Business Case

Are the SOC spending objectives

and planning assumptions still

valid?

 Are they set at an appropriate

level and SMART:

- specific

- measurable

- achievable

- relevant

- timely

 Still supported by stakeholders

and customers?

S2

Do the services to be procured in

the SOC still provide best fit in

relation to organisational needs?

 Organisational context

 Existing and future changes in

needs

 Expected changes in volumes

and mix of services

 Other existing, planned or

possible services

 Security and confidentiality

issues

S1

Have any outstanding

differences at SOC stage

between stakeholders and

customers been satisfactorily

resolved?

 Continued stakeholder

commitment and involvement

 Communication strategy

S4

Has the assessment of likely

benefits, risks, constraints and

dependencies in the SOC been

 Updated benefits criteria –

benefits study

 Updated risk assessment –

risk study

S5

Green Book Review Criteria

Consolidated Review

Criteria

Key Review Criteria

Main Evidence Required

Mapping

revisited and examined in further

detail?

 Ongoing assessment –

business strategies and plans

Full Business Case

Does the recommended deal still

provide synergy and best fit with

other parts of the organisation’s

business strategy?

 Notification of any changes

during negotiations

 Ongoing evaluation of

business strategies and plans

S1

Strategic fit

Does the recommended deal still

satisfy OBC spending objectives

and business needs?

 Notification of any changes

during negotiations

 Written confirmation of

agreement on part of

stakeholders and customers

S2

Spending objectives and

business outcomes

Does the recommended deal still

provide all of the required

services – both current and

future?

Related service requirements

and outputs

 Change control arrangements

 Notification of any changes

during negotiations:

- additional services

- agreement of stakeholders

and users

- business justification and

CBA

S3

Consolidated Assessment Criteria Used

#

Key Review Criteria

Main Evidence Required

S1

Does the recommended deal provide synergy

and best fit with the organisation’s business

strategy?

 Extracts from business and other

relevant strategies

 Reference to relevant Government

and organisational policies

 Organisational context

 Existing and future changes in needs

 Expected changes in volumes and

mix of services

 Security and confidentiality issues

 Understanding any changes in

alignment to strategy during

negotiations

 Ongoing evaluation of business

strategies and plans

S2

Does the recommended deal still satisfy the

original spending objectives and business

needs?

 Written confirmation of agreement on

part of stakeholders and customers

 Clear statement of business

outcomes and service outputs

 Are the spending objectives set at an

appropriate level and SMART:

- specific

- measurable

- achievable

- relevant

- timely

#

Key Review Criteria

Main Evidence Required

 Statement of any security and

confidentiality issues

S3

Does the recommended deal still provide all of

the required services – both current and

future?

 Change control arrangements

 Notification of any changes during

negotiations:

- additional services

- agreement of stakeholders and

users

- business justification and CBA

S4

Have any outstanding differences between

stakeholders and customers been

satisfactorily resolved?

 Continued stakeholder commitment

and involvement

 Communication strategy

S5

Has the assessment of likely benefits, risks,

constraints and dependencies been examined

in detail?

 Outline of benefits realisation plan:

- Direct and indirect to the

organisation and wider public sector

- Cash (£) and non-cash-releasing

- Ranking of benefits by key

stakeholder

 Outline of risk management strategy:

- Business risks

- Service risks

- Likely probabilities and impact (high,

medium or low)

 Assessment of internal and external

constraints

- Evidence of critical path

- Related programmes and projects

Economic Case

Analysis of Green Book Review Criteria

Green Book Review Criteria

Consolidated Review

Criteria

Key Review Criteria

Main Evidence Required

Mapping

Strategic Outline Case

Have the Critical Success

Factors (“CSFs”) for options

appraisal been identified?

 Prioritised CSFs (high,

medium or low)

 Relevant performance

measures

E1

Has a sufficiently wide range of

options been identified and

assessed within the long list?

 Use of any feasibility study

 10 to 12 main options – full

description

 Use of the options framework

- for business scope

- for potential solutions

- for service delivery

- for implementation

- for funding

E2

Has a preferred way forward

been identified following robust

analysis of the available options?

 SWOT analysis of options

against:

- spending objectives

- critical success factors

- benefits criteria

- evidence of likely support

from key stakeholders

E2

Has the preferred way forward

been unpacked within a short list

for further examination and

appraisal?

 Minimum of four options,

including:

- do nothing or do minimum

- Public Sector Comparator

(PSC)

8

N/A – covered under other

evidence points under E2.

Outline Business Case

Were the long-listed options in

the SOC revisited and subjected

to further scrutiny?

 New options

 CSFs revisited

 Options ranked, weighted and

scored

N/A – covered under other

evidence points under E2.

Were the short-listed options in

the SOC revisited and subjected

to robust analysis?

 Economic appraisals for

shortlisted options, including:

- do nothing or do minimum

- PSC

- PFI (PPP) solution(s)

 Use of appropriate tools:

- sensitivity analysis

- risk (£) quantification

- evaluation of qualitative

benefits (rank, weight and

scoring)

 Treatment of costs and

benefits in accordance with

Treasury ‘Green Book’ rules.

N/A – covered under other

evidence points under E2.

8

The PSC provides an estimate of how much it will cost the public sector, as a traditional supplier, to deliver the project. This is

distinct from the ‘do nothing’ option.

Green Book Review Criteria

Consolidated Review

Criteria

Key Review Criteria

Main Evidence Required

Mapping

Has the PSC been constructed

and assessed in accordance with

HM Treasury guidance?

 Realistic solution capable of

implementation

 Risks identified, apportioned

and measured for all project

stages:

- design

- build

- finance

- operate

 PFI (PPP) costs, where

available

E3

Does the preferred option

represent best VFM or the most

economically advantageous

offer?

 Rigorous use of spending

appraisal tools and techniques

 All assumptions recorded

 Achievable benefits streams

 Stakeholders and customers

support

E2

Full Business Case

Was a wide range of bids

received from service providers

in response to OJEC [the RFP]?

 Assessment of earlier

assumptions

 Use of evaluation criteria:

- long list of suppliers

- short list of suppliers

 Description of each bid

received at Best and Final

Offer (“BAFO”)

 Method of treatment for

varying bids

 Basis for selection of preferred

bidder (if applicable)

E4

Was the most economically

advantageous offer selected?

 Preparation and assessment

of economic appraisals for:

- do nothing/do minimum

- revised PSC

- best and final offers and/or

- preferred bidder (if selected)

 Use of appropriate tools:

- sensitivity analysis

- risk (£) quantification

- evaluation of qualitative

benefits (rank, weight and

scoring)

- Treatment of costs and

benefits in accordance with

Treasury ‘Green Book’ rules.

E2

Consolidated Assessment Criteria Used

#

Key Review Criteria

Main Evidence Required

E1

Have the Critical Success Factors (“CSFs”) for

options appraisal been identified?

 Prioritised CSFs (high, medium or low)

 Relevant performance measures

E2

Has a sufficiently wide range of long-list options

been identified and assessed, and the short-

listed options subjected to robust analysis?

Was the most economically advantageous offer

selected?

 10 to 12 main options – full description

 Use of the options framework

- for business scope

- for potential solutions

- for service delivery

- for implementation

- for funding

 SWOT analysis of options against:

- spending objectives

- critical success factors

- benefits criteria

- evidence of likely support from key

stakeholders

 Preparation and assessment of

economic appraisals for:

- do nothing/do minimum

- revised PSC

- best and final offers and/or

- preferred bidder (if selected)

 Use of appropriate tools:

- sensitivity analysis

- risk (£) quantification

- evaluation of qualitative benefits

(rank, weight and scoring)

 Treatment of costs and benefits in

accordance with Treasury ‘Green

Book’ rules

 All assumptions recorded

 Achievable benefits streams

 Stakeholders and customers support

E3

Has the PSC been constructed and assessed

in accordance with HM Treasury guidance?

 Realistic solution capable of

implementation

 Risks identified, apportioned and

measured for all project stages:

- design

- build

- finance

- operate

 PFI (PPP) costs, where available

E4

Was a wide range of bids received from service

providers in response to the procurement

notice?

 Assessment of earlier assumptions

 Use of evaluation criteria:

- long list of suppliers

- short list of suppliers

 Description of each bid received at

BAFO

 Method of treatment for varying bids

 Basis for selection of preferred bidder

(if applicable)

Commercial Case

Analysis of Green Book Review Criteria

Green Book Review Criteria

Consolidated Review

Criteria

Key Review Criteria

Main Evidence Required

Mapping

Strategic Outline Case

Has a high-level assessment of

the potential deal and its likely

acceptability to the supply side

been undertaken?

 Description of potential deal

 Market soundings

 Existing service providers

C1

Outline Business Case

Has the procurement strategy for

the successful delivery of the

required services been

considered and prepared in

sufficient detail?

 Consideration of procurement

options including:

- use of EC directives

- use of preferred bidder

- OJEC notice

- evaluation criteria and

strategy

- negotiations strategy

- ITT

- procurement plan and

timetable

- draft OJEC

C1

Is there sufficient scope for a

potential deal, which will meet

organisational needs whilst

offering best VFM?

 Potential for innovation within

the provision of services and

solutions

 Potential for risk transfer in

Design, Build, Finance,

Operate stages

 Potential for new business and

alternative revenue streams

 Likely contract length

C2

Has the potential deal been

considered in sufficient detail?

The how rather than what.

 Core, desirable and optional

services

 Delivery time-scales (phased

improvements etc.)

 Potential payment

mechanisms

 Ownership of residual assets

 Service levels and

performance measures

C3

Is there a clear understanding of

the business change agenda?

 Change management plans

 Proposed mechanisms and

milestones

 Assessment of personnel

implications

C4

Is the potential deal still likely to

be acceptable and bankable

within the private sector?

 Market research and surveys

 Use of HM Treasury standard

contractual terms and

conditions

 Benchmarks – similar projects

C5

Full Business Case

 Overview of procurement

process

C6

Green Book Review Criteria

Consolidated Review

Criteria

Key Review Criteria

Main Evidence Required

Mapping

Was the procurement

undertaken in accordance with

EC/GATT regulations and

accepted best?

- Deviations from procurement

strategy

 Use of legal and procurement

advice (internal and external

advisers)

Can the selected service

provider deliver the required

deliverables and services?

 Outline of the agreed deal:

- services – current and future

- delivery time-scales

- design

- build

- operate

- payment mechanisms

- performance and availability

- volume and usage

- incentives

- future change

- new business and alternative

revenue streams

- ownership of residual assets

- service levels and

performance measures

 Business, technical and

cultural fit – track record

C7

Have negotiations resulted in a

robust and legally enforceable

contract?

 Use of specialist adviser(s)

 Use of standard terms and

conditions

 Key contractual terms agreed

C8

How will business and service

change be delivered and

implemented successfully over

the lifespan of the contract

period?

 Assessment of known and

expected change

 Formula for handling

unexpected change:

- benchmarking

- market testing arrangements

C4

Consolidated Assessment Criteria Used

#

Key Review Criteria

Main Evidence Required

C1

Has the procurement strategy for the

successful delivery of the required services

been considered and prepared in sufficient

detail?

 Description of potential deal

 Market soundings

 Existing service providers

 Consideration of procurement options

including:

- use of preferred bidder

- public procurement notice

- evaluation criteria and strategy

- negotiations strategy

- Invitation to Tender (ITT)

- procurement plan and timetable

C2

Is there sufficient scope for a potential deal,

which will meet organisational needs whilst

offering best VFM?

 Potential for innovation within the

provision of services and solutions

 Potential for risk transfer in Design,

Build, Finance, Operate stages

 Potential for new business and

alternative revenue streams

 Likely contract length

C3

Has the potential deal been considered in

sufficient detail? The how rather than what.

 Core, desirable and optional services

 Delivery time-scales (phased

improvements etc.)

 Potential payment mechanisms

 Ownership of residual assets

 Service levels and performance

measures

C4

How will business and service change be

delivered and implemented successfully over

the lifespan of the contract period?

 Change management plans

 Proposed mechanisms and

milestones

 Assessment of personnel implications

 Assessment of known and expected

change

 Formula for handling unexpected

change:

- benchmarking

- market testing arrangements

C5

Is the potential deal likely to be acceptable and

bankable within the private sector?

 Market research and surveys

 Use of standard contractual terms and

conditions

 Benchmarks – similar projects

C6

Was the procurement undertaken in

accordance with best practice?

 Overview of procurement process

- Deviations from procurement

strategy

 Use of legal and procurement advice

(internal and external advisers)

C7

Can the selected service provider deliver the

required deliverables and services?

 Outline of the agreed deal:

- services – current and future

- delivery time-scales

- design

- build

- operate

- payment mechanisms

- performance and availability

- volume and usage

- incentives

- future change

#

Key Review Criteria

Main Evidence Required

- new business and alternative

revenue streams

- ownership of residual assets

- service levels and performance

measures

 Business, technical and cultural fit –

track record

C8

Have negotiations resulted in a robust and

legally enforceable contract?

 Use of specialist adviser(s)

 Use of standard terms and conditions

 Key contractual terms agreed

Financial Case

Analysis of Green Book Review Criteria

Green Book Review Criteria

Consolidated Review

Criteria

Key Review Criteria

Main Evidence Required

Mapping

Strategic Outline Case

Has a high-level assessment of

affordability and source(s) of

required funding been

undertaken?

 Indicative costs (£)

 Likely sources or

organisational funding

F1

Outline Business Case

Is the solution still likely to be

affordable?

 Financial appraisals for

preferred option, including full

assessment of:

- capital and current

requirements

- net effective on prices

- balance sheet impact

- income and expenditure

account

- stakeholder and customers

agreement

F1

Full Business Case

Is the proposed spending still

affordable?

 Financial appraisals for

recommended deal, including

full assessment of:

- capital and current

requirements

- net effect on prices

- impact on balance sheet

(FRS5 etc.)

- income and expenditure

account

 Stakeholder and customers

agreement;

 Confirmation of finance

directorate.

F1

Consolidated Assessment Criteria Used

#

Key Review Criteria

Main Evidence Required

F1

Is the proposed spending affordable?

 Indicative costs

 Likely sources or organisational

funding

 Financial appraisals for

recommended deal, including full

assessment of:

- capital and current requirements

- net effect on prices

- impact on balance sheet

- income and expenditure account

 Stakeholder and customers

agreement

Management Case

Analysis of Green Book Review Criteria

Green Book Review Criteria

Consolidated Review

Criteria

Key Review Criteria

Main Evidence Required

Mapping

Strategic Outline Case

Has a high-level assessment of

the achievability and

deliverability of the project been

undertaken?

 Indicative time-scales

 Use of special advisers

 Feasibility study

 Peer review

N/A – Items covered under

M2 below.

Outline Business Case

Are all the necessary

arrangements in place for the

successful completion of the next

phase?

 Programme Methodology

(MSP)

 Project methodology

(PRINCE2)

- project board and structure

- project manager and team

- project plan

- project resources and budget

 Reporting mechanisms

 Use of external advisers

- legal

- financial

- other

 Outline arrangements for:

- benefits study and realisation

plan

- risk management strategy

and plan

- change management

strategy and plan

- contract management

 Arrangements for evaluation:

- peer reviews

- OGC gateway reviews (if

required)

- project implementation

reviews

- post-evaluation reviews

 Contingency plans

M2

Full Business Case

Have the business and cultural

implications of the intended

service been fully understood

and taken into account?

 Agreed programmes for:

- change management

- business process re-

engineering

 Staff-side representation

 Personnel implications

M1

Are all the arrangements in place

for the successful

implementation and delivery of

the required services?

 Contract management

strategy, including disputes

resolution procedures

 Skilled contract management

team

M2

Green Book Review Criteria

Consolidated Review

Criteria

Key Review Criteria

Main Evidence Required

Mapping

 Agreed schedules for service

streams and outputs

How will the benefits be

delivered and associated

business and service risks

managed throughout the lifespan

of the service?

 Detailed benefits realisation

plan

 Robust risk management

strategy

 Monitoring and reporting

arrangements- registers and

regular audits

M3

Are all the necessary

arrangements in place for post-

project evaluation?

 Agreed arrangements for

evaluation:

- peer reviews

- Office of Government

Commerce (OGC) gateway

reviews (if required)

- project implementation

reviews

 Post-evaluation reviews

M2

Are contingency plans in place

should the recommended deal

fail at any stage?

 Contingency plans

 Arrangements for regular

review

M4

Consolidated Assessment Criteria Used

#

Key Review Criteria

Main Evidence Required

M1

Have the business and cultural implications of

the intended service been fully understood and

taken into account?

 Agreed programmes for:

- change management

- business process re-engineering

 Staff-side representation

 Personnel implications

M2

Are all the arrangements in place for the

successful implementation and delivery of the

required services?

 Programme Methodology (MSP)

 Project methodology (PRINCE2)

- project board and structure

- project manager and team

- project plan

- project resources and budget

 Reporting mechanisms

 Use of external advisers

- legal

- financial

- other

 Outline arrangements for:

- benefits study and realisation plan

- risk management strategy and plan

- change management strategy and

plan

- contract management

 Arrangements for evaluation:

- peer reviews

- OGC gateway reviews (if required)

- project implementation reviews

- post-evaluation reviews

 Contingency plans

 Contract management strategy,

including disputes resolution

procedures

 Skilled contract management team

 Agreed schedules for service streams

and outputs

M3

How will the benefits be delivered and

associated business and service risks

managed throughout the lifespan of the

service?

 Detailed benefits realisation plan

 Robust risk management strategy

 Monitoring and reporting

arrangements- registers and regular

audits

M4

Are contingency plans in place should the

recommended deal fail at any stage?

 Contingency plans

 Arrangements for regular review

Appendix 7 – Methodology Review Supporting Evidence

This appendix summarises the assessment of the reports and documentation against the consolidated FBC requirements outlined in Appendix 6. This

assessment is summarised in the main body of the report within Section 4 (“Methodology Review”).

Each of the Strategic, Economic, Commercial, Financial and Management Cases are assessed here individually, with the following analysis for each case:

 Introduction: For clarity, this section restates the purpose of the case, and the documents identified through our first phase activity as mapping to that case

9

.

 Detailed Data Assessment: This section analyses each relevant report or document against the consolidated review criteria for the Full Business Case, as

outlined in Appendix 6 (“FBC Assessment Criteria”). This recognises the need to perform this analysis on both a case-by-case basis (Strategic, Economic

etc.), as well as at the level of each individual document, given the number of evidence points in each document that provide insight for each case.

 Case Summary: In order to produce a full view of how the body of reports, documents and evidence points align to the requirements of the case, a summary

is produced from the analysis of each individual document to demonstrate how these documents, taken as a whole, align to the FBC assessment criteria for

each of the Strategic, Economic, Commercial, Financial and Management Cases. This summary is the key output of the analysis in this appendix, and is

pulled forward to the main body of the report in Section 4 (“Methodology Review”).

9

“Green Book Supplementary Guidance on Delivering Public Value from Spending Proposals”, 2013, p.8

Strategic Case

Introduction

The Strategic Case is designed to evidence that the project is supported by “a compelling case for change that provides holistic fit with other parts of the

organisation and public sector”.

Through our mapping activity we identified 39 reports and documentation as containing information relevant to the Strategic Case, which will be assessed in

this analysis.

Detailed Data Assessment

#

Key Review Criteria

Evidence Covered

Gaps Identified

1 – 3 year Strategic Planning 2012/13 – 2014/15

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 Provides general context of the DAO and LF

Wade airport operations.

 Details the business needs for the future, more

specifically pertaining to the ICAO airport

standards.

 Outlines business and operational strategies for

the current operation’s next three years.

 The document appears to be a useful input to

plans for the airport redevelopment.

 Focuses on the current airport operation rather than the

recommended deal to redevelop the airport.

 Does not provide support specific to the recommended

airport redevelopment deal, such as business strategy,

changes in volumes, security and confidentiality issues,

changes in alignment to strategy, nor evaluation of

business strategies and plans.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required

services – both current and

future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S5

Has the assessment of likely

benefits, risks, constraints and

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

dependencies been examined in

detail?

2 – Aerodrome Inspection Report (12 April 2013)

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 Audit developed by ICAO highlighting the areas

of the Airport’s infrastructure that require

improvement.

 Helps to evidence the need for change- the

current facilities are not meeting expected

standards.

 Provides some detail in regards to the security

of the existing infrastructure.

 There is no evidence for business strategy,

organisational context, changes in volumes, changes in

alignment, nor evaluations of business strategies and

plans.

 Appears to be a useful input in developing the case for

change.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required

services – both current and

future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

3 – Topic List for Interviews

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required

services – both current and

future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

4 – Government of Bermuda Organizational Chart – January 2015

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 While non-specific to the Airport

Redevelopment, this chart provides a diagram

of how the Bermuda Government operates and

is structured.

 The document provides context but does not support

business strategies, changes in need, changes in

volumes, security, changes in alignment, nor evaluation

of business strategies.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required

services – both current and

future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

5 – Traffic Forecast – Additional data – Issue 2 (20 March 2015)

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 Details expected changes in volumes and mix of

services through the projected traffic forecast for

2015 and actuals for 2014.

 Addresses change in volume. Does not address other

components of this set of criteria.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required

services – both current and

future?

 Forecasted data pertaining to the change in

average ticket fare indexes partially justifies the

business action.

 Neither change control arrangements, nor notifications of

change negotiations are included in this data set.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

6 – Traffic Forecast Data – Additional data (5 March 2015)

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 Details expected changes in volumes and mix of

services through the projected traffic forecast for

2015 and actuals for 2014.

 Addresses expected changes in volume and mix of

services. Does not address other components of this set

of criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required

services – both current and

future?

 Forecasted data pertaining to the change in

average ticket fare indexes partially justifies the

business action.

 Neither change control arrangements, nor notifications of

change negotiations are included in this data set.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

7 – Air Traffic Forecast (February 2015)

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 While there are no details pertaining to the

proposed plan, there are several scenarios

outlining potential change in volumes.

 Addresses expected changes in volume. Does not

address other components of this set of criteria. It should

be noted that forecasts are produced by the prospective

supplier.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required

services – both current and

future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 Describes four scenarios of potential traffic

forecasts that are crucial to assessing internal

and external constraints.

 Data does not support benefit realisation plan, nor risk

management strategy.

 Shows limited specific evidence for internal constraints.

8 – Peak and Stand – Traffic Forecast Model Results (18 December 2014)

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 Breakdown of the expected changes in volumes

through passenger forecasts, separated by

origin.

 Addresses expected changes in volumes. Does not

address other components of this set of criteria.

 It should be noted that this provides supporting evidence

for other parts of the case, and is not contextualised to

the project.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required

services – both current and

future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 The data contents do not align with any of the

evidence requirements listed in this criteria

 The data contents do not align with any of the evidence

requirements listed in this criteria

9 – Traffic Forecasting Assumptions Book – Working Copy (16 February 2015)

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 While there are no details pertaining to the

proposed plan, there are supporting

assumptions for several scenarios outlining

potential change in volumes.

 Addresses change in volumes. Does not address other

components of this set of criteria.

 It should be noted that forecasts are produced by the

prospective supplier.

#

Key Review Criteria

Evidence Covered

Gaps Identified

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required

services – both current and

future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 The data contents do not align with any of the

evidence requirements listed in this criteria

 The data contents do not align with any of the evidence

requirements listed in this criteria

10 – Draft – Traffic review and forecast (18 December 2014)

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 The forecast and business strategy are in line

with the organisation’s strategy, but are not

specific to the recommended deal.

 Provides context for the change in volumes.

 Outlines several potential future changes by

highlighting opportunities in the aviation market

to improve the organisation’s position.

 No support of organisational context.

 Not specific to the recommended deal.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required

services – both current and

future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

customers been satisfactorily

resolved?

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 Provides substantial support assessing the

constraints of the project through analysis of the

aviation market, route development strategy,

and traffic forecasts.

 No support for realisation plan, nor risk management

strategy.

14 – Airport Development P3 Models Report (1 February 2014)

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 Outlines several types of PPP procurement

strategies, fulfilling the need to assess relevant

strategies and organisational policies.

 The report lacks support tying potential procurement

options to the specifics of the LF Wade Airport.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required

services – both current and

future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 PPP options set out by key DAO personnel.

 Other stakeholders’ views are not represented in this

document.

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

15 – Project Concept for the Redevelopment of L.F. Wade International Airport (25 March 2015)

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 There is sufficient supporting documentation to

satisfy this criteria.

 There are no gaps identified for this criteria.

 However, it should be noted that this report is produced

by the prospective supplier, rather than Government.

#

Key Review Criteria

Evidence Covered

Gaps Identified

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 Spending objectives appear SMART, and a

clear statement of business outcomes and

service outputs, although these are documented

by the prospective supplier.

 Letter of Agreement provides some support for

agreement between stakeholders and

concessionaire.

 Little evidence for security and confidentiality issues.

 Agreement between Government and concessionaire

does not provide evidence of an agreement between

stakeholders and customers.

S3

Does the recommended deal still

provide all of the required

services – both current and

future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 Supports a cohesive action plan from key

stakeholders.

 Ultimately, communication of the Strategic Case may

need to be owned by the Government rather than the

supplier.

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

16 – Project Concept for the Redevelopment of L.F. Wade International Airport - ANNEXES (25 March 2015)

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 Annexes support business strategies within both

MOU and LOA.

 Government and organisational policies are

explained.

 Detail of concept of the project is provided.

 The appendix section does not cover the evaluation of

business strategies and plans.

 It should also be noted that this report is produced by the

prospective supplier, rather than Government.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 Written confirmation is detailed in the LOA

between Government and the prospective

supplier.

 No details of business outcomes, nor are the spending

objectives outlined.

 Security and confidentiality issues are not addressed.

S3

Does the recommended deal still

provide all of the required

services – both current and

future?

 MOU provides a brief context of the change

control arrangements.

 This information relates to change control in the

negotiation process, rather than in respect of the airport

project itself.

#

Key Review Criteria

Evidence Covered

Gaps Identified

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

17 – The Economic Impact of Constructing a New Terminal Complex (June 2014)

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 Calculations of the economic impact support the

organisation’s business strategy.

 Evidence requirements outside business strategy are not

detailed in this document.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required

services – both current and

future?

 A portion of the Benefits analysis from the CBA

are assessed.

 Change control arrangements and changes during

negotiations are not supported.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

20 – BDA Airport Fees and Charges Benchmarking (2015)

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 Airport fees and charges provide background of

the existing organisational arrangements. Their

subsequent comparison benchmarks to similar

markets provide organisational context and an

understanding of the context of change.

 Limited evidence for security issues, changes in

alignment, and evaluation of business plans.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required

services – both current and

future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 Fees and Charges provide some context for

benefit realisation.

 Benefits are not ranked.

 No reference to risk management strategy, nor

constraints.

21 – Capex Affordability Analysis (7 August 2013)

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 SWOT analysis provides a foundation for the

organisational context, and demonstrates an

element of strategic planning and evaluation.

 Other areas of this set of criteria are not covered in this

document.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required

 Provides considerations on PPP options and

their implications / lessons learned.

 Limited detail on business justification and CBA.

#

Key Review Criteria

Evidence Covered

Gaps Identified

services – both current and

future?

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 High-level assessment of the impacts of the

proposed procurement strategies.

 Does not provide a detailed assessment of each of these

points.

22 – Terminal Feasibility Study (8 May 2008)

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 Provides general context for status of the

project, short-listed design options, and the

recommended concept, as at May 8, 2008.

 Design concepts do not appear to align with any

strategies or policies.

 The master plan concept covered in this document is no

longer the preferred option.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required

services – both current and

future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

23 – Initial Land Use Assessment Report

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required

services – both current and

future?

 Details the potential revenue streams from the

altered real estate offerings of the existing and

new complexes.

 No support for control arrangements or changes during

notifications.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 Considers potential co-development

opportunities, i.e. related programmes and

projects.

 Not clear how these opportunities and considerations are

incorporated into options scope within Economic Case.

24 – Project Structure

S1

Does the recommended deal

provide synergy and best fit with

 A chart outlining the structure of the

recommended deal partially satisfies the

organisational context.

 Addresses organisational context. Does not address

other parts of this set of criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

the organisation’s business

strategy?

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required

services – both current and

future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

25 – Independent Peer Review of Aviation Activity Forecasts (March 2015)

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 Peer review assessing the robustness and

accuracy of MM’s forecast data in relation to air

traffic arrivals in Bermuda. While this only

scrutinises existing data, it does align with future

changes and expected changes in volumes.

 Business strategies, organisational policies, security

issues, changes in alignment, nor evaluations are

represented in this data source.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required

services – both current and

future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

customers been satisfactorily

resolved?

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 As the original forecasted data does, the peer

review also assesses constraints in detail.

 The document does not assess benefits and risks of the

recommended deal.

26 – Bermuda International Airport Master Plan (December 2006)

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 Document provides in depth detail of the

context, and reason for change. This plan,

however, has been superseded given that the

scope of the work has been altered significantly.

The bulk of the work behind traffic forecasts,

existing structures, constraints, etc are all still

valid considerations and demonstrate initial

strategic thinking.

 This is a 2006 document and shows strategic thinking

earlier in the process. It does not cover strategic fit with

the current airport redevelopment plan.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The spending objectives of this proposal are not

aligned with those in the latest proposals.

 This is a 2006 document and the spending objectives

and business needs outlined here are no longer

applicable.

S3

Does the recommended deal still

provide all of the required

services – both current and

future?

 Provides a CBA based on the 2006 concept and

plan.

 In this 2006 document, the redevelopment is a

stand-alone operation without a proposed

concessionaire. The concept has changed

substantially between 2006 and 2015.

 Does not outline the change control arrangements, as

there is no reference to a PPP.

 A CBA is provided, but it is not relevant to the current

2015 proposed redevelopment plan.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S5

Has the assessment of likely

benefits, risks, constraints and

 Significant relevant evidence is provided,

although some of the numbers included in this

 Gaps include the assessment of benefits and constraints

/ dependencies of the new, proposed facility.

#

Key Review Criteria

Evidence Covered

Gaps Identified

dependencies been examined in

detail?

source are out of date. For example, the

physical plan, as well as the design of the facility

has changed since this source’s publication.

This affects the commercial space and other

proposed rental areas, which have since

changed.

27 – Privatization Models White Paper (December 2008)

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 Potential privatisation models are outlined,

which provide background information on the

procurement strategy.

 Does not include additional contextual evidence.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required

services – both current and

future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 Some assessment of constraints and

dependencies within the proposed privatisation

model.

 Limited assessment of benefits or risks.

28 – Bermuda National Tourism Master Plan (11 June 2012)

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 The 2012 Bermuda National Tourism Master

Plan provides sufficient support for business

strategies and the need for new infrastructure

solutions to address traveller volumes. Helps to

support the case for change.

 Supports the need for improved tourism infrastructure but

is does not address the airport in detail.

#

Key Review Criteria

Evidence Covered

Gaps Identified

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required services

– both current and future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The tourism industry is a key stakeholder to the

airport. The document shows support from the

tourism industry for a new airport.

 Shows that the tourism industry may support a new

airport, but is not detailed or specific to the current

proposed airport deal.

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

30 – New Airport Terminal

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 Provides detail on strategic rationale for airport

redevelopment – as part of a wider strategy to

“help reposition and re-brand Bermuda as a

visitor and business destination: First Tier, First

Class, First World”.

 As expected in a high-level summary of project, limited

additional detail provided.

 Additionally, statement was provided at the same time as

commercial rationale / procurement strategy.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required services

– both current and future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S5

Has the assessment of likely

benefits, risks, constraints and

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

dependencies been examined in

detail?

31 – DAO Capital Expenditure Report (6 March 2013)

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required services

– both current and future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 CapEx report for the year end March 2013

supports internal constraints.

 As expected for a document of this nature, no mention

made of benefits, risks, or dependencies.

33 – Alternate Energy Evaluation with Recommendations (8 December 2014)

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 Survey into the effects of implementing a more

efficient energy system for the existing airport.

Provides some reference to organisational

policies.

 As expected for a document of this nature, no detail of

strategies, context, changes, volume changes, security,

changes in alignment.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

S3

Does the recommended deal still

provide all of the required services

– both current and future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

34 - Discussion with Price Waterhouse re Airport Investment by telephone (16 November 2010)

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 Minutes from a call in 2010, which allude to the

initial suggestion of a PPP procurement strategy

for the project. ‘Roundtable’ discussion of

procurement strategies and redefining business

strategy.

 Covers procurement/PPP strategies.

 Does not address other areas of this set of criteria.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required services

– both current and future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

35 – Economic Impact Report (2003)

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 Addresses dependencies of tourism on the air

traffic arrivals and the air visitor expenditure.

 Assessment is dated 2003, so whilst provides a clear

strategic rationale, is not a project-specific assessment.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required services

– both current and future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 Assessment of dependencies of tourism on the

air traffic arrivals and the air visitor expenditure.

 No assessment of benefits, risks, nor constraints.

37 – DAO Electricity Consumption

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required services

– both current and future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 Historical monthly electricity bill for the existing

structure that lends some assessment to

internal constraints.

 No assessment of benefits, risks, or dependencies.

38 – Terminal Complex Feasibility Study (9 September 2008)

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 Provides background detail of strategic rationale

for change, including:

– Improving storm surge protection

– Meeting regulatory safety requirements

– Improving financial performance

– Increasing operational efficiency

– Provides facilities to meet demand

– Providing sustainability

– Enhancing customer convenience

 Does not provide details on volumes.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 Provides detail on anticipated improvements

which could be interpreted as spending

objectives.

 Detail is high level and is not SMART, or considering

multiple impacted stakeholders and their priorities.

S3

Does the recommended deal still

provide all of the required services

– both current and future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 Provides some consideration of risks of ‘do

nothing’ option, e.g. risks of storm surge and

associated damage.

 No detailed assessment of benefits, risks, nor

dependencies.

39 – DAO Fees and Charges (January 2013)

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required services

– both current and future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 All airport fees and charges for the existing

operation provide evidence for a benefit source.

 No full outline of benefit realisation plan.

 No assessment of risks, constraints, nor dependencies.

42 – PPP Opportunity Scan

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 Sets out the DAO’s strategies for the project.

 Surveys the scope of the work, the stage in the

process, and their relation to executing the

project through a PPP.

 Does not address security and confidentiality issues, nor

the expected changes in volumes.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

S3

Does the recommended deal still

provide all of the required services

– both current and future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 Addresses budgetary constraints.

 No benefit realisation plan, risk management strategy,

nor dependencies are analysed in any detail.

Terminal Feasibility Study – Progress Review

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required services

– both current and future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 Provides evidence for continued stakeholder

commitment, as it is a briefing to the

Government of Bermuda as to where they are in

their process.

 No evidenced communication strategy.

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

45 – Airfield Diagram

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required services

– both current and future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

46 – Ministerial Statement (21 November 2014)

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 Provides strategic rationale for change and

strong Government support for new terminal.

This includes that, “The new terminal will show

the arriving passenger that he/she has entered

a country that is indeed First Tier, First Class

and First World. The new terminal will create a

buzz in tourism circles and substantially

enhance the airport terminal experience for the

travelling public”.

 As expected for a statement of this nature, this does not

address detailed assessment of strategy.

#

Key Review Criteria

Evidence Covered

Gaps Identified

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required services

– both current and future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 Provides public with a clear narrative of what the

Government plans to do to the airport and who

the key stakeholders are. The formal

announcement of the MOU indicates

stakeholder commitment and involvement.

 Suggests some stakeholder management is taking place,

but is not evidence of a comprehensive stakeholder

management approach.

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

47 – Memorandum of Understanding (10 November 2014)

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 Demonstrates Government of Bermuda’s

commitment to the airport infrastructure as

“crucial conditions for the promotion of world

class airport services and overall domestic

economic development of Bermuda”.

 The data contents do not align with other points in this

criteria.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 Non-binding agreement between CCC and the

Government of Bermuda. It provides a short

excerpt on the two parties’ intent to align in the

future.

 Spending objectives and business needs are not

addressed, nor are any security or confidentiality issues.

S3

Does the recommended deal still

provide all of the required services

– both current and future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 Document assesses some “General Benefits” of

enacting the MOU.

 It should be noted that the benefits were identified with

CCC, rather than Government consideration of benefits

in isolation from potential suppliers.

49 – Statement of Operation Results

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required services

– both current and future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 Operating revenue and budget for the existing

structure. Provides benchmark information on

the constraints and dependencies for the

project.

 No assessment of benefits or risks.

51 - CCC Approach

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 Details strategic rationale for change.

 Document produced to explain commercial rationale for

engagement with CCC, and therefore does not

demonstrate Government consideration of strategy in

isolation and in advance of engagement with prospective

suppliers.

 Security and confidentiality issues.

#

Key Review Criteria

Evidence Covered

Gaps Identified

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required services

– both current and future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 Written confirmation of the Government’s

approval of the recommended deal.

 Other key stakeholders and customers not represented.

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 Document assesses benefits of prospective

deal.

 Benefits assessed at a high level, not in detail.

 It should be noted that this was produced after

engagement with prospective supplier.

52 - Bermuda Airport G2G Structure

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 Evidence for the strategy behind the

recommended deal.

 Whilst this does provide context of the case for change,

rationale for prospective deal is typically expected as part

of Commercial Case.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S3

Does the recommended deal still

provide all of the required services

– both current and future?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 Evidence of stakeholder commitment and

involvement.

 No reference to communication strategy.

S5

Has the assessment of likely

benefits, risks, constraints and

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

dependencies been examined in

detail?

Strategic Case Summary

Based on the analysis above we can conclude the following on how the reports, documents and evidence points provided, when taken as a whole, align to

the FBC assessment criteria:

#

Key Review Criteria

Evidence Covered

Gaps Identified

S1

Does the recommended deal

provide synergy and best fit with

the organisation’s business

strategy?

 Overall there is a clear strategic rationale for

change incorporated in documents produced

over a number of years. This includes clear

descriptions of business strategies, context of

the airport, existing and future needs to support

the Bermudian economy and Government policy

objectives. There is evidence of ongoing

evaluation of the case for change throughout the

process.

 Broadly speaking, no major gaps identified, although

there has been limited consideration of security and

confidentiality issues throughout the documentation.

 However, it should be noted that a significant part of the

most recent evidence base for change has been

produced subsequent to or in parallel to the agreement

with the prospective supplier. Recognising this,

Government may want to be clear that it owns its own

strategy for the airport and ongoing evaluation of that

strategy, which is distinct from that of any prospective

concessionaire.

S2

Does the recommended deal still

satisfy the original spending

objectives and business needs?

 Overall clear stakeholder buy-in to the case for

change, and the objectives of spend.

 As above, it is worth noting that Government may want

to be clear on owning its own required business

outcomes and service outputs.

 When the recommended deal is more fully developed,

the Government may want to assess the deal against

the original spending objectives. To do so, it might wish

to incorporate these in a single statement – this may

feature within the procurement strategy in the

Commercial Case.

S3

Does the recommended deal still

provide all of the required services

– both current and future?

 Whilst change control is not addressed, there is

evidence of agreement of stakeholders and

users.

 It is worth noting relatively limited consideration of the

potential for subsequent change in strategic context.

Government might want to consider the need for

flexibility within the solution identified in the Economic

Case, and the provisions of the Commercial Case.

S4

Have any outstanding differences

between stakeholders and

customers been satisfactorily

resolved?

 Clear and ongoing involvement of key

stakeholders, including the public in the form of

ministerial statements, and an indication that the

tourism industry support the case for change.

 There is no defined communication strategy for the

ongoing delivery of the project, and there has been no

documented feedback from the public or travellers

(customers).

#

Key Review Criteria

Evidence Covered

Gaps Identified

S5

Has the assessment of likely

benefits, risks, constraints and

dependencies been examined in

detail?

 High-level benefits are detailed in a number of

places throughout the documentation as a

whole, which also includes high-level

consideration of risks and internal and external

constraints.

 Some of the more specific aspects of assessing benefits,

risks, constraints and dependencies have not been

examined in detail. This includes, for example,

production of a benefits realisation plan and ranking of

benefits by stakeholder. Given a strong Strategic Case

for change, this is considered as an opportunity for

refinement through the Management Case and

subsequent delivery.

Economic Case

Introduction

The Economic Case is designed to evidence that the project represents best public value.

Through our mapping activity we identified 24 reports and documentation as containing information relevant to the Economic Case, which will be assessed in

this analysis.

Detailed Data Assessment

#

Key Review Criteria

Evidence Covered

Gaps Identified

3 – Topic List for Interviews 02 Topic Guide

E1

Have the Critical Success

Factors (“CSFs”) for options

appraisal been identified?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E2

Has a sufficiently wide

range of long-list options

been identified and

assessed, and the short-

listed options subjected to

robust analysis? Was the

most economically

advantageous offer

selected?

 This document details interview questions associated

with a range of potential identified benefits in relation

to the airport and wider development opportunities,

including:

– Construction and operation of new terminal.

– New developments (solar PV generation, fast ferry

terminal, a landside development, and hotel and

conference centre).

– Wider benefits (promoting FDI, tourism and other

forms of economic development).

 Document does not detail specific defined scope or clear

options for economic assessment. This is to be expected

given that it is designed to support an activity to refine

scope and specified options, but these may be expected

to be assessed elsewhere under the Economic Case.

 Noted that these benefits are identified by supplier rather

than Government side.

 The data contents provide limited additional evidence

against these requirements, and do not assess economic

options.

E3

Has the PSC been

constructed and assessed in

accordance with HM

Treasury guidance?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E4

Was a wide range of bids

received from service

providers in response to the

procurement notice?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

7 – Air Traffic Forecast (February 2015)

E1

Have the Critical Success

Factors (“CSFs”) for options

appraisal been identified?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E2

Has a sufficiently wide

range of long-list options

been identified and

assessed, and the short-

listed options subjected to

robust analysis? Was the

most economically

advantageous offer

selected?

 Details four passenger air traffic forecast scenarios.

 Assumptions are outlined to support the range of

scenarios assessed.

 Whilst document demonstrates significant work to outline

scenarios and sensitivities for assessment in the business

case in the form of these air traffic forecasts, it provides

very little direct evidence of options assessment.

 Additionally, it should be noted that all forecasts anticipate

rising passenger volumes, and we might expect a

sensitivity to test a stronger down-side scenario.

E3

Has the PSC been

constructed and assessed in

accordance with HM

Treasury guidance?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E4

Was a wide range of bids

received from service

providers in response to the

procurement notice?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

8 – Peak and Stand – Traffic Forecast Model Results (18 December 2014)

E1

Have the Critical Success

Factors (“CSFs”) for options

appraisal been identified?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E2

Has a sufficiently wide

range of long-list options

been identified and

assessed, and the short-

 Details evidence of use of extensive underlying

assumptions for passenger volume forecasts/

scenarios.

 The analysis may be an important input to these aspects

of economic case, but are not developed in to the options

analysis required for this section.

 Noted that this analysis and its underlying assumptions

are owned by the supplier rather than government side.

#

Key Review Criteria

Evidence Covered

Gaps Identified

listed options subjected to

robust analysis? Was the

most economically

advantageous offer

selected?

E3

Has the PSC been

constructed and assessed in

accordance with HM

Treasury guidance?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E4

Was a wide range of bids

received from service

providers in response to the

procurement notice?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

9 – Traffic Forecasting Assumptions Book – Working Copy (16 February 2015)

E1

Have the Critical Success

Factors (“CSFs”) for options

appraisal been identified?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E2

Has a sufficiently wide

range of long-list options

been identified and

assessed, and the short-

listed options subjected to

robust analysis? Was the

most economically

advantageous offer

selected?

 Details evidence of use of extensive underlying

assumptions for passenger volume forecasts /

scenarios.

 Whilst offering supporting evidence, the data contents do

not align with any of the evidence requirements listed in

this criteria.

 Noted that these assumptions are owned by the supplier

rather than government side.

E3

Has the PSC been

constructed and assessed in

accordance with HM

Treasury guidance?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

E4

Was a wide range of bids

received from service

providers in response to the

procurement notice?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

10 – Draft – Traffic Review and Forecast (18 December 2014)

E1

Have the Critical Success

Factors (“CSFs”) for options

appraisal been identified?

 Document details key drivers of Bermuda’s position in

the overall aviation market, and international business

activities and tourism industry factors. A number of

these and factors to be considered in developing

greater airlift could be easily re-interpreted as CSFs for

airport development options.

 Document does not explicitly outline CSFs to enable

options assessment.

 Noted that the document was prepared by the supplier’s

advisors.

E2

Has a sufficiently wide

range of long-list options

been identified and

assessed, and the short-

listed options subjected to

robust analysis? Was the

most economically

advantageous offer

selected?

 Document provides a very detailed assessment of key

features that would be used in an options assessment,

including understanding in detail the market enablers

and how change might impact traffic. It provides a

case for a ‘do something’ option in respect of

increasing air traffic and reversing the trend of

declining traffic in Bermuda.

 However, the document does not explicitly provide an

options analysis or compare and contrast different options

to arrive at the most economically advantageous option to

reverse this trend.

 This is to be expected as the document was prepared by

the supplier, so would only take in to account the range of

options being considered by the supplier.

 The range of options considered in the Economic Case by

the Government should be much broader than those

which could be offered by one particular supplier (e.g., Do

minimum, Do nothing.)

E3

Has the PSC been

constructed and assessed in

accordance with HM

Treasury guidance?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E4

Was a wide range of bids

received from service

providers in response to the

procurement notice?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

14 – Airport Development P3 Models Report (1 February 2014)

E1

Have the Critical Success

Factors (“CSFs”) for options

appraisal been identified?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E2

Has a sufficiently wide

range of long-list options

been identified and

assessed, and the short-

listed options subjected to

robust analysis? Was the

most economically

advantageous offer

selected?

 Document details potential revenue streams and

scope options in the form of commercial airspace

management and renewable energy development.

 This could be considered a long-listed set of

procurement options/PPP options, which could form

part of a larger options analysis.

 Document does not define clear options for the economic

assessment of the solution for the Strategic Case.

 Focuses solely on options in respect of the Commercial

Case (e.g. appropriate PPP model).

 Other options – scale and scope of the development, non

PPP options, Do Nothing/Do Minimum, are not part of this

document.

 The analysis is not developed through to the selection of

an economically preferred option.

E3

Has the PSC been

constructed and assessed in

accordance with HM

Treasury guidance?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E4

Was a wide range of bids

received from service

providers in response to the

procurement notice?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

15 – Project Concept for the Redevelopment of L.F. Wade International Airport (25 March 2015)

E1

Have the Critical Success

Factors (“CSFs”) for options

appraisal been identified?

 Document details key drivers of Bermuda’s position in

the overall aviation market, and international business

activities and tourism industry factors. A number of

these and factors to be considered in developing

greater airlift could be easily re-interpreted as CSFs for

airport development options.

 Document does not explicitly outline CSFs to enable

options assessment.

 Document is produced by the proposed supplier rather

than by the government. It cannot, by its nature, include

CSFs against which a broad range of options could be

assessed.

#

Key Review Criteria

Evidence Covered

Gaps Identified

E2

Has a sufficiently wide

range of long-list options

been identified and

assessed, and the short-

listed options subjected to

robust analysis? Was the

most economically

advantageous offer

selected?

 Document outlines significant assessment and

appraisal of the proposed project concept for the

terminal area, including (but not limited to):

– Aviation market, traffic and airline analysis

– Analysis of tourism and international business

development initiatives to reverse decline

– Development of concept options for terminal area

– Development of high-level CAPEX scenarios

– High-level operating model, structures and

allocation of scope

– Exploration of commercial and organisational

structures

 Some options for configuration of the terminal are

considered, for example a Pier Terminal vs. Linear

Terminal.

 Document includes a section with considerations on

achieving VFM. This concludes that traditional

procurement routes are not likely to be viable, and

suggests that the “unique combination of project

guarantees, expert aviation knowledge and

construction expertise to de-risk the deal whilst making

it bankable”.

 Document does not clearly define options for assessment

using economic appraisal, risk assessment and analysis

of non-monetary benefits. The choice between Pier

Terminal and Linear Terminal, for example, is made

based on high-level qualitative discussion outside a

typical VFM options assessment structure.

 Whilst there is a financial assessment represented, this is

a summary of a CAPEX affordability analysis and does

not apply discounted cash flow or Net Present Value

(NPV) approaches to appraise the costs, benefits, and

risks of different options side-by-side in an economic

analysis.

 Whilst the document details that the prospective supplier

are aware of the need to demonstrate VFM through the

procurement process proposed, the means for assessing

this are outlined in theoretical ways and practice

assessment of VFM is not clearly established.

 Additionally:

– Key platforms of economic value that are discussed in

the document (such as use of local sourcing) are

outlined in an ‘in principle’ rather than in specific ways.

– It is noted that the “technical and design aspects of the

airport redevelopment project are still at a very

preliminary stage”, suggesting this is not ready for

contract execution until these are developed and

agreed.

 Taken together these points suggest that the case is more

akin to an OBC, which would be expected to establish the

preferred option and put in place the arrangements for

procurement of the scheme, than the FBC. However,

elements of the OBC case expectations for defining the

options for assessment and selecting the preferred option

and requirements for procurement are not evidenced. This

is expected to some extent, given that this is an outline of

a supplier proposal rather than a government investment

appraisal.

#

Key Review Criteria

Evidence Covered

Gaps Identified

E3

Has the PSC been

constructed and assessed in

accordance with HM

Treasury guidance?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E4

Was a wide range of bids

received from service

providers in response to the

procurement notice?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 It should be noted across this assessment that there is not

a clearly defined methodology for treatment of the

unsolicited proposal and how to assess the VFM and

strength of the Economic Case associated with it.

16 – Project Concept for the Redevelopment of L.F. Wade International Airport - ANNEXES (25 March 2015)

E1

Have the Critical Success

Factors (“CSFs”) for options

appraisal been identified?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E2

Has a sufficiently wide

range of long-list options

been identified and

assessed, and the short-

listed options subjected to

robust analysis? Was the

most economically

advantageous offer

selected?

 Document provides supporting detail for the proposed

airport design.

 Document does not explicitly perform an assessment on

variant options.

 Because this is a proposal from one supplier, it does not

include a wide range of options outside this supplier.

 Costs, benefits, risks, are not quantified and compared for

different options, side-by-side.

 Do nothing/Do minimum, PSC, are not considered.

E3

Has the PSC been

constructed and assessed in

accordance with HM

Treasury guidance?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E4

Was a wide range of bids

received from service

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

providers in response to the

procurement notice?

17 – The Economic Impact of Constructing a New Terminal Complex at L F Wade International Airport (June 2014)

E1

Have the Critical Success

Factors (“CSFs”) for options

appraisal been identified?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E2

Has a sufficiently wide

range of long-list options

been identified and

assessed, and the short-

listed options subjected to

robust analysis? Was the

most economically

advantageous offer

selected?

 Document assesses total economic impact of

proposed project, considering direct and indirect

economic impacts.

 Document references optimism bias as a factor in

economic appraisals.

 Assessment is based on CAPEX estimates from the 2008

Master Plan, and therefore does not provide a direct

Economic Case assessment for the current proposals.

 Assessment does not produce economic assessment of

different options.

 Assessment is focused on construction period only.

 Assessment does not consider economic appraisal of

options from a VFM perspective, i.e. including the time

value of money (NPV analysis).

 Document does not address optimism bias as an integral

part of economic assessment, but adjusts for this as a

sensitivity analysis on CAPEX.

 Focuses on benefits (positive impacts), and does not

quantify costs and risks.

E3

Has the PSC been

constructed and assessed in

accordance with HM

Treasury guidance?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E4

Was a wide range of bids

received from service

providers in response to the

procurement notice?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

18 – Addendum: Economic Impact of Constructing a New Terminal Complex at L F Wade International Airport (July 2014)

E1

Have the Critical Success

Factors (“CSFs”) for options

appraisal been identified?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E2

Has a sufficiently wide

range of long-list options

been identified and

assessed, and the short-

listed options subjected to

robust analysis? Was the

most economically

advantageous offer

selected?

 Addendum estimates the total economic impact of

construction at a range of building costs / CAPEX

values (ranging from $175m-$300m).

 Whilst these CAPEX figure bands are closer to current

proposals, the assessment includes the same gaps as

identified in the above document, i.e.:

– Assessment does not produce economic assessment

of different options, and is focused on construction

period only.

– Assessment does not consider economic appraisal of

option from a VFM perspective, i.e. including the time

value of money (NPV analysis) or assessment of risks

or non-monetary benefits.

– Document does not address optimism bias as an

integral part of economic assessment, but adjusts for

this as a sensitivity analysis on CAPEX.

E3

Has the PSC been

constructed and assessed in

accordance with HM

Treasury guidance?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E4

Was a wide range of bids

received from service

providers in response to the

procurement notice?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

20 - BDA Airport Fees and Charges Benchmarking

E1

Have the Critical Success

Factors (“CSFs”) for options

appraisal been identified?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

E2

Has a sufficiently wide

range of long-list options

been identified and

assessed, and the short-

listed options subjected to

robust analysis? Was the

most economically

advantageous offer

selected?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 It is noted that whilst this document provides

benchmarking analysis of regional peer airport fees and

charges, it is not clear how it has been used to support an

economic assessment of any given option.

E3

Has the PSC been

constructed and assessed in

accordance with HM

Treasury guidance?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E4

Was a wide range of bids

received from service

providers in response to the

procurement notice?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

21 - Capex Affordability Analysis (7 August 2013)

E1

Have the Critical Success

Factors (“CSFs”) for options

appraisal been identified?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E2

Has a sufficiently wide

range of long-list options

been identified and

assessed, and the short-

listed options subjected to

robust analysis? Was the

most economically

advantageous offer

selected?

 Document includes a SWOT analysis for the airport in

Bermuda.

 Whilst there is a SWOT analysis this is not used to drive

assessment of different defined options.

 Whilst there is a sensitivity analysis of different traffic

scenarios, airport departure taxes and financing options,

the financial model assessment is focused on affordability

as compared to economic appraisal. Considerations on

this and in respect of PPP structuring options are

therefore considered in the Commercial Case and

Financial Case analyses.

#

Key Review Criteria

Evidence Covered

Gaps Identified

E3

Has the PSC been

constructed and assessed in

accordance with HM

Treasury guidance?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E4

Was a wide range of bids

received from service

providers in response to the

procurement notice?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

22 - Terminal Feasibility Study (8 May 2008)

E1

Have the Critical Success

Factors (“CSFs”) for options

appraisal been identified?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E2

Has a sufficiently wide

range of long-list options

been identified and

assessed, and the short-

listed options subjected to

robust analysis? Was the

most economically

advantageous offer

selected?

 This study demonstrates that various options have

been considered for the Bermuda Airport over a

number of years, prior to the current (2015) concept

being considered. However it appears that options

have been assessed and dismissed in succession,

rather than compared side-by-side, resulting in the

selection of a preferred option.

 Incorporates high-level designs for a range of design

concepts, including Pier Concept, Triangle Concept,

and Bar Concept.

 Includes details of a high-level evaluation of these

design concepts using a qualitative ‘Evaluation Matrix’,

concluding on the Pier Concept.

 Includes a summary financial analysis with estimated

cash flow and costs. This includes operating revenue

and operating costs for the existing terminal, as

compared to the CAPEX, operating revenue and

operating costs for the new terminal.

 Whilst it is clear some different design concepts have

been considered, these are not assessed by an Economic

Case methodology against the strategic objectives. These

concepts also do not appear to map to the current

proposal, which concludes on a different preferred design.

 Financial analysis is extremely high level and does not

provide any clear assumptions or method for comparison

between the Existing Terminal and New Terminal options

on an Economic Case basis (i.e. including NPV, risk

assessment and non-monetary benefits). Additionally, it

does not compare the Pier, Triangle and Bar concepts

against the ‘do nothing’ cash flows identified.

E3

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

Has the PSC been

constructed and assessed in

accordance with HM

Treasury guidance?

E4

Was a wide range of bids

received from service

providers in response to the

procurement notice?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

23 - Initial Land Use Assessment Report

E1

Have the Critical Success

Factors (“CSFs”) for options

appraisal been identified?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E2

Has a sufficiently wide

range of long-list options

been identified and

assessed, and the short-

listed options subjected to

robust analysis? Was the

most economically

advantageous offer

selected?

 Outlines potential viability of a range of non-airport

development proposals, including a 152 berth marina

and a fast ferry dock.

 These proposals could be included if a long list of

options is developed for appraisal.

 Whilst provides some potential sub-options for

redevelopment activity, the document was produced in

2008, and options have not clearly been assessed by

Economic Case or incorporated into subsequent project

development activity.



E3

Has the PSC been

constructed and assessed in

accordance with HM

Treasury guidance?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E4

Was a wide range of bids

received from service

providers in response to the

procurement notice?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

25 - Independent Peer Review of Aviation Activity Forecasts (March 2015)

E1

Have the Critical Success

Factors (“CSFs”) for options

appraisal been identified?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E2

Has a sufficiently wide

range of long-list options

been identified and

assessed, and the short-

listed options subjected to

robust analysis? Was the

most economically

advantageous offer

selected?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 This represents an initial peer review of Mott Macdonald

activity forecasts for the airport (with a subsequent review

expected based on detailed bottom-up forecasts), and

could in theory be used to support a sensitivity analysis;

however, the assessment is not conclusive and does not

provide a complete assessment for these purposes.

E3

Has the PSC been

constructed and assessed in

accordance with HM

Treasury guidance?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E4

Was a wide range of bids

received from service

providers in response to the

procurement notice?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

26 - Bermuda International Airport Master Plan (December 2006)

E1

Have the Critical Success

Factors (“CSFs”) for options

appraisal been identified?

 2006 document provides significant detail on airport

facility requirements, background information and key

constraints, that could be interpreted as CSFs.

 CSFs are not explicitly identified and prioritised for options

assessment.

E2

Has a sufficiently wide

range of long-list options

been identified and

assessed, and the short-

listed options subjected to

 Options for development are assessed with reference

to non-monetary benefits, such as support for national

goals, safety, flexibility, and also with financial

implications.

 Approach taken was technically-led production of a

recommended new terminal concept, based on analysing

a set of terminal configurations to reach a

recommendation. Defined options were not economically

#

Key Review Criteria

Evidence Covered

Gaps Identified

robust analysis? Was the

most economically

advantageous offer

selected?

 Includes comparison between re-development of

existing terminal as compared to construction of a new

terminal.

 The option of developing the existing terminal could be

useful in developing a range of options such as a Do

Minimum option.

assessed in full and no NPV analysis or risk assessment

was included.

 Not clear how these are carried forward as requirements

for the current private sector proposal.

E3

Has the PSC been

constructed and assessed in

accordance with HM

Treasury guidance?

 High-level assessment of ‘Design-Build’ commercial

option is included.

 This is not defined as an option for assessment under an

Economic Case.

E4

Was a wide range of bids

received from service

providers in response to the

procurement notice?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

29 - Bill Of Approximate Quantities

E1

Have the Critical Success

Factors (“CSFs”) for options

appraisal been identified?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E2

Has a sufficiently wide

range of long-list options

been identified and

assessed, and the short-

listed options subjected to

robust analysis? Was the

most economically

advantageous offer

selected?

 Includes detailed CAPEX estimates from 2008

assessment.

 Assessment does not feature as part of current proposals

or option, and Economic Case assessment of any options

is not made.

E3

Has the PSC been

constructed and assessed in

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

accordance with HM

Treasury guidance?

E4

Was a wide range of bids

received from service

providers in response to the

procurement notice?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

30 - New Airport Terminal

E1

Have the Critical Success

Factors (“CSFs”) for options

appraisal been identified?

 Documents high level objectives for the new airport

terminal, including:

– Minimise the impact on Government balance sheet

– Reduce the risk of overruns and delays

– Reduce procurement costs

– Address job creation

– Ensure VFM

Objectives are outlined at a high level.

E2

Has a sufficiently wide

range of long-list options

been identified and

assessed, and the short-

listed options subjected to

robust analysis? Was the

most economically

advantageous offer

selected?

 Outlines the proposed mechanism for assessing VFM

through a ‘fairness assessment’.

 Clear identification of some risks associated with

different commercial options.

 As expected given the nature of the statement, further

detail on the assessment of the proposed option against

the defined criteria is considered elsewhere in the

evidence base.

 Risks associated with different commercial options to be

assessed as part of Commercial Case; assessment of

project options is a separate Economic Case assessment

to determine the solution with the best overall economic

value, outside commercial delivery models.

E3

Has the PSC been

constructed and assessed in

accordance with HM

Treasury guidance?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E4

Was a wide range of bids

received from service

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

providers in response to the

procurement notice?

34 - Discussion with Price Waterhouse re Airport Investment by telephone (16 November 2010)

E1

Have the Critical Success

Factors (“CSFs”) for options

appraisal been identified?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E2

Has a sufficiently wide

range of long-list options

been identified and

assessed, and the short-

listed options subjected to

robust analysis? Was the

most economically

advantageous offer

selected?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E3

Has the PSC been

constructed and assessed in

accordance with HM

Treasury guidance?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E4

Was a wide range of bids

received from service

providers in response to the

procurement notice?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

35 - Economic Impact Report (2003)

E1

Have the Critical Success

Factors (“CSFs”) for options

appraisal been identified?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E2

Has a sufficiently wide

range of long-list options

been identified and

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 Whilst considering the economic impact associated with

tourism, the data contents do not align with any of the

#

Key Review Criteria

Evidence Covered

Gaps Identified

assessed, and the short-

listed options subjected to

robust analysis? Was the

most economically

advantageous offer

selected?

evidence requirements listed in this criteria or in relation to

this project or its options.

E3

Has the PSC been

constructed and assessed in

accordance with HM

Treasury guidance?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E4

Was a wide range of bids

received from service

providers in response to the

procurement notice?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

38 - Terminal Complex Feasibility Study (9 September 2008)

E1

Have the Critical Success

Factors (“CSFs”) for options

appraisal been identified?

 Assesses key challenges, such as storm protection,

which could be interpreted as CSFs.

 CSFs are not explicitly identified and prioritised for options

assessment.

E2

Has a sufficiently wide

range of long-list options

been identified and

assessed, and the short-

listed options subjected to

robust analysis? Was the

most economically

advantageous offer

selected?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 Whilst outlining a potential solution for airport

development the Economic Case associated with this is

not detailed.

E3

Has the PSC been

constructed and assessed in

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

accordance with HM

Treasury guidance?

E4

Was a wide range of bids

received from service

providers in response to the

procurement notice?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

41 - Financial Model (July 2013)

E1

Have the Critical Success

Factors (“CSFs”) for options

appraisal been identified?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E2

Has a sufficiently wide

range of long-list options

been identified and

assessed, and the short-

listed options subjected to

robust analysis? Was the

most economically

advantageous offer

selected?

 Model enables calculation of NPV based on traffic

scenarios, departure tax scenarios, and additional

revenue streams associated with the ‘Bermuda

Commercial Airspace initiative’, concession length,

and CAPEX values.

 Whilst demonstrating consideration of NPV assessment it

is not clear from this and other documents which options

have been assessed for NPV, how these factor in wider

economic impacts, risk assessment, or non-monetary

benefits to assess across different options.

 A separate consideration for the Financial Case will be the

extent to which this assesses the financial implications of

different concession assumptions or provisions for

revenue share.

E3

Has the PSC been

constructed and assessed in

accordance with HM

Treasury guidance?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E4

Was a wide range of bids

received from service

providers in response to the

procurement notice?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

42 - PPP Opportunity Scan

E1

Have the Critical Success

Factors (“CSFs”) for options

appraisal been identified?

 Incorporates key ‘Project Objectives’ which could be

interpreted as CSFs.

 CSFs are not explicitly identified and prioritised for options

assessment.

E2

Has a sufficiently wide

range of long-list options

been identified and

assessed, and the short-

listed options subjected to

robust analysis? Was the

most economically

advantageous offer

selected?

 Considers at a high-level the impact of project scope

on the project.

 Defined options not identified for Economic Case

assessment.

E3

Has the PSC been

constructed and assessed in

accordance with HM

Treasury guidance?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

E4

Was a wide range of bids

received from service

providers in response to the

procurement notice?

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

44 - Terminal Feasibility Study - Progress Review (8 May 2008)

E1

Have the Critical Success

Factors (“CSFs”) for options

appraisal been identified?

 Prioritised CSFs (high, medium or low)

 Relevant performance measures

 Substantively covers same material as #22.

E2

Has a sufficiently wide

range of long-list options

been identified and

assessed, and the short-

listed options subjected to

 10 to 12 main options – full description

 Use of the options framework

- for business scope

- for potential solutions

- for service delivery

 Substantively covers same material as #22.

#

Key Review Criteria

Evidence Covered

Gaps Identified

robust analysis? Was the

most economically

advantageous offer

selected?

- for implementation

- for funding

 SWOT analysis of options against:

- spending objectives

- critical success factors

- benefits criteria

- evidence of likely support from key stakeholders

 Preparation and assessment of economic appraisals

for:

- do nothing/do minimum

- revised PSC

- best and final offers and/or

- preferred bidder (if selected)

 Use of appropriate tools:

- sensitivity analysis

- risk (£) quantification

- evaluation of qualitative benefits (rank, weight and

scoring)

 Treatment of costs and benefits in accordance with

Treasury ‘Green Book’ rules

 All assumptions recorded

 Achievable benefits streams

 Stakeholders and customers support

E3

Has the PSC been

constructed and assessed in

accordance with HM

Treasury guidance?

 Realistic solution capable of implementation

 Risks identified, apportioned and measured for all

project stages:

- design

- build

- finance

- operate

 PFI (PPP) costs, where available

 Substantively covers same material as #22.

E4

Was a wide range of bids

received from service

providers in response to the

procurement notice?

 Assessment of earlier assumptions

 Use of evaluation criteria:

- long list of suppliers

- short list of suppliers

 Description of each bid received at BAFO

 Substantively covers same material as #22.

#

Key Review Criteria

Evidence Covered

Gaps Identified

 Method of treatment for varying bids

 Basis for selection of preferred bidder (if applicable)

Economic Case Summary

Based on the analysis above we can conclude the following on how the reports, documents and evidence points provided, when taken as a whole, align to

the FBC assessment criteria:

#

Key Review Criteria

Evidence Covered

Gaps Identified

E1

Have the Critical Success

Factors (“CSFs”) for options

appraisal been identified?

 A number of documents detail the key drivers of

Bermuda’s position in the overall aviation market, and the

importance of the airport for international business

activities and the tourism industry.

 Other key factors in improving airlift and the requirements

for improving the airport, are identified throughout. These

include, for example, key project objectives such as

addressing key challenges like storm protection.

 Additionally, the Ministerial Statement (#46) provides a

clear summary of some further project objectives.

 Taken together, there are a number of different sources

which could readily be interpreted as CSFs.

 However, although a number of factors exist which

could be interpreted as CSFs, the documentation as a

whole does not explicitly outline CSFs or prioritise

these for the purposes of options assessment.

 This is to be expected given that the documentation

has not been prepared according to Green Book

guidance.

E2

Has a sufficiently wide

range of long-list options

been identified and

assessed, and the short-

listed options subjected to

robust analysis? Was the

most economically

advantageous offer

selected?

 Throughout the documentation ‘options’ are defined in a

number of different ways. These include:

– Options for technical solution for airport re-

development, including contrasting refurbishment of

existing terminal with new build, and a range of ‘project

concepts’ identified at different stages in the

development process.

– Commercial options for delivering the project, which

will be considered under the Commercial Case

section. The objective of the Economic Case is to

identify the best VFM for Government, and that

preferred solution is then assessed for delivery model

and procurement strategy considerations in the

Commercial Case.

– Options associated with wider re-development

opportunities, such as solar photovoltaic (“PV”) and

landside development.

 A large number of the available documents touch on

elements of the Economic Case, including:

 Taken as a whole, there is no clear or structured

assessment of all options performed in order to

appraise the Economic Case of short-listed options and

arrive at a preferred solution. Whilst it is clear that a

wide variety of solutions have been identified, there

may be a case for confirming the scope of the preferred

solution and the impact of that scope on future cases,

such as the Financial Case and affordability

considerations.

 Whilst a large number of the documents touch on

elements of the Economic Case, these typically assess

different elements of different option sets, and it is

therefore not clear that a preferred solution has been

identified through a clear assessment of net present

value (“NPV”), risks, and non-monetary benefits. Key

considerations include:

– In a number of instances, options are proposed by

the current proposed supplier rather than the

Government. This means there is no clear appraisal

#

Key Review Criteria

Evidence Covered

Gaps Identified

– Potential revenue streams and scope options (e.g.

commercial airspace management and renewable

energy development).

– Assessment of benefits associated with a ‘do

something’ option, including benefits associated with

reversing the trend of declining traffic in Bermuda, and

non-monetary benefits such as support for national

goals, safety and flexibility.

– Assessment of the economic impact of the proposed

project by direct and indirect economic impacts during

construction.

– Identification of some risks associated with different

commercial options.

– Assessment of NPV for the project based on a private

sector WACC.

 There is a large volume of evidence for assumptions

used at different points in the development of the project.

of options from a Government perspective with

which to engage the market.

– This means it is not clear that Government has

determined the optimal scope from the potential

options prior to going to market.

– Frequently this means that the project is assessed

from a project/SPV rather than holistic Government

perspective. For example, whilst the affordability

analysis performed by Leigh Fisher includes an NPV

calculation, this looks to focus on project cash flows

only and uses a developer weighted average cost of

capital (“WACC”) rather than Government discount

rate. The Green Book guidance uses HM Treasury’s

Social Time Preference rate of 3.5% p.a. in real

terms to discount economic cash flows for the NPV.

– The economic assessment performed by the

Bermuda College does not consider NPV.

– The economic assessment performed by the

Bermuda College only considers the construction

period.

– Whilst there is reference to optimism bias, this is not

incorporated into any investment appraisal.

 Additionally, concepts of VFM are often assessed at

theoretical levels and not always in respect of the

Economic Case or defined options. In particular, the

CCC Project Concept document concludes on the VFM

case with limited reference to the preferred solution as

compared to alternative options, and in respect of the

Commercial Case (i.e. the preferred delivery model)

rather than Economic Case (the preferred option).

 Some analysis of socio-economic benefits e.g. job

creation, impact on tourism industry, has been

performed in different documents. These are key

factors in the rationale for the project and may need to

be validated in the Economic Case.

#

Key Review Criteria

Evidence Covered

Gaps Identified

E3

Has the PSC been

constructed and assessed in

accordance with HM

Treasury guidance?

 High-level assessment of different commercial options

are considered, including some consideration to typical

risks.

 A PSC is not clearly identified as a delivery option for

Economic Case appraisal.

 This is expected given that the documentation has not

been prepared according to Green Book guidance, and

the private finance solution has been a key project

driver from the outset.

E4

Was a wide range of bids

received from service

providers in response to the

procurement notice?

 Not Applicable: A competed procurement process was

not conducted, so no procurement notice was issued.

 It should be noted that there is not a clearly-defined

evaluation criteria or methodology for the bid to assess

the VFM of the unsolicited proposal against

Government expectations. This is considered in more

detail in the Commercial Case.

Commercial Case

Introduction

The Commercial Case is designed to evidence “that the proposed deal is attractive to the market place, can be procured and is commercially viable”.

Through our mapping activity we identified 16 reports and documentation as containing information relevant to the Commercial Case, which will be assessed

in this analysis.

Detailed Data Assessment

#

Key Review Criteria

Evidence Covered

Gaps Identified

10 - Draft - Traffic review and forecast (18 December 2014)

C1

Has the procurement

strategy for the successful

delivery of the required

services been considered

and prepared in sufficient

detail?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C2

Is there sufficient scope for

a potential deal, which will

meet organisational needs

whilst offering best VFM?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 It should be noted that, in line with other documents

provided by the proposed supplier, whilst this does not

provide evidence for government consideration of the

optimal procurement strategy, it does include some

considerations on parameters of a potential deal, such

as potential agreements between the Bermuda

Tourism Authority, travel agents, airlines and the

airport operator.

C3

Has the potential deal been

considered in sufficient

detail? The how rather than

what.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

C4

How will business and

service change be delivered

and implemented

successfully over the

lifespan of the contract

period?

 Document does include considerations of an ‘airlift

development plan’, incorporating:

– Airline engagement

– Key stakeholders

– Marketing and communications

– Budget and incentives

– Resource and skills

 It should be noted that, in line with other documents

provided by the proposed supplier, this does not

provide evidence for government consideration of the

optimal delivery of commercial value from the

prospective contract. Notably, as identified in the ‘Main

Evidence Required’, this might require consideration of

appropriate incentivising mechanisms, and of obtaining

value through benchmarking and/or market testing.

C5

Is the potential deal likely to

be acceptable and bankable

within the private sector?

 Document details some parameters of a potential deal to

include use of Bermuda Tourism Authority budgets with

Bermuda airport marketing budgets.

 Document not a direct assessment of bankability.

C6

Was the procurement

undertaken in accordance

with best practice?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C7

Can the selected service

provider deliver the required

deliverables and services?

 Document does include considerations of an ‘airlift

development plan’.

 However, document does not provide details of an

agreed deal.

C8

Have negotiations resulted

in a robust and legally

enforceable contract?

The data contents do not align with any of the evidence

requirements listed in this criteria. It should be noted that

negotiations have not commenced, supporting the overall

conclusion that the project status is more comparable to

OBC than FBC, albeit that the decision to proceed would

leave the government liable for bearing supplier costs

through negotiations.

 The data contents do not align with any of the

evidence requirements listed in this criteria. It should

be noted that negotiations have not commenced,

supporting the overall conclusion that the project status

is more comparable to OBC than FBC, albeit that the

decision to proceed would leave the government liable

for bearing supplier costs through negotiations.

14 - Airport Development P3 Models Report (1 February 2014)

C1

Has the procurement

strategy for the successful

delivery of the required

services been considered

 Provides an assessment of potential airport development

models under PPP, including:

– Management contracts

– Lease-term concession

– Developer financing and operation

 It should be noted that there is limited evidence of how

the recommendations from this report, including the

pre-procurement activity and implementation of the

procurement strategy, were carried forward.

#

Key Review Criteria

Evidence Covered

Gaps Identified

and prepared in sufficient

detail?

– Joint venture

– Sale of asset

 Outlines a procurement strategy, including:

– Details key drivers of viability for potential deal,

including (for example) ensuring appropriate flexibility

in the agreement, and being clear on the scope of PPP

desirable.

– Recommends a pre-procurement pan prior to market

engagement, including “financial, legal, market

valuation and project delivery consultation” prior to

initial engagement with industry.

– Outlines a procurement plan for competed RFI/RFQ

process.

C2

Is there sufficient scope for

a potential deal, which will

meet organisational needs

whilst offering best VFM?

 Documents provides consideration on risk transfer

associated with different commercial structures.

 It should be noted that there is limited evidence of how

the recommendations from this report were carried

forward.

C3

Has the potential deal been

considered in sufficient

detail? The how rather than

what.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C4

How will business and

service change be delivered

and implemented

successfully over the

lifespan of the contract

period?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C5

Is the potential deal likely to

be acceptable and bankable

within the private sector?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

C6

Was the procurement

undertaken in accordance

with best practice?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C7

Can the selected service

provider deliver the required

deliverables and services?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C8

Have negotiations resulted

in a robust and legally

enforceable contract?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 It should be noted that final negotiations have not

commenced, supporting the overall conclusion that the

project status is more comparable to OBC than FBC,

albeit that the decision to proceed would leave the

Government liable for bearing supplier costs through

negotiations.

15 - Project Concept for the Redevelopment of L.F. Wade International Airport (25 March 2015)

C1

Has the procurement

strategy for the successful

delivery of the required

services been considered

and prepared in sufficient

detail?

 Concludes in favour of sole-source procurement over

competitive procurement recognising:

– Lack of investor interest.

– Costs of setting up and running a traditional

procurement process.

 Document provides a description of how commercial

model assures VFM. This includes identifying World Bank

references to the benefits of unsolicited proposals, and

identifying benefits associated with ‘almost halving the

cost and time associated with a traditional procurement

process’.

 Recommends evidence of market-based pricing to be

obtained through a third=party audit of key aspects of the

capital budget.

 Recommends an open-book negotiation, with the

appointment of independent Government advisors to the

deal, to provide independent advice to Government.

 Limited supporting evidence in the form of market

soundings to evidence lack of market viability of airport

concession.

 Evidence for sole-source procurement provided at

theoretical level and not assessed quantitatively in the

context of this procurement.

 It should be noted that, in line with other documents

provided by the proposed supplier, this does not

provide evidence for Government consideration of the

optimal procurement strategy. It should be noted that

CCC stress “it is important to emphasise CCC’s

entirely commercial role”.

 Limited evidence of consideration of specific

mechanisms to benchmark or assure VFM through the

unsolicited proposal process. Such considerations are

included at a theoretical level, such as acknowledging

“a need to demonstrate the process within this

#

Key Review Criteria

Evidence Covered

Gaps Identified

proposal retains the core principle of being

demonstrably value for money”.

 Third-party audit remains to be completed, and would

only cover the capital budget under this proposal.

C2

Is there sufficient scope for

a potential deal, which will

meet organisational needs

whilst offering best VFM?

 Document notes that the project viability would need to be

demonstrated to CCC’s internal Risk and Opportunities

Committee.

 It should be noted that internal approval processes for

CCC are likely to consider CCC’s commercial position,

rather than Bermudian Government VFM.

C3

Has the potential deal been

considered in sufficient

detail? The how rather than

what.

 Concludes that Bermuda can access “the benefits of a

competitive, public procurement process without

triggering its drawbacks”.

 Document refers to openness to use of local sourcing,

and important consideration for Government.

 While the benefits of avoiding the drawbacks of public

procurement are outlined (faster and less expensive),

there is limited evidence to demonstrate how a “risk-

sharing, ‘Government-to-Government’ approach”

achieves “the benefits of a competitive, public

procurement process.”

 Scope of services proposed by potential supplier rather

than Government. This includes all design details

(landside development and infrastructure etc.).

 Proposal at this stage is not clear on extent of local

sourcing or how this might be contractualised.

C4

How will business and

service change be delivered

and implemented

successfully over the

lifespan of the contract

period?

 Considers Government retained risks and requirements,

including (for example) delivering Governmental permits

and approvals, and monitoring contract performance.

 Recognising that this is a document produced by the

proposed supplier, there is limited detail on

Government ability to deliver its dependencies and

requirements for the concession term.

C5

Is the potential deal likely to

be acceptable and bankable

within the private sector?

 Document considers a range of comparators for the

concession model of delivery, and evidences a ‘robust

market for airport debt’.

 Recognising the bankability of the project may raise

questions on the relative merits of a sole-source vs. a

competed procurement strategy.

C6

Was the procurement

undertaken in accordance

with best practice?

 Document considers the competitive tendering of 80% of

construction works, which “will provide commercial

tension throughout the supply chain during construction”.

 It should be noted, of course, that the procurement has

not been undertaken. It is understood from the

evidence available that AECON have been selected

through a non-competed process. It is not unusual for

a prime contractor to compete sub-contracts, but is not

#

Key Review Criteria

Evidence Covered

Gaps Identified

synonymous with offering the Government value

through the procurement process. A prime contractor

would expect to take risk/reward associated with its

sub-contracting arrangements. Government would be

interested in obtaining value in competitive tension

amongst potential prime contractors, unless there are

specified gain-sharing mechanisms between the prime

contractor and Government in respect of sub-contract

arrangements. These are not referenced.

 Limited evidence of scrutiny to date on proposals by

independent advisors in advance of go/no go decision.

C7

Can the selected service

provider deliver the required

deliverables and services?

 Evidence of strong expertise and track record on

comparable projects, from CCC and sub-contractors.

 Specifics of structuring and scope are not fully defined

in this document.

C8

Have negotiations resulted

in a robust and legally

enforceable contract?

 The data contents do not align with any of the evidence

requirements listed in this criteria.



 The data contents do not align with any of the

evidence requirements listed in this criteria.

 It should be noted that final negotiations have not

commenced, supporting the overall conclusion that the

project status is more comparable to OBC than FBC,

albeit that the decision to proceed would leave the

Government liable for bearing supplier costs through

negotiations.

16 – Project Concept for the Redevelopment of L.F. Wade International Airport - ANNEXES (25 March 2015)

C1

Has the procurement

strategy for the successful

delivery of the required

services been considered

and prepared in sufficient

detail?

 This data source includes relevant details from MOU and

LOA, and these will be assessed individually under the

relevant document below.

 This data source includes relevant details from MOU

and LOA, and these will be assessed individually

under the relevant document below.

C2

Is there sufficient scope for

a potential deal, which will

 This data source includes relevant details from MOU and

LOA, and these will be assessed individually under the

relevant document below.

 This data source includes relevant details from MOU

and LOA, and these will be assessed individually

under the relevant document below.

#

Key Review Criteria

Evidence Covered

Gaps Identified

meet organisational needs

whilst offering best VFM?

C3

Has the potential deal been

considered in sufficient

detail? The how rather than

what.

 This data source includes relevant details from MOU and

LOA, and these will be assessed individually under the

relevant document below.

 This data source includes relevant details from MOU

and LOA, and these will be assessed individually

under the relevant document below.

C4

How will business and

service change be delivered

and implemented

successfully over the

lifespan of the contract

period?

 This data source includes relevant details from MOU and

LOA, and these will be assessed individually under the

relevant document below.

 This data source includes relevant details from MOU

and LOA, and these will be assessed individually

under the relevant document below.

C5

Is the potential deal likely to

be acceptable and bankable

within the private sector?

 This data source includes relevant details from MOU and

LOA, and these will be assessed individually under the

relevant document below.

 This data source includes relevant details from MOU

and LOA, and these will be assessed individually

under the relevant document below.

C6

Was the procurement

undertaken in accordance

with best practice?

 This data source includes relevant details from MOU and

LOA, and these will be assessed individually under the

relevant document below.

 This data source includes relevant details from MOU

and LOA, and these will be assessed individually

under the relevant document below.

C7

Can the selected service

provider deliver the required

deliverables and services?

 This data source includes relevant details from MOU and

LOA, and these will be assessed individually under the

relevant document below.

 This data source includes relevant details from MOU

and LOA, and these will be assessed individually

under the relevant document below.

C8

Have negotiations resulted

in a robust and legally

enforceable contract?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 It should be noted that final negotiations have not

commenced, supporting the overall conclusion that the

project status is more comparable to OBC than FBC,

albeit that the decision to proceed would leave the

#

Key Review Criteria

Evidence Covered

Gaps Identified

Government liable for bearing supplier costs through

negotiations.

21 - Capex Affordability Analysis (7 August 2013)

C1

Has the procurement

strategy for the successful

delivery of the required

services been considered

and prepared in sufficient

detail?

 Documents provides assumption for most likely PPP deal,

including:

– 30 year concession

– Mandatory CAPEX requirement

– No upfront payment from Concessionaire

 Summarises appetite for private sector involvement in

comparators.

 Summarises key considerations and value drivers for

concession structure and parameters.

 Assessment is not specific to proposed terms for

current concession.

 Assessment does not incorporate market soundings

for this specific opportunity.

C2

Is there sufficient scope for

a potential deal, which will

meet organisational needs

whilst offering best VFM?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C3

Has the potential deal been

considered in sufficient

detail? The how rather than

what.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 Not clear what concession assumptions or provisions

for revenue share etc. have been incorporated in

assessment.

C4

How will business and

service change be delivered

and implemented

successfully over the

lifespan of the contract

period?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C5

Is the potential deal likely to

be acceptable and bankable

within the private sector?

 Provides considerations and lessons learned from

privatising airports in the Americas.

 High-level considerations only and it is not clear that

these have been used to inform any current proposed

concession structure.

#

Key Review Criteria

Evidence Covered

Gaps Identified

C6

Was the procurement

undertaken in accordance

with best practice?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C7

Can the selected service

provider deliver the required

deliverables and services?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C8

Have negotiations resulted

in a robust and legally

enforceable contract?

 The data contents do not align with any of the evidence

requirements listed in this criteria.



 The data contents do not align with any of the

evidence requirements listed in this criteria.

 It should be noted that final negotiations have not

commenced, supporting the overall conclusion that the

project status is more comparable to OBC than FBC,

albeit that the decision to proceed would leave the

Government liable for bearing supplier costs through

negotiations.

24 - Project Structure

C1

Has the procurement

strategy for the successful

delivery of the required

services been considered

and prepared in sufficient

detail?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

The data contents do not align with any of the evidence

requirements listed in this criteria.

C2

Is there sufficient scope for

a potential deal, which will

meet organisational needs

whilst offering best VFM?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C3

Has the potential deal been

considered in sufficient

detail? The how rather than

what.

 Scope of services and commercial relationships outlined

in structure diagram.

 Diagram provided by AECON.

 It should be noted that, in line with other documents

provided by the proposed supplier, this does not

provide evidence for Government consideration of the

optimal structure and scope of services.

#

Key Review Criteria

Evidence Covered

Gaps Identified

C4

How will business and

service change be delivered

and implemented

successfully over the

lifespan of the contract

period?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C5

Is the potential deal likely to

be acceptable and bankable

within the private sector?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C6

Was the procurement

undertaken in accordance

with best practice?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C7

Can the selected service

provider deliver the required

deliverables and services?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C8

Have negotiations resulted

in a robust and legally

enforceable contract?

 The data contents do not align with any of the evidence

requirements listed in this criteria.



 The data contents do not align with any of the

evidence requirements listed in this criteria.

 It should be noted that final negotiations have not

commenced, supporting the overall conclusion that the

project status is more comparable to OBC than FBC,

albeit that the decision to proceed would leave the

Government liable for bearing supplier costs through

negotiations.

26 - Bermuda International Airport Master Plan (December 2006)

C1

Has the procurement

strategy for the successful

delivery of the required

services been considered

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

and prepared in sufficient

detail?

C2

Is there sufficient scope for

a potential deal, which will

meet organisational needs

whilst offering best VFM?

 Outlines a range of potential commercial structures for

project including:

– Design, Bid, Build, Operate

– Agency Construction Manager

– Construction Manager at Risk

– Design-Build

– Build-Operate-Transfer

 Concludes with recommendation for further consideration

of market and approach.

 Generic considerations are provided only.

C3

Has the potential deal been

considered in sufficient

detail? The how rather than

what.

 Outlines some considerations on scope under different

commercial structures.

 Generic considerations are provided only.

C4

How will business and

service change be delivered

and implemented

successfully over the

lifespan of the contract

period?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C5

Is the potential deal likely to

be acceptable and bankable

within the private sector?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C6

Was the procurement

undertaken in accordance

with best practice?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C7

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

Can the selected service

provider deliver the required

deliverables and services?

C8

Have negotiations resulted

in a robust and legally

enforceable contract?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 It should be noted that final negotiations have not

commenced, supporting the overall conclusion that the

project status is more comparable to OBC than FBC,

albeit that the decision to proceed would leave the

Government liable for bearing supplier costs through

negotiations.

27 - Privatization Models White Paper (December 2008)

C1

Has the procurement

strategy for the successful

delivery of the required

services been considered

and prepared in sufficient

detail?

 Concludes that Government may consider assessing the

level of interest by soliciting a Request for Qualifications

(RFQ) from prospective developers.

 Limited firm consideration of procurement strategy.

C2

Is there sufficient scope for

a potential deal, which will

meet organisational needs

whilst offering best VFM?

 Outlines a range of potential commercial structures for

project including:

– Private Developer Designs-Builds-Finances Facility

– Private Developer Builds-Finances Facility

– Private Developer Designs-Builds-Operates Facility

 Generic considerations are provided only.

C3

Has the potential deal been

considered in sufficient

detail? The how rather than

what.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C4

How will business and

service change be delivered

and implemented

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

successfully over the

lifespan of the contract

period?

C5

Is the potential deal likely to

be acceptable and bankable

within the private sector?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C6

Was the procurement

undertaken in accordance

with best practice?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C7

Can the selected service

provider deliver the required

deliverables and services?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C8

Have negotiations resulted

in a robust and legally

enforceable contract?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 It should be noted that final negotiations have not

commenced, supporting the overall conclusion that the

project status is more comparable to OBC than FBC,

albeit that the decision to proceed would leave the

Government liable for bearing supplier costs through

negotiations.

30 - New Airport Terminal

C1

Has the procurement

strategy for the successful

delivery of the required

services been considered

and prepared in sufficient

detail?

 Statement proposes sole-source procurement strategy to:

– “Reduce and/or eliminate the real risk of overruns and

delays

– Reduce heavy procurement costs

– Address the urgency of job creation by cutting the time

of procurement

– Ensure Government gets Value for Money”.

 As expected in a high-level statement, limited detail on

how fairness assessment would ensure value for

money, or how commitments such as local

employment would be contractualised through

procurement plan.

 Again, as expected in a high-level statement, limited

analysis of relative benefits of sole-source

procurement strategy in the circumstances of this

procurement. There are clearly-identified benefits of a

#

Key Review Criteria

Evidence Covered

Gaps Identified

 Statement proposes that the CCC sole-source proposal

will achieve this through:

– “CCC guarantees the construction project is delivered

on budget and on time

– Heavy procurement costs, especially consultants’ fees

that became such a significant cost element in the new

hospital wing project, are mitigated

– The overall procurement time is greatly reduced – by

about half – fulfilling the urgency requirement for the

creation of jobs. Subcontracting to local contractors will

engage local labour

– A fairness assessment will be provided by an

independent international firm to ensure value for

money”

sole-source procurement strategy through the current

unsolicited proposal. However, it should be noted that

this is likely to give rise to additional required

considerations on extracting best value from the

procurement process and strategy itself. It should also

be noted that previous procurement failures in

themselves may not be evidence of the failure of a

competed process to secure value through competitive

tension, as such failures could have been due to

ineffective allocation of construction risk, for example.

C2

Is there sufficient scope for

a potential deal, which will

meet organisational needs

whilst offering best VFM?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C3

Has the potential deal been

considered in sufficient

detail? The how rather than

what.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C4

How will business and

service change be delivered

and implemented

successfully over the

lifespan of the contract

period?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C5

Is the potential deal likely to

be acceptable and bankable

within the private sector?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

C6

Was the procurement

undertaken in accordance

with best practice?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C7

Can the selected service

provider deliver the required

deliverables and services?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C8

Have negotiations resulted

in a robust and legally

enforceable contract?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 It should be noted that final negotiations have not

commenced, supporting the overall conclusion that the

project status is more comparable to OBC than FBC,

albeit that the decision to proceed would leave the

Government liable for bearing supplier costs through

negotiations.

34 - Discussion with Price Waterhouse re Airport Investment by telephone (16 November 2010)

C1

Has the procurement

strategy for the successful

delivery of the required

services been considered

and prepared in sufficient

detail?

 Evidence of early stage (2010) consideration to PPP

models, including potential need to bundle Bermuda

airport with another Caribbean jurisdiction to make this

more attractive, given that the market is very challenging

(or was at the time- 2010).

 A procurement strategy was clearly in development in

2010. However, it was not followed, and was

superseded by the preferred sole-source approach.

C2

Is there sufficient scope for

a potential deal, which will

meet organisational needs

whilst offering best VFM?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C3

Has the potential deal been

considered in sufficient

detail? The how rather than

what.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

C4

How will business and

service change be delivered

and implemented

successfully over the

lifespan of the contract

period?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C5

Is the potential deal likely to

be acceptable and bankable

within the private sector?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C6

Was the procurement

undertaken in accordance

with best practice?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C7

Can the selected service

provider deliver the required

deliverables and services?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C8

Have negotiations resulted

in a robust and legally

enforceable contract?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 It should be noted that final negotiations have not

commenced, supporting the overall conclusion that the

project status is more comparable to OBC than FBC,

albeit that the decision to proceed would leave the

Government liable for bearing supplier costs through

negotiations.

42 - PPP Opportunity Scan

C1

Has the procurement

strategy for the successful

delivery of the required

services been considered

 “PPP Opportunity Scan” concludes that “The size and

nature of the Airport suggest that, given an appropriate

procurement process and risk assignment meaningful

competition could be generated for the Airport project”.

 Whilst these are relatively early-stage considerations in

the project development process, it should be noted

that it is not clear how these considerations were

factored in to decisions on current procurement

strategy.

#

Key Review Criteria

Evidence Covered

Gaps Identified

and prepared in sufficient

detail?

C2

Is there sufficient scope for

a potential deal, which will

meet organisational needs

whilst offering best VFM?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C3

Has the potential deal been

considered in sufficient

detail? The how rather than

what.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C4

How will business and

service change be delivered

and implemented

successfully over the

lifespan of the contract

period?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C5

Is the potential deal likely to

be acceptable and bankable

within the private sector?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C6

Was the procurement

undertaken in accordance

with best practice?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C7

Can the selected service

provider deliver the required

deliverables and services?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C8

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

Have negotiations resulted

in a robust and legally

enforceable contract?

 It should be noted that final negotiations have not

commenced, supporting the overall conclusion that the

project status is more comparable to OBC than FBC,

albeit that the decision to proceed would leave the

Government liable for bearing supplier costs through

negotiations.

43 - Letter of Agreement (June 2014)

C1

Has the procurement

strategy for the successful

delivery of the required

services been considered

and prepared in sufficient

detail?

 Outlines exclusive negotiation process for the structuring,

development and implementation of the project. This

includes Go/No-Go decision point for the project for

completion of Airport Development Agreement. Prior to

this decision point in order to use the CCC Work Product

both parties may need to agree reasonable commercial

terms and conditions. CCC would have a right of first offer

for three years. Subsequent to the Development

Agreement, CCC would be reimbursed for all costs plus a

20% mark-up on termination.

 Outlines preferred long term concession model.

 Outlines CCC role to source Canadian development and

construction expertise, through a non-competitive

process.

 It is not clear how the preferred procurement strategy

in the LOA was arrived at, recognising previous

evidence to suggest a competed process was viable.

 It should be noted that it is not a clearly defined part of

a procurement strategy or an output of market

sounding activity that Government would bear bidder-

side costs.

C2

Is there sufficient scope for

a potential deal, which will

meet organisational needs

whilst offering best VFM?

 Document is clear that Bermuda retains responsibility for

satisfying itself that agreements contain fair and

reasonable terms and meet value for money

requirements.

 It should be noted that this is clear that Bermudian

Government should not rely on CCC proposals to

assess VFM.

C3

Has the potential deal been

considered in sufficient

detail? The how rather than

what.

 LOA describes an agreement to reach an agreement.

 LOA does not provide detail on the precise nature of

the agreement and scope of services that is being

pursued within the potential deal.

C4

How will business and

service change be delivered

and implemented

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

successfully over the

lifespan of the contract

period?

C5

Is the potential deal likely to

be acceptable and bankable

within the private sector?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C6

Was the procurement

undertaken in accordance

with best practice?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C7

Can the selected service

provider deliver the required

deliverables and services?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C8

Have negotiations resulted

in a robust and legally

enforceable contract?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 It should be noted that final negotiations have not

commenced, supporting the overall conclusion that the

project status is more comparable to OBC than FBC,

albeit that the decision to proceed would leave the

Government liable for bearing supplier costs through

negotiations.

46 - Ministerial Statement (21 November 2014)

C1

Has the procurement

strategy for the successful

delivery of the required

services been considered

and prepared in sufficient

detail?

 Statement outlined benefits of proposed procurement

approach, and notes that prior to delivering procurement

strategy the Government will establish the procurement

parameters with CCC based on best practices.

C2

Is there sufficient scope for

a potential deal, which will

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

meet organisational needs

whilst offering best VFM?

C3

Has the potential deal been

considered in sufficient

detail? The how rather than

what.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C4

How will business and

service change be delivered

and implemented

successfully over the

lifespan of the contract

period?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C5

Is the potential deal likely to

be acceptable and bankable

within the private sector?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C6

Was the procurement

undertaken in accordance

with best practice?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C7

Can the selected service

provider deliver the required

deliverables and services?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C8

Have negotiations resulted

in a robust and legally

enforceable contract?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 It should be noted that final negotiations have not

commenced, supporting the overall conclusion that the

project status is more comparable to OBC than FBC,

albeit that the decision to proceed would leave the

#

Key Review Criteria

Evidence Covered

Gaps Identified

Government liable for bearing supplier costs through

negotiations.

47 - Memorandum of Understanding (10 November 2014)

C1

Has the procurement

strategy for the successful

delivery of the required

services been considered

and prepared in sufficient

detail?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C2

Is there sufficient scope for

a potential deal, which will

meet organisational needs

whilst offering best VFM?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C3

Has the potential deal been

considered in sufficient

detail? The how rather than

what.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C4

How will business and

service change be delivered

and implemented

successfully over the

lifespan of the contract

period?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C5

Is the potential deal likely to

be acceptable and bankable

within the private sector?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

C6

Was the procurement

undertaken in accordance

with best practice?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C7

Can the selected service

provider deliver the required

deliverables and services?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C8

Have negotiations resulted

in a robust and legally

enforceable contract?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 It should be noted that final negotiations have not

commenced, supporting the overall conclusion that the

project status is more comparable to OBC than FBC,

albeit that the decision to proceed would leave the

Government liable for bearing supplier costs through

negotiations.

51 - CCC Approach

C1

Has the procurement

strategy for the successful

delivery of the required

services been considered

and prepared in sufficient

detail?

 Re-caps key drivers of procurement strategy and choice

to use CCC sole-source procurement route.

 Does not include supporting analysis such as market

soundings, robust comparison of costs and benefits of

different procurement options.

C2

Is there sufficient scope for

a potential deal, which will

meet organisational needs

whilst offering best VFM?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C3

Has the potential deal been

considered in sufficient

detail? The how rather than

what.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

C4

How will business and

service change be delivered

and implemented

successfully over the

lifespan of the contract

period?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C5

Is the potential deal likely to

be acceptable and bankable

within the private sector?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C6

Was the procurement

undertaken in accordance

with best practice?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C7

Can the selected service

provider deliver the required

deliverables and services?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C8

Have negotiations resulted

in a robust and legally

enforceable contract?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 It should be noted that final negotiations have not

commenced, supporting the overall conclusion that the

project status is more comparable to OBC than FBC,

albeit that the decision to proceed would leave the

Government liable for bearing supplier costs through

negotiations.

52 - DELOITTE Bermuda Airport G2G Structure

C1

Has the procurement

strategy for the successful

delivery of the required

services been considered

 Outlines ‘Fairness Assessment’ process to obtain VFM.

“This involves the hiring of an independent, international

construction company to fully examine and assess the

details of the entire arrangement to determine whether or

not Government has obtained VFM.”

 It should be noted that the VFM case associated with

the airport will not relate only to the

CAPEX/construction element of the project, but also to

the concession terms and structure.

#

Key Review Criteria

Evidence Covered

Gaps Identified

and prepared in sufficient

detail?

 Detail of the how the fairness assessment will achieve

VFM is not provided. Eg, if it is determined that the

arrangement does not represent VFM, does the

supplier agree to the terms outlined in the fairness

assessment?

C2

Is there sufficient scope for

a potential deal, which will

meet organisational needs

whilst offering best VFM?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C3

Has the potential deal been

considered in sufficient

detail? The how rather than

what.

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C4

How will business and

service change be delivered

and implemented

successfully over the

lifespan of the contract

period?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C5

Is the potential deal likely to

be acceptable and bankable

within the private sector?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C6

Was the procurement

undertaken in accordance

with best practice?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

C7

Can the selected service

provider deliver the required

deliverables and services?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

C8

Have negotiations resulted

in a robust and legally

enforceable contract?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 It should be noted that final negotiations have not

commenced, supporting the overall conclusion that the

project status is more comparable to OBC than FBC,

albeit that the decision to proceed would leave the

Government liable for bearing supplier costs through

negotiations.

Commercial Case Summary

Based on the analysis above we can conclude the following on how the reports, documents and evidence points provided, when taken as a whole, align to

the FBC assessment criteria:

#

Key Review Criteria

Evidence Covered

Gaps Identified

C1

Has the procurement

strategy for the

successful delivery of

the required services

been considered and

prepared in sufficient

detail?

 Overall there is a significant body of evidence considering

the potential procurement strategy, approach, and

commercial structures.

 This includes consideration of potential commercial airport

models under a public private partnership (PPP), including:

– Management contracts

– Lease-term concession

– Developer financing and operation

– Joint venture

– Sale of asset

 There is evidence provided to support the viability of a

PPP model for the airport.

 There is also evidence of considering procurement

strategy, including considerations on:

– Market engagement

– Use of financial, legal, market valuation and project

delivery consultation

– Use of RFI/RFQ process

– Open book negotiation

– ‘Fairness Review’ to help deliver VFM

 The benefits of the proposed procurement strategy are

identified including:

– Reduce and/or eliminate the real risk of overruns and

delays

– Reduce heavy procurement costs

– Address the urgency of job creation by cutting the time

of procurement

– Ensure Government gets VFM

 Consideration given to the need to establish procurement

parameters with CCC based on best practices.

 Whilst there is significant evidence relating to

procurement strategy, it should be noted that:

– The available evidence is typically quite generic and

frequently theoretical – there is very little specific

assessment of procurement strategy in this context,

recognising the specifics of the Bermuda airport.

There is no evidence, for example, of incorporating

market soundings.

– The available evidence is in large part from earlier

stages in project development. There is a potential

gap in the evidence to support the sole-source

procurement strategy opted for from June 2014, as

compared to previous evidence suggesting a

competed PPP procurement process could be viable

– It is not clear that some of the recommendations of

reports from earlier stages in development were

carried forward into the procurement strategy now

proposed

 The proposed deal itself is not very clearly defined,

particularly in respect of key drivers of value for the

Government on the concession agreement - this is

typically required to assess how successful a

procurement process has been prior to final signing of

contracts

 Overall, there is limited evidence of Government driving

the procurement strategy agenda and how to obtain best

value from a sole-source arrangement, including:

– Whilst there is significant consideration of delivering

VFM, there is not a clear negotiation strategy for how

Government will do this under sole-source proposal.

The ‘Fairness Review’ refers to an independent

#

Key Review Criteria

Evidence Covered

Gaps Identified

construction company, but it is not clear how this will

be used in the negotiation of the concession under the

Letter of Agreement (“LOA”). Expertise in airport

concessions rather than construction may be needed

too.

– It should be noted that the conclusion in favour of a

sole-source procurement (notably citing lack of

investor interest) is made by CCC, and Government

may want to perform independent analysis on

procurement strategy to satisfy itself on the validity of

this analysis.

– In particular, Government may want to consider how to

extract value from the procurement process – open-

book negotiation, for example, may provide better-

value if open book accounting and gainshare

mechanisms are enforced in the concession

agreement

– The LOA with CCC includes provisions for

Government re-imbursement of costs, a mark-up on

termination and a first right of refusal – it is not clear

that this has been analysed as a preferred

procurement approach, including the implication on

market demand

– Whilst sole-source procurements have some benefits,

they give rise to additional required considerations to

access benefits in the absence of competitive tension

C2

Is there sufficient scope

for a potential deal,

which will meet

organisational needs

whilst offering best

VFM?

 A number of documents outline potential commercial

structures and associated risk transfer.

 In terms of deal scope, CCC note that:

– CCC have a requirement to demonstrate project viability

to their internal Risk and Opportunities Committee.

– Government retains responsibility for satisfying itself that

agreements contain fair and reasonable terms and meet

VFM requirements.

 Documents to define approach to risk transfer are

typically generic - Government have not produced a clear

service requirement for market, or defined scope (e.g. for

ancillary opportunities) for risk transfer.

 It should be noted that CCC’s internal processes are

likely to consider CCC’s commercial position, not VFM

for Bermuda.

 It is likely that Bermudian Government will not want to

rely on CCC’s proposals to assess VFM. There is limited

evidence of consideration of specific mechanisms to

#

Key Review Criteria

Evidence Covered

Gaps Identified

– Government will need to satisfy itself of market-based

pricing through a third-party audit of key aspects of the

capital budget.

benchmark or assure VFM through assessing the

proposed deal.

 Therefore, Bermudian Government may want to consider

testing VFM not only in respect of capital budget, but

also in terms of concession structure and provisions.

These might include concession length but also:

– Pricing (revenue share, structure and incentivisation,

definition of revenue, annual escalation formula etc.)

– Service levels (Key Performance Indicators (“KPIs”),

enforcement, cost effectiveness, safety etc.)

– Labour commitments within contractual documents

(levels of staff retention, training commitments, local

supplier obligations etc.)

– Rights to renegotiate and review aspects of the

agreement

– Regulation considerations

C3

Has the potential deal

been considered in

sufficient detail? The

how rather than what.

 Significant detail on potential parameters and intent of

proposed deal included within the project concept

documentation.

 There is no defined deal for consideration. The LOA

describes an agreement to reach an agreement.

 To the extent intended scope of services are expressed,

these are proposed by the potential supplier rather than

as defined requirements and optimal structure and scope

for Government.

 Limited detail on concession structure, including payment

mechanisms, applicable regulation etc.

C4

How will business and

service change be

delivered and

implemented

successfully over the

lifespan of the contract

period?

 Potential supplier documents include considerations on

solutions to enable change.

 Considers Government retained risks and requirements,

including (for example) delivering Governmental permits

and approvals, and monitoring contract performance

 Limited evidence of Government consideration of how to

deliver value, including through benchmarking and/or

market testing.

 Limited detail on Government ability to deliver its

dependencies and requirements for the concession term.

C5

Is the potential deal

likely to be acceptable

and bankable within the

private sector?

 Documentation considers potential funding market for

PPP, and concludes overall on a robust market for airport

debt.

 It should be noted that the documents supporting the

bankability of the project raise considerations for the

procurement strategy on the relative merits of the sole-

source strategy.

#

Key Review Criteria

Evidence Covered

Gaps Identified

C6

Was the procurement

undertaken in

accordance with best

practice?

 Documentation includes CCCs proposal to competitively

tender 80% of construction works, which “will provide

commercial tension throughout the supply chain during

construction”.

 CCC propose Government use of legal, financial and

technical advisors to maintain VFM considerations for

Government and help deliver project.

 It should be noted that the procurement process has not

been undertaken for sub-contractors. It is understood

that AECON have been selected through a non-

competed process, although believed they have passed

through CCC’s due diligence process.

 It should be noted that it is not unusual for a prime

contractor to compete sub-contracts, but that is not

synonymous with offering the Government value through

the procurement process. A prime contractor would

expect to take the risk/reward associated with its sub-

contracting arrangements. In order to obtain VFM,

Government would therefore be interesting in extracting

value in competitive tension between potential prime

contractors rather than between sub-contractors, unless

there are specified gain-sharing mechanisms between

the prime contractor and Government in respect of sub-

contract arrangements. These are not referenced in the

documentation.

 Whilst there is a clear aspiration to use independent

advisors to help Government obtain VFM, there is limited

evidence of may require a road map for how and when to

use them throughout the project development and

procurement process, rather than on an ad hoc basis.

Use of technical, financial structuring and wider financial,

legal, and programme management advisory support is

typically documented within the Commercial Case prior

to commencing the procurement process.

C7

Can the selected service

provider deliver the

required deliverables

and services?

 Evidence of CCC and sub-contractors strong expertise and

track record on comparable projects is available.

 Documentation as a whole does not provide details of an

agreed deal against which CCC will deliver. Further

evidence might be explored in the future to test supplier

capabilities.

#

Key Review Criteria

Evidence Covered

Gaps Identified

C8

Have negotiations

resulted in a robust and

legally enforceable

contract?

 It should be noted that negotiations have not

commenced, supporting the overall conclusion that the

project status is more comparable to OBC than FBC,

albeit that the decision to proceed would leave the

Government liable for bearing supplier costs through

negotiations, and a first right of refusal. The Government

may want to consider the nature of the LOA agreement

and the CCC deliverables this ties the Government to

(and associated cost).

Financial Case

Introduction

The Financial Case is designed to evidence that the project is affordable.

Through our mapping activity we identified 21 reports and documentation as containing information relevant to the Financial Case, which will be assessed in

this analysis.

Detailed Data Assessment

#

Key Review Criteria

Evidence Covered

Gaps Identified

14 - Airport Development P3 Models Report (1 February 2014)

F1

Is the proposed

spending affordable?

 The report gives a high level overview of the pros and cons

of various development options and proposes one PPP

model with a high level timeline from setting objectives

through to financial and commercial close.

 Briefly summarises and puts in to context Leigh Fisher’s

August 2013 Capital Expenditure Affordability study, which

put the affordability price at $200m, in addition to a scenario

analysis. Highlights the importance of revenue streams to

support affordability and bankability.

 Proposes that a Lease Concession and Developer Financing

PPP model is a possible option for the Bermuda Airport.

 The document explores procurement options,

affordability, and proposes a way forward, but is

early-stage and states clearly that, “much

consultation will be required before identifying any

PPP model for the Airport project.”

15 - Project Concept for the Redevelopment of L.F. Wade International Airport (25 March 2015)

F1

Is the proposed spending

affordable?

 A preliminary phased construction cost budget is provided

based on the preferred terminal design.

 Sets out the preferred design which is selected largely on the

basis of a streamlined and efficient design which is less

capital intensive and supports affordability.

 The estimated capital cost of the preferred terminal design is

stated to be roughly 50% of the 2008 Master Plan design

cost.

 The estimated capital cost of the airfield apron, taxi-lanes

and taxiways infrastructure is stated to be roughly 40% of the

2008 Master Plan design cost.

 Affordability is assessed from the point of view of

CCC rather than the Government of Bermuda. Whilst

the CCC have provided a strong affordability analysis

on the proposal, it focuses on Capital Expenditure

Affordability, i.e., the project itself. The Government of

Bermuda may need to assess affordability from the

point of view of its own budget and balance sheet.

 All of the Government’s costs for the new terminal

operation may need to be budgeted for, e.g.,

computers, equipment, fit-out for Customs and

#

Key Review Criteria

Evidence Covered

Gaps Identified

 The CCC team identified an affordability gap in the operating

phase based on air traffic forecasts, operating cash flows

and financing costs.

 Based on CCC’s proposed design, Sources of Funds

estimated at $353m and Uses of Funds are estimated at

$388m—an affordability gap of $35m (a $186m reduction in

the gap over the 2008 Master Plan).

 The remaining $35m affordability gap is unlikely to be

closed, based on the report, and will remain with the

Government of Bermuda. A Source of Funds is not identified.

 Sensitivity analysis performed on key value drivers including

passenger traffic, an incremental Airport Improvement Fee,

Commercial Sales Revenue, and Salaries & Wage costs.

 CCC plans to use a limited recourse project finance

structure, financing the project cost based upon forecast

revenue streams rather than upon Government debt or

balance sheet.

 The proposed Source of Funds is provisionally identified as

16% equity from sponsors; a mix of debt from low- to near-

investment-grade private placement bond financing;

reserves, and export credit financing, likely from Canada’s

EDC totalling 47% debt; 25% Cashflow from Operations; 3%

Escrow from advanced Airport Improvement Fee; and a 9%

Funding Gap to be covered by the Government of Bermuda.

Immigration. These are Bermuda Government costs

and are not accounted for in CCC’s proposal.

 Additionally, the scope of the affordability assessment

is based on CCC’s proposed project scope rather

than the total project scope (i.e. incorporating

Government retained costs and additional project

scope, such as Solar PV panels or fast ferry

terminal).

 The assumptions on costs, revenues, financing and

sensitivity analyses in the construction and operating

phases in CCC’s proposal may need to be challenged

by the Government of Bermuda’s own advisors. E.g.,

Will the entire Departure Tax be allocated to the

airport? Is a 1-month debt service payment reserve

sufficient? Is the Cost of Debt analysis accurate? Is

there appetite in the Private Placement market for this

investment? Is refinancing risk accounted for in the

financial model?

 The financial model may need to be challenged if the

Government of Bermuda intends to rely upon it to

make an investment decision. It then may need to be

translated into the context of the Bermuda

Government’s budget and balance sheet.

 A Source of Funds for the remaining Affordability Gap

(currently identified by CCC at $35m) may need to be

identified and budgeted for.

 The feasibility of collecting $13m in Airport

Improvement Fees from passengers may need to be

tested.

 The allocation of risk between the Government of

Bermuda and the CCC team may need to be

challenged by the Government of Bermuda’s

advisors. The appropriate sharing of demand risk (air

traffic volumes) between the two parties in particular

should be very closely examined.

 The sharing of pre-close transaction costs should be

challenged and examined.

#

Key Review Criteria

Evidence Covered

Gaps Identified

 Responsibilities that remain with the Government of

Bermuda have associated costs and may need to be

budgeted for. E.g., maintaining offsite infrastructure

and airport access; delivering Governmental permits

and approvals; Guaranteeing stability in the legal

framework applicable to the project and project

investments; Coordinating Government agencies and

stakeholders and procuring required enabling

legislation; Oversight and monitoring of the

concession performance including construction,

operational standards, service standards,

environmental standards and; Civil Aviation and

related functions.

 We expect the Affordability Analysis performed by the

CCC team will be refined as the design and related

costs are developed and finalised.

 A balance sheet analysis for the Government of

Bermuda may be needed.

 Accounting treatment for the Government of Bermuda

may be needed.

 Stakeholders and customers should be consulted on

the Financial Case

16 - Project Concept for the Redevelopment of L.F. Wade International Airport (25 March 2015)

F1

Is the proposed

spending affordable?

 A Credit Analysis and Cost of Debt Analysis, which feed in to

the affordability model in the main Project Concept

document, are outlined in the Annex.

 The assumptions underlying the projected Cost of

Debt may need to be challenged by the Government

of Bermuda’s own advisors. Typically, these would be

considered in parallel to the project commercial

structures.

17 - The economic impact of constructing a new Terminal Complex at L F Wade International Airport (June 2014)

F1

Is the proposed

spending affordable?

 Document assesses total economic impact of proposed

project, considering direct and indirect economic impacts.



 Assessment is based on out-dated CAPEX estimates

from the 2008 Master Plan, and therefore does not

provide a direct assessment of costs for current

proposal.

#

Key Review Criteria

Evidence Covered

Gaps Identified

 Does not consider funding options or financial

appraisals for the recommended deal.

20 - BDA Airport Fees and Charges Benchmarking

F1

Is the proposed

spending affordable?

 Benchmarks charges and fees levied in Bermuda on airport

passengers, on airlines, and on fuel. Suggests that there is

room to increase passenger charges and fees, a small

increase in fuel fees, but no scope to increase charges to

airlines, when compared to Caribbean and US airports.

 CCC’s affordability analysis is based upon generating

revenue from a new Airport Improvement Fee, an

increase in the Security Fee (both levied on

passengers), and inflationary increases to all

aeronautical fees.

 The benchmarking analysis does not tie directly to the

assumptions made in CCC’s proposal, specifically

relating to which fees and charges have scope for

increase while remaining competitive compared to

Caribbean and North American airport charges and

fees.

 The benchmarking analysis appears to demonstrate

that on average, ‘all-in’ passenger charges across

Caribbean airports is roughly $58. This differs from

the CCC affordability analysis, which states that a

competitive ‘all-in’ passenger charge in the Caribbean

is $90-95. This is the basis of CCC’s assumption that

an Airport Improvement Fee of $31 can be added,

which would contribute to the Source of Funds

(including $13m accumulated prior to close).

 The above points demonstrate how the benchmarking

analysis, if valid, could be used to check and

challenge CCC’s financial assumptions, to ensure

they are robust and achievable.

 The author of the benchmarking study (un-named)

states that the benchmarking needs to be validated.

21 - Capex Affordability Analysis (7 August 2013)

F1

Is the proposed

spending affordable?

 Leigh Fisher’s report estimates that, using baseline

assumptions, roughly $200 million capital cost over 4 years

would be affordable.

 Leigh Fisher has assessed affordability from the point

of view of the airport project. The Government of

Bermuda may need to assess affordability from the

point of view of its own budget and balance sheet,

#

Key Review Criteria

Evidence Covered

Gaps Identified

 A key underlying assumption is that the Airport Departure

Tax revenue would need to be dedicated to the Airport and

would need to be $40 per enplaned passenger.

 Base Case assumptions include: financing set at 65:35 D:E

ratio, 11.78% WACC, $40 departure tax, 30-year

concession, Traffic grows 1.6% annually through to 2045,

i.e., from 795k pax in 2012 to 1.4mn pax in 2045.

 Based on a 30-year concession.

 Identifies challenges and success factors of Airport PPPs,

and recommendations to avoid issues.

and take in to account its own costs outside the

project SPV. The proposed concession structure will

impact affordability and this 2013 study may need to

be updated to take in to account the proposed

concession structure.

 The assumptions are similar to those in the 2015

CCC proposal but slightly different – e.g., Departure

Tax estimated at $40. These may need to be updated

and tested.

 Underlying assumptions may need to be challenged

and tested by the Government of Bermuda or its

advisors. E.g., is it realistic that air traffic growth will

continue at the same rate through 2045? Is the useful

life of the asset 25 years? Is a 50% reduction in

energy costs realistic?

 Should more sensitivity analyses be performed, e.g.,

a reduction or stagnation in passenger traffic growth?

(only positive growth scenarios are shown);

sensitivities on the WACC and hurdle rate.

 As Leigh Fisher’s model is critical to the affordability

assessment, it should be quality reviewed and tested

by the GOB or another third party.

22 - Terminal Feasibility Study (8 May 2008)

F1

Is the proposed

spending affordable?

 Presents several terminal concepts – written in 2008.

 Provides an overview of the terminal concept options,

selects a preferred option based primarily on technical and

aesthetic criteria, with Landside and Terminal construction

costs included (2 of 42 concept evaluation criteria).

 Presents summary estimated cashflows including operating

revenue, operating costs and construction costs. Affordability

is not estimated.

 The concepts in this presentation are no longer

considered options. CCC’s current proposal is based

upon a concept with a much lower capital cost

(roughly half), which should be more affordable than

the 2008 concept.

 The 2008 concept is therefore no longer relevant in

terms of affordability, except as a proposal against

which the affordability of CCC’s current concept can

be compared.

#

Key Review Criteria

Evidence Covered

Gaps Identified

23 - Initial Land Use Assessment Report

F1

Is the proposed

spending affordable?

 Considers the potential for land side commercial real estate

development, and was an input to a 2008 feasibility study by

HNTB on the Bermuda airport terminal redevelopment.

Provides recommendations on what land uses, square footage

and lease/sale rates would be appropriate based on market

data.

Does not provide comprehensive evidence to satisfy

criteria and is no longer relevant

 Focuses on land side – which is out of scope for the

terminal.

 Does not consider affordability.

25 - Independent Peer Review of Aviation Activity Forecasts (March 2015)

F1

Is the proposed

spending affordable?

 Prepared for the Bermuda Department of Airport Operations.

Assesses and challenges the assumptions and methodology

of Mott MacDonald’s Bermuda air traffic forecasts, which

were prepared for CCC. Suggests recommended changes,

additions and explanations required from Mott MacDonald in

order for the Bermuda Airport to rely upon the figures for

their planning.

 Air traffic forecasts are a critical input to a financial

affordability model, for both revenue and design specs (size)

of the planned terminal building.

 No gaps – this achieves what it sets out to achieve,

although further review is required as the forecasts

are updated.

26 - Bermuda International Airport Master Plan (December 2006)

F1

Is the proposed

spending affordable?

 The plan presents a chapter of financial implications

including capital and operating costs, passenger forecasts,

revenue enhancement opportunities, a benefit-cost-analysis,

and a discussion of procurement structures.

 Mentions that “private funding of the entire terminal complex

appears unlikely, as the expense of the project cannot be

entirely covered by projected revenues,” and asserts that the

key benefits are off-airport developments including lodging,

dining, and shopping. The report indicates that the 2006

master plan for the terminal building was not affordable.

 The concepts in this report are no longer considered

options. (By comparison, CCC’s current proposed

design is roughly half the cost and intends to close

the affordability gap.)

 The 2006 Master Plan is therefore no longer relevant

in terms of affordability, except as a proposal against

which the affordability of CCC’s current concept can

be compared.

29 - Bill Of Approximate Quantities

F1

 2008 construction cost estimates for the HNTB Bermuda

airport master plan provided by a quantity surveyor.

 No longer relevant to the current proposed airport

development.

#

Key Review Criteria

Evidence Covered

Gaps Identified

Is the proposed

spending affordable?

30 - New Airport Terminal

F1

Is the proposed

spending affordable?

 Outlines the GOB’s reasoning for selecting CCC as the

procurement solution for the Bermuda Airport Development.

 Discusses affordability at a conceptual level including:

limitations on the Government’s ability/willingness to raise

debt for the project; developer financing minimises impact on

the Government’s balance sheet; reduces risk of overruns,

delays and heavy procurement and consultant costs;

ensures the Government gets value for money.

 A fairness assessment is mentioned, to ensure value for

money.

 The statement is conceptual and focuses on the

benefits of the CCC procurement solution. A more

robust and evidence based review of affordability,

balance sheet impact, GOB budgetary impact,

quantifying both potential positive and negative

impacts on affordability resulting from the sole-source

procurement proposal.

 The specifics of the savings and efficiencies may

need to be analysed and supported by evidence.

 The scope and nature of the fairness assessment

may need to be set out to ensure it can indeed help

achieve value for money. Will it also help ensure

affordability?

34 - Discussion with Price Waterhouse re Airport Investment by telephone (16 November 2010)

F1

Is the proposed

spending affordable?

 2010 discussion of PPP and other financing and delivery

opportunities for the Bermuda Airport development based on

the 2008 HNTB master plan.

 PwC indicated that PPP financing would be challenging

based on market conditions at that time.

 Suggested a financial review, among other things.

 Very top level indication of financing and affordability

challenges under the market conditions at that time

(November 2010).

 This conversation does not meet any requirements

for the Financial Case but does indicate the Airport

team were considering the Financial Case at that

time.

37 - DAO Electricity Consumption

F1

Is the proposed

spending affordable?

 Excel tables showing actual electricity consumption by the

Bermuda Airport.

 This may be an input to the financial analysis. No

further information is provided.

#

Key Review Criteria

Evidence Covered

Gaps Identified

38 - Terminal Complex Feasibility Study (9 September 2008)

F1

Is the proposed

spending affordable?

 Outlines high level construction costs and cash flow over the

life of the project, based on HNTB’s 2008 Bermuda Airport

master plan.

 No longer relevant to the current Bermuda Airport

proposal, except as a comparison.

41 - Financial Model (July 2013)

F1

Is the proposed

spending affordable?

 Excel model underlying the Leigh Fisher 8 August 3013

Capex Affordability study.

 The model and study may need to be updated, and

expanded to study affordability for the Bermuda

Government, taking in to account the concession

structure and including all of the Government’s costs

and responsibilities related to the airport, aviation,

and supporting services and infrastructure.

42 - PPP Opportunity Scan

F1

Is the proposed

spending affordable?

 KPMG reviewed at a high level the opportunity for a PPP to

construct HNTB’s 2006 airport masterplan concept and

HNTB’s $544m total capex estimate ($398m for the terminal

complex itself).

 KPMG indicates that Financial Considerations (affordability)

are “Acceptable”, and that a large component of costs could

be covered by its revenue by increasing the current levy per

passenger by 2,628% in the base case.

 KPMG note that the project could be viewed by the public as

“excessive” given the $544m cost.

 Suggests that the 2006 Master Plan could be

affordable. This review was intended to be very high

level, and was based on a terminal concept which is

no longer being considered.

 Some of the insights are nonetheless still applicable

and should be re-checked against the current

proposed project concept.

 Underlying assumptions may need to be tested.

44 - Terminal Feasibility Study - Progress Review (8 May 2008)

F1

Is the proposed

spending affordable?

 Similar to earlier document, “BDA May8_final_edit”

46 - Ministerial Statement (21 November 2014)

F1

Is the proposed

spending affordable?

 Statement considers that the proposed commercial structure

will mean “no new debt for Bermuda”.

 Implication for Bermudian balance sheet treatment

might need more detailed assessment, including

implications (for example) on Government debt rating.

#

Key Review Criteria

Evidence Covered

Gaps Identified

51 - CCC Approach

F1

Is the proposed

spending affordable?

 Outlines the GOB’s reasoning for selecting CCC as the

procurement solution for the Bermuda Airport Development.

 Discusses affordability at a conceptual level including:

limitations on the Government’s ability/willingness to raise

debt for the project; minimising impact on the Government’s

balance sheet; reduces risk of overruns, delays and heavy

procurement costs; ensures the Government gets value for

money.

 The document is conceptual and a more robust and

evidence based review of affordability, balance sheet

impact, GOB budgetary impact, quantifying potential

positive and negative impacts on affordability

resulting from the sole-source procurement proposal.

52 - DELOITTE Bermuda Airport G2G Structure

F1

Is the proposed

spending affordable?

 This document appears to have been developed for local

stakeholder consultation.

 Budgetary and balance sheet impacts are mentioned, as

follows:

 Revenues will support repayment of debt of the developer.

Details are yet to be determined.

 Will the Departure Tax become earmarked for the airport?

 Yes

 Won’t this deplete the Consolidated Fund by removing one

of its revenue sources?

 Very little, because the expenses from running the airport will

also be removed from central Government. Only the net of

the two will affect the Consolidated Fund.

 High Level view of affordability.

 Further evidence of stakeholder consultation and

agreement would be useful.

Financial Case Summary

Based on the analysis above we can conclude the following on how the reports, documents and evidence points provided, when taken as a whole, align to

the FBC assessment criteria:

#

Key Review Criteria

Evidence Covered

Gaps Identified

F1

Is the proposed spending

affordable?

 Preliminary construction cost budget is provided based on

preferred terminal design.

 Preferred design has been selected based on design which

is less capital intensive and more affordable.

 Preferred terminal design is about 50% of 08 Master Plan

design costs.

 Airfield apron, taxi-lanes, and taxiways infrastructure listed

as 40% of 08 Master Plan design costs.

 CCC developed affordability gap in operating phase based

on air traffic forecasts, operating cash flows and financing

costs.

 CCC’s proposed design shows an affordability gap of $35m

(compared to $186m reduction from 08 MP).

 Sensitivity analysis performed on key value drivers:

passenger traffic, incremental Airport Improvement Fee,

Commercial Sales Revenue, and Salaries & Wage costs.

 CCC to use limited recourse project finance structure, based

upon forecast revenue streams.

 Source of Funds proposed as 16% equity from sponsors;

mix of debt from low to near investment-grade private

placement bond financing; reserves, and export credit

financing, likely from Canada’s EDC totalling 47% debt; 25%

Cashflow from Ops; 3% Escrow from AIF; 9% funding gap

covered by BDA Government.

 Benchmarking for airport charges and fees in Bermuda

(passengers, airlines, fuel) – suggests there is room to

increase passenger and fuel fees.

 $200 million capital cost over 4 years is affordable based on

Leigh Fisher’s estimates.

 Airport Departure Tax revenue would need to be dedicated

to Airport and needs to be $40/passenger.

 While there has been a great deal of work on the

affordability of the project, it has been developed by

CCC as opposed to the Government.

 CCC’s affordability components fail to encapsulate all

costs to be borne by the Government during and after

the project.

 Financial model requires a peer review.

 The main element missing from the affordability of the

project is that the perspective it has been developed

under leaves several cost components of the

Government amiss. It is therefore not robust enough

to make an investment decision and requires further

development.

 Cost of Debt needs to be challenged by Government

through the use of its own advisors.

 Balance sheet analysis for Government, including

impact on debt and credit ratings – this could have an

impact on the project structure and preferred

financing solution.

 Clearly set out the agreed accounting treatment of the

project for the Government.

 Specifics of the savings and efficiencies need to be

analysed and supported by evidence.

 Financial Model and study need to be updated, and

expanded to study the concession structure and all

Governments costs related to the airport.

 Further evidence of stakeholder consultation and

agreement would be useful.

#

Key Review Criteria

Evidence Covered

Gaps Identified

 Base Case assumes financing is set at 65:35 (D:E ratio),

11.78% WACC, $40 departure tax, 30 year concession,

traffic grows 1.6% per annum until 2045.

 Preferred terminal concept selected on technical and

aesthetic criteria (landslide and terminal construction costs

included).

 Estimated cashflows with operating revenue, costs, and

construction costs.

 Land side commercial real estate study included in the 2008

HNTB feasibility study.

 Peer review of air traffic forecasts including recommended

changes, additions, and explanations

 Brief overview of the reasoning behind selecting CCC as the

procurement solution.

Management Case

Introduction

The Management Case is designed to evidence “that what is required from all parties is achievable”.

Through our mapping activity we identified 14 reports and documentation as containing information relevant to the Management Case, which will be assessed

in this analysis.

Detailed Data Assessment

#

Key Review Criteria

Evidence Covered

Gaps Identified

10 - Draft - Traffic review and forecast (18 December 2014)

M1

Have the business and

cultural implications of

the intended service

been fully understood

and taken into account?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

M2

Are all the arrangements

in place for the

successful

implementation and

delivery of the required

services?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

M3

How will the benefits be

delivered and associated

business and service

risks managed

throughout the lifespan

of the service?

 Provides some detail on how benefits will be delivered.

While not aligned with the actual proposed plan, the traffic

forecasts and aviation market details outline how a key

benefit is generated.

 No benefits realisation plan, or risk management

strategy.

 Lacks detail for the lifespan of the proposed project.

#

Key Review Criteria

Evidence Covered

Gaps Identified

M4

Are contingency plans in

place should the

recommended deal fail

at any stage?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

14 - Airport Development P3 Models Report (1 February 2014)

M1

Have the business and

cultural implications of

the intended service

been fully understood

and taken into account?

 Considers at a high-level how different PPP structures

impact management control and responsibilities.

 These considerations are not in respect of the

preferred commercial option (concession agreement)

specifically.

M2

Are all the arrangements

in place for the

successful

implementation and

delivery of the required

services?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

M3

How will the benefits be

delivered and associated

business and service

risks managed

throughout the lifespan

of the service?

 The document considers benefit streams associated with

commercial airspace management and renewable energy.

 Detail on delivery of these opportunities is not

provided.

M4

Are contingency plans in

place should the

 High level timeline is provided on planning for and

delivering the procurement process for a competed PPP

procurement.

 Detail underpinning this timeline has changed

significantly since the document was produced and

single-source procurement strategy determined.

#

Key Review Criteria

Evidence Covered

Gaps Identified

recommended deal fail

at any stage?

15 - Project Concept for the Redevelopment of L.F. Wade International Airport (25 March 2015

M1

Have the business and

cultural implications of

the intended service

been fully understood

and taken into account?

 This document touches on staff transition to the new

concession arrangement in Section 7.2: Embracing and

Enhancing the Existing team. This section outlines

principles of the proposed approach to staff transition, a

proposed org chart of the management team, and

anticipated changes in headcount. No detailed change

plans are provided.

 It is worth noting that the document is prepared by the

prospective supplier rather than Government. Full

detail is not yet available on key elements of the

supplier offer in respect of labour commitments (such

as staff retention and staff training commitments) and

use of local labour.

 Recognising the sensitivity and local importance of

these plans, Government may want to retain control of

key elements of this part of the Management Case.

M2

Are all the arrangements

in place for the

successful

implementation and

delivery of the required

services?

 The document indicates that Phase 1 of the current

planning process with CCC will include risk management.

No detail is provided.

 Mention of providing external advisors to assist in the

contract although there is nothing reported in detail.

 Broad description of the project structure. Includes a

diagram showing how CCC fits into the airport operation.

 Currently a lack of detail on key elements of

implementation planning and approach.

 No reference to programme management, change

management, reporting mechanisms.

 Contingency plans have not been documented.

 Service streams and outputs have yet to be agreed.

 Evaluation, contract management, schedules, are

mentioned but not detailed in this document.

 Use of advisors for CCC is mentioned but the

Bermuda Government’s use of advisors may need to

be documented separately by the Government.

 Overall CCC’s “Project Concept” document is, by its

very nature, conceptual, and outlines principles of

programme management and delivery from CCC’s

point of view, but does not detail a delivery plan or

address delivery from the GOB’s point of view.

M3

How will the benefits be

delivered and associated

business and service

risks managed

 Limited current detail on benefits and risk management for

concession period. Some high-level consideration of how

commercial structures support risk management and deliver

benefits.

 Robust risk and benefit management strategy and

monitoring and reporting have not yet been included in

the plan.

#

Key Review Criteria

Evidence Covered

Gaps Identified

throughout the lifespan

of the service?

M4

Are contingency plans in

place should the

recommended deal fail

at any stage?

 Brief and high-level analysis behind contingency plans.

 There are currently no contingency plans set in place if

the development fails.

16 - Project Concept for the Redevelopment of L.F. Wade International Airport (25 March 2015)

M1

Have the business and

cultural implications of

the intended service

been fully understood

and taken into account?

 Full outline of the contracting team, yet to be agreed by the

Bermuda Government.

 No agreed programmes.

M2

Are all the arrangements

in place for the

successful

implementation and

delivery of the required

services?

 Project approach is conceptually outlined in Annexes 1-5:

CCC Team, CCC Bermuda MOU, Letter Agreement,

Design Brief, and Conceptual Drawings. These touch on

certain aspects of project management methodology,

reporting, risk management, contract management, but are

not fleshed out with detail yet at this stage.

 Some inputs provided by CCC’s external advisers to-date

are included.

 Brief overview of the contract management team (AECON).

 Specific detail of how project management

methodology and advisers will be used in the delivery

of the project are not included at this stage.

 Whilst many areas are touched upon conceptually, the

full delivery plan may need to be completed as the

concession plan matures.

 The Government of Bermuda may need its own

implementation and delivery plans, distinct from

CCC’s. Areas such as contingency, contract

management, reporting, use of external advisors, and

evaluation may need to be driven by the Government

of Bermuda for their own benefit.

M3

How will the benefits be

delivered and associated

business and service

risks managed

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

throughout the lifespan

of the service?

M4

Are contingency plans in

place should the

recommended deal fail

at any stage?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

21 - Capex Affordability Analysis (7 August 2013)

M1

Have the business and

cultural implications of

the intended service

been fully understood

and taken into account?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

M2

Are all the arrangements

in place for the

successful

implementation and

delivery of the required

services?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

M3

How will the benefits be

delivered and associated

business and service

risks managed

throughout the lifespan

of the service?

 Provides lessons learned for privatisation of airports in Latin

America and Caribbean, and identification of risk issues in

respect of:

– Aeronautical charging regime

– Concession arrangements

– Labour

– Financial objectives of concessionaire

– CAPEX investment

 Does not provide any detail on robust management of

risks in practice.

 Whilst this document provides lessons learned from

comparable developments, a full benefits delivery and

risk management plan is required.

M4

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

Are contingency plans in

place should the

recommended deal fail

at any stage?

26 - Bermuda International Airport Master Plan (December 2006)

M1

Have the business and

cultural implications of

the intended service

been fully understood

and taken into account?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

M2

Are all the arrangements

in place for the

successful

implementation and

delivery of the required

services?

 Benefits study has been included.

 Benefits realisation plan is not included, and overall

Master Plan is from 2006 and does not form part of

current management proposals.

M3

How will the benefits be

delivered and associated

business and service

risks managed

throughout the lifespan

of the service?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

M4

Are contingency plans in

place should the

recommended deal fail

at any stage?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

29 - Bill Of Approximate Quantities

M1

Have the business and

cultural implications of

the intended service

been fully understood

and taken into account?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

M2

Are all the arrangements

in place for the

successful

implementation and

delivery of the required

services?

 Several advisors were used to generate the estimates for

this project.

 As expected given the nature of the document, no

specific arrangements are in place for use of advisers.

M3

How will the benefits be

delivered and associated

business and service

risks managed

throughout the lifespan

of the service?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

M4

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

Are contingency plans in

place should the

recommended deal fail

at any stage?

30 - New Airport Terminal

M1

Have the business and

cultural implications of

the intended service

been fully understood

and taken into account?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

M2

Are all the arrangements

in place for the

successful

implementation and

delivery of the required

services?

 Document details poor track record for delivering of public

capital projects in Bermuda, and proposed use of CCC to

guarantee the project is delivered on time and budget.

 As expected in a document of this nature, detail on

how CCC will ensure delivery on time in terms of

practical management methodologies is not included.

M3

How will the benefits be

delivered and associated

business and service

risks managed

throughout the lifespan

of the service?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

M4

Are contingency plans in

place should the

recommended deal fail

at any stage?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

38 - Terminal Complex Feasibility Study (9 September 2008)

M1

Have the business and

cultural implications of

the intended service

been fully understood

and taken into account?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

M2

Are all the arrangements

in place for the

successful

implementation and

delivery of the required

services?

 Document includes section on ‘Implementation’ covering:

– Moving forward with enabling projects

– Public outreach

– Causeway coordination

– Land development

– Ongoing financial due diligence

 Delivery is addressed at a very high level.

 Whilst this provides evidence of past consideration of

implementation, this is based upon the 2008 plan and

does not form part of current proposals.

M3

How will the benefits be

delivered and associated

business and service

risks managed

throughout the lifespan

of the service?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

M4

Are contingency plans in

place should the

recommended deal fail

at any stage?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

#

Key Review Criteria

Evidence Covered

Gaps Identified

43 - Letter of Agreement (June 2014)

M1

Have the business and

cultural implications of

the intended service

been fully understood

and taken into account?

 Preliminary intent letter shows the high level concession

structure under which implementation would be carried out,

including the use of ProjectCo as the prime contractor with

Bermuda.

 Specifics of agreed programmes have not been

developed.

 Staff-side representation is not included.

 Personnel implications are not included.

M2

Are all the arrangements

in place for the

successful

implementation and

delivery of the required

services?

 Document outlines use of specialist consultants, advisors

and subcontractors.

 As expected for a project of this nature, very limited

detail provided on specifics of implementation.

M3

How will the benefits be

delivered and associated

business and service

risks managed

throughout the lifespan

of the service?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

M4

Are contingency plans in

place should the

recommended deal fail

at any stage?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

46 - Ministerial Statement (21 November 2014)

M1

Have the business and

cultural implications of

 The data contents do not align with any of the evidence

requirements listed in this criteria

 The data contents do not align with any of the

evidence requirements listed in this criteria

#

Key Review Criteria

Evidence Covered

Gaps Identified

the intended service

been fully understood

and taken into account?

M2

Are all the arrangements

in place for the

successful

implementation and

delivery of the required

services?

 Document highlights CCC’s guarantee that the project will

be delivered on time. It also notes the use of an

independent construction firm to review the project model to

ensure VFM.

 As expected for a document of this nature, there is

limited detail on specific provisions for project

management, or whether the scope of this review

would include project management methodology.

M3

How will the benefits be

delivered and associated

business and service

risks managed

throughout the lifespan

of the service?

 The data contents do not align with any of the evidence

requirements listed in this criteria

 The data contents do not align with any of the

evidence requirements listed in this criteria

M4

Are contingency plans in

place should the

recommended deal fail

at any stage?

 The data contents do not align with any of the evidence

requirements listed in this criteria

 The data contents do not align with any of the

evidence requirements listed in this criteria.

 It is worth noting that there is limited provision for

contingency plans should the procurement not be

successful.

47 - Memorandum of Understanding (10 November 2014)

M1

Have the business and

cultural implications of

the intended service

been fully understood

and taken into account?

 Agreed programme to engage with CCC on any airport

related matters. Does not detail any specifics of the plan.

 Business and cultural implications of service are not

fully taken into account.

#

Key Review Criteria

Evidence Covered

Gaps Identified

M2

Are all the arrangements

in place for the

successful

implementation and

delivery of the required

services?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

M3

How will the benefits be

delivered and associated

business and service

risks managed

throughout the lifespan

of the service?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

M4

Are contingency plans in

place should the

recommended deal fail

at any stage?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

51 - CCC Approach

M1

Have the business and

cultural implications of

the intended service

been fully understood

and taken into account?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

M2

Are all the arrangements

in place for the

successful

implementation and

 Change management strategy is addressed at a high-level.

Outlines the overall structure of the concession agreement.

 There are no arrangements in place.

#

Key Review Criteria

Evidence Covered

Gaps Identified

delivery of the required

services?

M3

How will the benefits be

delivered and associated

business and service

risks managed

throughout the lifespan

of the service?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

M4

Are contingency plans in

place should the

recommended deal fail

at any stage?

 The data contents do not align with any of the evidence

requirements listed in this criteria.

 The data contents do not align with any of the

evidence requirements listed in this criteria.

52 - DELOITTE Bermuda Airport G2G Structure

M1

Have the business and

cultural implications of

the intended service

been fully understood

and taken into account?

 The data contents do not align with any of the evidence

requirements listed in this criteria

 The data contents do not align with any of the

evidence requirements listed in this criteria

M2

Are all the arrangements

in place for the

successful

implementation and

delivery of the required

services?

 Document highlights CCC’s guarantee that the project will

be delivered on time.

 It also notes the use of an independent construction firm to

review the project model to ensure VFM.

 There is no detail on specific provisions for project

management, or whether the scope of this review

would include project management methodology.

M3

 Very high level outline provided on project timing.

 Detail is high level and not a detailed plan.

#

Key Review Criteria

Evidence Covered

Gaps Identified

How will the benefits be

delivered and associated

business and service

risks managed

throughout the lifespan

of the service?

M4

Are contingency plans in

place should the

recommended deal fail

at any stage?

 The data contents do not align with any of the evidence

requirements listed in this criteria

 The data contents do not align with any of the

evidence requirements listed in this criteria

Management Case Summary

Based on the analysis above we can conclude the following on how the reports, documents and evidence points provided, when taken as a whole, align to

the FBC assessment criteria:

#

Key Review Criteria

Evidence Covered

Gaps Identified

M1

Have the business and

cultural implications of

the intended service

been fully understood

and taken into account?

 Taken as a whole, there is relatively limited detail; CCC’s

documents do include consideration to personnel and

related considerations.

 Recognising the stage of development of the

Management Case, there is currently no agreed

programme. This is expected given that there is not an

agreed scope of the project or contract against which to

construct a Management Case.

 The Government may want to consider the need for

further detail in this area, and in particular the labour

commitments and personnel implications in the

contractual commitments made by any supplier.

M2

Are all the arrangements

in place for the

successful

implementation and

delivery of the required

services?

 From a Government perspective, detail is provided on the

benefits of using CCC to guarantee the project is delivered

on time and on budget..

 Detail is provided on the use of external advisors to support

successful delivery on both Government and contractor

sides.

 Overall, this part of the case is not well-developed.

There is limited detail on the practical arrangements to

ensure the successful implementation of the project.

Additionally, the detail that does exist is high level and

typically relates to CCC’s delivery of the project, rather

than considering the overall programme plan and

Government delivery responsibilities.

 Whilst an independent construction company is

anticipated to review the VFM case of the project, it is

not clear whether this scope includes review of project

planning. More broadly, specific detail of how project

management methodologies and advisers will be used

in the delivery of the project are not included.

 CCC’s contribution, role, and responsibilities outline

some aspects of risk management and change

management, but detail is limited.

 There is very limited detail on reporting, contingency

planning and contract management. Some of this

responsibility falls to Government, and Government may

want to play a proactive role in defining this.

#

Key Review Criteria

Evidence Covered

Gaps Identified

M3

How will the benefits be

delivered and associated

business and service

risks managed

throughout the lifespan

of the service?

 Detail is provided on high-level benefits, and CCC provide

high-level descriptions of effective risk management.

 There is very limited practical detail on the management

of benefits realisation or risks. It is also worth noting that

the detail that does exist is typically not ‘owned’ by

Government, who are in the large part the owner of

benefits from the project.

 Further work is required to develop a robust risk

management strategy and monitoring and reporting

arrangements.

M4

Are contingency plans in

place should the

recommended deal fail

at any stage?

 Limited detail.

 There is no evidence of contingency planning from

Government should the proposed deal fail.

Appendix 8 – Acronyms and

Abbreviations

Acronym

Full Title

Green Book

HM Treasury’s Green Book

CCC

Canadian Commercial Corporation

DBFO

Design Build Finance Operate

FCO

UK Foreign and Commonwealth Office

VFM

Value for Money

SOC

Strategic Outline Case

OBC

Outline Business Case

FBC

Full Business Case

DAO

Department of Airport Operations

CRB

Cash Releasing Benefits

QB

Quantifiable Benefits

CBA

Cost Benefit Analysis

RFP

Request for Proposal

ICAO

International Civil Aviation Organisation

ACRP

Airport Cooperative Research Program

MOU

Memorandum of Understanding

LOA

Letter of Agreement

EIA

Economic Impact Assessment

PPP

Public-Private Partnership

BAFO

Best and Final Practice

SPV

Special Purpose Vehicle

SMART

Specific, Measurable, Achievable, Relevant,

Time-constrained

CSF

Critical Success Factors

PV

Photo-Voltaic

NPV

Net Present Value

WACC

Weighted Average Cost of Capital

KPI

Key Performance Indicators

OGC

Office of Government Commerce

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