Cayman Islands government cuts deal for port with cruise lines

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Cruise ship passengers lining up for the tender at George Town, Grand Cayman. Photo: David Stanley/Wikimedia

GEORGE TOWN, Cayman Islands (CNS) — Royal Caribbean Cruises and Carnival Corporation have both made financial commitments towards the Cayman Islands’ controversial cruise berthing project, the territory’s government has revealed.

The tourism ministry said it is now in a position to issue the final tender documents to the shortlisted bidders, only one of which is partnered with the two cruise lines. Officials said that the financing commitment will be provided from the cruise lines in partnership with the preferred bidder and the agreement will be included in the invitation to submit final tenders that will be sent to all three remaining bidders.

“I am very pleased with the progress being made to move the procurement process for this project steadily ahead,” said tourism minister Moses Kirkconnell in a release on Sunday about the deal, reportedly signed on Tuesday.

“Formalising this agreement represents the achievement of a major milestone and is a great example of a public private partnership working for the benefit of the country. While the cruise lines had verbally confirmed their willingness to finance the CBF project, having signed agreements in place takes that commitment to another level,” he added.

The three shortlisted bidders will now be expected to submit their final bids by the end of the first quarter of 2019 and the winning bidder will be announced shortly after that, the ministry stated. Once the preferred bidder has been approved by the Public Procurement Committee, they will be contractually obligated to undertake a number of activities, such as conducting a geotechnical survey and submitting a coral relocation plan, a dredge management plan and an environmental management plan, according to the press release.

The Environmental Statement and Environmental Impact Assessment (EIA) will also be updated and submitted to the Environmental Assessment Board and will then go out for public consultation as part of the EIA process.

The announcement that the two cruise lines had agreed to part finance the project was first revealed by Premier Alden McLaughlin on Friday evening at the event marking the arrival of the first of Cayman Airways’ four new aircraft, when he said that no public money would be required to build the piers.

“This represents a huge vote of confidence in the Cayman Islands and in the viability of this project,” McLaughlin told the audience gathered to welcome the Boeing 737 Max 8, an investment made to help continue the islands’ historic overnight tourism success, which many people believe will be threatened by the decision to build the cruise berthing facility.

But McLaughlin remained undeterred by the risks of undermining the lucrative stay-over side of the tourism sector, even though a large section of the community remains unconvinced of the justification for the cruise port.

Describing the deal with the cruise lines as a “very significant milestone on the critical path towards the delivery of the new port facilities that this country needs to secure its economic future”, the premier pointed to the figures by PricewaterhouseCoopers in the outline business case to support the project.

“There is no future in doing nothing,” he said. “But in building the cruise piers the experts at PwC have told us that we can expect a net economic benefit of some $245 million plus the creation of hundreds of jobs during and after construction.”

Those figure remain controversial because the predictions are based on unsupported data and assumptions, in particular the claims about passenger spend. Despite the numerous unresolved issues, not least the simple logistics of where all of the passengers needed to cover the costs will go once they get here, McLaughlin said that securing the funding and active involvement of the cruise companies was crucial to the sustainability of the project.

“It is important to our many merchants, large and small, to the hundreds of people who they employ, to our taxi and tour operators, and to many, many Caymanians who make a living directly or indirectly from cruise tourism,” he said.

However, there are still many questions about the number of locally owned businesses and Caymanians employed that depend solely on the cruise side of tourism, as many of the jobs are held by permit holders and many are also equally dependent on the overnight business. McLaughlin also failed to spell out the details of the “hundreds of jobs” that would be created after construction.

One of those many other unanswered questions is how many jobs and businesses will be lost in George Town as a result of the destruction of the underwater attractions in the harbour. The devastating impact that this project will have on the marine environment and the jobs and businesses at risk were also dismissed by the premier, who said that the redesign would help mitigate the destruction of marine life.

Recent revelations, however, have shown that the projected reef destruction under the new design is only seven percent less when compared to the first drawings. In addition, the problems of silt and sediment killing reefs during and after construction have not been addressed.

“I respect the views of those who argue that no economic benefit can outweigh their environmental concerns,” McLaughlin said, before making it clear he did not consider the environmental impact a good enough reason to reconsider the project.

“But whilst I respect their viewpoint, this is not a position that a responsible government can take. We acknowledge that there will be environmental impact, and while we are redesigning the project to minimise that damage, there is no way that we can build a new cruise and enhanced cargo port without some impact.”

The premier said it came down to a question of judgement. “Do the benefits outweigh the costs?” he asked rhetorically and stated that the PwC prediction was the justification.

“In my judgement and that of my government, $245 million of net economic benefit, 500 construction jobs and then decades of increasing employment and business opportunities for Caymanians in the tourism industry definitely outweigh the inevitable environmental costs. At a time when huge economic threats are looming, we cannot and must not turn our backs on what in our view is a clear and convincing case for the benefits the cruise berthing and cargo port will bring,” he added.

The premier said he had kept the promise to structure the financing of the project in such a way as to minimise any risk to the country’s finances. Now, with this latest agreement, that risk was all on the cruise lines and the government will do all that it can to mitigate the environmental impact of the project, he said. But any proposals to mitigate the loss of reefs and wrecks that the project will cause will be down to the winning bidder.

“It is now essential that we get on with it and deliver this critically important project,” he said. “The cruise berthing and cargo enhancement project, like the new CAL airline fleet, or the upgrading of our airports, is an important part of moving Cayman forward and preparing us for the future.”

McLaughlin made no mention of the petition for a people-initiated referendum, which has been circulating for the last three months, which is reportedly almost ready to be handed to the Elections Office for verification. Regardless of the government’s plans, if the petition is certified to have the necessary 5,282 signatures from legitimate registered voters, the government is constitutionally obligated to hold a referendum.

Republished with permission of Cayman News Service

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