Archive for June 16th, 2011

Mac signs MOU with Chinese

| 16/06/2011 | 61 Comments

(CNS): The country’s premier has revealed that he has signed a ministerial Memorandum of Understanding with the Bejing based developer, China Harbour Engineering Company, to build the George Town Cruise port. Speaking in the Legislative Assembly on Wednesday afternoon, McKeeva Bush said the new government partners would also be renovating the Spotts jetty and developing a cruise ship pier at the Cayman Turtle Farm in West Bay. He further stated that as well as developing the George Town cruise facilities, CHEC will be involved in the future operation of that port.

Despite having rejected the last planned project by GLF because he said he did not believe the developer had the financing and would not be able to act quick enough, he revealed Wednesday that government did not expect to have a signed a contract with the new developers until November. Although he did not give a date for when the project might start, given the time frame for the contract preparations it is unlikely that the George Town project will now break ground before the beginning of 2012.

“Our joint objective, together with the Port Authority of the Cayman Islands, is to work towards signing a contract before the end of November this year,” Bush stated. “China Harbour Engineering Co. will provide the financing and technical designs for these projects. They will work closely with the government and the Port Authority on appropriate developmentplans for the reclaimed upland area in George Town.”

He said the construction projects will provide local employment and stimulate local business and that there would be chance local investors to buy into the George Town Port enhancement project. Bush said progress had already been made on the plans for the renovation of the Spotts area, which he said meant that the project could be underway as early as July. “A local firm, Office for Architecture and Design (OA&D), has already been retained as project managers for the Spotts Jetty rehabilitation and upgrading works,” he revealed.

After making the announcement to his parliamentary colleagues, he confirmed that after making a significant investment the developers would be involved in the management and operation of the facility. Bush said that after the completion of the projects the details of CHEC would be worked out. He also stated that the Central Tenders Committee would be examining the deal, but he did not go into details over how the firm was selected. Bush confirmed that CHEC is a state owned company and not a group of private Chinese entrepreneurs. It is also understood that the company didnot submit a bid during the original tendering process.

When the CTC originally announced the results of the review of the cruise port bids, DECCO had the most successful bid and was the first company to begin negotiations with government. Following the collapse of talks between DECCO (Dart’s construction firm) government moved to the second placed bidder, GLF/Royal construction, but talks with GLF were terminated by the premier in April, when the developer was potentially a mere six weeks away from mobilization. The premier did not say why the government had not gone to third place bidder or when it began talking with CHEC about the possibility of it being the developer of the cruise facilities.

The premier denied knowing anything about the issues CHEC were facing in Jamaica in connection with an investigation by the auditor general into a road project in that country.

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Dart to get $45m in waivers

| 16/06/2011 | 92 Comments

(CNS): The Cayman government is entering into a massive partnership deal with the Dart Group that includes land swaps, public infrastructure projects and road building, as well as regulation changes and duty waivers of up to $45 million. The premier has said the deal is designed to facilitate the development of a new resort and further expansion of Camana Bay and stimulate the local economy. Government has confirmed that it will be allowing a stretch of West Bay Road to be closed and in turn Dart will pay for the development of the extension of the Esterly Tibbetts by-pass to Batabano in West Bay. Dart has also given land in Bodden Town to government in exchange for the current landfill in GT which it intends to cap and redevelop.

As part of the new "For Cayman Investment Alliance", McKeeva Bush announced that government will soon be signing the deal with the country's largest investor, which will see Dart offered various concessions, regulation changes, and re-zoning, plus tax and duty waivers. In return the group will be making significant investments in both private sector and public sector development projects.

Dart will be contributing land to the new Barkers National Reserve — and will in return receive land from government in Viste Norte (the Salt Creek area) –  funds to Grace Christian Academy to build a new school, central mangrove wetlands for conservation and a new public beach north of the new resort on the site of the former Marriott Courtyard, as well as some $18 million in cash for community project s such as parks and educational programmes.

Although the values of the quid pro quo deals have not yet been detailed, it is understood that Dart will have to spend over $1.2 billlion to get back the $45 million in duty waivers. Another 50% rebate on any further duties will be given to Dart if its spending exceeds that amount.

Government has also promised other fee reductions and waivers, such as planning application and infrastructure fees, tourism tax abatements directly related to the new hotels and various other concessions. It has also been offered regulatory andprocedural changes to facilitate its development programme.

Speaking at a press conference held to announce the broad details of what is not only the largest ever public-private deal in Cayman but a complex one as well, the premier said Dart would be investing US$3 billion over the next 25-30 years in the Cayman Islands, with more than US$200 million of that being spent in the next two years.

“Nothing from nothing is nothing,” the premier observed as he announced the myriad concessions given and benefits he said would be gained for the country. “So before people start crying about our giving away duty concessions, if Dart does not spend their money here, there will be no duty accruing and nothing to collect.”

He added that if the developer was incentivized to spend money in the short term the country would benefit through other government revenue and the stimulation of the economy and the multiplying effect of the investments. Bush said the projects and investment by Dart would create hundreds of jobs for local people and trade for local businesses.

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