Challenges ahead for port bosses

| 09/11/2015 | 21 Comments
Cayman News Service

Port Authority of the Cayman Islands

(CNS): The Port Authority of the Cayman Islands (PACI) is still battling with issues relating to its accounts, which could spell trouble ahead for the authority if it becomes the main entity to manage the proposed cruise dock development and the collection of the taxes which will cover the costly project. In the recent report on the state of government companies and their financial situations, the auditors found that there had been significant improvement at the port but the public finance watchdog has warned that its liabilities still exceed its assets and uncertainty remains over its future.

The Port Authority of the Cayman Islands (PACI) has received a qualified opinion on its 2014 accounts, mostly as a result of problems valuing the land swap deal at Safe Haven. But the auditors have also pointed to other difficulties the management has with its finances. The authority is still unable to collect more than half a million dollars in tender fees as a result of a deal with the Florida-Caribbean Cruise Association over fees, which is preventing the authority from following its own regulations.

Garnet Harrison, the acting auditor general, expressed concerns about the board and management relationships as well as the risks ahead for the authority. He said the port project was still at an early stage and it was not clear who would be the owners and managers.

“From our view it is still unclear who is taking complete responsibility for this, whether it will be the port board or the ministry of tourism,” he said.

In the latest report reviewing the financial reporting of government companies and statutory authorities, the auditors still have concerns about the port’s future, and despite the major improvement in its financial situation, the auditors warn about the potential trouble ahead for the authority if it incurs more debt.

The financing model for the proposed cruise port development is now the next step for the government. However, given the commitments made that the new dock will remain in public ownership and the government’s difficulties over borrowing the financing options are very limited. The most likely way government will pay for the dock is a deal with the cruise lines to increase passenger fees, which will be down to PACI to collect.

But the port has a history of financial problems. “PACI has continued to have liquidity issues, as significant resources continued to be consumed in financing capital investments and meeting long term debt obligations,” the auditor general said about the port, as he warned that “liquidity risks” are still a factor for the port board to consider.

Despite a promising turn in the financial performance of PACI, which the auditor said could see the authority strengthen significantly if it continues, he warned that PACI’s current liabilities still exceeded its current assets by $0.9m as at 30 June 2014, indicating that it does not have the current resources available to meet its current liabilities.

Retaining concerns about “PACI’s ability to continue operating in the future without support from Government”, the auditor specifically notes risks if significant capital expenditure is required. The port’s long term debt obligations, which cost the authority $2 million per year, will be fully paid down in 2017 but if government forges ahead with the cruise port project, the ability of the port to function could be severely undermined if it has to carry the debt burden.

Cayman News Service

Port Authority of the Cayman Islands

Tags: , , , ,

Category: Government Finance, Government oversight, Politics

Comments (21)

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  1. jezcuz says:

    What ever happened to ‘FISCAL RESPONSIBILITY’ ??? So after Dart owns the island and The ‘cruise-ship’ company owns the port we (Caymanians) will be ****ed !!




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  2. Local Driftwood says:

    Well if they continue to pay the managers and heads the kinda salary they are being paid of course they will have to depend on government and the loyal tax payers. Is the Port Chief still making more than the Premier? How is this even possible?




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  3. J. Maguire says:

    People still think there is going to be a cruise berthing facility? LOL.




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  4. Anonymous says:

    Cayman being to own its own cargo and cruise facility should be a plus and not twisted around into a negative. Most other countries have much less means to build such a project and have no choice but to allow the cruise lines full control.
    There are other ports that charge well over what Cayman does to cruise lines and this is where Cayman needs to understand its worth. This project could be paid off in much less time if CIG realizes what we have and charges accordingly.
    If we don’t get this done now then when we are really hurting that’s when you’ll find yourself in a huge jam and no negotiating room.




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    • Anonymous says:

      Apparently we don’t have means, apart from the magic money fairy in the sky, and last time I looked his do called representatives on earth got their money from the NBF. That worked well for Cayman, right?




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  5. Anonymous says:

    The FCCA is a private Florida-based media company run by an wealthy old lady, her son, and a handful of compliant staff. This is neither a US Government Agency nor a non-profit consumer advocacy group. The people of Cayman should cringe when they hear a CIG department or leader mention the FCCA. For $200-25,000 a year they will spin positive articles on your Caribbean business/destination in their own industry publications. I can only imagine what they would propose to do for $500,000 a year in port fees, and the quality of Caymanian politicians that would consider such arrangement. With the compartmentalization of our CIG, it would not be surprising to find out that more than one Dept is paying baksheesh payments to FCCA along with dozens of eager local businesses. CNS, do you have a copy of this document?




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  6. Anonymous says:

    Maybe the KirkBots could help out




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  7. Anonymous says:

    So in other words ,Gov’t will not or could not build the cruise ship port without cruise lines lending money. The Cayman Islands are broke after building a high school and Gov’t headquarters. So any projects that will bring back revenue to our bank acct should be done as soon as possible. Such as airport and cruise port. So who will loan us money ? The UK? IMF? Private businesses ? Cruise Lines?




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