Cruise port project and possible global recession

| 22/08/2019 | 75 Comments
Cayman News Service

Johann Moxam writes: I would like to state for the public record that MLAs Kenneth Bryan, Chris Saunders, Alva Suckoo and Ezzard Miller all assisted the Cruise Port Referendum group to gather signatures for the petition to trigger a people-initiated referendum under S.70 of the Cayman Islands Constitution Order 2009.

Each MLA walked CPR volunteers through their constituencies during the door-to-door petition signing process. Their efforts are greatly appreciated.

As the campaign and public awareness meetings begin on the merits of the project, all elected MLAs are expected to champion and lead the national discussion on the pros and cons of the proposed Cruise Berthing Facility (CBF). The public should demand that all elected representatives share all the facts and updated relevant information on the most complex, largest and most expensive capital works project in our history.

It is important that they address the key areas relating to the significant environmental, financial and socio-economic concerns held by a significant portion of voters and citizens of our country. It is these unanswered questions that have driven the quest for a people-initiated referendum, which is now inevitable.

Also, it is important to note that all the signs and key financial market indicators point towards a global recession in 2020. I pray our elected leaders have learnt the lessons from the last PPM government in 2007-08 when, on the cusp of a global recession, they ignored all the signs and arrogantly pressed ahead with a number of capital works project, such as the $110M Clifton Hunter High School, the unfinished John Gray High School and the school that was planned for the district of West Bay.

Neither the PPM nor CDP leadership that forms the current Government of National Unity have a sound or proven track record of success on any major capital works project undertaken to date that the public can have confidence in or rely upon.

Cayman is not isolated from the impact of a global recession and it would be irresponsible to plunge the country into unnecessary long-term debit when the Cayman Islands is experiencing a record number of 1.92M cruise passengers visiting the Cayman Islands in 2018 and further growth anticipated for 2019 and 2020.

This information is available by looking at the list of scheduled of ships (Oasis class ships are not on the list), yet passenger arrivals are expected to surpass the current records to call into Cayman. Please note this information is available from the Port Authority of the Cayman Islands.

In the spirit of accountability, transparency, good governance and sound leadership, all MLAs are obligated to encourage all registered voters to exercise their democratic rights by showing up on Referendum Day (TBD) and use their voice/power at the ballot box by voting ‘yes’ or ‘no’ on the proposed CBF after the government has conducted the updated environmental impact assessment and proved all information on the proposed CBF.

The outcome of the referendum will provide the elected government with a clear view of how the people feel about this issue of national importance, given the other priorities the country has at this time.

That is how true democracy is supposed work and what the 19 MLAs are paid to do in a mature, rational and respectful manner as representatives of the Caymanian people.

Share your vote!


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The comment was posted in response to: Opposition hits out at gov’t petition attack

Related Viewpoint: Key concerns over cruise port project, Part 1

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Category: development, Local News, Viewpoint

Comments (75)

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  1. Anonymous says:

    at 7:56 am Please slandering the Kirkconnells. You have no idea what you are talking about. These people provided income to many families here in Cayman long before you arrived. Please go visit Capt Eldon and have a talk and enlighten yourself.

  2. Anonymous says:

    “Construction phase”, if this even gets there, is just one line item of many lifetime project costs (a third of which looks to already be assigned to the gullible of the Cayman s Islands), and not even close to being the most significant of the costs the territory will bear. We need to look at and weigh all of them.

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  3. Anonymous says:

    Oh darling, get yourself some jewellery.

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  4. Anonymous says:

    “That is how true democracy is supposed work and what the 19 MLAs are paid to do in a mature, rational and respectful manner as representatives of the Caymanian people.”

    Oh Johann you must have problems writing that last statement. especially the part about what the 19 MLAs are paid to do.

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  5. Anonymous says:

    They all have are wolves on sheep clothing trying to stop progress, but the reality if a oil refinery or something in n there favour was brewing we would not have heard from them!!

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  6. Anonymous says:

    What I want to know why the cost is so high? Elsewhere it doesn’t exceeds $100mil (USD) and that includes state of the art terminals.

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  7. George says:

    I don’t believe the PPM was in power during the 07-08 resession.

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  8. Anonymous says:

    Am I mistaking in thinking that the CI Government emphatically stated that the consortium selected to build the dock will bear all financial risk of the project including any fall in passenger numbers during a recession and any cost over-runs on the project? Am I right in thinking that the Government won’t be taking on any debt for this project and the cost will be borne by the consortium with the cost repaid over a fixed term from a portion of head tax revenue?

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    • Anonymous says:

      Santa Claus and the Tooth Fairy are not real. I might believe CIG if they show the public full details about this deal.

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    • Anonymous says:

      Do you believe CIG?

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    • Anonymous says:

      I bet you believe in Jesus too.

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    • Anonymous says:

      CIG have already committed us to make up the cash differential pertaining to falsely presumed headcount gains, for ships and routes that don’t exist. This Cabinet essentially went ahead and unilaterally decided to put us on the hook for a third of cost, and likely more we haven’t seen the “deal” they won’t share – not even with the Caymanians that do this stuff for a living.

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  9. Anonymous says:

    I’m not sure about a global recession pending but he has picked up on a useful point. Any tourism product is extremely vulnerable to abrupt changes in the market caused by things ranging from economic issues to crime and terrorism. I’ve worked in a number of areas where boom turned to bust in a matter of months without any warning.

    Based on what CIG is saying, and not saying, you need to be very sure that if this project goes belly up sometime in the future the Cayman Islands won’t carry the loss and it’s not clear to me that is the case.

    If this is your money, and that of future generations here, being poured into the dock I would be a little bit cautious because one thing you can guarantee is that if it turns into a screw up nobody’s going to come in and bale you out.

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    • Anonymous says:

      Since when has Moxam been an economist

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      • SMH says:

        Anybody can watch the news read the papers and follow the financial markets and read industry periodicals.

        That does not make you an economist it makes you informed. It’s free try it some times. SMH

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        • Anon says:

          Following the financial news can really be tough, sorry but you got to be able to drill down in some of these reports to make an informed decision.

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        • Anonymous says:

          for every downturn there is an upturn. The dock would help in a recession. The ships won’t stop running, and it’s more cost effective to run the bigger ships. So, what we might find if we do not build the docks, is the recession hits us harder. Because much less or no smaller ships may come Collecting any monies is better than collecting no monies.

          and when the down turns into an up turn as it always does. We will be ready.

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          • Anonymous says:

            In a recession people tend to have less money or discretionary income for vacations. That means potentially less tourists to take cruises which for Cayman is less cruise visitors to pay the fees or head tax which allegedly will be the only means to fund the CBF.

            The government claim they will not pay for the project. It would be good if they can explain how they define a loan agreement or what the financing agreement with the cruise lines represents.

            Less visitors means CIG will need to make up the shortfall to pay the financiers because Royal Caribbean and Carnival Cruise lines are not charities or giving this government anything for free.

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          • Right ya so says:

            Anon 6:31am – don’t you remember the last recession & downturns before that? I certainly do, having been in the hospitality industry when they hit, and I can tell you vacations are the first to be cancelled. We’ll be fine for the 1st 6 months as trips have been pre-paid but then reality will hit. And we’re usually 12/18 months behind the US in recovery.

            • Anonymous says:

              that is exactly what i said above. So, the cruise industry won’t stop running in a recession. But I can tell you from a business standpoint. If they have the numbers to fill one big ship, or 3/4s of two ships. They will abandon the little ships. That much is obvious from a business standpoint. It would half their costs. But if cayman does not build that dock. As sure as anything. Eventually if the bigger ship create more profit, from an upturn or downturn market. They will get rid of the smaller ships. If they do..what then? THEN do we build a dock? when the costs are 700 million?

              I have no idea why the fear mongering about a stupid dock. Just build the damn thing. End of story. And life will go on.

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      • Anonymous says:

        2:28 Isn’t that what I said in the original post?

      • Anonymous says:

        At least the current serving MLAs had the guts to run for office unlike some people who announced their candidacy on the radio and then failed to show up to register. False prophets are abundant!

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        • Anonymous says:

          Surely you are not referring to the one that ran to Red Bay with his tail between his legs at the last possible minute leaving Archer to be sacrificed?

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      • POLITRICKS 101 says:

        A good reminder of our recent history.

        The irony and the comments of McKeeva Bush should give all a moment of pause.

        Was he lying then about Alden McLaughlin then or is he lying now?

        https://caymannewsservice.com/2015/05/mac-takes-credit-and-attacks-alden/

    • Anonymous says:

      We don’t need to wait for a recession to find the folly in this deal: focus on the unachievable passenger count assumptions for ships and routes that don’t exist, today, tomorrow, or anytime soon. That’s what we are on the hook for. About a third of construction cost, PLUS 100% of the latent irreversible costs and impacts to stay over, resident and marine quality of life PLUS 100% of eventual decommissioning costs.

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    • Anonymous says:

      1:53 can you name two things we are sure of!

  10. Anon says:

    Johann, seriously…. are you trying to equate previous public works projects which have no revenue earning ability with an initiative which is self funding and which requires no government contribution?
    Is this editorial from the CPR introducing the word “Recession”, an attempt at deflecting the reality that their claims for the project costing $300m to $400m were just plain wrong and nothing more than scaremongering?
    If you truly believe the berthing project will be affected by an economic downturn, where were you when the airport was being proposed? I didn’t hear vociferous objections coming back then but the model is the same. People using the facility pay for the infrastructure and the payback is decades……. The reality is that when the government and cruise lines enter into agreements about fees, these will be paid, in the same way the Royal Watler improvements were paid off over many years, which included through the 2008 financial meltdown. It is unfortunate that your comments are short on facts and large on rhetoric.

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    • Anonymous says:

      “Claims for the project costing $300m to $400m” were true!!! Verdant Isle will be paid $8 per passenger for 25 years. Even at current cruise tourist numbers, that is 1.92 million x 8 x 25 = $384,000,000

      When are you pro-porters going to get this into your extremely thick heads

      The CBF may cost $196.5 million for Verdant Isle to build but they will double their money in what they actually get paid. You are spreading misinformation and should be ashamed.

      While I’m at it, the airport has to do with stay-over tourists who have many times the amount of money cruise tourists do. They contribute more in taxes and spending to Government and the economy. They make enough money that they are still going on holiday recession or not. When have you ever seen the CEO fired in a recession? No, the CEO decides who *else* gets fired, then goes on holiday to Cayman!

      Furthermore, the model is not the same; we paid cash for the airport upgrades. Importantly, no environmental damage, with knock-on economic damage, was necessary! Nor payment of $15 million plus for 25 years come rain or shine to a construction group. The airport project was contained within its site, and only slightly inconvenienced travellers. The CBF will be equivalent to everyone in GT having a jackhammer outside their offices for years! By the time this contract would be signed it would be 2045 when we are done paying for the CBF. In this volatile political and economic environment, does it make sense to commit ourselves to a quarter-century of staged payments to businesses with a failing model (cruise lines)? Of course not!

      You pro-porters make me sick to my stomach with your lies and greed and stupidity. I don’t want to share this country with you. Go live in America and vote for Trump; he’s really good at destroying things and ignoring facts and will make you very happy.

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      • I ❤️ Kirkbots says:

        Kirkbots and ppm bloggers cannot handle basic math or the truth! Do they all live in an alternate reality or are they all drunk?

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      • Anonymous says:

        @Anonymous 3:19pm

        Thank you for making it really simple to understand. The pro-port bloggers are being paid to try and confuse us. Unbelievable our public funds for the misinformation.

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      • anon says:

        Wow. That’s a huge amount of rationalization to deal with.
        – Project cost has been disclosed it’s less than $200m. CPR made a number of claims it would cost around $400. This was simply scaremongering. You want to rationalize this as more because it’s going to be paid for over 20+ years? Show me any infrastructure project which doesn’t require financing.
        – No we didn’t pay “cash” for the airport. It’s financed through the monies received from people using the facilities.
        – No environmental damage? Well they are just about to lengthen the runway which will cause environmental damage. Then when they extend into the Sound it will cause marine environmental damage….. but you really didn’t want to acknowledge that awkward fact did you! And guess what they are now talking about building a completely new terminal because the existing facility isn’t going to be big enough. So more $$ and new environmental damage to deal with.
        – Volatile political and economic climate? failing model? These comments aren’t based on any reality. Most of the cruise lines are public companies. Go and see for yourself if they are failing.
        It’s shame that you’re missing the point. This isn’t black and white as you want it to be. I am not the enemy as you want me to be, even if you think I am.

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        • Anonymous says:

          1) That’s Verdant Isle’s cost, not ours. Ours depends on passenger numbers and adds up like this:

          passenger numbers x $8 in lost fees x 25 years

          Yes projects need financing and the cost of financing is part of the cost of the project. Only the 100%+ gross profit margin going to Verdant Isle is not just for financing it is also massive profits. I am not rationalising anything; you are rationalising that it doesn’t cost as much as it costs because it gets paid over a long period of time. Your finances must be great.

          2) Paying cash is what you do when you don’t have to borrow. We did pay cash for airport upgrades. We did because we had the money because we collected it. I love how paying cash is not paying cash if the money came from a specific fee and a project only costs $196.5m because the $400m we will actually pay is paid over a period of time. I say you lack a basic understanding of finance and are just trotting out talking points to confuse people.

          3) What environmental damage will the runway lengthening cause? They are going to fill in a few ponds that no one can ever use anyway because they’re already right next to the runway inside the fence. They will also be cutting the grass. I wasn’t aware that the area next to the runway was a protected wetland (as the harbour is a marine park). It isn’t an awkward fact that if we decide to extend the runway into the North Sound, that will cause damage to the environment there. But then I’m not aware that there are any famous shipwrecks or landforms in that area. Nor an industry built around it with snorkelling, diving, glass-bottom boats, submarines and photography. Even so, if the environmental impact assessment on that project says that extending the runway will ruin the North Sound, I will be against it. I supsect you will be for it because you are for the port which will cause much worse damage.

          4) I’m afraid they are based in reality. Cruise companies cater to people who tend to lose their jobs in recessions. If Billy Bob Joe doesn’t have the cost of a ticket, he can’t go, that simple. They can promise us all the passengers they want and we can cater to them with a project model that pays them more the more passengers they bring us all we want. People have to be buying voyages or it means nothing. Furthermore, everybody knows cruises aren’t cool anymore. They certainly aren’t the future of tourism, even if the industry is stable for the time being. Lastly, as the industry founders, they will squeeze tour operators even harder, rip off their passengers even more, keep as much profit for themselves as they possibly can, and the countries that have got in bed with them will suffer.

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          • not Johann says:

            As of April the reported airport renovation cost was $68m, an overrun of about 20%. Are you saying that the CAA had this cash on hand and has just used it out of its reserves? Or is it financed by other means?
            If the CAA has been able to pay for the complete renovation work out of available funds, they must be seriously price gouging the paying public! Oh that’s right the CI government is contributing $15 million to the project but you forgot to mention that!
            Your comments show that your viewpoint is one sided at best with little interest in looking at both sides. I wonder why that is. Perhaps it’s because you are running for office and it’s more convenient to just make people as angry as possible.
            You argue that the winner of an open bidding process shouldn’t be allowed to do the project because they will make money, when the reality is that no one else offered better terms. And you know full well the winning bidder will not make the kind of money you are trying to intimate. Firstly the whole project will be financed by FCIB and the annual cost of servicing the cost at an example interest rate of 5% will be $10m. Secondly the government has made it clear they intend to negotiate a profit cap. Again these are elements you fail to acknowledge. But then you are the expert in financing.
            As to the cruise companies operating a failing business model all I can say is that they have survived many recessions and continue to thrive. You have your opinion which seems to ignore both history as well as the current trends that are publicly available in a variety of forums. If you doubt their financial stability why is it that they are able to finance building so many new ships?
            Cayman has a choice. It can make itself a monoculture in tourism, depending more and more on a small number of big resorts which are not unlike cruise ships in their corporate approach, or it can continue to stay more diversified and grow both segments successfully.

      • Anonymous says:

        3:19 pm You are very creative with your accounting but also misleading. To say that the Port construction is worth $384 million, is like saying your $50,000 BMW is really valued at $80,000 because you have added in the total you paid over 4 years. That stuff won’t fly and you will only be able to get it insured for the $50,000 cost price and no more. The fact is CPR misled the public with that $400 million figure and you just need to admit it.

    • Anonymous says:

      1:15 you should run for office.
      It seems you are thinking straight.
      A rare thing.
      People can’t seem to see that the cruise docks will bring in money to your Government.
      Some politicians are using this as a political tool to trash PPM govt.
      Politics is very strange animal.

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    • Anonymous says:

      The projected cost is lower than planned because they took out $100M in cargo improvements. DUH!

      I signed the petition but didn’t object to the airport expansion because air arrival visitors make a 4X economic contribution compared to cruise. The airport infrastructure directly serves residents, leisure visitors and business visitors.

      Cayman’s economy, Cayman’s people and Cayman’s environment are ALL better off if this country focuses on growing stay over visitors and capping cruise tourism at 2million per annum.

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  11. Anonymous says:

    Cayman needs more people like Mr. Moxam who understands the issues and have a track record of success in business and leadership involved in front line politics.

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  12. Anonymous says:

    Where have you been, they have been calling for its implementation. It hasn’t happened because you illustrious Premier and his sheep refuse to implement it. All the opposition can do is call them out on it, which they have done numerous time. Go tell you Premier to deal with it ASAP -ans see if he listens to you,

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  13. Anonymous says:

    Yea I’d worry about the recession if WE were paying for it like the airport, but we aren’t.

    We didn’t make a deal with Delta and Jet blue for them to finance it. We built the airport.

    We aren’t paying for the port. You can’t lose what you never gained. Without the port we will still get ships yes but it will decrease, resulting in a bigger loss.

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  14. Anonymous says:

    All of this petition and so many excuses not to build the port.
    All for what? So the cruise berthing Tender company can continue to have a one sided contract.?
    What does it mean when we are being told that if the Cruise Port is built that the remaining cruise berthing would not be sustainable?
    Very obvious what is going on.

    Build the Main Port.
    Then also Build a smaller version at Turtle farm. Have the tender company use there little dorrys to ferry Tourist to that location via water.
    Tourist get a good view of the island. Less traffic jam.
    And speaking about Jam. Keep them off the roads or the ferry boats.
    Perfect solution.

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  15. Anonymous says:

    Johan was complaining that the verification staff at the elections office would be putting people under duress….BUT he thinks it is totally acceptable for elected ministers to go door to door like this and pressure people to sign? What are they really going to say no to a government minister? horrible double standards.

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  16. Caveat Emptor says:

    Very well written and thoughtful commentary.

    This Unity government should heed the warnings about a pending recession. Focus on the message and not the messenger.

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  17. Anonymous says:

    Thank god for Johann, we need more people like him who are experts in every field.

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  18. Anonymous says:

    The sky is falling don’t build the port. Really!! come on Johan this is just wrong.

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  19. Anonymous says:

    Johann: will you adhere to the much-amended Standards in Public Life Law, and if not, why not? That’s the most basic first step towards a semblance of good governance in the Cayman Islands. Sitting MLAs Kenneth Bryan, Chris Saunders, Alva Suckoo and Ezzard Miller should be vocally calling for its immediate and retroactive enactment at the next sitting, per the Constitutional requirement of a decade ago. They are muted at best on the topic. Non-enactment of SIPL (ie enactment of criminal consequences) is at the crux of all infrastructure plans: past, present, and future…it’s likely a cornerstone of CarePay, CIFA scandals, and so much more. Voters need to cleanse the LA, upper echelons of CIG and Judiciary of all the bad actors that actively deter these first steps towards good governance.

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    • Anonymous says:

      Way to let Aldart off the hook

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    • Anonymous says:

      Enacting SIPL retroactively would probably compel a wave of immediate “early retirements for personal reasons” and liberate decision-making positions to any of the honest people left in the room. Curious to see what that would look like, and whether there would be arrests and charges for those exposed with sticky fingers over the years.

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      • Anonymous says:

        This is the only possible reason why the UK is putting up with us not implementing this legislation. Unlike most things where the Governor can say ‘that’s a local matter’ SIPL is about good governance – a direct responsibility of the Governor. Someone must have whispered in a former governor’s ear that Cayman would have to be put under direct rule like TCI if SIPL was implemented before certain politicians retire. The UK has definitely turned a blind eye.

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