CPR rebuts premier’s misleading claims

| 28/02/2019 | 47 Comments

Cayman News ServiceCPR Cayman writes: Premier Alden McLaughlin again stated at last week’s Chamber of Commerce Luncheon that no public money will be used to build the proposed cruise berthing facilities. This statement may be technically correct, however it is misleading. Taking into consideration the accounting principle, substance over form, while public money might not be allocated to pay for the facility up front i.e. the initial capital, the cost is actually a loan to Cayman which will be repaid to one or more private companies in the future from port, or other, as determined by the government, receipts out of future public money.

Bigger ships:

The premier refers to the cruise lines building bigger and bigger ships; again, correct but misleading. The cruise lines are building a few bigger ships, however, as supported by the cruise industry order book for new vessels, the majority (69%) of new ships on order between 2019 and 2027 are for the smaller vessels with passenger capacity under 4,000, all of which can tender. The largest class ships with passenger capacity over 6,000 represent 9% of new ships on order during this period.*

The cruise industry recognises there is a limited market for the novelty new larger ships, and publicly available industry reviews indicate cruise visitors prefer the smaller vessels, notably under 3,000 passengers. Further, of the announced destinations for the 28 ships on order with passenger capacity of over 5,000, only one is scheduled to sail the Caribbean, in contrast with six to sail in China and five to sail in Europe and Asia.

Ship order book 2019-2027 by passenger capacity, as at 18 February 2019:

Innovate or die like Kodak:

We do need to innovate, but it is wrong to think that bigger is better, that multiple millions of cruise visitors and more of the same for more crowds is the way to go. Where is the innovation in that?

What we actually need to do is protect our cruise tourism by enhancing our offering, improve the experience of our current visitors and make ourselves a distinct and unique destination, stand out from the crowd. And we can do this without incurring hundreds of millions of dollars of debt to the cruise lines and losing control of our cargo and cruise port.

If one of Cayman’s tourism industry goals remains to convert cruise visitors to stay-over visitors, we need to improve our offering with a focus on quality of experience rather than downgrading it through overcrowding.

The environment:

The premier saying that “the developers will do their best to keep the environmental impact to a minimum” is of little comfort to anyone who has even a basic understanding of the Environmental Impact Assessment report and/or understands the nature of the limitations clearly stated in the report.

At the moment George Town harbour and its surrounding is enviable, with clear waters and beautiful Caribbean sand, full of snorkellers, swimmers, glass bottom boats and submarines. All of this will disappear from dredging during construction and under the silt from bow thrusters and fuel pollution from huge ships at permanent, dockside berths.

This is a high cost for current and future Caymanians to pay in terms of lost ecosystem services, loss of cultural and historic shipwrecks, loss of scenic coastline, and lost tourism revenue for the businesses currently operating there.

Massive economic gains, increased employment and business opportunities:

So many construction jobs and business opportunities, but for whom?

The government has failed to disclose the type of new job opportunities that they claim will be made available and how they have evaluated the economic benefits, and it is reluctant to share with the public the business opportunities.

$245 million economic benefits? An interesting figure. Where does this come from and, more importantly, who does it go to? Given that the cost of the project has been projected to exceed US$250 million and we know that this will rise again (and again), most likely to well over US$300 million, where’s the economic benefit in that?

To use the words of our premier:

This comes down to a question of judgement – do the economic and environmental costs outweigh the benefits? This should be a question asked to the citizens of this country, whose children and grandchildren will be the ones most impacted. In an informed democracy, the government should enact the will of the people.


*Sources:
Cruise Industry News
AMEM
CruiseMapper

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Category: Viewpoint

Comments (47)

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  1. ThIs WrItInG Is VeRy IrRiTaTiNg says:

    Please fix the broken education system and clean up the dump before proceeding with the cruise birthing facility.

  2. Anonymous says:

    In the latest Tripadvisor best beaches poll not only has SMB dropped well down the ratings but it’s been outpointed by Varadero beach at a time when tourism to Cuba from the USA has fallen off due to Trump’s reversal of the Obama policies.

    As a occasional visitor to GC I think Varadero already makes SMB look like a scruffy over-crowded, over-developed dump anyway but just imagine how bad it will get with the cruise dock and the proposed high-rise hotels.

    One of the great things about Varadero is the hotels are set back from the beach, you can go down there (and I have on several occasions) at dawn to enjoy a run and a swim on a totally empty, unspoilt, beautiful stretch of sand. Try that here.

    Here’s a scary scenario for you – you build the dock but in the meantime Trump gets kicked out and the new president opens up relations with Cuba. Where do you think the cruise lines will go then? RCCL and Carnival have apparently already surveyed up to a dozen potential locations for cruise resorts in Cuba and they could probably build the whole lot and get change out of $300million – that’s the reality of life.

    This is a project built on foundations of quicksand.

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    • Tell It Like It Is says:

      People of the Cayman Island all of this repeated blah blah ain’t changing anything. Get up and get off of your fannies and protest against the monstrosities ( the Tower of Babel includes) that this avaricious Government is supporting.

      Enough is enough so all the Referendum leaders and the opposition leaders the Rooster clan and the general caring public needs to march on the glass house march on the residences of the powe hunger, march to the Governors residenc with the slogans of dissatisfaction and a call for a stop to this madness and yes removal of those who will carry you to a path of no return for generations to come.

      Do it now or forever live in shame and regret.

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  3. Cal says:

    Ok folks time to reflect. Been coming to Cayman since 1994 but monthly since 2014. I recognize that change is a part of life…but wow..the traffic jams on big cruise day, the lost fun of stingray city, the Burbon street tee shirt atmosphere.. who wants this? The phony radio commercials promoting the dock…the phony big ship arguments…who really wants to cruise with four to six thousand of your non closest friends..just love waiting in line for lunch. I understand Dart wants to make money but at what expense to the wonderful Cayman atmosphere…a fifty story tower is obscene! Tourists come here to get away from their crowed cities and bad weather. The real draw for tourism is public safety. Compare other Islands? Your arrogant politicians and their know it all “just trust us” response to the dock is both juvenile and short sighted. A Beautiful ship to dock boat ride is actually a positive experience. It sure beats a mass of people on a dock waiting for a tractor train only then being shuttled to a bus only to be caught in stop and go traffic.This whole path to the future is just shameful. Let us hope more intelligent planners take front and center. The current group are nice people but a long term view is now required

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  4. Anonymous says:

    Reminds me of when Mac declared Cayman people would not have to pay cancellation fee when he took port project from Italians and gave it to the Chinese…then it turned up in the financial statements.

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  5. Better Public Schools! says:

    I’ll say it here again; why put hundreds of millions of dollars into a concrete and steel cruise berthing facility, with the goal (says the Gov) of creating opportunities and jobs for Caymanians? Why not put that hundreds of millions of dollars into fixing the BROKEN public education system so that young Caymanians can leave the public school system better prepared for higher education, so that they can take advantage of the opportunities that already exist? Too many young Caymanians are not able to gain access to high paying CAREERS in Cayman’s financial industry, because the public education that they receive is sub-standard, making it harder for them to get into higher learning, and making it harder for them to get even low paying retail jobs.

    New cruise ship berths = low paying retail and transportation JOBS for Caymanians (if we’re lucky)

    Fixing public education = access to university education, access to high paying CAREERS, a populace that is better able to support their families and educate their children and eliminate the need for government handouts.

    If you have a child in Cayman’s BROKEN public education system, shouldn’t you be running out to sign that petition right now?

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  6. Anonymous says:

    This was a great read and clearly states the reasons why this port is so controversial.

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  7. Arthur Rank says:

    How many sensible, well argued pieces like this need to be written before the CIG is shamed into responding? Well the answer is that they appear beyond shame. The reasons not to do this project are so clear, the obfuscation of actual fact so obvious, that I have to ask, again and again, what is causing the Ministers involved to plough on despite what is obvious? Maybe it is something “behind the scenes” which they cannot share with us? Well, that is a possibility we must all start to believe if they will not answer arguments such as the CPR item.
    Consider:
    The talk of bigger ships, shown above to be irrelevant.
    The clear case against encouraging low spenders, because they deter high spenders.
    The nonsense about zero cost to the Island, when the amount the Cruise Companies pay for the project is offset by what they will not pay for port dues.
    And the environmental issues which themselves kill the industry which draws people here in the first place.

    To ignore, or not to counter, all of the above, is inexplicable, unless, as I say above there are reasons the Ministers don’t want to share with us!

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  8. Anonymous says:

    So sad, you still haven’t figured it out after years of explanation. If the ships don’t come they lose the money. There is no loan, there is a trust between parties, but nothing is written in stone. Could the world end next week on Friday? However, we do know that every cruise ship port is building more ports because of business and expected the increase in population. Bahamas, Jamaica, Cozumel will we be next?
    I hear we don’t want to be like other islands. However, if the islands would come together, we could be so much more. No matter what you think if we don’t keep up our game, we will not get back the islands that time forgot. Banking is only good for a time we need to refresh and reboot, or we will die. Join the world Cayman build taller buildings improve infrastructure to offer more in the North Sound you can’t stop it. The train is leaving the station if you don’t the youth will, and someone else will come and do it instead.

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    • Johann Moxam says:

      In life and business the saying goes “There is NO such thing as a free lunch”, and anything that sounds too good to be true usually is. A multi-million dollar contract which will easily surpass CI$300 million in total costs with inevitable cost overruns (given the nature of the project and the track record of poor project and financial management of the government) will have have clearly defined terms, conditions, force majeure clauses and penalties for potential breach of contract that protect the cruise lines that we are told will be providing financing.

      Having mutual respect and trust for the contracting parties is nice to have but it is naive for any major decision to be based on that alone. The numbers and terms will underpin whether this is a fair deal or the project that will push CIG over the financial cliff and accelerate the implementation of a direct form of taxation.

      There is no room for emotion, egos and tribal politics. The best interests of our country must come before before getting re-elected, placating party/political supporters. Cayman cannot afford to get this decision wrong. This project is not the panacea the public is being told that it will be for taxi/bus tour operators, water sports operators and shop owners not operating jewelry and duty free stores in George Town.

      This is a significant long term commitment for the government to make. They should not fear transparency, considering public funds will be used to repay the loan to the financiers of the project, which represents long term debt for the Cayman Islands. The reason why CIG is unwilling to provide details and information regarding the financing model and terms is because the numbers are substantial and will surpass figures provided by the Minister of Tourism to date (USD150 million) and CIG knows that disclosing the full details will lead to greater upheaval and public pressure.

      The only group currently focused on of the merits of the project and any estimate on the total costs associated with a total turnkey redevelopment project and costs are the recipients of CIG Sponsored Corporate Welfare (a select few retailers and members of the “chumocracy”) that have been driving this project from day one and continue to do so as they have the most to gain need this project to happen. The needs of a few at this cost to the country cannot be placed ahead of the needs of the majority.

      This national discussion and information that should be provided by our government should consist of a list of the pros and cons of the project. Consider the record number – 1.92 million – cruise passenger arrivals in 2018 and public statements by the cruise lines representatives from Carnival Cruise lines and Royal Caribbean Cruise lines on 26th September 2018 at the public meeting held at the Family Life Centre that a port is nice to have in order for them to park their larger ships but there is no threat to the Cayman Islands falling off the itinerary due to customer demands.

      Doesn’t Cayman have other priorities where these public funds which will be used to repay the financing (also known as a loan) can be used to help improve the way of life of the majority instead of a select few businesses and acolytes?

      With every announcement by Premier and Deputy Premier there are more questions than credible answers being provided by our government.

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      • Anonymous says:

        Johann I think you are being kind when you say the project is driven by the desire to look after a few vested interests. Given the lack of coherent logic or economic justification it has surely passed explanations of incompetence or even cronyism. These people are not stupid- which leaves us with another and very unfortunate conclusion as to the enthusiasm for pursuing a three digit millions project in the face of obvious public concerns . The ACC and AG should be all over this.

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      • Anonymous says:

        Keep telling the truth Johan. This cruise dock is built on lies and deception. What is obvious is the public will ultimately have to pay for it. Why hasn’t the Auditor General started it’s investigation?

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    • Anonymous says:

      Why would you imagine the ships won’t come, who is peddling that lie? Cayman is a destination that cruise ship passengers want, the cruise lines will fill that want, all Cayman needs to do to keep cruise ships coming is to be somewhere cruise ship passengers want to come to. That’s where we need to focus.

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      • Anonymous says:

        Cayman has already become a concrete jungle and a cruise cattle market. It’s fast losing its unique appeal. They’re going to look for something more peaceful and idyllic. Which is why most people holiday in the Caribbean.

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  9. Anonymous says:

    Yet on Cayman 27 the other night Moses unequivocally said no money would come from the public purse, yet what he went on to say tells me it is! SMH.

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  10. say it like it is says:

    I could not agree more, we truly need people like the author of this article making decisions for this country rather than ill informed politicians.

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    • Anonymous says:

      Its not that they are ill informed, its that they have a different agenda, and not one they wish to make public. Far better to clad yourself in the robes of righteousness and try persuade people you are doing this for an alturistic reason than be transparent on facts which would demonstrate that there has to be a different purpose for it to make sense. They would rather risk being thought honest fools than the alternative. Once you accept that then all the other decisions make sense as well, be it deciding we should build to 50 stories on SMB, rip up acres of turtle grass in marine replenishment zones, decide only after we have awarded the airport refurbishment contract and are tied to the selected contractors to make significant change orders that radically increase cost,

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    • Anonymous says:

      It’s worst than being dumb, or quainty naive: we can’t follow the money because these crooks won’t enact the SIPL Law.

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  11. Anonymous says:

    CPR would already have the numbers if they had properly vetted some of their spokespersons.

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  12. Anonymous says:

    I wonder why we never see detailed case studies like this from CIG? Their arguments to date all seemed to be based on the logic of ‘if we build it they will come’.

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    • Anonymous says:

      Their argument is also if we don’t build it they will all disappear! The cruise lines have publicly debunked that one so why does CIG persist in that obvious misrepresentation! The truth is whether we build cruise berthing they will still come and then the argument is only can we really handle much more and does it make sense to do it base on where we are at with our existing capacity levels, crowded beaches and traffic jams! The answer is certainly not definitive and the cost in the short term and the long term is high!

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      • Anonymous says:

        and again everyone is ignoring the fact that the driver of your economy is not tourism.

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        • Anonymous says:

          The problem from the politicians perspective is that financial services are now so tightly regulated and scrutinized that there is little opportunity for a little “grease” – real estate development, major infrastructure contracts, not so much.

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        • Anonymous says:

          And certainly not cruise ships

  13. Void says:

    That $250m price tag seems like a lot until you realize that each ship costs roughly $800 million minimum just to build one..

    Disney’s fantasy and dream ships carry about 4000 passengers and cost $1.8 Billion to build both.

    If you are for it, sit back and sip your tea.

    If you are against it, sign the petition.

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  14. Anonymous says:

    Making Cayman another cookie cutter Caribbean destination hurts the tourism product. Someone please tell Alden and Moses before it is too late.

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  15. Anonymous says:

    Someone needs to breathe a little life in this CPR group.

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  16. Anonymous says:

    Well said…

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  17. Anonymous says:

    Kirkbots will hate this view point because it makes sense

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  18. Anonymous says:

    Alden and Moses cannot afford to tell the public the truth or share the details because the scam will be exposed.

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  19. Anonymous says:

    An objective piece that highlights the folly of this government.

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  20. Anonymous says:

    Great article very good points and easy to follow. Thanks CPR

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