CIG and Dart still discussing failed dump deal

(CNS): Talks are continuing between the Cayman Islands Government and Dart over the failed dump deal, and it could be some time before the ministry is in a position to begin a new procurement process to find a suitable private sector entity to solve Cayman’s garbage crisis. The CIG has already wasted almost $16.5 million during the ReGen negotiations on consultants, insurance and project management.

However, Sustainability Minister Kathy Ebanks-Wilks told CNS that intense talks over the agreement are ongoing, even though she announced in July that the government was withdrawing from it.

At this stage, the sustainability ministry is expected to retain the waste-management problem in its portfolio once the government has cleared the legal, financial and other hurdles to extricate itself from what the minister and her predecessor, Wayne Panton, have both said was a bad deal. Given that ministry’s experience, it will take on the new procurement exercise, which is now unlikely to start before parliament is prorogued ahead of the 2025 General Election.

How much more the failed $1 billion deal will cost the public purse remains to be seen. However, according to the ministry’s response to a freedom of information request, $10 million alone had been spent on legal fees by the time the talks collapsed. Other costs associated with the project include the capping and remediation of a large part of the original landfill, which benefitted Dart as the surrounding land owner.

In addition, since the government began the original procurement exercise around seven years ago, there have been a number of land deals associated with the project. There were also general costs relating to the preparation of the project, which led to the Dart-led consortium securing the bid to build a new waste management and recycling centre, including the waste-to-energy plant, in 2017.

During a parliamentary meeting in July, Ebanks-Wilks finally confirmed that the marathon talks over this deal had collapsed as the proposed costs were too high. The UPM government, like PACT before it, said when it took over the negotiations that although the PPM-led administration signed an agreement in March 2021, just weeks before the election, the deal was far from complete and many elements of the project had not been settled.

After a further three years of negotiations between PACT/UPM and Dart, Sustainability Minister Katherine Ebanks-Wilks announced last month that the CIG had pulled the plug on the project, which she said was “untenable and unaffordable”.

“We need to find a more affordable option for the future,” Ebanks-Wilks said at the time as she warned the cost of the project could put CIG at risk of breaching the Framework for Fiscal Responsibility and losing control of the public finances to the UK. “This decision by Cabinet was not taken lightly,” she said.

Speaking to CNS on Thursday, Ebanks-Wilks said the government remained committed to finding a solution and would move towards the procurement process as soon as the talks to end the deal were over.

Since the announcement, a damning report by the Office of the Auditor General about the state of the deal as of early 2022 was leaked. The OAG had found that the negotiations between Dart and the government started badly and got progressively worse, even before the PPM-led administration signed a more than CI$1 billion preliminary deal with the islands’ wealthiest landowner.

At almost every turn officials made mistakes or failed to make the necessary reviews, calculations and assessments to protect the public purse.