Port heading for fiscal turnaround

Port Authority of the Cayman Islands

(CNS): The acting director and chief financial officer of the Port Authority both told the Public Account Committee (PAC) Wednesday that the facility was facing a turnaround in its financial fortunes and expected to have turned its negative liabilities versus assets situation around by the end of this fiscal year.

At a surprise PAC hearing, which was not publicized, the three members who turned up heard that the port’s previous problem of liabilities outweighing its assets by more than $3.8 million would be in a positive position of assets outweighing liabilities to the tune of around $2 million by the end of this financial year.

Clement Reid, the acting managing director of the Port Authority, and its chief financial officer, James Parsons, were among a number of witness from government companies and statutory authorities as well as the CFOs from core government called to PAC to discuss the findings of the auditor general’s reports on financial and performance reporting and the consolidated accounts for the year ended 30 June 2011.

In those reports the auditor general had identified some significant problems for the port, and although there are still plenty of problems for the new director, whenever they are recruited, to address the future viability of the port, it looks more promising after Parsons explained that a combination of factors had helped to stem and effectively turn around the losses.

Parsons said that from a negative position of $3.8 million in 2011 the authority had gradually reduced the liabilities as the country recovered from its economic slump. Lower interest rates on the loans and cargo fee increases, combined with a growth in imports and a significant increase in cruise passengers had led to an anticipated positive situation of assets exceeding liabilities by some $2 million, making the port, once again, a viable concern, the CFO told the committee.

The PAC, however, heard that there were still problems, especially regarding tender fees, as a result of a deal the previous government had signed with the Florida-Caribbean Cruise Association (FCCA) agreeing to freeze tender costs until 2017 in exchange for a commitment from the cruise lines to contribute to the port development costs.

However, the port increased the fees to the tender agencies and the owners attempted to pass those on to the cruise lines, but because of the deal they would not pay and the previous tourism minister, McKeeva Bush, had instructed the port not to collect the fee increase, leaving the authority in breach of its regulations.

Neither Bush, who is the deputy chair of PAC, nor his West Bay party colleague and PAC member, Captain Eugene Ebanks, turned up to the meeting, so there was no explanation forthcoming about how that situation had arisen.

Despite still facing numerous problems, both Parsons and Reid were upbeat about the future of the port and said that governance issues and many other problems identified were being addressed. The men also said the current board had all been through good governance training, had signed their interest declarations and were taking a hands-off approach when it came to the day to day running of port operations, concentrating on the more strategic elements of the authority.

The port is now in the process of recruiting a new director after Paul Hurlston, the former boss, was placed on leave for the remainder of his contract, which will not be renewed. See related story.

Check back to CNS tomorrow for more from the PAC.