Bean counters to cost out cruise dock

| 08/12/2016 | 46 Comments

(CNS): The government has issued a request for proposal from financial experts to help it find a way to pay for the costly and controversial cruise berthing project in George Town Harbour. The Ministry of Tourism is looking for consultants to help create a financial formula and prepare the tender documents for the project following the re-working of the plans by design consultants to put the piers in deeper water.

“With that process now well advanced, information is being developed to better estimate the cost of the piers, which is an important part of the next phase of the project,” said Chief Officer Stran Bodden, who is overseeing the development of the proposed facility.

The RFP, which was issued on 5 December, is seeking to attract consultants for the commercial, financial and legal aspects associated with the project, who have experience with cruise line companies and development. The ministry wants them to come up with a model for the entire project, and interested consultants would need to be pre-qualified by tomorrow lunchtime when the documentation will be sent out to them. Their bids are expected to be submitted to officials in January.

A Design-Build-Finance model in a public-private partnership agreement is one of the financing frameworks being considered. “What this essentially means is that financing for the project could be obtained or provided by the appointed contractor and would generally include all of the development costs from construction through to completion,” said Bodden.

Tourism Minister Moses Kirkconnell was confident that repositioning the piers in deeper water will minimise dredging and reduce the impact on the environment.

“While we await the official confirmation and full details of the redesigned plans, the decision has been taken to move ahead with other aspects of the project. The ministry has been working to an aggressive timeline since the business case was approved by Cabinet in October 2013 and we are keen to maintain that positive forward momentum,” he said.

Suggesting the controversial project would be a “national asset” owned by the people, he said various financial models must be considered to achieve value for money.

Bodden added,“Once the civil engineering design works are fully completed and a detailed estimate of the cost to construct the piers is known, the ministry will be in a better position to negotiate the best possible financing framework with cruise lines.”

But as government presses ahead with the project there are many people who believe it will be the opposite of a national asset. The projected was rejected three to one against during the public consultation process.

Kirkconnell has stated that this administration will not allow any upland retail development alongside the berthing facilities and government hopes to finance the project entirely through cruise line passenger fees and redirecting tender fees, avoiding any direct liability to the public purse.

It remains unclear, however, how the cruise lines feel about that idea, as it would mean a significant increase in the tax in order to pay for what could cost anything from $150-300 million. In an article in the travel press following the release of the consultants RFP, Roger Frizzell, Carnival’s chief communications officer, said that cruise line “remains open, as always, to playing a role in these types of activities as a partner in the community”.

The minister has cited the refusal of the cruise lines to include Cayman as a port of call for the new generation of mega-ships as the motivating factor for the development, which has raised very significant environmental concerns.

As the battle to protect Cayman’s threatened but exceptionally valuable marine environment gets increasingly difficult, many believe the loss of reefs and the impact on the underwater and potentially coastal habitat in and around George Town is far too high a price to pay to ensure more business for taxi and tour operators as well as a limited number of waterfront retailers.

The issue of the cruise lines opting to keep Cayman off the port of calls is a choice, as the giant ships, like all others, can still be tendered. Carnival has included Cayman in the schedule of it latest and biggest ever ship, the Carnival Vista, which carries close to 4,000 passengers. The ship will sail into George Town on 29 December.

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Category: development, Local News, Marine Environment, Science & Nature

Comments (46)

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  1. Anonymous says:

    If you cannot afford something, you cannot afford it. Simple. Stop hanging your hat too high.

  2. Anonymous says:

    Where are the Kirkbots? We can’t have a discussion about the port project without the Kirkbits and their ‘thumbs down’.

  3. Anonymous says:

    You know ……you people could get what you wish . You could get no port. But that will then be that we should not get into another 100 million dollar high school for 1000 children. Which of course the population isn’t going to stop. Children graduating at a larger and larger population each year will all go and become Accts, Bankers, hedge fund admin., private equity, lawyers? That would be the number 1 industry in the island. Oh wait , we were at 600 plus banks but they went down to 189 banks and going down? or up?
    So the number 2 industry then? Tourism would then be hotels and cruise lines? So if we are not going to grow and increase cruise ship business then only hotels? How many children graduating want to work in the hotels? Aren’t they hiring only a small amount ? How many at the new Kimpton? What about the new 4 seasons? You have already want to save the reefs for the tourists and they have less the 4 dive masters on Grand Cayman it doesn’t appear to me thats going to take a dent in over 1000 children graduating from public high school. So is someone going to open a factory? Or is Gov’t going to create some new industry? Oh dam I forgot Medical tourism High school will have at least 100 new jobs at Shetty’s What about next year? and the next?
    It was the idea that Taxis and Bus Drivers who are getting old would double their business and stingray city boat operators would create more jobs faster then any other tourist related jobs here and now. What about new venues: new stores, wet and wild, cafes, rest that are cheaper along with liquor? Are we not going to BUY airplanes for hotel guests? How much is that going to cost? What about the landfill wasn’t that around 580 million?Isn’t that going to cost more then the docks? How much would we make on that? If you want to understand why there will be less people on these old ships check Cruise critic on the internet and check their review on each island. This is not the cruise lines these are the customers. They will tell you who they like and whats right or wrong about this island. THEN you can make an informed opinion.

  4. satirony says:

    There’s much negativity surrounding the cruise piers, destined to form an essential part of an industry that employs directly and indirectly, between 1,000 and 2,000 people in Cayman, yet in the process of being built, will damage less than 1% of our reefs.

    The Ironwood golf course and access road, which environmentalists seem rather unconcerned about, will destroy over 700 acres of forest, including mangroves in the sensitive, untouched interior, while opening up large tracts of farmland for subdivision and construction, creating the inevitability of thousands of new cars on our roads. which are already intolerable during rush hour. All this is being contemplated without a revised or relevant National Development plan, or any meaningful plan whatsoever, as far as I can see. Anything goes, just about!

    As a society, we seem more concerned about the reefs where we don’t live, than the terrestrial environment, where we do. As a conservationist, I value all the systems of Nature, but as a society, we seem to be prejudiced against our unique, land-based ecosystems yet become emotional about our reefs. At the same time, we have just watched as the stewards of our Grouper spawning holes, the fishermen, allowed them to dwindle from over forty to around five, thus putting at risk of extinction a keystone species of our reefs, and possibly the only fish that might adapt to feed on the invasive Lionfish. The cruise piers are not the real threat to our environment.

  5. Anonymous says:

    The only ones who want this port are the already filthy rich George Town merchants. Up until recently I supported the PPM – I no longer can. Between giving still more of our island’s beach to Dart and an unnecessary/unwanted/unafordable port to our merchants I can stand no more. Alden, say bye-bye to my vote – it’s history!

  6. Anonymous says:

    This entire port fiasco project is like the man who jumped off the ten story building. As he was falling, the people on each floor kept hearing him say, “So far, so good.” -SMH

  7. Beanie Man says:

    Dem need bigga calculator fi count den beans!

  8. Anonymous says:

    Caymanians would be much better off if they just try not to do or build anything for about ten years.

  9. Anonymous says:

    Hahahaha you mean they haven’t figured out how to pay for it yet? How long has it been? A decade?

  10. Anonymous says:

    Train wreck in slow motion.

  11. MM says:

    PPM would sell their mothers out

  12. Anonymous says:

    more like magic bean counters…because this project is a fairytale……

  13. Anonymous says:

    Surprised Dart hasn’t been blamed for this yet, but there is always time

  14. Anonymous says:

    They keep shoving it down everyone’s throat.

  15. Anonymous says:

    Vote them all out for being stupid

  16. Anonymous says:

    They refuse to learn and will pay the price.

    • Anonymous says:

      We will be the ones paying the price, not them. They will be fine with their inflated pensions for life, side-deals and whatever else they have going on.

  17. Anonymous says:

    It’s ironic/sad that local Taxi operators have been among the most vocal supporters of the mega-liner berthing when they stand to be among the first casualties. By necessity, they will be replaced by large liner-owned buses, and will be cut out of the shore logistics loop completely, as they have been at every other port around the world. There’s plenty of factual feedback to Google on the subject that they ought to learn from. Unless you are a bus driver, or fleet owner, you ought to tempering your enthusiasm and considering what shore logistics for 20,000 will look like. Hint: it doesn’t include 10 passenger mini-buses.

  18. Anonymous says:

    ppm decoded: project still at square 1.

  19. Anonymous says:

    With Trump ascending to the White House, the false economic premise that Cayman must urgently scramble its cruise product to compete with “an emerging Cuba” has been invalidated (and was never a realistic threat anyway). Our cargo port is operating well under capacity as well and won’t need expansion for another 10years (with very optimistic growth assumptions). It’s not worth destroying marine park reef and saddling generations with debt we can’t service. This issue would be best stalled out to next (hopefully more consultative) regime. Cayman could do a lot of other higher priority things with the $200mln+ we don’t have.

  20. Anonymous says:

    Will you please stop referring to accountants as “bean counters”. The time and commitment it takes to become a qualified accountant deserves respect that is sadly lacking in this publication and I personally find it insulting.

    • Anonymous says:

      I really wanted to be a lion tamer.

    • Hancock says:

      Where were the bean counters at CIFA. Audit fees of $20,000+ and a 1500 clubhouse costing CI $750,000. You work out the maths. Mr auditor, can we have our money back.

    • Chris Evans says:

      Also, “Cops” in headlines, they are “police” and British slang not used in Cayman, such as “bung” instead of “bribe”. You are becoming really “Naff”!

  21. Anonymous says:

    This port is obviously not needed. In addition to the cost, you also have the destruction of valuable marine assets. I know that a port would make life easier for our cruise ship visitors but our on-island visitors who stay in our hotels contribute much more to the economy per head than the Cruise visitors. Building this port will be disastrous because it will likely be over-budget, take way too long to build and will likely not contribute greatly to our economy.

    Is there any other benefit to the island than just allowing cruise ships easier access?

  22. Anonymous says:

    What scares me about the CIG approach to this is that they’re talking about financing the largest capital project these islands have ever contemplated on long-term business predictions that are little more than guesstimates. Trying to predict what the cruise industry will be doing in 20 years time and basing those expectations on current trends is, at best, a very dangerous game. I can think of a more than a few places on this planet (I’ve worked in a couple) that saw a thriving tourism industry vanish almost overnight as the situation in the area changed. One in particular sunk $millions into hotel development only to find their neighbours across the border not only suddenly pulled in even more investment but because their cost of living was much lower could undercut the existing resort’s hotel rates. When I was last in this particular resort it was dead but across the border the hotels, I was staying in one, were packed.

    And in that context we have to remember that companies like Carnival are already talking to the Cubans about how many cruise destinations and resorts they may be able to build when the country opens up. The harsh reality is the cruise lines are already squeezing these islands for every cent they can get. They’re not going to put their own money up for anything when it can be better spent elsewhere and when they find that somewhere else that’s where the ships will go.

    Simple question for the Minister, “Can you guarantee that there will even be cruise ships visiting these islands in 20 years time if the dock is built,” and the only honest answer is, “No.” Right now there’s been absolutely no serious interest from the cruise industry (and here I’m completely discounting any vague promises from the FCCA because they don’t control the money) to become financially involved in the project and if that doesn’t sound a few warning bells nothing will.

    One of the problems with this projected is that the arguments have been side-tracked by environmental concerns. I’m not saying for one second this isn’t an essential part of the debate but at the end of the day what drives these islands is money. Nothing gets done unless someone can see something in it for them – that’s why we still haven’t got recycling here and why the use of alternative energy sources is lagging behind the rest of the region. Right now the only thing really driving the cruise dock project is the fact that certain people imagine they are going to make a lot of money out of it and we need to be very careful that these same people don’t commit us to a debt that we later find we cannot possibly pay off.

  23. Anonymous says:

    Cayman does not need the cruise dock. Does the minister remember presenting these stats?

  24. POLITRICKS 101 says:

    This decision to move forward at all costs could result in the final act of political suicide for this PPM government led by Premier Alden McLaughlin plus his MLA’s Marco Archer, Kurt Tibbetts, Osbourne Bodden, Wayne Panton, Roy McTaggart and Joey Hew.

    It is fair to bet that the two MLA’s from Cayman Brac will retain their seats and have nothing to lose under the circumstances but the other members of PPM seem unwilling to listen to the logic and legitimate concerns expressed by multiple stakeholders and citizens of the Cayman Islands.

    The Outline Business Case prepared by PWC by has been used as the justification but was littered with disclaimers by the consultants. It is fair to conclude that the costs of the entire project will increase beyond the projections of CI$150-200 million due to a new design, marine environmental mitigation & impacts and the proposed moving the berthing/piers into deeper waters.

    Are the PPM being secretive with the full details of this project because they are afraid to admit that their estimates are off and the project could cost the public purse over CI$350 million by the end?

    Where is the transparency? Public funds will be used to pay for the expensive dreams of this government. Would the PPM and MLA’s gamble with their own monies to placate and benefit a select few friends, family members and political supporters? Probably not but each should be asked to explain how and why they support this project at all costs. Let us never forget the multiple reasons the Framework For Fiscal Responsibility was enacted into local law and demanded by the FCO.

    Who is going to finance this project? Carnival Cruise Line, Royal Caribbean or a wealthy investor like the DART group but on what terms?

    Are tendering services done in the Cayman Islands? What happens on days when there are 5-8 cruise ships in port? The proposed cruise berthing facility can only dock four ships (the plan is to build two piers) Mr. Hew has publicly stated the CI$5.00 per passenger head tax currently used to pay the tender boat operators will be used to pay our partners in this Public Private Partnership.

    Does anybody believe this project will only cost the people of the Cayman Islands CI$200m as the magical figured quoted by the PPM government and Ministry of Tourism officials yet the Outline Business Case estimated total costs of CI$150m?

    The recent statement by Deputy Premier Moses Kirkonnell was lacking in depth, substance and details while timelines mentioned by Mr. Hew on behalf of the PPM seem impossible to achieve but there is an election to be won at all costs so it appears full steam ahead the consequences be damned.

    A few questions that the PPM appear unwilling or unable to answer:

    1. Where is the financing model they promised to share with general public? The PPM offend quote the Outline Business Case does that mean it’s content and projections are no longer valid?

    2. Who are the cruise line partners in the PPP and how much are they legally obligated to contribute to finance and build the CBF? Is there a guarantee for the total number of passengers calling into port which will pay for the project? What are the full terms and length of the arrangement in the PPP 30, 50, 99 years?

    3. What has been spent to date by the PPM on consultants, reports, professional services to move the project forward to this point? What is the total budget for this project? How much is too much to spend given the forecasted Return on Investment projections?

    4. If the plan does include any form of upland development to compete with current retailers what other incentives are being offered to the cruise lines, financiers and partners to make this a profitable venture for the investor?

    5. Has the FCO given its approval considering this project will require a financing agreement of some kind and new debt with the financing partner added to CIG balance sheet?

    6. Where are the full details for public review BEFORE the PPM commits generations to another massive amount of debt and another white elephant project like the Clifton Hunter High School and the other derlict projects like the John Gray High School and the other incomplete schools which is the political legacy of Premier Alden McLaughlin and his PPM government?

  25. Anonymous says:

    People of the Caymans Say NO to crony capitalism!

  26. Anonymous says:

    This dock project clearly butters the bread of the Kirkconnells, Thompsons, CCL/RCL, and Dart. Where is the proposal that has THEM financing this? It ought not to cost the public a dime given the benefit to everyone but the public.

    All the brainwashed cabbies that think this will be good for them, will be replaced by experience-controlled liner-operated busses, just like every other port that has done this before us. The little guys and ma and pa businesses will be crushed and squeezed out of the pie altogether.

  27. Anonymous says:

    PPM have to deliver for their friends in corporate cayman and the merchant class or else

  28. Anonymous says:

    Moses Kirkonnell and the government are attempting to deliver a cruise port that they cannot afford and are not certain how they’re going to pay for it primarily to benefit five GT retail businesses.

    The LPB is to benefit two law major firms that are driving the process and control the Law Society and CBA. Clearly the concept of conflict of interests DOES NOT exist in the minds of PPM leadership. The clear objective is to satisfy special interests groups that fund the political campaigns and look after key supporters no matter the costs to the country.


    • Anonymous says:

      Correction (as it is our money they so frivolously spend) WE can’t afford it and neither can our children and grandchildren.

  29. Anonymous says:

    Construction politics PPM style just in time for elections 2017.

  30. Bean Counter says:

    Watch out for the winning Dart finance-build proposal that Moses and ppm have already approved. This rfp process is compromised just like the values of this and the last government.

  31. Like Monkeys in the Jungle says:

    Destroying the coral and rock which the marine life have been using for security and food and that’s been around possibly for millions of years so that some monkeys can have their little building and dock. No better than a bunch of monkeys with cash that thinks their doing their part for the economy.

  32. anonymous says:

    The big 4 accounting firms are smiling all the way to the bank.

  33. Anonymous says:

    I am so impressed with how this project has been taken forward. Very open and transparent. All documents published.

    We can’t say we were not kept informed.

    • Veritas says:

      8.55pm tongue in cheek, right?.

    • Anonymous says:

      True. We just didn’t pay heed that the reports said ‘don’t do this’. (They have all so far said that there is better things to spend the money on for tourism, and though they show potential payment options no one has actually stepped up to say they’d pay for it because they can read that this is a bad investment.)

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