Port MOU pushed to March

| 28/11/2011

cruise ship 22.JPG(CNS): The Cayman premier has revealed that the memorandum of understanding he signed with China Harbour Engineering Company (CHEC) will be extended to the end of March next year. As a result of the UK’s requirement for a comprehensive business case review, government will not be signing a framework agreement to build the port any time this year. Following discussions with the overseas territories minister in London, McKeeva Bush said the work being done on the evaluation by KPMG is detailed and complex and this means the MOU signed earlier this year will have to be extended.

The goal of the MOU when it was signed in June had been to reach a situation where government would be in a position to move to a framework agreement with the Chinese firm with a view to beginning work on the port before the end of this year. Bush also revealed that the extended MOU would now include the Port Authority, despite the original document having been what Bush described as a “ministerial” MOU between himself and CHEC.

The new document will give government a further four months to formulate the business case and justify that the project presents value for money, as required under the new agreement signed last week with the British government.

The premier made it clear that the MOU and the evaluation relate to the proposal to construct the port in the capital, George Town, and not at the alternate site in Red Bay, as proposed by a group of local sea captains.

In a release from the office of the premier Monday, Bush stated that KPMG had been contracted by the Port Authority of the Cayman Islands (PACI) in August of this year to make the case for the project.

“The work being done by PACI through KPMG is detailed and complex; because it should be completed prior to the signing of a Framework Agreement, the current MOU will be extended beyond its expiry date of 30 November 2011,” the premier's office stated. "Accordingly, the Cayman Islands Government, PACI and China Harbour Engineering Company have agreed to extend their MOU to 31 March 2012.”

The extension confirms speculation that work on this project would now be unlikely to start before the middle of next year, if at all, almost one year after the previous developer had stated it was ready to start. GLF Construction had stated at the time the premier decided to pull out of talks with the Italian company and their local partners that it would have been able to begin work by the end of May 2011.

Category: Politics

Comments (65)

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  1. Anonymous says:

    Just one more in a long list of things done the Caymankind way.  Really no sense coming up with any good ideas when there is not enough intelligence, education, or common sense in the leadership of these islands to get ANYTHING done in a competent manner.  Big clue: millions of dollars spent each day and NOTHING of merit gets done.  Junk in=junk out. end of story.  Like watching a fish out of water climb a hill.

  2. Anonymous says:

    it would be nice if mac had an mou with his brain…..

    • Anonymous says:

      Maybe he is really the Scarecrow from the Wizard of Oz and that is why he has been searching the world over for the last two-and-a-half years under the guise of "inward investment".

  3. Anonymous says:

    GLF would have been well underway with its first pier by now.  Sorry for those businesses that depend primarily on cruise tourism for their income, they will be in for what appears to be a rough ride for the next 2 years, IF they can even last that long.  I heard that approx. 60 businesses closed over the last 3-year period – could CNS do an FOI with the Registrar of Companies to check if this is so and do an analysis to see how many of them depended primarily on the cruise business?  For sometime now, George Town does seem like a ghost town on certain days including weekends – with new for rent signs popping up here and there.   As for rest of us who benefit from the trickle-down effect from cruise tourism (i.e. the rest of us who live and work here) – none of us are immune to what is going on in the economy.  We all need to care about our fellow businesses who are directly impacted by the reduced numbers of cruise arrivals and the indirect effects it has on the rest of us when these businesses close down.

     

  4. Anonymous says:

    Can we see the MOU and just how badly it’s drafted?

  5. Anonymous says:

    Have you read the Jamaica Observer recent articles showing the huge problems the NWA / JDIP program in Jamaica is causing there, as a result of the way the CHEC contracts there were awarded?  Cayman be warned.

  6. Anonymous says:

    All it means, is that the project will not start till probably end of 2012, if even starts at all.  The MOU is merely being extended to March, after which, if all goes well, a Framework Agreement will then be signed, after which, if all goes well, the actual contract.   And there is no guarantee all will go well, because UK is now checking everything to ensure there is value for money.  So whereas GLF's works would have been well underway for the past 6 months, had their FA not been so abruptly terminated for no apparent good reason, we now all have to sit and wait for a much longer to see if the Port actually will get built, and all the while, as each day goes by, the merchants and businesses downtown suffer and more people will find themselves out of work as more businesses will close.   I heard the other day that approx. 60 companies having closed over the last 3 years due to the ongoing recession and no doubt the lack of proper berthing facilities contributes to this stagnant situation downtown.  This in turn has a trickle-down effect on the rest of us and the economy.   NICE GOING UDP !!!

  7. Anonymous says:

    Why don't we get the DART project started? This would inject billions into our economy and give us a much needed boost to put our people back to work.

    Someone needs to tell Alice Mae and gang that what they are doing is counterproductive. She is retired and living well with nothing to do but run around frightening people with petitions in her efforts to fight McKeeva and gang.. Forget about it and both of you join together and help get our country started.

    Someone also needs to tell MckKeeva that all talk and no action makes him totally useless. This DART/Government partnership was the best thing that ever came out of his administration. It was the one that most people were entirely behind yet he sits buy waiting for the naysayers and the pettioners to stir sh*t until DART says "screw it" and leaves us to wallow in our own crap.

    Time for Action Cayman. DART has the ability to get started now and by the time we even get an agreement on the dock, there will be a new government coming in to scuttle whatever the previous government had put in place. Normal Cayman politics but foolish and nonproductive nonetheless.

    Let's stop thinking politics and who can have the most power and money! Let's start thinking about reviving the economy of these our beloved islands becausee as I see they are on their dying bed and there is no doctor in sight. In fact our funeeal is being prepared right now by our Mother Country so just a matter of time if we do nothing.

    • Anonymous says:

      FORCayman Alliance project is likely dead also for two reasons:

      1. It has CAVE people working against it, and West Bay CAVE people at that- Our government has a recent history of bowing to such "minor vote losing" rants. It is now only 18 months to elections so all we are likely to see now is turkey handouts.

      2. More importantly, The UK will require the FFA to kick in to that deal. That means that the exchange of Crown lands, dumps,cash, roads, jobs, hotels, concessions, beaches, etc will be delayed for another KPMG review. That will take forever given the complexity of that deal.

      So Cayman we are up the creek without a paddle. The CAVE folks & UK have won.

       

       

      • Anonymous says:

        <p>OMG, heaven forbid <b><i>that the exchange of Crown lands, dumps,cash, roads, jobs, hotels, concessions, beaches, etc</i></b> should be subject to due dilligence or any oversight whatsoever.</p>

        History has shown us, most recently in the TCI, that when politicians negotiate with themselves and close friends it is always in the best interest of country.

      • Knot S Smart says:

        Anonymous at 8.42 – I always enjoy your comments.

        In this case because of the absurdity of your point #1 and partial correctness in item #2.

        The FFA Agreement was signed after the FCO called our Premier from 'his turf' to 'their turf'.

        I therefore wonder what was our powerful Premier told why he suddenly became so timid?

        That might be the real reason why all the big projects and Crown land giveaway is being put on hold. Not the West Bay Cave people as you call them, and neither the FFA Agreement.

        By the way – Did you hear a rumour about a Minister and a Maid?

         

  8. anonymous says:

    Another glorious andcalm “Red Bay Day”.  In fact, all days will be “Red Bay Days” if the harbour goes there.

    Sympathies to all who lost business today and also will tomorrow. In the future the $300,000,000 GT piers will be closed on days like today and Spotts will be bypassed- just like today. Sigh.

  9. Anonymous says:

    You know what is hard to comprehend?  From the news reports, it seems GLF was swiftly and suddenly terminated despite having "checked all the boxes" according to Stefan Baraud, Cline Glidden and D. Priestly.  GLF accomplished in a short time of 4 months, something no other prospective developer has accomplished to-date.   According to the copy of GLF'S Framework Agreement posted online by CNS, GLF could have gotten an extra 2 months if they needed more time, but they did not need it as they had "checked all the boxes."   If CIG did in fact have sincere concerns or questions regarding GLF's ability to secure financing, they did not give GLF even 1 extra day to answer or clarify any concerns. For some reason, CIG chose not to give them the courtesy of a little more time and terminated them without notice, not even giving them the 10 days notice to cure any "breach" as required under their FA.  Yet when CHEC's MOU expired November, the SAME CIG is quite willing to extend it to next year March, so that an independent assessment can be done by KPMG to see if the project is worth the $300M that CHEC claims it will cost and if there will be value for money.   Anyone else notice the glaring inconsistency on the part of CIG in the way they dealt with GLF and the way they deal with CHEC?  They also seem to bend backwards to extend Shetty's MOU because Shetty had not completely fulfilled his requirements, and quite willing to grant huge concessions and change existing laws for them.  They are also willing to grant huge concessions to the developer of the Economic Zone.  Yet GLF seems to have been suddenly flung to the wayside despite "having checked all boxes." There seems to be no adherence to standard, established procurement rules and fair treatment to all prospective developers, and certain ones seem to get preferential treatment.  Does CIG simply make up the rules as they go along?  This is the type of thing that creates and fuels the ongoing speculation surrounding these projects, how certain developers are handled and preferential treatment to certain ones.  This is the type of thing that will make international investors (except CHEC, obviously) very wary of doing future business here or bidding on future projects, because there seems to be no consistency or a level playing field.

    • Anonymous says:

      If KPMG's "independent assessment" is to hold any water, they should also be looking at GLF's proposal and comparing it to CHEC and see which one offers better value for money.  It does not make sense to be assessing CHEC's proposal only, as there will be nothing to compare it to.  Furthermore, I hope KPMG will produce a truly independent assessment and not allow the entity that is paying them to do t his, to sway their opinion in any way. 

    • Anonymous says:

      I'll cut to the chase for you –  me you and everyone else knows why GLF were expensively booted into touch and CHEC courted. Just that Cayman seems happy to tolerate this sort of thing and prefers to look the other way and pretend it isnt happening. Even when its right under our noses. Chances of proving anything is slim to none, and all those involved know that. Even when someone gets complacent and leaves incriminating evidence lying around all that happens is the DPP politely writes to the parties effectively inviting them to admit all. Obviously they deny it, and its the way in Cayman that we just accept the denials and that's the end of it.

      In more moral countries than ours mere unexplained suspicion is unacceptable to the public and out you go.

    • Anonymous says:

      There is but one Premier Common Denominator in the questionable removal of GLF; granting extraordinary questionable concessions to Shetty; backing the questionable Imparata quarry; giving a very questionable "For Cayman Alliance" over $100m in beach land value; granting a questionable $4m to a few churches; requesting $350k of questionable fees from Stan Thomas. Questionable, rather than accountable, should not be acceptable.

  10. Anonymous says:

    Seems someone is not trusted handling an MOU, need to get the Port Board involved

  11. Anonymus says:

    Note: This is not an unbiased assessment. "Bush stated that KPMG had been contracted by the Port Authority of the Cayman Islands (PACI) in August of this year to make the case for the project." KPMG is not checking to see if the Chinese plan is value for money compared to anything. They are creating a reason why we need it. KPMG does good work, they give you what you pay them for. So be careful the questions that you ask. – IIRC the EE Port also had an economic case why they were the best thing since sliced bread.

    • anonymous says:

      I agree…they need to compare it against Red Bay for a true value-for-money comparison.

  12. Anonymous says:

    Take your time mckeeva, there is really no rush.   When Cuba opens up, there will be no more Cayman Islands.

     

    • Anonymous says:

      The opening up of Cuba, if and when it comes, will have far more impact on Jamaica than on Cayman.

      • Anonymous says:

        Dream on.  Jamaica competes competitively for cruise business and has a lot more culture and amenities and sightseening to offer, like Cuba, than Cayman will ever have.  Their recently completed Port has attracted rave reviews and that is just one of their ports.  Poor Cayman, always playing catch up and still can't.

        • Anonymous says:

          That is precisely the point: Cuba would be in direct competition with Jamaica, not Cayman.  

          • Anonymous says:

            The point is, at least Jamaica is in there fully competing and are still able to get business because they had enough foresight to get their cruise berthing facilities completed, while Cayman can only simply look on for the next 2 years as the ships pass by and wish it too could compete.   Don't worry about Jamaica, you need to worry about Cayman who cannot hope to even compete.  THAT, MY FRIEND, IS THE POINT – the continual loss of business to Cayman and the downward spiralling effect it continues to have on the businesses downtown. 

  13. Knot S Smart says:

    I dont know what Mr. Bellingham told him – but it seems to be working.

    Soon we will hear that the dump, and the blocking of the west bay road, and the dredging of the north sound, and the giveway sale of the golf course land, and the oil refinery, are put on hold too.

    Thanks Mr. Bellingham – he certainly is afraid of whatever you told him.

     

    • Anonymous says:

      and DrShetty's hospital.  And the new schools.  Or are they still on hold from last time?

  14. Anonymous says:

    Like to OT Minister clearly does, I still don't see any committment from the cruise lines to use this new dock if it's built or even anything remotely resembling a guarantee that they will continue to use Cayman as a destination in the coming years.

    Doesn't the fact that the cruise lines have carefully kept well away from this project tell you anything?

    • Anonymous says:

      Actually, they have guaranteed 1,500,000 pax per year for 15 years. Whether the come or not.

      • Anonymous says:

        That has not yet been signed / agreed in writing – and it is doubtful that they will agree after they see what CHEC wants.

      • Anonymous says:

        Yeh, and I'm the old man in the moon.

        They can't deliver 1.5million per annum right now so let's see them put their money where their mouth is and give us a substantial penalty clause (like CI$20 per customer under quota) if they don't deliver on that.

        Ah, but that won't work will it? What with all the US bankruptcy protection the cruise lines can sign anything they like and then walk away from it.

        I still haven't seen one word from the cruise lines that supports this project in a meaningful manner and neither has the Governor, the OT Minister or the FCO. Right now in business terms this ain't going to fly without that and I really don't think you are going to get it.

        In the meantime guess who the FCCA, having flagged many of their vessels to non-US ports, is talking to? If you answered Cuba you are in the know 🙂 

        The cruise berth is something big, white and makes this sort of noise –

         

  15. Anonymous says:

    McKeeva apologise to GLF and stop wasting our money.  We don't want the Chinese here.  Look what happened in Jamaica.  

    • Anonymous says:

      so you prefer the Italians???

      • Anonymous says:

        Most definitely, as they do not flood their projects with cheap Italian labor at the expense of local labor and house them in their "camps" or barracks built by them,  and feed them 3 meals a day in-house which means they do not contribute to the local economy by way of renting apartments, supporting local bars and restaurants, etc.   Furthermore they do not import all their construction materials from Italy.   Furthermore, their company is not marred with scandals in other countries e.g. Bangladesh and Jamaica.  Furthermore, they are not backed by a communist regime who has no regard for basic human rights in their own country.    Is that enough reason for you?  There is none so blind as those who refuse to see.

    • Anonymouse says:

      We don't want the CHECH and CHONG here living in baracks doing all the labour work and leaving crums for Caymanian at little or nothing or is the law on minimum wage on yet? At least we'll get $5 and not  $3 per hour if …..

  16. Castor says:

    We now believe in Communism, puleeze give me a break. Lrt's get with the programme and finance this locally!

  17. Castor says:

    All the time, what foolish people, the cruise ship port could and should be built and financed locally. Simple, what a bunch of fools goverment are. Enjoy the Chinese, what a mistake, look inward. Think what is available locally, it's a no brainer. There is a lot of money in this long term. Maybe something is nasty here?

     

  18. Anonymous says:

    It looks like the same scenario when PPM was in power. Wait until their last year before they do anything. Typical politician.

  19. Anonymous says:

    These people couldn't run a bath.

    If a light bulb blew in the assembly building our MLAs would still be sitting in the dark a year later arguing about who's fault it is and announcing that a committee had been formed to prepare a paper on the correct course of action while McKeeva toured the world's light bulb factories.

    It would be funny if it wasn't many people's livelihoods at stake.

  20. It's so depressing it's funny, then it's just depressing says:

    This was the sole reason people forgave McKeeva and voted him back in: his ability to develop.  Now even the investment he can attract he cannot manage or corral into being.  We are left now with 17 months of an administration that has literally nothing to recommend it.  The ministers are silent, the government has been shackled by the UK and the Premier will soon be signing an MOU with his washing machine.  We are screwed.

  21. I am Fed up. says:

    I am at a loss to understand how a body so dysfunctional could operate a soup kitchen let alone a country. I can not beleive that the 'boys' (and they are boys) that I voted for are so WEAK and SPINELESS. 

    • Anonymous says:

      Bye bye cruise industry.

      I wonder who's fault this will be.

    • Anonymous says:

      you and every other missinformed voter who elected them to office, ito blame for this mess we are in; and, will have to suffer for years to come.

      So, parden me if I am a bit taken aback by your surprise in their lack of substance.

      Next election, try so use your brain and not getcaught up in the rabble rousing and free loads of gravel.

    • Anonymous says:

      Well, at least something good came out of it all – you woke up:)

  22. Anonymous says:

    Come on Mac we are starving out here..Get off your butt and get one of these projects started. What happened to the airport project or the DART partnership??…Comeo n let's get something going..pleaseeeee

     

    • Lachlan MacTavish says:

      The Dart projects will go forward. The rest will not pass muster under the UK microscope.

    • Like It Is says:

      You are not starving.  Otherwise you would have priorities other than posting on CNS.  Stop being so melodramatic. It is unseemly.

  23. anonymous says:

    I believe the Governor should ensure that Red Bay is also evaluated at this point. Let us know if Red Bay is a good idea or not. Is it better value for money than downtown?  The captains have certainly opened my mind to the option.

    We should save as much time as possible should the George Town piers turn out to be an expensive and disruptive "dud" that they claim.

  24. Anonymous says:

    More smoke and mirrors from Bush.  What does it really mean?

    No port construction.  No jobs.  No help for cruise ship tourism.  NOTHING.  That's what has been provided by this administration.  Nothing.

  25. Anonymous says:

    When they compare it to Red Bay that whole silly George Town, partially usable, non-expandable, hurricane prone, onthe edge-of-the-drop-off finger pier idea will be off indefinately.

    No business case can be made by anyone for us spending $300,000,000 out there while killing Eden Rock, Cheeseburger, Devil's Grotto and Cali Reefs and at the same time having to spend millions on shore fixing the traffic and flooding problems. It surely cannot be justified just to satisfy the Kirks and Dart Companies.

     

    • Anonymous says:

      As is the case with politicians, who have been known(believe it or not) to exaggerate and make inaccurate statements in efforts to further their cau$e$, we must also be wary of others who may use the same tactics for similar rea$on$.

      You are very right in saying that a business case cannot be made for a $300m port, but one can surely be made for a sensible one with minimum upland that could be built for between $150-$200m.

      Kirk and Dart are not the only businesses in town. There are scores of small businesses that depend on the George Town port as well. One also needs to be careful in how one infers that the Kirk and Dart businesses do not deserve consideration, as their contributions to the development of cruise tourism as well as the amount of locals they employ are fairly sizeable.  

      Honestly, at first I thought this Red Bay idea was being brought by a couple of patriotic seamen who sincerely believed they had an idea that would be of benefit to their country. I still think very highly of those seamen, but I get the feeling that there are others trying to take advantage of the seamen's good name so as to further their own personal economic aspirations.

      We also cannot afford to wait until the end of March for a decision. No one, especially The Premier who now seems to be going into the negative with regards to credibility ratings, can convince me that KPMG is that slow, especially with regards to a project whose delay is already causing great economic suffering.

      • Anonymous says:

        I agree with you re Kirks and Darts…without those two downtown would be dead however they do control 83% of the cruise retail there.

        The problem with the business case for a $150-200M dock is that it does not provide enough reclaimed space to make the project self funding. As a result the project has to add significant retail, around 125,000 square feet to make it profitable. That will kill the Kirks, Darts and all the rest of businesses that are there. Its a "catch 22"…..smaller, cheaper- not self funding….larger, more expensive- self funding but "local business killing". That is our choice right now as the Government cannot afford tobuild it.

        Unfortunately, given last week's FFA signing the port will not start until the end of next year. All that was stated was the MOU was extended to March. It did not say the project was delayed until March. I believe it will take longer to do a real report, even by KPMG as the data is all unique and it also has to be signed off by UK after that. The UK wants a "business case" proving it is value-for-money. And in addition that, Red Bay will come out on top anyhow.

        Given that everything the captains have said supports the GT retail remaining and they have constantly said they do not care who designs or builds it ( even suggesting CHEC does to speed up process) I think your penultimate paragraph is merely mischievous.

        This dock has been talked about for 38 years…6 more months to get it right will not kill us.

        • Anonymous says:

          There is no "Catch 22" with regards to being self-financing. All that is needed is approxmately 20,000 square feet of additional retail to make it self financing as this is only supplementary to the revenue stream that will come from the cruise lines. The cruise lines currently pay $4.50 per passenger for tendering services and I am certain that both Royal and Carnival would have no issue paying that $4.50 plus a couple dollars more towards the financing of a berthing facility. 

          What most people do not realize when considering cruise line guarantees is that the cruise line may only guarantee say 500,000 passengers/year, but in actuality we have averaged over 1,500.000 per year for the past several years and have approx. 1,700,000 scheduled for 2012. The revenues collected by the port are actually based on the total numbers and not the guaranteed numbers, so there is a lot more $ available to service the financing of a berthing facility than most realize.

          CHEC knows this full well, which is why they can boast about their ability to finance without guarantees, because they know the revenue stream is there. However, CHEC wants us to believe that they are doing us a favor by taking a risk that people will still want to come to Cayman, as Mr. Sangster so arrogantly put it in a recent Compass article! This is also how they want to justify pushing excessive upland retail on us!

          What is important about guarantees is that they ensure continued calls by the cruise lines well into the future. The absence of guarantees in the CHEC proposal is a huge negative, in addition to its $300m cost.

          With regards to the penultimate paragraph, there are many other way$ for the "non" sea captain proponents of Red Bay to benefit from it other than through retail. Number one is the contractto build it. By the way, why are the honorable sea captains suggesting that CHEC build it? CHEC is clearly the more expensive firm as illustrated by their $300m GT proposal, in addition to the existing proof of CHEC's questionable business practices ie.Bangladesh. I also see a hotel and megayacht marina in the Red Bay plan.

          The dock may have been talked about for 38 years, but it should have been built 20 years ago! Not all of us have the luxury, as you obviously do, to continue to wait. Many more will lose jobs and businesses in the meantime.

          My grandma, "What big eyes you have"!     

    • Anonymous says:

      Oh yes, that hurricane prone George Town. I much prefer hurricane proof South Sound.

       

       

      • Anonymous says:

        Check out the breakwater on "www.caymancruiseport.com"….that ends hurricane waves in Red Bay. Not possible to build one in GT to protect you all down there.

        • Anonymous says:

          Ends hurricane waves in Red Bay? You are either a comedian or ignorant. To protect you all down there. May one infer from this comment that you don't even live here? I can assure you hurricane waves can enter, pass through, and destroy Red Bay. If you doubt me research some Hurricane Ivan pictures. It was an actual hurricane and not an artist's rendering.

    • Anonymous says:

      The traffic problems we already have need fixing regardless.  This is a good opportunity to re-engineer George Town.  We can build as many ports as we need to.  The fact is that's where we can get one up and running most quickly and it's where the shops are.  You Red Bay people, poking up your heads like gophers with your little suggestions – you are even worse than McKeeva switching from GLF to CHEC.  We are not now going to switch locations too.  Let's get it going.  George Town it is.

  26. Anonymous says:

    hahaha…the latest soon come story….. the incompetence is never ending……

  27. Anonymous says:

    It should be put off indefinetely.  The port needs to go in Red Bay.  These delays are a blessing from high above.  Think Cayman. Think.

  28. Anonymouse says:

    Meaning no port soonand no mention of the other contractor suying. So we are at lost but Bush will be a little more restrained in his future signing in the future. We will all lose another year or more.

  29. Anonymous says:

    Detailed and complex work being done prior to the signing of a Framework Agreement?  

    How does anyone know what the project will be enough to assess it if there is not even a Framework Agreement?

    Who is paying for this KPMG assessment?

    As usual, this press release only creates more questions.  This is why press briefings are a better use of Mac's time than he realises.