Uncertain projects behind CIG fiscal forecast

| 01/05/2017 | 45 Comments

(CNS): The government’s pre-election economic report, which was published last week, shows that government is on track for a healthy balance sheet and for economic growth this year. But the report’s rosy predictions for 2018, including a $75 million plus surplus, economic growth of 2.6% and a fall in unemployment to 3.6%, are dependent on speculative private sector construction and development. For the four years since taking office the PPM has touted major development projects, such as a hotel in Beach Bay, the Ironwood golf community and the cruise berthing facility, as the keys to economic prosperity, but none of them have started.

Most of the development that has taken place over the last four years has largely been down to public sector projects, like the airport and roads, as well as the islands’ largest and most persistent developer — Dart.

The report, which is in the CNS Library, suggests that the government is still hoping that the proposed but largely uncertain projects will begin next year to support the positive economic forecasts and that, despite the current unpredictability of international politics, there will be no global economic shocks.

“The forecasts are contingent on stable international economic conditions, private sector growth and the absence of economic shocks resulting from natural disasters or adverse international legislation,” the authors of the report at the finance ministry state.

“The economic forecast also assumes the continuation/commencement of major private sector construction projects in the Cayman Islands during the forecast period. If these projects do not come to fruition, it will negatively impact the forecast unemployment rate, GDP growth and other economic indicators,” they added.

If re-elected, despite the continued wide public opposition to the controversial and costly cruise berthing project, the premier has made it clear that his government will forge ahead. Nonetheless, even if he is at the helm of a Progressive or coalition government on 25 May, problems with the financial model, the position of the UK and public opposition could still see the policy steered off course. And while the one investor that has largely delivered, the Dart Group, is planning another major hotel, it is facing challenges to this next proposed resort.

The PPM has said that it will not allow a threat to Seven Mile Beach but Dart has said that unless they can dig up a whopping 1,225 linear feet, or around 8,410 cubic yards, of Grand Cayman’s famous beach along the shoreline to remove beach rock, the project will not go ahead.

The two other major projects that the government is still depending on and talking about with continued optimism are the proposed Beach Bay development and the Ironwood Arnold Palmer golf course resort in Frank Sound, but in both cases there is very little evidence that the developers actually have secured the financial investment to make them realities.

Providing that the financial services industry and the overnight tourism product continue to generate income and the local population continues to buy stuff, government will be able to fuel infrastructure development such as the road works, the recommencement of the John Gray High School project and even the long-awaited waste-management project, which will help create jobs for locals.

But government’s persistent consideration of what have often been termed ‘phantom projects’ means that while the hypothetical economic outlook maybe looking good, its continued optimism could be misplaced.

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Comments (45)

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  1. Anonymous says:

    We have a derelict High school that remains unfinished and 300 destitute elderly people that need a few hundred dollars a month assistance, who cannot get any help………. but we have a $400million surplus. Whoop de do.

    Way to run a country PPM. Lets get some more of that.

  2. Anonymous says:

    PPMs think that the UDP are a bunch of losers and they seem to be right. UDPers think that PPMs are only good at throwing money away and they seem to be right. Its like having to choose between a slow death and a fast one. The outcome will be the same for expats and Cayman businesses.

  3. Anonymous says:

    There is also mention of a South Sound Boardwalk, completed in April 2017. This is pie in the sky and South Sound is still unsafe and losing its identity to developers.

  4. Anonymous says:

    Yes they have a projected surplus of 48 million based on phantom projects that have not started and are unlikely to start while denying Poor Caymanians access to the poor relief payments provided by Government.
    The God fearing, Christian veneer Marco Archer and his PPM government have refused 300 Caymanians assistance which would have cost for the 18 month budget period about $2.8 million or about half of one percent of the surplus. So much for the benefits of the o
    “Older Persons Law”.

    • Anonymous says:

      CNS can we get back the “LOL” button please….

    • Anonymous says:

      Sorry Caymanians. Mac took all the poor relief budget, quintupled it, and has spent it educating, medicating, housing and maintaining hundreds of foreign nationals who he invited in without the legally expected checks and balances, and who are not in a position to provide for themselves. No subsequent government has sought to curtail it. Now there is less and less available for you. I believe the expression is “Dat wha u get.”

  5. Anonymous says:

    World economic growth has been revised upwards from 3.2% to 3.6%. Not good that Cayman is only forecasting 2.6%.

  6. PPM Dockeys says:

    What they don’t say is that the last Government had been in discussions and started these projects before they came into power, so really they think they have done this.
    In fact if they start to take credit on tourism as well, guess what it was the last Director who is now at Health City put all this in place before they came into power.
    I just love how others take credit for others work.
    I am happy I recall a useless school getting built in NS and elsewhere by the PPM , when we didn’t really need it and didn’t concentrate on our actual education system and teachers, not even being able to purchase school supplies for the kids.

    I’m so happy I won’t be voting for Alden this election, Mr Tibbets has my and families votes!

  7. Anonymous says:

    Have they found the missing $1 Billion dollars yet?

  8. Anonymous says:

    Smoke and Mirrors, Alden Marco and Wayne should be ashamed of themselves

  9. Anonymous says:

    $75mln is not “extra” savings that have been found that we can spend – adherence to the PMFL, a requirement for FCO lending, requires CIG to build sufficient reserves for a few months of extravagant civil service payroll to avoid gov’t shutdowns and sufficient surplus to service and retire outstanding debt – most of it originating under the PPM watch two terms ago.

  10. Anonymous says:

    What is the best estimate of how much the PR lawsuits will cost us? This regime is completely unwilling to accept their role and responsibility for what is coming in that regard. I don’t know how we can pretend that there is any credible effort to stay on budget when this Cabinet went out of their way to create this wholly unnecessary legal exposure – presumably against advice from counsel.

  11. Fed up already says:

    Learning from Trump. Very little accomplished but let’s take the praise.

  12. Anonymous says:

    But despite the notes of caution from CNS, the PPM has met or exceeded financial targets throughout their term. Despite potential delays (or cancellations) of the above-mentioned projects, other large developments have taken place, or are in promising stages of planning (i.e. HHG ongoing and planned works, large residential complexes, etc.). Point being – yes, there is a rosy forecast – but barring circumstances outside the government’s control such as global destabilization or recession, the figures are not unreasonable.

    • Anonymous says:

      When you drink too much of the PPM kool aid. #SMDH

    • Anonymous says:

      Guess you don’t understand the concept of creative accounting?

    • Anonymous says:

      The global, US and Caribbean economy all improved and Cayman’s economy improved right along with it. What the economic forecast hides is what Government services and programmes were cut to create this rosy picture. Can someone do a year by year comparison of the CI Government budget?

  13. Veritas says:

    To all these PPM naysayers do you really want the CDP to replace them,if so integrity goes out the window.

    • Anonymous says:

      Idiot, CDP is not the only other choice, stop being divisive.

      • Caymanian says:

        It’s who will get in. You are so naive to what’s happening. Half of these darn Independents are CDP people in hiding. Let’s make this clear so even you can understand. We have HONESTLY 2 choices. CDP or PPM…..Independents will not have enough to form the government. They will have to get either people from PPM or CDP to form. PPM won’t join if they don’t have control and independents won’t give that. CDP will play possum with it to get a foot in then take over from the inside.

    • Anonymous says:

      CDP – Credit Down Payment, only when government credit card is used in Las Vegas, for security services. The way to go.

  14. Anonymous says:

    Marco Archer’s creative accounting at work, too bad it’s not real. What a joke!

  15. Anonymous says:

    Figures! They always lying about the budget yet so many ready to vote Marco Archer back in based on this BS!!!

  16. Anonymous says:

    Small Caymanian business will never forget what the PPM has done to them led by Mr. Regulation (Wayne Panton) NEVER. Keep counting on foreigners to develop our resources, hope you are counting on them to vote for you too. Because it will NEVER come from us. Pipe dreams on our backs that’s all it is.

    • Anonymous says:

      Some small businesses were taking advantage and stealing from their employees more in the past. Making pension deductions and not paying it into their pension; Making health insurance deductions and not insuring their employees and getting away with it. Small businesses need to be held accountable too.

  17. Anonymous says:

    Even if this wishful thinking happens, the PPM is still focused on temporary low end employment. I really wouldn’t bother putting your kids through school as the PPM has secured those positions in a contracting financial service industry for expatriates. They really don’t have a clue what we need.

    • Anonymous says:

      Not having a clue is right! But don’t bother putting your kids through government schools and expect them to be able to compete with those who have gone through ANY other schools.

  18. Voodoo Economics says:

    Fantasy island stuff with healthy dose of voodoo economic speculation by Alden Marco and ppm comrades.

    Must be election time

  19. Anonymous says:

    Oh Man here they go again. All of the Projects that Mr. Bush left after they tried to (KILL )him. As the song says HARD MAN FE DEAD. They don’ t know how to get business for us. One thing I know that God will take care of you all PPM. He is a fair God. Uwill not be
    celebrating this time like you did the last Election. We have been waiting for four long years to Drink lots of BUBBLY.

    • Anonymous says:

      …at Country and Western, nah. LOL!

    • Anonymous says:

      12:17 pm, I hope their hands are clean and their hearts are purer by not spending taxpayers money at the CASINOS. Honesty, Integrity, and Accountability, that’s the PPM.

  20. Anonymous says:

    “The PPM has said that it will not allow a threat to Seven Mile Beach but Dart has said that unless they can dig up a whopping 1,225 linear feet, or around 8,410 cubic yards, of Grand Cayman’s famous beach along the shoreline to remove beach rock, the project will not go ahead.”

    No better reason to finance Big Mac and the Little Fries than to get what you want. Finance a few trips to Vegas and he might even consider relocating everyone in the West Bay cemetery across the street so a hotel can be put on Cemetery Beach.

    • Has anybody ever given any thought to the fact that Dart has a $300 million USD investment in Kimpton. Why would they want to destroy the beach asset immediately North of their investment? It would make no economic sense for them to want to destroy the beach asset as people come here for all of the beach not just the beach in front of Kimpton.

      One other point. I do not work for Dart and have no ties to Dart whatsoever. I am only a citizen interested in the long term development of Seven Mile Beach.

      • Anonymous says:

        Seven mile beach is over developed. Stop the destruction of the beach now and ever. There is no need for the removal of the rock formation.

        • Anonymous says:

          Spoken like a man who has no idea where his money comes from.

        • Anonymous says:

          Waikiki beach used to be a swamp before it was “developed”. Cayman Islands was and still is a swamp in the ocean. Unless there is oil under that swamp ‘development’ is the only way for it to sustain itself.

      • Anonymous says:

        Caymanians are not intelligence driven. Look at who they want as a leader. The fact that Dart is so successful is the problem with Dart. The fact that Bush was a failure at everything is not a problem for them.The only way to sway the voters here seems to be with bribes. Promises of money, washing machines, TVs, and a future with no Dart, no expats, and no way to pay for it all.

      • Anonymous says:

        Yes, the fabulous Kempton Hotel, where out of 400 employees a whole 7 are Caymanian.
        The Island really needs a few more of these right now because we know what a terrific job Mr. Dart does with anything he sets out to do.
        Let him go ahead and dig up the beach and build another one……… we all know that we need to create more jobs for work permit holders if this Island is going to survive because we Caymanians are too dumb to do it ourselves. WTF.

  21. Anonymous says:

    very good points CNS, we do need to delve bit more into these rosy projections. While a few things were achieved by the government its also very clear that a lot was talked about but there was no action. sounds like more promises to me.

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