FFA won’t stop port,Mac says

| 22/11/2011

BUSH $$$.jpg(CNS): The UK will support the George Town Port cruise berthing project, the premier has said, despite speculation that the strict conditions of the financial framework agreement (FFA) it wants Cayman to sign could rule out the development. McKeeva Bush said the FCO is content that a proper business case evaluation would beenough to meet the conditions of the financial plan and that KPMG is already working on the report. Speaking in the country’s parliament on Friday about his impromptu meeting with the FCO minister, Henry Bellingham, Bush said that the UK would not stop the port but had indicated that government must slow down.

“He affirmed that a properly developed business case evaluation of the much-maligned cruise facilities project would satisfy their procedural requirements,” Bush said about his meeting with the Overseas Territories minister in London on 14 November. “The process to produce such an evaluation is well underway and is central to our assessment of the capabilities of the developer and the overall viability and sustainability of the project,” he added, indicating that local auditors KPMG were doing the evaluation.

Bellingham would not be stopping the project, but Bush told his colleagues that the UK minister had indicated a need to slow down and complete the evaluation.  The premier said that if his government was trying to rush through projects it was because he needed to stop the “disaster” of people losing their jobs, their homes and their business. “He says we must slow down … well, so be it,” Bush added.

Although the MOU the premier signed with China Harbour Engineering Company has now expired, Bush has not yet indicated when, or if, government still intends to move to a main agreement with the Bejing based firm.

The premier has said on a number of occasions recently at various public engagements that he intends to get the cruise port project done but has not revealed when that will be or what agreement government has come to with CHEC to ensure the Chinese owned firm will be able to recoup its investment, estimated to be as much as $300 million. CHEC is believed to be asking for a 51 year lease with retail concessions, as well as a significant share in the cruise line fees.

According to the agreement with the UK, which Bush is expected to sign this week while he is in London for the Overseas Territories Consultative Council, the local government cannot borrow any more money for capital projects and must finance further development from its general revenue.

The agreement also requires projects that will be financed through public-private partnerships to follow strict protocols, even if government is not putting up the initial cash, as is the case with the proposed cruise port project in George Town.

The UK is calling for government to see that “all projects, whether funded from recurrent surpluses, conventional borrowing or all alternative financing transactions, are suitably appraised before the procurement stage” to ensure value for money.

For projects with a lifetime value above CI$5m where the use of Pubic Private Partnerships (PPPs) or any other form of alternative financing is being considered, government must retain independent accounting, legal, financial, economic and environmental and other technical advice as appropriate to ensure robust investment appraisals are produced.

“The business case which results from the appraisal process should demonstrate the economic need for the project; include a fully argued and costed risk and impact assessment; and specify the benefits the project is designed to deliver to ensure that an informed decision can be made on whether or not to proceed to the procurement stage,” the agreement, which Bush has said he will sign, states.

The UK further requires government to make the evaluation of a project public and to follow a statutory procurement process, even with PPPs.

See draft Financial Framework Agreement below.

Category: Politics

Comments (38)

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  1. former cayman resident says:

    Hang on a second.

    To me this is the important piece

     "CHEC is believed to be asking for a 51 year lease with retail concessions, as well as a significant share in the cruise line fees".

    Why are these cruise liners that we are worried about going way so important to the Cayman economy?

    My understanding has always been that it is not really the $s that the tourists spend on shore (I was always told – by retailers and others – that many if not most do no more than hop off the boat, buy their 'Hard Rock Cayman' badge hitch a – cheap – ride to SMB for a couple of hours before going back to their on board food and drink etc). Stop over tourists (air arrivals) are who I was always told the real spenders were.

    For Cruise liners I thought the main income benefit – and certainly +/- the only income to government – was the substantial berthing fees that each ship pays.

    If we are going to see the chinese  take a 'significant share' of these fees then economically for the government  that will be precisely the same as seeing a 'significant' proportion of the Liners not come to town in the first place which is what one of the main concerns is isn't it?

    Be very careful here. I doubt very much that a dock will increase the number of ships that come in above what has historically been the case. Even with that level of income going directly to government the budget is difficult to balance. If the Cinese are going to take more of that revenue than the Government will save in not having to pay the (locally owned) tender operators then this will make the Island finances worse as well as transfer income from Caymanian tender operators to chinese contractors

  2. Bushwacker says:

    What you expect! you can't give CASH back!

  3. Anonymous says:

    In light of the Chinese's Jamaican associate (Mr. Sangster's) recent comments in the newspaper which raised some serious questions in the minds of the enquiring public, the UK's insistence on this FFA being signed, is welcome news, given the concerns about the increased scope of works the Chinese company proposes to do and longer period of time they will require for their debt to be paid off.  Value for money must always be ensured and proper protocols must always be followed during the procurement process by Government, so that when competitive proposals are invited, apples can be compared to apples, instead of apples to oranges because goal-posts are being continually being moved mid-stream and project parameters keep changing.  The Chinese company, as far as was reported in the news, was not among the original bidders on this project but rather came in at a later stage and offered an increased scope of works other than that called for in the original tender invitation.  When these things take place, it puts questions into the minds of the enquiring public.

    The Jamaican Auditor General, based on its findings, expressed serious concerns about the way contracts were awarded to the Chinese company in Jamaica under the JDIP program and the head of the NWA has already been sacked and answers are being demanded from the Minister responsible who has now been removed from handling that program.  The Jamaicans for Justice group and the Opposition Party are equally demanding answers.  Based on other news, this same Chinese company was recently implicated in another legal scandal with another country – one has to wonder about the implications this could possibly have on Cayman's international reputation.

    Another concern is that their Jamaican associate stated that once they complete the port project, they hope to be able to get other significant projects in Cayman in the future.  In a time when local, long-time contractors have had to lay off staff and scale down operations due to a severe shortage of construction projects locally, it is not good news to hear yet another foreign company being allowed to come and do projects that our local contractors should be doing.

    Another serious concern is the labor impact, as their Jamaica associate stated that at least a third of their workforce on projects is Chinese.  This has caused serious labor issues and social problems in other Caribbean Islands, including Bahamas, Jamaica, etc.   In a time of serious unemployment here, this is a recipe for trouble.  Please see link below. 

    http://www.jamaicaobserver.com/news/Paulwell–Chinese-doing-manual-work-on-Palisadoes-project_10245601

    • Anonymous says:

      But Ellio went to Jamaica and said it was a good thing. Jamaican to Chinese labour was almost 2 to 1.

  4. Anonymous says:

    "Pubic Private Partnerships."

    What I see happening here…..

  5. Anonymous says:

    Yeah, and when they disembark on our shores they will be greeted in every store on the waterfront by a foreigner who knows NOTHING about heavy cake, coconut candy, breadfruit, national anthem and on and on…….!!! Mckeeva tell your guys to concentrate their efforts on getting jobs for Caymanians. CANCEL ALL PERMITS THAT ARE FRONT LINE CUSTOMER SERVICE AND HAVE A JOB READY FOR OUR YOUNG PEOPLE too. My first  job was serving ice cream and guess what? I loved it. You know why?? I WAS MAKING MY OWN MONEY!

    • Anonymous says:

      The sad thing is that most young Caymanians don't want these jobs, and many wouldn't care enough to give good customer service anyway.

    • Pit Bull says:

      "God Save The Queen" is the national anthem.

      • Anonymous says:

        Then how come it's beloved Isle Cayman when we play international football ?

        • Anonymous says:

          If you were the Queen, would you want your song used by a team like that?

    • Anonymous says:

      Yes do that.  See how fast "they" stop disembarking on your shores.  If Mckeeva had told his "guys" to see to it that young Caymanians have the same education at home and in school that those on permits have now they would already have all the jobs and could teach those disembarkers all about the good things in Caymans past.  But no!  Right now most young Caymanians do not have the ability to serve and not much has been done to solve that.  the fact that you would give your 5 year old the car keys and tell him to go fetch you a beer dosen't mean it would work for everyone else.

      • Michel says:

        I am sorry to have a different opinion. Serving does not require a lot of education. It requires to have a proper attitude, a sense of proudness accompagnied with some common sense. You add proper knowledge of the island and who will best look after you and where and I would hire that one first over an overeducated egostatic fool that can't make it in is own country. i should know we were the original part owners of Haagen Dazs ice cream with the Hatch Family and many of our staff and our our own friends still are and own condos and always ask for us. 30 years later. 1 ice cream cone. Oh! and the most any of us had was a high school education at best then. Our children were serving or collecting and visitors loved it They wood come back and shop at Coconut Liquor and Deli or go eat DJ'S. Why? We enjoyed what we did with prider . PASSION< GOOD ATTITUDE> Common sense with HONEST FRIENDLINESS. Some of you must think Cayman Tourism was build on plain luck or something. We may not have your education but where our visitors come from there's plenty of that there but they are here and happy to meet us. HOW MANY have been asked what does a CAYMANIAN looks like, what do they do, where do they live ??? Well many of us are at home now or fishing to try and get to feed our family in an honest way hoping that we too have our chance again one day! God bless, Michel Lemay.

        • anonymous says:

          Wrong, Wrong, Wrong.  Serving DOES require education. Not neccessary formal college education but education to realise that the relationship between a happy customer and the business, hence your personal success, is real thing and something to value.

          Without "education" it is hard to value the customer and hence impossible to have a Good atitude, to be friendly, to care, to have passion with what you do…..etc.

          We Caymanians do not understand that those folks really do not have to be here or that we are not the best place in the Caribbean. Until we EDUCATE our people, especially on the frontline like the servers, to understand that, we are doomed and more of us will be at home with nothing to do.

          • Michel says:

            Well then each establishment is supposed to have a training program and if bad service is offered  the manager is to blame for not providing his potential staff with what is needed. Don't mix education to tell me that it help's to tell the difference between a happy customer and one not happy. Either the manager trainer is not qualified or plain too lazy and goes the easy way of not being threatened by a local person to take over their job so they hire a permit holder. Many would not be here today had our locals not worked very hard in the past so please  don't sell us short ! No one said anything about no education at all. Proper training, proper attitude, good leadership, and treat EVERYONE FAIRLY.Some of the service that I see in some establishment is so poor at times that I will tell the person or the manager that thank God I'm not a tourist and there is no excuse if there on a work permit except they will make life a little easier for the managers who often don't have much knowledge or let's keep it simple common sense. The fact that ALL Caymanians are lazy and don't want to work unless they start at the top is getting old and rusty, time you try and start recruiting properly for there are many right now and if I had the money I would prove it by employing Caymanians only and show you a thingor two about proper service without the word T.I.P.S mentioned. Michel Lemay

          • Michel says:

            sorry you have given up already but as you know it won't work with that type of attitude. Everybody is trying to catch on to the fast americanised path that we have been subjected to and maybe we can hurry up and slow down a bit. It is scary to even think that we will be doomed. I think this is very nagative and unfortunatly I find that many of our own are often to blame to the mighty dollar. There is no luggage rack on a hurst have you notice? the Egyptian tried it and they did not make it back to claim their riches. Invest in our people please or no I refuse tosay it. Michel Lemay

        • Anonymous says:

          Education is knowing your island.  That is knowledge and learning.  So many people know little about our island including our own people.  They need to learn, be educated.  Servers need to know how to read, know math, know how to write, know about the island, etc.  That requires education.  For example, the server can't spell properly and writes down an order.  Time is wasted while the server then has to tell the cook what he/she wrote.  

          • Michel says:

            Thank you 23:12 you hit the nail on the head and you would think that our education dept. would recognise that and offer classes. For writing , reading and adding and I'm not taken on the fingers as well. The Education Dept.owes those young Caymanians that. It's nice with the new graduation rules but repair the past mistakes.That is the most problem we have been faced with for many years that even a simple math test given to a school graduate and they can't add very simple additions. And reading and writing. Now how hard is that to focus on. And this should be mandotary from Labour Board and all. We can't save all of them but I am certain that many now are hungry enough or want their own things because their parents can't afford then anymore. The question is are WE willing to take the time to teach them or keep calling them lazy and stupid ? And I don't want tohear there is no money for that. Have the same churches with all that money support some of these programs. If we invest in our own, while we slill and always need permit holders as it is good to have a mix but to heve locals involved his good for the economy also. Thank you so much because as you can see I have this very much at heart and I was not born here but I have 11 grandchildren growing up and if their parents have difficulty making ends meet, the grandparents can only pray for a better Cayman and I ask some of you to have some compassion,there not all bad but just like many of you some need help and guidance and remember most of the people that moved here was because of a laid back atmosphere and we should not forget where we come from. God Bless 

    • Michel says:

      I do agree with part of your post. Cancelling all permits would not be a good solution however for we are now getting many visitors from foreign countries such as : Russia, Brazil( Portugal), ,Slovania, Italy, Province of Quebec (France), Spain ( or Miami), India, Japan, yes China, and more I am certain. Those person specially in the High end to middle end business need to be able to communicate with someone and they feel more comfortable when doing so. It's up to us (of course we need to be employed also) to teach them about the various candies, breadkind and all. WHAT THEY NEED TO KNOW is that it should be non negociable that they know before hand about our islands, our people, what the culture is (yes we have culture) places to visit and interest, times it takes to go from A to B so they dont get mislead and plainly where things are located thet even many Caymanians don't know where some places are(yes really). Now this should be done before hand to someone who applies by being given information at time of application and be followed by a test when they arrive. The Company applying for them should BEFORE they through them to the wolves take the time to take them on an Island trip by a Caymanian covering everything they were asked or the person could answer their questions. A lot of them also need training includind some Caymanians and before giving them the right to sell by an experience proven successful person caymanian or a proper manager nedd to sped a few days with them. I know I have done with many of our staff when at Island Companies. Nothing like being through the proper way from the get go. No experience, no problem, no bad habits (in some cases but attitudes,people person and willingness to work as a team is very very important. Must be taught to know and work with other persons from other countries.) Everyone who had the opportunaty to work with me or as their manager know what I am taking about. I do have a problem with persons working for a company, getting fired and rehired by another company just like that. If they have been fired or quit from a company there has to be a reason: Their attitude ,work ethics, bad habits and I always had a problem with this because they will not tell you the truth or the company is so glad to get rid of them that they let this rotten apple go work for the compitition so they give them a release and know that it will be only a matter of time. Some companies follow up but not many and all they are hiring are bodies and there are Caymanian out there capable to be trained, yes a little more maintenance but most HR or managers are on permits and can't be bothered. And that goes for restaurants,bars etc. Caymanians should be given 2nd. chances but not a person on permit pretending to represent our beautiful Islands that easily and should have to leave and try to reapply with picture in papers. I have worked with many permit holders and trained them as best as I could including Caymanians and we do have very good permit holders who love Cayman but we also have some who are only here as a stepping stone to move on and Cayman is NOT their preferred place of work only for $ and kwick to critisize.Ttour guides,Concierge in hotels should be only here to train and work closely with Caymannians and understood that the job will be theirs one day. Taxis and bus Drivers, Watersport operators, food servers(unless specialized) should be Caymanians, PR with right to work, or close connections by marriage or of at least one parent. I could go on but I hope you get what is needed here as a beginning to back to the basics. God Bless. Michel Lemay ( 25 years in both hospitality aeras ( Jewellery by day, Restaurant by night.

  6. biker says:

    Recent (1, Nov., 2011) news article from the BBC:

    http://www.bbc.co.uk/news/business-15544841

    and, if this site doesn't allow "links" posted, try:

    bbc.co.uk/news/business-15544841

    or "google": Russian and Chinese companies 'most likely to bribe'

     

  7. anonymous says:

    The Red Bay Cruise Facility willclearly outshine the George Town one if KPMG actually gets to look at it. All weather and cheaper. None of the problems of GT and expandable.

    Hopefully reason will find the politicians before they spend $300,000,000 downtown and cause a huge traffic problem while killing the upper reefs there.

  8. B.B.L. Brown says:

    This sounds like the best thing to come along that I can remember.  It should stop some of the governing powers-that-be from squandering our money……… by EITHER  party.  Let's hope it works!!!  Thank you, U.K.

  9. Anonymous says:

    The FFA won't, but the CSC will.  (Cayman Sea Captains).

    This project needs to be well studied.

  10. Anonymous says:

    "Government must slow down"? Those idiots need to come to a hault!!!!

  11. Anonymous says:

    OK Mac, here is what you have to do for a proper business case. Purchase the Imparato cruise port web site and replace the word "East End" anywhere it appears with "George Town" and make the cruise ships in the video a bit larger.

  12. J.B. says:

    Anyone who still continues to belive anything that comes from Bush's mouth is not showing value for the air they breathe.  Think for yourselves for a change in perspective to what Bush has already done and will continue to do for the Cayman islands. 

  13. Sunlight Please says:

     It is known that KPMG have been consultants to the Port Authority for some time and their involvement with the very successful St. Maarten cruise port is well known.  What I would love to see is all KPMG Reports on the GT Cruise berthing Project be analysed by The Cayman Islands Public Policy Institute. http://sites.google.com/site/cppicayman

     

  14. anonymous says:

    I hope KPMG is also evaluating Red Bay as well. Surely that all weather harbour is much better value for money for the Cayman Islands than those two $300,000,000 finger piers in Hog Sty Bay.

  15. Knot S Smart says:

    We need to slow down?

    As if we have too many projects going on at once?

    Since this Govt took over in 2009 exactly no new project has started!

    They have the world record for blowing hot air, and signing and breaking MOUs though.

    And travel excursions for themselves and their pals.

    The BS and travel needs to STOP, not slow down…

    • Anonymous says:

      I think they meant slow down spending/giving away all the money.  The fact that spending all the money but not having anything to show for it might just be the problem.

  16. Anonymous says:

    Chalk up a win for the auditor.

  17. Anonymous says:

    Very well done UK. Finally forcing this cowboy government to be more responsible by imposing the kind of assessment process that any normal person wouldconsider common sense. Parent 1 insolent kid 0. Make no mistake this process would have killed the turtle farm redevelopment at birth and saved us half a million bucks a month in losses ever since. And let me remind you all; that half million a month in losses will continue evermore into the future until someone has the cajones to deal with it. Bravo UK

  18. Anonymous says:

    slow down??????…….you've got nothing done in 2 and a half years!!!!!

  19. Polly Tricks says:

    Can we please hear that from the FCO?  Forgive us, Mac, but we just don't trust you.

    • Anonymous says:

      this whole episode is also a big slap in the face for the governor….. he has obviously been too quiet for too long and the FCO has had to come in to sort things out…..

      • Philip says:

        whom do you think has been reporting whats going on here to the FCO?, Mckeeva, the governor has been doing exactly what his job is , and that's reporting to the FCO.

  20. Anonymous says:

    "The UK is calling for government to see that 'all projects, whether funded from recurrent surpluses, conventional borrowing or all alternative financing transactions, are suitably appraised before the procurement stage' to ensure value for money."  Now where have I heard the phrase "ensure value for money" before, Mr Bush?

     

  21. Y U T E says:

    "You can pay for school,
    but you can't buy class"!!!!