Cruise finance deals conflict with bid

| 13/02/2019 | 91 Comments
Cayman News Service

Cruise ship and tender in George Town Harbour

(CNS): Opposition Leader Ezzard Miller has called for the tendering process for Grand Cayman’s cruise port project to be stopped and redone because government has created a serious conflict by completing a side deal with two cruise lines and starting new negotiations with several other cruise partners that he has since learned about.

The tourism ministry announced late last year that it had cut a side deal on financing this project with Royal Caribbean Cruises and Carnival Corporation, even though it is still engaging in a design, build and finance tender for the entire project.

But now Ezzard Miller has red-flagged the ministry’s efforts to secure separate supplementary funding arrangements.

Government has so far kept a lid on the details of the deal it has already made with Royal Caribbean and Carnival, recently refusing an FOI request made by CNS.

However, in a media statement issued Wednesday Miller said he has learned that the ministry has gone a step further and is “actively negotiating” with as many as four more cruise lines, seeking loans to defray the cost of the design, building and maintenance of the cruise and cargo project.

“According to the sources, who have spoken on condition of anonymity, it is being proposed that these loans from the cruise industry are to be repaid through rebatement of port charges,” Miller said.

These side negotiations are apparently happening in the midst of an ongoing tendering process for the entire project, where two or three final bidders remain in the running and are expected to submit final bids at the end of next month.

The basis of the request for proposals for this project was that bidders would provide 100% financing, but Miller believes the Ministry of Tourism is trying to secure supplementary funding under a separate arrangement.

He said that this parallel arrangement will effectively alter the RFP that has been issued to the bidders and wants to know why the supplementary funding has become necessary and how these actions will impact the Public Procurement Committee’s ability to carry out its role.

“Does this mean that the short-listed bidders are experiencing difficulty in raising financing?” Miller asked, and if that is the case, how would the ministry know?

“What are the implications of those financing issues for the bidders and their longer-term capacity to honour their contracts, and how will the negotiations for and acquisition of supplementary funding
impact the Procurement Committee’s evaluation of the bids?” he asked, as he pointed to the serious issues that all of this raises in an already opaque process.

The opposition leader is also the chair of the Public Accounts Committee (PAC) and familiar with the requirements of the Procurement Law. He said the issue of transparency relates to the seven codes of practice in the newly implemented legislation, which requires public sector entities to ensure that there is openness and clarity on procurement policy and its delivery.

“All proposed procurement shall be published on the government’s website in addition to the results of procurement,” he explained.

Meanwhile, in six weeks time the cruise bidders will have concluded their financial arrangements in accordance with the ministry’s existing RFP requiring 100% financing, he noted.

“Unless there are some rapid interventions that will appropriately address the conflict, the potential clash in the two seemingly concurrent processes would drastically alter the RFP, presenting a complication in the final stages of bidding that would make it impossible for the Public Procurement Committee to properly evaluate the three bids,” Miller added.

Given all of the circumstances, the opposition leader is calling for the process to start over, otherwise the process will fall foul of the law.

“The Public Procurement Committee would therefore be well advised to reject the bids and to require the bidding process to be re-started,” Miller said. “Barring urgent adequate interventions, this is the least that should be done out of an abundance of caution to ensure that the bidding process and its outcome do not fail to meet the requirements of the Procurement Law, with all those far-reaching implications, to the ultimate detriment of the project and the people of the Cayman Islands.”

If the parallel negotiations continue, the publication of a new RFP would seem “not only unavoidable but absolutely imperative”, he added.

Given the real questions and concerns about the conflicting parallel process surrounding this controversial project, Miller said he would continue to flag these issues, while remaining committed to the people-initiated referendum.

“The referendum drive is gaining momentum as it nears its target number of signatures,” he said, noting that he and his opposition colleagues are engaging in a final drive to push the numbers of signatures to more than the required number to initiate a referendum.

“I am confident that members of the public will have their say on this very important national issue that will impact us irrevocably now and in the future,”Miller stated.

Read the full release and other relevant documents in the CNS Library

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Category: Local News

Comments (91)

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  1. Anonymous says:

    Before the contract is signed, the full port financing will be announced after the preferred bidder is selected and the updated business case and EIA are published and there is FURTHER PUBLIC CONSULTATION. Some know better and some are genuinely inexperienced and want to know, however with all due respect, asking for finalized information at this stage is like asking “are we there yet?”

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    • Anonymous says:

      4:11 pm: you are joking right? Or is it that you don’t really understand what public “consultation” means?

      Or are you implying that the public are so stupid that they will go along with the meaningless ritual of asking permission to close the gate after the horse has bolted?

      Not to mention that you seem totally oblivious of the importance of the observance of the protocols in place to protect against corruption in government procurement practices?

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      • Anonymous says:

        Perhaps you can enlighten us as what you think that Public Consultation means. While you are at it, please state specifically which protocol(s) you think are not being followed.

        I am a member of the public and don’t think I am stupid. The OP was simply summarizing the situation as they see it without casting aspirations and hurling insults at others. While you have every right to state your opinions, you do NOT have the right to insult others who may not agree with you. It is actually very weak.

  2. Anonymous says:

    Ezzard has never figured out yet that the role of the opposition is not to take the name literally. You shouldn’t just make up stories and information just for the sake of opposing everything the government does.

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  3. Anonymous says:

    Judging by how crowded public beach is during the day, how polluted the air and oceans are here (you wouldn’t know because we don’t monitor it – don’t think they aren’t) this island will most likely have a lifespan of about 10-15 years before being shut down like Boracay and other islands. Since we are already could be the cancer capital of the world, it’s a bit concerning that we want to have more, bigger ships. “Pollution from the port is leading to asthma and chest diseases. We are now seeing more, bigger liners but also very large bulk cargo ships.”said Chris Hinds, vice chair of the Southampton docks watchdog group WDCF. I didn’t have any health issues previous to moving here. Now I do, including asthma.
    I read somewhere that one cruise ship idling in the port all day is equivalent to 250,000 cars running. Do the math on that one.
    Go ahead, build the port and make some money for a few years. But it will be at the cost of this small island, and then we will all have nothing.

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  4. Anonymous says:

    Keep up the disinformation. The only people who will lose will be the Caymanian people. Do you think wealthy people are going to lose? Please tell anyone how we are paying for free public schools? CNB belongs to Dart? Foster’s moved to Camana Bay. Mary Street is dying, tenants are leaving to go to Camana Bay. OLEA has sold first and second phase of their project. 7 mile beach is sold and only millionaires will be able to go to the beach.The beach access will magically close because of crime, through UK. All the “people who don’t want the dock,” will want it when Cruise lines leave. We can see already that ships like Disney no longer go to Turtle Center or Dolphins company. AIDA passengers ride on bicycles and hold up traffic and won’t even buy a patty or a postage stamp. MSC European or Spanish tourists from Latin America spend very little money and has to get a discount.
    Well I say it, business is going down. So don’t build the dock just increase taxes and stand in line at NAU and beg on the streets for drugs and liquor. The Merchants will just move to another country where they will listen to business economics and not people who are not in business with Cruise ship companies. Bahamas, Jamaica and Cozumel are building more cruise ship facilities. They are not listening to the gloom and doom fools who are trying to stop an industry that has proven itself from 1937.

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  5. Anonymous says:

    We have the best government money can buy……

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  6. Anonymous says:

    sock it to them, Ezzard. thanks a million.

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  7. Anonymous says:

    Mr. Miller is correct in that the financing deal should have been completed separately before starting the tendering process for construction and operation of the port facility. In fact the government was advised in this regard and choose to ignore that advice. Further the presence of the cruise lines in the current bidding process should not have been allowed due to the conflicts that arise from their role on both sides of the project – financier and builder/operator. In the first stage of the tendering process it was stated in the tender document that only the top 5 bidders would be eligible to participate in the next stage. The question to be asked is were the cruise lines involved in any of those top 5 groups at that time and, if not, how did they still manage to get through to the second and subsequent stages? It appears that for the entire tendering process the government has been engaged in a parallel “negotiation” with one of the 3 remaining bidders. Can you imagine the reaction of the other two bidders once this is realized and the process concludes? We won’t know until the end but it may end up being tied up in court for years to come.

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    • Arthur Rank says:

      This would be an ideal project to experiment with a new procedure! This time, involve the Audit operation at the opening stages and throughout, after all that would save any embarassment later when people will inevitably claim corrupt practices given the parties involved and the scale of the project!
      Any bets on the likelihood of this happening?

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  8. Anonymous says:

    Just smell the cash behind all opaque transparency….

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  9. Anonymous says:

    7:52 am: So are the bidders being required to provide 100% financing of the port facilities or not? Did Moses provide this information at his meeting? Can you update us?

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    • Anonymous says:

      Why can no one answer the question concerning who will finance the port. Will it be financed by the private sector or the CIG? The people of the Cayman Islands have a right to know.

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      • Anonymous says:

        The bank of China will step up with financing, like they did in the Bahamas, then they’ll screw us , like they did in the Bahamas .

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      • Anonymous says:

        That question has been answered so many times. The CIG is not financing the piers. It is being financed by the cruise lines in partnership with whoever wins the bid.

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      • Anonymous says:

        Construction costs, still unknown, on a project with business case, engineering study, EIA, feasibility, scope, and design still TBD, with a long list of “other” ongoing incidental and operational costs this regime hasn’t bothered to factor because they are children. Hushaby everyone; we’re going to emerge from the darkness with the arbitrary appointment of a winning bidder in two weeks!

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    • Anonymous says:

      Yes Moses did provide this information at the meeting. Move along, nothing new here.

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  10. Anonymous says:

    Before selecting a winning bidder, we should be backing this decision process right back to the very first stage: where we openly analyze the rationale and impacts for a pier we don’t seem to need. The business case is predicated on there only being 6000+ untendered boats that either do not exist or aren’t being built for our waters. How do we ignore that fact?

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  11. Anonymous says:

    We need Mr. Miller to stand up for our Christian values and speak up regarding how wrong same sex marriage is. Why is he so meek on this? Now is the critical time for a strong voice like Mr. Miller’s.

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    • Anonymous says:

      Unfortunately for you, being gay is already completely legal in Cayman

      Saying your rights are infringed upon because you’re scared if we give them equal rights you won’t be able to discriminate against someone who doesn’t share your personal views makes Caymanians look very backwards.

      Which isn’t the case – by the way. You’ll still be able to hate gays and be bigots.

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    • Anonymous says:

      Expats are ruining the morals of our country, please Mr. Miller do something.

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      • Anonymous says:

        Ah, those good old expat morals eh? Yes when will those pesky furreners learn that incest is best, corruption to be praised, that they should pay money to scandalous churches that they cannot afford, buy a shiny new car instead of a sturdy home, not bother to educate their kids properly, rape and pillage at will, discriminate at will etc… BTW, I am Caymanian, the difference between you and I being that I face up to our issues, whilst you blame everyone else and pretend it don’t happen. Wake up and man up.

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      • Anonymous says:

        9:16 am — not a fair allegation.

        One of the two in this case is a Caymanian. Also, Cayman has always had its share of homosexuality.

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      • Anonymous says:

        Gee, maybe you missed this:

        In 2014, Caymanian Leonard Antonio Ebanks was finally found guilty of assisting fellow Caymanian Chad Anglin in the rape and killing of Swiss banker, Frederic Bise, following a sexual encounter that turned violent in 2008.

        Bise’s badly beaten body was found in February 2008 in the back of his own burned-out car. Ebanks and Anglin had moved the corpse from the murder scene, and set the car alight.

        Both Ebanks and Anglin had been arrested as suspects in the wake of the killing but they were NOT CHARGED until SEVERAL YEARS LATER following a cold case review. Witnesses testified they’d heard both men boasting about how they had done it, gotten away with it, and would never be tried for it because of what they had felt was widespread community sympathy for their hate crime.

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      • Anonymous says:

        Not expats…. many expat are as disgusted by the foreign liberals infecting the moral fabric of this country.

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        • Anonymous says:

          Don’t forget the racist conservatives!

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        • Anonymous says:

          Don’t forget the racists conservatives

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          • Anonymous says:

            As expats cannot vote Cayman must lay all political decisions on the Caymanian politicians voted in by the people. Expats make convenient red herring targets and scape goats but the local politicians who refuse me make the anti corruption bill into law after 5 years tells the tale.

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      • Anonymous says:

        Are Jamaicans expats. ?

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    • Anonymous says:

      Little too close to home.

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    • Anonymous says:

      8:38 am: This is a matter being heard by the Courts — Mr. Miller is aware of the separation of powers and that politicians cannot influence the court in its work.

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    • I'll see you there says:

      Your “Christian values” you claim to have also prohibit adultery, wearing wool and linen together, eating shellfish and working on Saturday so, unless you’ve done none of these and, not to mention the many more then, you’re probably going to hell anyway according to your Bible.

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      • Anonymous says:

        All fine and dandy, but at the end of our lives, it is not each other that we have to face. You were given a life and you have lived it as you see fit.
        You have to convince God of your righteousness, not us. We are all in the same boat. If at any time in the process of personal introspection you feel that you have not been perfect, do not worry. God has already provided a Saviour, His Son, Jesus Christ.
        I think that the biggest issues for us are unforgiveness, greed, pride, sexual promiscuity and spitefulness.
        Who is perfect? I have not met that person yet.
        Good luck with the shellfish thing.

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      • Anonymous says:

        Christian or not, wool and linen together are a big fashion no-no

      • Anonymous says:

        And you dear one 10:05 I presume have ordered your chariot of ? have you. Dumb Arsoneiest

    • Anonymous says:

      Wrong article my dear…

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  12. Anonymous says:

    I’m not a supporter of the dock but some of this doesn’t make sense. The story reads that the loans, ‘are to be repaid through rebatement of port charges.’ But isn’t this the whole game plan, that the project will be self-funding from the revenue is will supposedly generate?

    In fact it could be argued that, assuming the agreements are drawn up correctly and that’s never certain with CIG, a deal like this forces the cruise lines to use the dock in order to recover their investment. The big danger there is if CIG make their usual hash of negotiating the contracts the companies involved could pull out of here and still demand repayment of the money.

    Having said that it does sound like one of the other observations suggesting, ‘the short-listed bidders are experiencing difficulty in raising financing,’ be might not be exactly correct but is uncomfortably close to the truth. It sounds like the deal with RCCL and Carnival is dependent on CIG doing all the preparatory work and they simply haven’t got the money for that. Looking at everything that has been revealed (and that’s not much) the cruise line deal seems based on CIG presenting them with a project, which if they like it will be funded. It all looks a bit tenuous and extremely risky to me – how much money can we afford to lose if it goes belly up?

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    • Anonymous says:

      8:30 am: It sounds to me that for the next 25 years funds from passenger tax will go to the successful bidder.

      On your point in your first paragraph, what I discerned from what Mr. Miller was saying that APART from the prime bidding process, a separate negotiator was taking place that would be repaid by rebatements on port charges, as this involves cruise lines (separate from the bidders, I gather).

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      • Anonymous says:

        9:59 It all looks to me like this is turning into a complete cluster***k! The people pushing the project have got ‘target fixated’ – they know what they want but with no idea how they’re going to get it, if it will work out or even why they want it.

        Check today’s news on the A380, that’s a classic example of this mentality. Airbus convinced themselves there was a market for 1200 of these monsters even though all the evidence said that was delusional. Common sense should have told them that (like the earlier A340) the project should have been binned but egos got in the way and the whole thing went very expensively pear-shaped on them.

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      • Anonymous says:

        CI Port charges $2.46 per passenger, which @ 10 year avg of 1.6mln pass/year = $3.9mln. At that return rate, and assuming $200mln build cost, we’re still looking at AT LEAST 50 years to payoff. Build cost excludes structural maintenance, dredging, staffing, tug boats, tug crews, training, insurance costs, and inevitable other unforeseen costs.

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        • Anonymous says:

          This was explained in the public meeting. The simple answer is – right now it costs the cruise line $10 to transfer a passenger to our shores on a tender boat. Once the dock is built that $10 goes to the financiers instead of the tender operator because the dock that the passenger walks on is what will transfer them to our shores.

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          • Anonymous says:

            It was McKeeva’s tendering deal with RCL that set tendering subsidies into a tailspin at the GT port. The emails are Googlable. It was all in effort to lure their biggest new gambling ships to our port for his pleasure. This is a vanity and gambling addiction run amuck. Not only will our ecosystems be irreversibly affected, but we will be saddled with the humiliating costs associated with maintaining a lunatic’s pier in 80 feet of blue water – for as long as mother nature allows. Probably without insurance.

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          • GT Voter says:

            There will still be tendering services even if the dock is built please try another set of lies to justify this complete nonsense

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            • Anonymous says:

              Passengers using the tenders pay the tender operators while passengers (the majority) pay the dock fee which goes to the financiers of the dock. Not rocket science.

  13. Anonymous says:

    I have a theory explaining why government continues to move ahead with the expensive dock even though the reasons for building it namely Cayman would lose cruise ship business no longer is valid.
    My theory is that it is the government competing with Dart and Camana Bay. George Town rehabilitation has been weak to say the least and although it has been a goal for 5 years not much has been accomplished. The dock is meant to revitalize George Town.
    Government doesn’t know how to redesign George Town and replace all the trees that they previously removed thus the dock moving forward regardless of the 1,000s of voters against it and risk to 7 mile beach.
    The dock is a mistake, George Town can be redesigned and revitalized without a dock. The money can be spent on George Town, education, the landfill and roads. Hire people who are up to these challenges as the talent clearly isn’t in government.

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    • Anonymous says:

      8:28 The reason they’re pushing ahead with this is simply that a number of well connected people know they can make a financial killing out of it and buy themselves nice retirement homes in somewhere like Miami.

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  14. Anonymous says:

    The cruise lines funding the dock was part of the plan and declared in public from the beginning. This is not against the process but exactly as it was laid out for all to hear and see.

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    • Anonymous says:

      Amen. I heard this explained by CIG at one of their public meetings. This has always been the plan and it’s a good one.

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  15. Anonymous says:

    Moses Kirkconnell and his team at the Ministry of Tourism do not understand basic concepts of what international best practice and the highest standards of integrity for a procurement process should consist of if they are indeed continuing negotiations with other cruise lines after closed bids have been submitted and the review of bids has begun. The procurement process for the project proves how third world the Cayman Islands really is. Sadly it is a reflection of the country’s leadership and people.

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  16. Anonymous says:

    This port project stinks worse than Mount Trashmore.
    Where is the official investigation by the Auditor General’s office and the Anti-Corruption commission?

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    • Anonymous says:

      Wait until the contract is awarded to you know who , then you’ll have some corruption to investigate.

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    • Anonymous says:

      Speaking of Mount Trashmore, it is now high enough to see when you drive to West Bay. One can only wonder if you can see it from space? Every day it gets bigger…

  17. Anonymous says:

    Awful. Thank goodness Mr. Miller is on top of these shenanigans.

    It does point toward the fact that only some people in the CIG are getting paid for pushing ahead with the port.

    So it does seem that the CIG is well and truly cracked. That should be enough for a no confidence vote.

    Kenneth Bryan is vocally pushing back for his constituents, as well.

    There is a big black cloud hanging over the Cayman Islands. The greed and deceit runs deep and wide.

    Sinister backroom dealings will come to light and being blacklisted in the financial world will be the least of the problems for the Cayman Islands.

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  18. Anonymous says:

    Anyone notice Norwegian Epic just crashed into demolished a cruise ship dock in Puerto Rico the other day?

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  19. Anonymous says:

    What rewards? Millions and millions in repayments over the next 25 years? The notoriously weak spending by cruse ship passengers? The increasing congestion in GT? The destruction of our eco-system? The congestion on our beaches?

    Is that it? Pray tell.

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  20. Anonymous says:

    Ezzard knows the Minister publicly announced all these so called new things he now acts as though he discovered himself, so does Ezzard think we are so dumb we would believe this bologna he’s saying??? Come on Ezzard give Us more credit. We see thru your games.

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  21. Anonymous says:

    No deal for Millerssss at this time.

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  22. Anonymous says:

    oops.

  23. Void says:

    Difficult paths often reap the most rewards.
    The dock will be built..?

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