Owen Roberts Airport project tops $100M
(CNS): What started as a $51 million upgrade to the terminal at Owen Roberts International Airport in 2014 is now a major project, running at more than $100 million, Tourism Minister Moses Kirkconnell told Finance Committee on Monday. And outlining the need for a bridging loan from the tourism ministry, Albert Anderson, the Chief Executive Officer of the Cayman Islands Airport Authority, revealed a 50% increase on the original price tag for the external work.
Although Anderson did not give an exact final figure for the project, he explained that the work outside the terminal, which the authority has been focused on since the COVID-19 pandemic locked down the country, is $8 million over the original budget. In addition, some $12 million worth of unanticipated work was required, including an extra taxiway and more upgrades to the apron.
Anderson said that the CIAA had to borrow the money because of the additional work and overruns, at a time when the airport’s income has completely dried up as a result of the pandemic. He said that government is offering an interest-free bridging loan, but in the meantime the authority is going through the process of getting the loan from a local commercial bank so that it can carry on working while the airport is not being used.
Explaining how the outside work alone has gone from $25 million dollars to more than $34 million, he said the cost estimates were far short of the real price tag.
“The original master-plan was done in 2014,” Anderson told the committee. But he said that was a vast plan, so the airport management had focused on the most important parts, such as strengthening the runway, filling the ponds, building the perimeter road and dealing with the apron.
“The estimates that we had originally from the 2014 master-plan was that it would cost somewhere in the region of $25 to 26 million. But when we went out to tender, it came back at $34 million-ish or somewhere in that ball park,” he added, as he explained the $8 million budget shortfall.
Opposition Leader Arden McLean pointed out that this was around a 50% increase on the original estimate and questioned if whoever made the original estimate was still in their job.
Anderson also explained that the balance of the loan was to cover additional building work that was needed after some technical issues had emerged with the taxiways.
Opposition MLA Chris Saunders asked the minister to explain or supply a breakdown on how the price tag for this project had gone from the outline business case estimate for the airport terminal of around $51 million to this major project running at more than $100 million. The minister said he would endeavour to get the information to the members.
Watch Monday’s Finance Committee proceedings on CIGTV below:
Category: Business, Government Finance, Politics, Transport
DO not, i repeat, do NOT ever borrow from China or Dart.
Very true, you will never pay them back, bottomless loan!
Save your self while you can! I like the fact that I don’t have to learn Mandarin or depend on Camana Bay to live in Cayman.
Vanity
CNS 21/10/2014
“ But the latest revelations show that the ministries of tourism and district administration, in particular, have an appalling record of mismanagement and potential abuse over the last seven years, failing to account for the whopping sum [$1billion unaccounted for].”
Has the missing billion been found?
http://archive.caymannewsservice.com/2014/10/21/1billion-unaccounted-for/
100 million ? And it still looks mediocre.That money could of went towards something more important like education, homeless, or even towards stipends for people who are STILL out of a job because your government doesn’t want to open the borders. They’re only doing this because they know election time is coming and people are obviously not smart enough to know this is just a ploy. Bermuda has been open for several months and is about the same size as cayman with about the same amount of people. FYI they have less cases than cayman with fully opened borders. Hmmm the sheep on cayman compass keeps saying people are selfish to want to open the borders but They’re the ones who are actually selfish.
Excuse me, back to school to learn maths. Over $100m final cost after initial estimated costs were to be $51m is a 100% increase in cost not a 50% cost increase as you have reported. Also, how can the runway upgrades be over budget when because of Covid 19 they had no overtime working at night because of incoming flights as their work was in daylight hours and the airport was closed Don’t you think that Govt should get a credit for all the savings by the contractor (Dart/Island Paving) in labour costs.
What can you expect when you deal with a bunch of crooks?
This is normal and should have been anticipated. Everything the Caymanian run government has done has been done this way. Its part of the great Caymanian welfare program that will soon come to a grinding halt. What happens to a parasite that the host has stopped feeding? First off the parasite will look around and see what is closest that it can feed off of. Anything that still has cash coming in is fair game. What ever is left of the financial industry is next. After that anything expat. Plan accordingly.
another fine mess by the ppm….its like 2009 all over again.. huge expenditure and huge deficits…
UDP long gone? Really? Who’s the speaker? Who pulls Alden’s strings?
Who? H-m-m-m-m…. I would say Mac and the boys over at the temple. Who do you think pulls them?
Look South East my friend.
Why would we waste our time being controlled by them when we can do our own thing?
I guess it wasn’t good enough to bankrupt their own country, they coming to do the same to ours!
The definition of insanity is to do the same things and expect different results.
if there is not enough demand for a direct uk flight…forget about africa and asia.
also who says you are entilted to fly direct everywhere in the world?…miami connection is no big deal for international travellers.
If they can do it at Montego Bay Airport they can do it here.
10:39 They can do it to Montego Bay because Jamaica has so many excellent all-inclusive resorts offering holidays at prices tourists from the UK and Europe can afford. The reality is the Cayman Islands have priced themselves out of the mass UK/European tourism market. Unless that changes direct transatlantic flights will never happen.
Wow! What a misrepresentation of the facts. I’m pretty sure Marl Road would have done a better job.
There have been 2 separate major projects at the airport. The first was the terminal renovation and expansion which was 15-20 years overdue. There is a second and completely unrelated project that includes runway strengthening, lengthening, and the addition of a much needed parallel taxiway. Absolutely no connection between the 2 projects. One was based on need and the other was driven by regulatory audits and safety recommendations.
Both projects were well managed and the facts will show they were both completed at costs very close to the original business case projections. The need for supplemental financing is entirely COVID related. That shouldn’t surprise anyone.
The question is why did they not make it one big project originally? Why 2 projects?
Would have been cheaper to do one big project like they did with the new Bermuda airport.
How much did the Bermuda job cost? Was it comparable to the Grand Cayman work?
Ayno Nutten,
When the Bermuda airport redevelopment project was agreed to with the Canadians the Bermuda Government made a number of demands on the Canadian engineering firm, AECON. Those demands were related to Bermudian participation in the project.
The Bermudian airport redevelopment project began in March, 2017 and the following are facts:
1) 885 Bermudians were directly involved with the airport redevelopment project
2) The project engaged nearly 400 Bermudian companies, vendors and suppliers.
The question is what are the numbers of Caymanians employed, Caymanian companies, vendors and suppliers for the 2 airport projects at our airport?
Does anyone know? Does anyone care?
Are you sure about 400 bermudian companies? I can’t imagine that. 4 or 40, but 400?
The Bermudian Government said last week nearly 400 companies, vendors and suppliers in the local paper.
Not sure why the would lie about that statistic.
Of course it is not comparable. CIG decided not to go with the Public / Private / Participation approach to the project and the way modern airport projects are undertaken these days.
The concept was beyond the intellectual capabilities of our airport decision makers.
Because by phasing the projects, they can hide the undisclosed overruns from Phase 1 into the new Phase 2 “additions”.
If you talk to ANYONE in construction who was part of Phase 1 of the airport, you will know that they spent WAY over what was reported…the number was more like the higher, more realistic and honest bids as opposed to the lowest bid who knew theyd make a little extra in changes, information details through RFIs (requests for information) and oversights, of which there were many!
Read the last paragraph.
Thank you for the explanation 9.23
As you know everyone’s an after the fact expert who can’t be bothered with facts.
Pity you weren’t the one answering the questions in FinCom.
So, do we believe what they said in the LA or what the anonymous poster on CNS said?
No, You should never believe what is said on the floor of the LA by an opposition politician in an election year.
Only in Cayman would these 2 projects be unrelated to an airport redevelopment project, especially if there was a “Master Plan”.
Both projects were well managed? That is not what the figures show. Stop using COVID as an excuse for the higher costs. Absolute B.S. we are not all fools on this island.
Anything that the PPM proposes multiply it by 2..Remember Clifton Hunter..oh yeah and the other one that is still overgrown in GT.
The runway is sufficient for aircraft lift to Europe now. BA has done it on many occasions during the repatriation. There is not sufficient passenger lift for the soon to be phased out A380 and from what I gather BA will be using the more efficient B787 in the near future which doesn’t demand the same runway length of the B777.
I think if you check you’ll find that the runway still isn’t anywhere near long enough for fully-loaded direct flights to Europe.
As for BA using Dreamliners on this route? Don’t hold your breath on that. It’s what they were promising as replacement for the B767s in 2014 and look what happened.
Just wait and see who’s going to get the sweet deal on the “after the fact” air bridges. Most likely the big four letter word developer who’s already received massive duty concessions from CIG. And in all of this who gets slapped with paying the skyrocketing deficit?
The current building is not set up with the second floor needed for air bridges to work. With the present building you would still need to ascend/descend stairs or have some of those boarding ramps that Cayman Airways uses.
Pigs feeding at the trough. They literally can’t help themselves. Next time when they have a car rally, take down the license plate #s and you’ll see nearly all of those who benefitted from the “cost over runs.”
Got my pen and paper ready!!
My take-aways from this article area as follows:
1. $100 million is most likely under-reported. The real figure is probably quite a few million more when factoring-in lost revenues from concessions for the period of the Terminal re-development. This was long before covid impact!!
2. Mr. Anderson’s explanation is astounding and not quite correct. The “original” Master Plan was done in the mid-1990s and revised a few times since, including 2001, 2007 and 2014. However, why was construction in 2017/18/19/20 commenced using 2014 estimates? Did no one in CIAA Management, Board, Government Ministry of Aviation realize that was erroneous? Wow!! Anyway, excuses are the norm in the public service and accountability is unknown.
3. While all the airside works which have been undertaken or completed in this development program, except extending the runway, were included in most versions of the Master Plan, it had never been the intention of any CIAA admin/Board to undertake them all at once – the financial burden was obvious and always a challenge.
4. This Government and thus the CIAA, undertook all the Terminal and airside works as one project – split into two phases, for political expediency. That in itself was fiscally demanding. In today’s pre-covid airport management world, an airport’s main revenues are expected from retail/concessions (including parking). International airport regulatory bodies recommend that concessions revenues take a priority over air carrier-generated revenues, such as landing fees, etc.
Even without covid’s impact, the CIAA would have been hard-pressed to meet it’s financial commitments from it’s existing revenue streams, thus it revised it’s concession and tenant policy in 2015/6 – with the expectation (“hope”) that new business, both from increased concessions and air-carrier charges (accommodating more airlines) would address the issue. Covid has turned the world upside down and only this week there was a report that 183 airports throughout Europe are facing dire financial circumstances. Does CIAA expect that it will be any less affected?
5. Wonder if CIAA will consider cost-cutting measures – such as Cayman Airways did some years ago when staff at many levels took pay cuts? If so, they could start with a review of the salaries of it’s management tiers. But I bet, even if they do, their senior staff will be the last affected.
Very informative, 6:54 pm. Thanks for posting.
Would be interesting to know how many lodge members are at senior management level, and how many other companies run by lodge members obtained contracts to do this work. Don’t know why they bother to run adds and put items out to tender when the result is already known i.e. the contract or position will go to a Lodge member.
nepotism is rife at the CIAA
What happen to the port??? Same crap would have went on. Money missin as usual and no jail time for anyone!
Not a solar panel in sight.
No man, with some of the characters involved in this the upcharge might be 500% resulting in another $100M in dirty pockets.
George, I don’t need Africa or Asia, I would just be happy with an airlift in Europe other than London. Just like at Montego Bay Airport.
How about scheduled flights from anywhere.
I’m watching the Ching-Chings and Egrets flying through my yard right now ,lucky devils they be ..
Sounds like someone wants a direct flight to Ocktoberfest!
Frankfurt would be more logical.
Why do you want a world class airport?
In defending the >100% cost overrun, over which he presided, Tourism Minister Moses Kirkconnell believes he only owes a parliamentary duty of explanation and cost breakdown to MLA Chris Saunders, and not to ALL THE VOTERS of Cayman that must now, somehow, pay for his continuous 9-figure gaffs and redacted secret deals. Enough of this Cayman!
Seriously, who really can defend or support this government any longer. There really is no caymankind anymore, really is caymancorrupt.
Who didnt realize they would hide the non disclosed overruns of Phase 1 in next phase?
For comparison, Toronto Pearson Airport Terminal 3 Project, a B&H designed, 46 gate 1,916,000 sq ft facility, with a 5 story covered parking garage, 3,800 parking spaces, a monorail, and passenger train terminals, cost CAD$350mln (KYD$210mln) in 1997 dollars. How our airport refurb could possibly cost >KYD$100mln would be beyond belief if it were not for the cast of characters behind it. We accept this number because we understand who and what they are: crooks. Vote wisely in 2021 Cayman. It’s very expensive to leave crooks in charge.
To be fair you should also consider the cost of materials and labor in Canada, not to mention efficiencies of scale.
Don’t forget they knew what they were doing as well
Yeah 4:53, and that was AECON engineering that did Toronto and Bermuda airports too. But these guys don’t play games and put up with financial B.S. therefore, were rejected by CIG on grounds they were too expensive. Also, CIG really could not get their heads around PPP concept.
Oh yeah.
And still no jetways, or adjustment to the drainage to take the water away from where you have to walk from the planes into the covered walkway….
I wonder what the budget is for the whole new terminal for which plans already exist! Double or triple it at least.
I thought Stran was a financial guru. What happen?
Allow me come to!!
Stran? Finance guru??? What a joke! That XXXX yes man, nah he don’t know his head from his toe but to be fair here is who also needs to fired.
Moses Kirkconnel
Stran Bodden
Tom Guyton (especially him)
Joel Jefferson
Albert Anderson (the man who helped run C&W into the ground)
Yep not just Stran Bodden and Albert Anderson needs to be blamed and fired for this but so does all the others listed below, as they were all privy to the every step of this financial disaster and non of them could offer nothing to control the cost….. but who’s worried?, it’s not their money.
Non of these men have the slightest little clue about what they’re doing with an airport project. All completely oblivious on how to run a project of this magnitude. Non of these men could even run a project to built a frank hall house within budget and yet we sit here with great expectation from this crew? Shame on us 🤣
Moses K Stran B Joey Who and the Chairman of CIAA that direct management are all responsible for this mess. They must all be held accountable and never be allowed to manage any process again in the best interests of the Cayman Islands.
Vote out the politicians involved in 2021 and fire the board that had oversight of the project.
5:42 pm , Stran is the man that said the Airport could not be extended to the west, because the birds would not have any place to go and if filled in the swamp there then the water would not drain, he does NOT not have any common sense, the birds was a hazard to the jet planes and for the water drill drain wells. Simple, but not for him.
But you must admit the airport is handling the crowds real good now, Sir.
How the hell do I know? I can’t fly anywhere!
Of course it does. $30mln in Cayman becomes $60, and carry the one and you arrive at $100mln…Kyd. Money neither the CIAA or CIG have, plus the money already surely accruing and owed in IOUs to CIAA from Cayman Airways. Let’s not forget those!
Cayman Gongs for everyone involved in this nonsense. Now please fix the dump
Please? Are you begging? Why?
Fix the freak Dump! But it will never get fixed.
4:24, No never. The DUMP is now a national treasure. It is our heritage. Will never be done but expect big boy talk before election again but nutin goin to happen. Same thing for 20 years. Talk big always before elections but talk is cheap and voters are always stupid here.
Alden it is almost 100% increase on the estimate not 50% – get it right please.
From a distance the airport looks like a gigantic nissen hut decorated with masking tape. I much prefer the building that it replaced – it had character.
How true, your comment captures perfectly the thing that inspired the innovative (sarc.) design of our big new airport “hut” sans air bridges.
Anderson is responsible for this mess, but will we get accountability – not in a million years as he’s a public servant. He is trying to justify the overrun on the external work, but I see no mention of what the overrun is on the terminal project. We have been waiting for this information for more than a year and we still don’t know if it’s finished. All we had from Mr Anderson on the new terminal earlier this year was that further expansion would be required to cope with the increased traffic. Fortunately since that announcement Covid has intervened.
In the meantime the multi million headquarters of the Civil Aviation Authority is almost finished – any word on cost overrun on this project?.
I won’t dwell on Anderson’s debacle in announcing the closure of the airport for 10 consecutive Tuesdays which caused havoc with all the airlines flying here.
That’s the CAA a much better run organization.
W. T. F.
At what point will we realize that this overspending means our bills will never be lowered, customs duties never lowered, cost of living never lowered, etc.
Who is responsible for this?!? Time to name names!
You know who it is. Caymanians.
I think if you investigate this you will find that a few greedy Lodge members are behind most of the corruption in Cayman
But they are still Caymanians screwing everyone
Duh x100
Clifton Hunter 2.0. And it’s not even finished yet!
Time for Mo$e$ to do the honorable thing and resign.
If only Mo$e$ would resign…or just go away.
He is still the best you got. Or are you going to open up to real educated, skilled and experienced people? I thought not. Caymanians need to prepare themselves for the worlst news they have ever heard.
Why does every major capital works project led by a PPM government become an expensive joke? Fortunately, CPR stopped the cruise dock project before it even got started and signed the contract. This motley crew in the LA is hopeless. SMH
I was thinking the same thing SMH. Why did they have to make it look so gaudy and still no jetways? I don’t know much but it sure seems like a lot of money!
SHM: “Why does every major capital works project led by a PPM government become an expensive joke?”
Because we elect fools! Over, and over, and over…
great job moses alden and ppm
Why is this news? Anyone who builds in Cayman knows one has to budget double what they’re told.
Private sector ripping off Government and then complaining about the cost of Government.
I wonder how much of that 50 % increase was for kick backs
Enough with your childish kickback theories, UDP long gone.
UDP long gone? Really? Who’s the speaker? Who pulls Alden’s strings?
Nothing new here people….(more BS) Move along.
Ouch! Something has to give soon, money doesn’t grow on trees.
CI$ gonna end up down the drain.
I am sick and tired of the excuses. There need to be some accountability. Is this project on the list of accomplishments for this government?
And not even one good overhead canopy to protect arriving passengers from the elements. But hey, what’s new.
Straight to the comments
me too! lol
always
It’s a 100% increase not a 50% increase. That’s ridiculous…
Yeah, 3D grade arithmetics
i work with caymanians on a daily basis and i’m shocked at their standard of basic maths.
…And those “Mensa Masters of Maths” ( invariably some form of “Houourable” or “Doctor”) are the ones controlling the spend….God help us,all.
Should have gone with the Canadians. Canadian Government was prepared to give a price guarantee on the deal. In the end, the project will end up costing same as Canadian proposal and still no jetways and many more Caymanians would have been trained in Canada on airport management.
Nope, we would have been paying for it big time for the next 25 years with guaranteed payments to the contractor. Big problems with the contract in Bermuda for their new airport with the same Canadian company. No thank you.
If it was good enough for Nassau, Montego Bay, Barbados and Trinidad then it would be good enough for me. Oops, forgot, we are a brilliant people and cannot learn from anyone else. We don’t even know what Public / Private / Partnerships are here. So 1960’s.
I’m not defending the Gov’t costs overrun, far from it. I’m just saying the Canadian company, the same one that did the new Bermuda airport as far as I know, was not a good option. Bermudians were and are furious at the ‘deal’ and it cost the sitting Gov’t at the time the election, or at least was a major factor in their not getting back in.
PPPs in their various guises have in general been found to be bad business for public infrastructure projects. The problem is finding competent public officials to efficiently run major projects.
You don’t have a clue what you are talking about. ALL / ALL the major airports built in the past 10 years in the developed world have been PPP. Guess being brilliant people, we know something that no one else knows.
By the way, I was in Bermuda last month and heard nothing but good things about the new Bermuda airport, however, did hear that COVID had messed up the finances of the airport for this year because of the much lower number of tourists arriving.
Good point 9:52, but at least the airport in Bermuda is fully open.
Canadian-based IDL Projects Venture and WSP Canada Inc. are involved with the airport upgrade and there was no such discussion concerning any price guarantee or training Caymanians to manage the airport. These are project management/engineering firms, it’s not a Canadian’s job to progress Caymanians and address the employability issues and protection of locals in the workforce.
That’s because the add on airport project did not involve the Canadian Commercial Corporation and price and quality of work guarantees. CIG is on the hook for all the cost overruns as a result. Caymanians will pay the price.
The original proposal involving the Canadian engineering firm AECON and the Canadian Commercial Corporation was rejected 5 years ago. The proposal contained airport management training for Caymanians in Canada, and other related airport training. The 2 Canadian companies with the Phase 2 runway upgrade had nothing to do with the original proposal.
Why was the budget not increased when the tender came back as outside the estimate? That’s like me walking in to the store with $50, seeing that the item costs $75, and still going to check out with just my original $50.
No it’s more like you having another $50 note in your back pocket which you were saving for a few drinks later on. You were originally told it would cost $50 but then were presented with a bill for $100 and you haven’t done anything up to that point to control costs, so you’re on the nickel for it all. Bang goes all your money, and your night out, unless you go borrow more money from a mate (who will want it back) because by that point you really need a drink.
😂 great analogy
What a disgrace!!!
And with continuous border closure, the cost of maintaining this airport will continue to go up and more debt will accumulate.
Spending, spending and more spending – that’s the only thing these people are good at.
what do you expect from people who couldn’t even run a car-park ticketing machine!
civil service strikes again!..
just another day in wonderland.
Sorry 1:25. The airport authority is not part of our world class civil service.
Don’t blame this public service entity for this. This is the private sector ripping off the Government
ciaa is paid for by government and the public purse…hence civil service….hence gross incompetence at every turn
4.38pm Sorry but Govt is responsible for their performance therefore it is the public sector.You can’t make this claim just because Franz Manderson is not trying to get them to answer their telephones.
World Class.
And it still looks mediocre. Seriously it was a big disappointment, the departure hall is basically the same size as it was before, just with a few more food choices. And no jet ways? I only like the check in hall. Thumbs down for me!
Compare our airport with the new Canadian built airport in Bermuda and cry.
The main difference other than financing, which is a separate comparison and not obviously in Bermuda’s favour, is that they built a completely new terminal separate from and whilst still using, the old one. They have plenty of space on the airport property as it’s an ex military base, so an easier project operationally.
But Cayman always does things the hard costly way it seems, or at least attempts to (Port).
The new Nassau airport and the new airport in Quito, Ecuador were financed the exact same way as Bermuda. They were also both PPP projects.
9:23, You do not understand the intricacies of modern airport financing.
Go back to school and learn PPP and modern project financing.
You say the deal is not in Bermuda’s favor, however, Bermuda did not have to take on massive new debt. Public / Private / Participation projects makes that possible.
However, here we just keep taking on more and more new debt . It will catch up to us in about a years time if we do not have a vaccine by then. We will then have no choice but to introduce personal income tax.
No surprises here?
I drive by the airport and it’s impossible not to see what a beautiful project it is 🙊
you should be ashamed
Public sector attitude to finances – ‘It’s not our money and there’s plenty more where it came from!’ Got a feeling that little gravy train is about to hit the buffers in the current situation 🙂
Link to the LA Proceedings?
CNS: I’ve embedded the video for you but I don’t have time right now to find the exact point where this discussion starts. If you find it, perhaps you could let me know.