Archive for July 8th, 2011

We can’t spend money after it is burned

We can’t spend money after it is burned

| 08/07/2011 | 24 Comments

About 70 million of our tax dollars went up the smokestack in the form of wasted heat. This article explains how some of our tax dollars are being incinerated. It is aimed at you the taxpayer and the policy makers to expose this calamity and offers ways to stop it.

Although CUC is mentioned here, there is no fault directed toward this company. CUC is very good at what it does and I am thankful every time I enter an air-conditioned space or flip a light switch. I do not take them for granted and offer some insights as to how the current systems work and what can be done to improve the overall contribution to our economy by both Government and CUC.

CUC’s 2010 Annual Report states concern that electrical consumption declined while the number of customers increased by 3%. This was partially explained by empty rental units still hooked up but not in use. Additionally, it is likely that the existing customers are making a concerted effort to use less power because of the high cost of electricity.

In July 2010, government increased the duty on a gallon (imperial gallon) of diesel fuel from 50 cents to 75 cents. Government collected about 20 million dollars in tax by my calculations.

Here’s where the waste begins. A gallon of diesel fuel represents 40.64 kilowatt hours of power. In a perfect world CUC would produce 40.64 kwh for each gallon used. But there are losses due to heat and machine inefficiencies and transmission line losses in the wires coming to your home that result in an overall efficiency of about 36%. This means that although we are paying for 40 kwh worth of diesel we are actually getting at most about 24 kwh per gallon.  The remaining 64% of energy is lost along the way. It is not criminal, it is science and the way electrical generation works. Of course electrical producers strive to attain maximum efficiency in order to maximize profits.

The financial impact of this fact is painful. Of the 110 million dollars we spent for CUC fuel in 2010; about 70 million dollars of it went up the smokestack in the form of wasted heat.

I will address a real world solution to reclaim some of this lost energy and turn it into electricity and more net profit for CUC but first I want to address a bigger problem. The problem is that government is placing a tax on this fuel. Therefore it follows that 64% of the money we spend on this tax is being burned up and wasted in the process of creating electricity. If government collected about 20 million dollars in this fuel tax then this means 64% or $12,800,000 of our taxes went up the chimney as waste heat. We did not get the bang for our buck we just got a lot of smoke. The most damaging thing in this scenario is that these 12 million dollars will not be used ever again to purchase goods or services that would generate more revenue for government in the form of duties and other fees and taxes. This is 12 million dollars we won’t have to put gasoline in our cars to provide government with gasoline tax revenue. (This burns money too). This money is gone and cannot come back.

As was pointed out in an earlier article I read, lowering electrical costs to the consumer result in growth to the gross domestic product of a country. I submit that when consumers are presented with extra money due to lower electrical costs that their spending power increases by much more than the amount saved since the prices of goods and services will also become less expensive. Therefore, an extra $10 in the pocket of the consumer could purchase more goods than before since they are now less expensive. Increased consumer spending causes more goods to be imported and more revenue for government. Electricity costs less so people use more and CUC realizes greater revenue and profits to shareholders.

The 2010 report also shows that over the 5 year period ending 2010 that an investment in CUC common stock returned only 3% while the Standard & Poors utility index produced a 48% return. Expensive electricity stifles economic growth and profits to shareholders. Our kwh cost to the customer is about 33 cents as compared to about 10 cents for the companies represented by the S&P index. Higher prices do not make for higher net profit.

By the way, the 20 million dollars in net profit earned by CUC represents 12% of their income for 2010. This does seem a bit excessive when banks are paying less than 1% in interest on savings. Reducing slightly this figure and passing the savings on to the customer would create more consumption and more return on investment than current levels. It truly is all about efficiency. It should also be noted that CUC pays the duty on fuel to Government even when customers fail to pay their bills. This creates a further financial burden on the company which was 6.5 million dollars billed that has not been collected at the end of 2010.

In spite of 3% more customers and less consumption, CUC managed to grow its income for 2010 by 8% through cost cutting and efficiency measures. Placing any tax on fuel used by CUC is a very inefficient use of our money and spending power. Many ask how Government would make up for this shortfall in revenue if they were to remove the fuel taxes. First of all, this year’s budget provides 10 million dollars for Nation Building. I recommend using that to offset the immediate shortfall. That leaves 10 million left to account for. Much of this money will go to subsidize things that are costing the country millions like the Turtle Farm, Pedro Castle etc.

Although I am a proponent of no government involvement in the retail private sector, we are currently saddled with these debt producers. Taxes could be raised by taxing unhealthy food items in order to reduce the cost of healthcare. There are many other areas where taxes could be increased or implemented that allow the money to still exist and be used again and again rather than have 64% of it vanish up the smokestack. As demand for goods and services grow, more revenue will flow to government immediately as these goods are brought back in. Demand for jobs will follow as economic growth begins. As the once unemployed now have income, they too will spend and contribute to the overall growth. Growth feeds on itself and continues whenunimpeded by the wrong kinds of taxes or excessive taxation. As the economy grows, crimes related to tough economic times will diminish which will mean decreasing Police, Court and Prison costs.

One very cost effective remedy: Many are familiar with OTEC (Ocean Thermal Energy Conversion). This is an alternative energy device that utilizes the difference between cooler deep ocean water and warm surface water to boil a gas like ammonia which has a low boiling point in order to propel a turbine in a closed loop system. This is the most efficient device to date and its efficiency rivals that of the Carnot Engine (Sterling Engine) also known asthe Sterling Cycle Engine. The efficiency averages in the range of 65% to 75% in converting heat to power. It is a means of capturing energy from heat. It has been studied here in Cayman because of our deep water.

I propose that such a device is not warranted or affordable. Rather, use the concept of the system to utilize the waste heat from the power plant and the nearby water of the North Sound to create the temperature differential needed to boil and condense a suitable gas like ammonia to drive turbines for electrical production. This is a large amount of potential power that could be reclaimed for the purpose of further lowering cost to the consumer and further increasing gross income and net profit to CUC. The benefits to the economy as a whole are increased immeasurably.

The above makes it clear that although we need taxes for government to run, this tax is highly detrimental to the country as a whole. There is one guiding premise that must always be remembered: energy is money and money is energy. They are one to one identical. Anything that wastes energy also wastes money. We cannot afford this waste any longer.

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Five nations, five tries

Five nations, five tries

| 08/07/2011 | 0 Comments

(CRFU): As Round 3 of the Touch Rugby Summer League 2011 came to a close, the form guide shows which teams have the early season form that could take them to those all-important play-off places.  Teams can reflect on their recent performances as they enter a two week hiatus so the Cayman rugby community can focus on the Under-19 Caribbean Championships and the Women’s Caribbean Championships, both being played right here in Grand Cayman. In Division 1, Genesis Five Nations had an emphatic 5-0 win over DMS.  This truly multicultural outfit easily lives up to its motto of “Games without Frontiers”. 

Boasting players from such far flung places as England, Scotland, Ireland and Jersey they play a game of contrasts.  The “sledgehammer” of Henshaw, Andersen and Kehoe is offset against the rapier of Toketokevanua and Byrne.  Venassio Toketokevanua, from the island nation of Fiji, has lightning feet to put him through a gap.  Howard Byrne, born and raised on the sunny shores of Dublin City, adds audacious handling skills and throws some outrageous dummies.  Both sprinkle stardust over this team. 

However the moment of the match came early in the first half when Steve “the Baker” led a 40m chase down the touchline that had the crowd out of his seat.  As if in High Definition Slo-Mo he somehow managed to outrun the defence before collapsing in a heap over the try line.  It was a great effort but I don’t think Usain Bolt has anything to worry about just yet!
Maples1 racked up a convincing 8-1 win against Applebyto make it three wins from three.  With the return of Scott MacDonald to the starting lineup his trademark side-step kept the defence just beyond arms-length as he ran in two well-taken tries. 

Team LIME took the honours in the battle of the newbies beating Walkers Blue Iguanas 4-3.  Both teams were bright in patches and Walkers ensured that it was close right up to the full time whistle.  However, that’s three defeats on the bounce for Walkers, and the two week break may give them time to re-group and find that first win.

PWC continued their recent form with a win in an excellent game with Ogier.  In a tight match they just pipped it 5-4.   Ogier are struggling for points this season but they have been close in all their games so far and a win must surely come soon.    PWC, on the other hand, are building nicely and currently sit third in the table.

In Division 2, Trident Titans used their archetypal three-pronged attack of Matt Smith, Stu Miller and James Waters to put KPMG1 to the sword in an entertaining match.  Eventually winning 8-5 the game was even in the first half but Titans came on strong as the match progressed and Smith dealt the fatal blow with a 3 neat tries.

UBS and Maples2 remain joint top of the division with wins over Harmonic (10-4) and DART (7-5) respectively.  UBS shared out their tries amongst six different players but Shane Gallery caught the eyes of the spectators’ gallery when he ran in three tries on the day.  Tim Rossiter of Harmonic led from the front with his third hat-trick in 3 games, making him the league’s top scorer.  Meanwhile Maples2 came up against a spirited

DART team who, although they have lost three from three, seem to have little trouble scoring tries – they have racked up 15 in three games.  However, some work on their defence is needed to ensure that gaps are closed and the touches can be made.  Neal Ainscow notched up a brace of braces winning his second MVP award in as many weeks.
Resplendent in vivid orange, Campbells notched up their first victory of the season, with a 6-3 win over the (not so) Happy-Fish Ticklers.  A stand out performance by try-hero Dicky Thomas helped secure all three points.   

In Division 3, Credit-Suisse ran out of credit this week as they got turned over by a KPMG2 team in a top-of-the-table clash.  Well-rehearsed in the snatch and grab of touch rugby, KPMG2 scored four tries in total, and Jan-Sorel Kruger rightly took the plaudits in his last game for the team.  His two tries made the difference and he can leave the island knowing his team is top of the table. I’m sure he’ll be missed by all, especially his touch rugby teammates.

In the epic battle of the Shortest-Named-Side-In-The-League versus the Team-With-The-Longest-Name, GCM beat Queensgate Grizz’s Old Fellas 6-3.  Philip Fourie starred for GCM in a spectacular one handed display.  Having damaged his hand helping an old lady across the road, he still had the skills to run in four tries.  His two fingered salute to the crowd could have been misinterpreted but actually it was in honour of the fact that they were the only ones he hadn’t broken.

However, this was not enough to be the game’s MVP, this accolade goes to Kate McClymont of the Old Fellas for an astonishing performance.  “I owe it all to my teammates, they are the best!” she said when interviewed after the game.  She’s not wrong.  Great defence and she bought a bucket too.  Well played mademoiselle!

Deloitte hammered Island Heritage running in 11 tries.  It was a bad day at the office for the Heritagers’ defence and Deloitte shared the tries out amongst six different players.  They claim their first win of the season with great interplay and fast breaks through the defensive line.

In the battle for theAmpersand (&) Cup, Rawlinson & Hunter beat Ernst & Young 5 tries to 3. Conrad Proud put in another fine performance with three tries and claimed the Player of the Match award.

Player of the Week
This week’s Heineken Touch Player of the Week goes to Neal Ainscow from DART.  His inspirational performances for DART have caught the eye and his 4-try haul merits this prestigious award.  A bucket of cold ones awaits you at the bar, Sir!
This year will be showing a selection of touch rugby games each week.  Fans can also become friends of Cayman Rugby on Facebook to see player profiles, interviews and get an inside look at the worlds of touch rugby.

Division 1 Results
Maples 1 8 v. 1 Appleby
Genesis 5 Nations 5 v. 0 DMS
Team LIME 4 v. 3 Walkers Blue Iguanas
PWC  5 v. 4 Ogier
Division 2 Results    
Campbells 6 v. 3 Happyfish Ticklers
Maples2 7 v. 5 DART
KPMG1 5 v. 8 Trident Titans
UBS 10 v. 4 Harmonic
Division 3 Results    
Island Heritage 3 v. 11 Deloitte
Ernst&Young 3 v. 5 Rawlinson&Hunter
GCM 6 v. 3 Queensgate Grizz’s Old Fellas
Credit-Suisse 1 v. 4 KPMG2



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Driver pleads guilty to road death

Driver pleads guilty to road death

| 08/07/2011 | 19 Comments

(CNS): Jared Morgan has pleaded guilty to causing the death of Matthew Bodden (23) on Shamrock Road last year by dangerous driving. Bodden died following a crash which occurred around 10:20pm on Friday 15 January 2010, close to Wil T Drive, involving a Honda Torneo and a Toyota Altezza travelling east on Shamrock Road. Prosecutors say that Morgan, who was driving the Honda, attempted to negotiate a right hand bend when he apparently lost control of the vehicle and collided with a concrete fence. The vehicle spun and debris flew across the roadway striking two oncoming vehicles.

The four male occupants of the Honda where thrown from the car and the Toyota, which had been travelling close behind, collided with the Honda. Although all three passengers from the Honda were injured, Bodden was pronounced dead on arrival at the hospital and Morgan was arrested.

During his court appearance Morgan surrendered his driver’s license and wasordered not to drive. He was released on bail pending sentencing, which is expected to take place 2 September after a social enquiry report is completed.

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Family focus of crime fight

Family focus of crime fight

| 08/07/2011 | 50 Comments

(CNS): After years of failing to consider the family situation of children in trouble, Michael Myles, the government coordinator for at risk youth, says that efforts are now being made to focus on the entire family in an effort to prevent kids from becoming criminals at the earliest possible age. Having headed up local youth institutions such as the former Marine Institute and the Bonaventure Boys Home, Myles pointed to past mistakes of taking children into care and then sending them back to the same unchanged environments. At a meeting in West Bay this week he revealed that it costs the tax paper around $150,000 per year to institutionalize a child in a home, and yet 80% of kids from Bonaventure end up in jail.

The long term issue of crime is one that the country has to deal with, Myles said at a police meeting held on Tuesday evening as part of the RCIPS gun amnesty road show. “Crime doesn’t just happen; it is cultured over a long period,” he said, as he pointed to the critical importance of the family and the need to intervene very early in the lives of troubled youngsters to stop them becoming the next generation of gunmen.

The environment where children are growing up is where the problems start, he noted, and explained that if government resources were used to address the problems of the whole family the community had a much greater chance of preventing a troubled kid from becoming a criminal. Historically, Myles said, the local authorities had been too slow to identify the signs of kids at risk.

He said right now the police were dealing with the kids that had passed through local institutions where, no matter how much good may have been done, they ended up in a life of crime. This, he explained, was because they were sent back after a year or two to the same families and places where the troubles had started or they had arrived too late to address their offending.

Myles warned that the school kids that were now being singled out under the new ministry BEST initiative for help were in many cases the children of those kids that had been in care. The new approach was focusing on the entire family as it was the only way, he said, to stop the next generation following the same road as their parents and ending up in the criminal justice system or dead.

In candid revelations about the issues being dealt with in the new programme, he said that he was encountering increasing amounts of inappropriate sexual behaviour by very young children that was most definitely as a result of what they were being exposed to at home.  Of the 150 children in the school system that have been identified as needing help, Myles said, ten percent of them were displaying sexual behaviour problems.

“We have chronic issues with children as young as five years old,” Myles revealed at the meeting. “We are now trying to make sure we are very active in their lives almost from birth.”

He explained that there were an enormous amount of resources out there to help families with their children, whether it was a matter of child care, youth groups, or helping them with parenting skills but many families were simply not aware of or not capable of accessing the myriad services and support on offer.

What Myles emphasised was the importance of parenting and that the goal was to help the families of at risk kids be better parents rather than just focusing on the behaviour of the children. Myles said that for many of the children the problems were not yet that serious that they could not be addressed. In many cases, he added, it was merely a matter of better supervision and structure as well as the right sort of help to directly address parents’ needs.

The youth expert explained that children were not being placed on the ‘roster’ for the sake of it and there were several different categories that were used to indentify that a child was at risk. This, he said, included truancy, conflict at school, poor performance, problems with inappropriate sexual or violent behaviour and signs of mental health disorders, something the community didn’t like to discuss. However, he noted that there were several children that had low self-esteem and others suffering from depression. He said that of the 150 kids currently on the roster, they were dealing with a significant number of them.

Myles called on the community to help identify children that needed help and where possible offer support to children in their own communities as he said that collectively by helping families we would help to reduce crime.

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CUC price cut ‘soon come’

CUC price cut ‘soon come’

| 08/07/2011 | 122 Comments

(CNS): The country’s Electricity Regulatory Authority said that the recently announced fuel rebate on CUC bills is currently being worked out and will be launched in the next few weeks. Responding to concerns that CUC had increased its charges, the ERA said Thursday that the local power company had only changed the formatting of its bills but had not imposed any additional charges. The authority explained that CUC cannot increase rates or add new charges without regulatory approval and the next change to come would be a reduction, not an increase.

“It is the intention of the Cayman Islands’ government to launch within the next few weeks a monthly rebate which would show up as a credit on your CUC monthly invoice. The final details of that rebate are currently being worked,” the ERA said in a release.

The announcement was made by the premier last month when he brought the long awaited 2011/12 budget to the Legislative Assembly. McKeeva Bush said in his budget address that he would use some of the money government would earn this financial year from a new regulatory fee imposed on hedge funds to cut duty on CUC bills.

It is not clear how the $4.5 million which he said would be taken from the expected earnings will be allocated to CUC’s residential customers, as Bush made it clear it would be domestic rather than commercial bills which will benefit from the government rebate.

During the budget debate in the week that followed the premier’s announcement, the opposition asked the government to roll back the extra 25 cent duty placed on fuel import duty and questioned how this rebate would be allocated and what it would equate to for the consumer. It was also revealed that CUC had not been informed of government’s plans.

Bush had said he was under no obligation to inform CUC about the duty rebate until he had got the money to do it. The premier said the only reason why he had imposed the duty increase was because there was no money to run government and Bush said he had always said he would find a “way to take it off” when the government’s financial situation stabilized. He also hurled accusations at the opposition bench accusing them of giving the local power firm a sweet heart deal.

Since the announcement regarding the forthcoming rebate, CUC have changed the format of bills to reflect the spike in international oil prices. “CUC has chosen to separate the portion of fuel charges that represent import duty charges on CUC fuel purchases used in the production of electricity,” the ERA said Thursday but acknowledged that it could be confusing for the consumer.

“The Electricity Regulatory Authority understands the potential confusion that this new billing format may have caused. It is important to realize that these are not additional charges to your CUC bill and that these charges have always been included in the overall fuel cost charge item of previous CUC bills,” the authority noted. “No new charges can be added unilaterally by CUC without proper regulatory approval.”

Ironically,in light of government’s failure to notify CUC of its intention to offer residential customers a rebate, CUC did not give prior notice to the ERA of its intention to make the change to monthly bills.

The increse in the cost of electricity bills has been having a significant impact on the cost of living and according to the latest Annual Economic Report, average electricity inflation was at  21.3 percent during 2010.

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Businesses trade illegally

Businesses trade illegally

| 08/07/2011 | 35 Comments

(CNS): Government is issuing a warning to the local business community that they need to pay their Trade & Business licenses otherwise they are operating illegally. The Department of Investment and Commerce said Thursday that the board had identified a number of outstanding company licensing fees for 2010 and that is a criminal offence, liable to prosecution, to be trading without one. Anyone convicted can be fined up to $5,000 or serve 12 months in jail. The DCI secretariat said it intends to take action against those not complying with the law. CNS asked the DCI how many licenses had not been paid but the department said it was unable to supply that figure.

There are at least 4,000 licenses registered with the Trade & Business board. The office could not say what percentage were outstanding but said there were concerns that people were not paying the fees due for last year.

“The Trade and Business Licensing Board is currently consolidating all outstanding payments for 2010/ 2011 and reminding all licensees that it is an offence to operate without a valid Trade & Business License,” the DCI said in a release Thursday.

“The Trade and Business Licensing Secretariat plans to take serious action against those companies who are operating illegally and would therefore encourage those in contravention of the Law to take the necessary steps to bring (their) licensing fees up to date.”

In May this year the Department of Commerce and Investment announced the Trade and Business License Board, which moved to that department from immigration last year, had addressed the backlog of applications and was up to date. Having introduced more efficient methods for processing applications, DCI Head of Business Licensing Ryan Rajkumarsingh said significant progress had been made.

“We have made small but significant changes to the handling and processing of applications and the results are such that from January to March this year alone, a total of 1,593 decisions were made by the Board, 232 of which related to new issues, 1,266 to renewals and 9 to local companies control grants,” he revealed, adding that turnaround time had been reduced by as much as 40 percent. 

Board Chairman, Garth Arch, said all the board members were extremely pleased with the enhancements to the system and was confident that the changes were working. “In spite of the fact that we review more applications at each sitting, the board now meets every two weeks instead of weekly, we get through them far more efficiently as we have more consolidated documents to go through,” he added.

With the improvements allowing the board to deal more efficiently with those complying with the law, the board appears to be in a position to turn its attention to those who are not.

The DCI will also be hosting a workshop on the T&B law next Thursday (14 July) The class costs $10 in advance or $15 on the day and will be hosted by the deputy chair of the board Lynn Bodden.

In order to address outstanding payments traders are asked to contact the office at Cayman Corporate Centre, 27 Hospital Road, George Town or call 945-0943. Forms are available online at

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Lawyer problems delay staged robbery case

Lawyer problems delay staged robbery case

| 08/07/2011 | 0 Comments

(CNS): The four people suspected of staging a robbery at Reggae Money Express earlier this year appeared in Grand Court in front of Justice Harrison last week to address a trial date, but problems over legal representation prevented that from happening. Joseph Suberan, Sanjay Burrell, Emmanuel Wright and Martha Levy were bailed to return on 22 July when it is hoped they will all be represented by a lawyer. Local attorney Ben Tonner, one of three lawyers currently representing one of the four, told the court that “the sticking point on the case moving any further” was finding a fourth legal representative that wasn’t conflicted and prepared to do legal aid work.

An increasingly common problem in the local court system, Tonner pointed out that Burrell had been told by the legal aid office that an attorney had been allocated to him, only to find that the lawyer was from the same firm already representing one of the other suspects. With so few firms willing to take on legal aid work, cases involving multiple defendants are continuing to cause difficulties and hold up the system of justice.

The four are charge with a variety of different crimes, from possession of an imitation firearm to accessory after the fact, as the prosecution says the suspects were involved in staging what appeared to be a hold up in order to steal from the local money shop, which has since closed down.

The crime took place on Saturday, 15 January, at around 6pm when police were told that a man had entered the premises of the Reggae Express cash shop in Elizabethan Square, George Town, with what was believed to be a firearm, threatened staff and made off with a sum of cash.

Later that evening police arrested Suberan and Burrell, who were charged with theft, conspiracy to steal and possession of an unlicensed firearm. Wright and Levy, who were arrested soon after the incident, were charged with interfering with a criminal proceeding and theft and accessory after the fact and possession of criminal property, respectively.

Since the robbery, the Capital and Credit Financial Group (CCFG) which owns Express Remittance Services, the firm which operates the Reggae Money Express stores, closed the Cayman subsidiary as a result of declining business, high operating costs and the robbery, which it said had aggravated the circumstances.

"The decision by Capital & Credit to cease business in Cayman was taken due to the increasingly unfavourable market conditions in that territory, which has seen significantly declining remittance numbers, increasingly higher operational costs, and was further aggravated by the recent robbery of the ERS offices in Grand Cayman," spokeswoman Michelle Wilson-Reynolds told The Jamaican Gleaner recently.


16-year-old Ashleigh Hydes, a CNS summer intern, contributed to this report.

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