Spotts Jetty costs balloon

| 16/03/2012

spotts.JPG(CNS): The premier has revealed that the cost of re-developing the Spotts Jetty as a future alternative cruise port to George Town for ships that can still tender has doubled in cost from the last estimate of around $3 million. McKeeva Bush has not explained why the development is now twice the price but there are fears that the ballooning bill will eventually be paid by the Cayman people. Ezzard Miller says this sudden doubling of costs is worrying as it does not bode well regarding the rest of the cruise facilities, which CHEC, government’s current preferred developer, will build, as all of these costs will eventually come from the public purse. (Photo courtesy of Cayman 27)

He warned that the more grandiose the three cruise port related projects become, the more the public purse will eventually suffer. Despite claims by the premier that the port developments will not cost the government money, Miller says this is misleading as he believes part of the financing will come from passenger tax.

“If, as government claims, the passenger fees are not increasing, then the developer must be taking funds directly from the existing fees, which would normally be collected by the Port Authority and added to government coffers. If that money is lost because it has gone to CHEC then new taxes will have to be implemented to replace the missing revenue,” Miller pointed out.

He said government makes around $13.5 million per year from cruise fees but if all or part of that goes to pay for the port then the drop in government earnings will need to be replaced from somewhere.

Although the premier has stated that CHEC will be making its money from the upland element, he has not denied that there will not be some money coming from passenger tax but he has denied any major hike in the tax, as suggested in a report by KPMG last year for the Port Authority.

“The increase on the Spotts project is frightening. It has more than doubled. Does that mean that we can expect the same thing on the main $300 milllion project?” Miller asked and he queried why it is the cost of the Spotts Jetty has more than doubled as he called on the premier to explain the increase. He said he could not imagine how it could be justified to spend so much on a back-up port that would be used on no more than a couple of dozen occasions throughout the year.

The original Port Authority plans for a basic revamp of the area at Spotts had been estimated at around $1.5 milllion, a more comprehensive upgrade was then price at about $2.3 milllion. When the premier first signed an MOU with China Harbour Engineering Company and negotiated an advance to make a start on Spotts ahead of the main agreement, the price tag had risen to $3.3 million. Plans for that cash advancement were shelved because it appeared the sum would have had to be included in government borrowing.

Speaking at the special meeting of Finance Committee on Tuesday, Bush revealed that the Spotts project was now between $6 and $8 million.

“There was no explanation for what this extra money was for,” Miller said. “And if this goes the way of other UDP projects, then it will be closer to $8 million rather than $6 milllion.”

The independent member for North Side warned that there does not appear to be the same kind of checks and balances that existed in the framework agreement between the former proposed developer GLF and government with the CHEC deal so he questioned how the project could be prevented from ballooning.

“The Chinese proposals includes financing, designing and building, so the more they can finance, design and build the more profits all round,” he added

Category: Politics

Comments (55)

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  1. Wayasay says:

    SPECULATION or FACT?

    Let me see if I have been following this right.

    The Government got rid of GFL for what they said was due cause. – FACT

    GFL thought differently so they sued Government. – FACT

    Govern decided that instead of presenting their case for due cause, it was more cost effective for the Caymanian People to pay GFL $2 million because (as they say) it will cost $3 to $4 million to prove that Government did indeed dismiss GFL for due cause (their words not mine).  – FACT

    Furthermore Government assured us that if we fought the case that the Caymanian People would have to bear the cost of the litigation and went even further to assure us that if we settled out of court it would cost the Caymanian People NOTHING because they would raise the money from the sale of "intellectual property" that they were in effect buying from GFL with the $2 million settlement. – FACT

    Lo and behold the Horerable Mr. Rolston Anglin then did the honerable thing and told us the truth, that we had paid the $2 million fron the Caymanian People's money. – FACT

    Here is where I run out of FACTS as no more facts are forthcoming fron the Government. Please forgive me for indulgeing myself in speculation but everything I write from here on in this post is SPECULATION.

    At some point, either before Rolston spilled the beans or after, the Premier, or his designate, tried to sell the "intellectual property" to the Chinese and they told them to "get lost" because they had their own "intellectual property" and did not need any from GFL ,particularly because the entire scope of the project had changed and what GFL had prepared was for a completely different project to the one the Chinese is going to build. – SPECULATION

    The Government is now left in a position of holding worthless paper that they claim is "intellectual property". – SPECULATION

    The Government is now in the position where they have told the Caymanian People that the settlement would not cost them anything, therefore they have to prove to the Caymanian People that it will indeed cost us nothing. – SPECULATION.

    Now the Government has put the  'Smoke and Mirror Team" (read Public Relations team) into action in order to calm down a restless and unbelieveing public. – SPECULATION

    Here is their ticket to make that happen. Mac tells the Chinese, "Mr. Chinese you will pay the Government $2 million dollars whither you want this " intellectual property" or not. Quit complaining about paying $2 million for nothing, Mr Chinese, I will make it up to you on the Spotts Jetty." – SPECULATION???

    HERE IS THE SMOKE AND MIRROR PLAN. The Government pays GFL $2 million, the Chinese pays the Government $2 million. The Government then agrees to increase the estimated cost on the Spotts Jetty by $2 million without increasing the scope of the project. – SPECULATION

    The people will think that Everybody MAKES $2 million in this exercise. GFL spent $2 million??? to acquire their 'intellectual property" and sold it to Government for $2 million. The Government paid $2 million of the treasury's money to GFL and will be repaid $2 million from the Chinese. The Chinese is left holding the bag for $2 million? The Chinese simply increases the cost in the Spotts Jetty by $2 million for the same scope of work plus another $1 million for the actual changes to the scope of work beyond this. No harm no foul. – FACT

    The Caymanian People are left out of pocket for $2 million which we would have spent under the guise of increased cost of the Spotts Jetty but is really due to the careless way that the Government terminated GFL. – FACT

    The Caymanian People will see through this mess of smoke and mirrors by our Government Ministers and will kick them ALL out come May 2013. – FACT

  2. Baldric says:

    "Spotts Jetty costs balloon"

    That's not expensive. I got a whole bag of balloons for under $2 the other day.

  3. Philo the Philosopher says:

    Wouldn't it show some INTEGRiTY and MENTAL FORTITUDE  if those other 7 U.D.P. members  would {as they claim to }  show some concern about the exorbitant cost of so many of these projects? One would think that if they were so concerned, and/ or cared about our Island as they so often claim, while spewing out so much rhetorical verbiage at their "SO CALLED"  public [I Call Them "Early Campaign"] meetings at which they do nothing more than to ascent to everything Mr. Bush says. Would it not be much better, and would it not show  that you are independent  thinkers  if you would on occasion question some of the ridiculous  statements and claims that he makes. I would be asking for, and would have to be shown  a cost break down of whatever project it was that was looking for approval from our GOVT.  at the time before I wold give my Yea or Nay!  Don't you realize that there are a lot more intelligent people out here than the eight  members of the ruling U.D.P. party. They see what"s happening and will remember you when you come begging for votes. Stop being PUPPETS for your leader and do what you were sworn to do, that is to do whatever was necessary to improve living conditions for all the people of  "This Our Beloved Island."  But it seems to me, that the only people who are being looked after are those Political Crones who are rewarded constantly for screwing the people by overcharging us on every major project we give to them. Explain to the people before sneaking out of the Island when, where and for what you are taking these trips and wasting our resources. There is nothing that will be built at Spots that should cost more than a couple million. Has anyone noticed that as soon as the contract is awarded the increase in costs begin? RIDICULOUS!!! This is now so prevalent  that it has become the norm!  IN OTHER-WORDS NOBODY GIVES A DAMN! Just throw out a figure and GOVT. will pay. "VERY INTERESTING"   

    • so Anonymous says:

      Just how foolish are the Caymanian people?  After all the lies, unanswered questions, court cases, partial failures, total failures, finacial irregularities, double dipping, and failure to follow regulations and protocal there are some still looking for INTEGRETY and MENTAL FORTITUDE?  REALLY?

  4. TheTruthWillOut says:

    Here is an analogy that will help all to understand what is going on here. The BIGGER the SALE, the BIGGER the COMMISSION!

  5. Anonymous says:

    This should not be a surprise to anyone. CHEC are famous for escalating costs faster than you can count 1, 2, 3.  If they can under estimate the cost so badly on what is a tiny contract then guess what will happen to the main dock. Now is the time to stop this madness.

  6. Chris says:

    Ezzard is right.

    Ballooning costs from before the project is started is a real cause for concern.

    Lets all stop drinking the PPM Pepsi and UDP Coke and realise this Port project is much bigger than any of them.

    Not so long ago we were in shock and awe at the cost of the schools of around $120 million that were going to bankrupt the country. The school costs are now estimated at 200 million and we are reminded daily that the country is still struggling financially.

    Now, many of the same people who were giving  the PPM 40 lashes for the schools project and who remind us daily of our financial woes are proposing this port project. The various port proposals have ranged from just over 100 million now to over 300 million! Bear in mind that most of government's construction projects end up over budget so we can expect to pay closer to 400-500 million when its all said and done.

    The above story already confirms that the Spotts element of the port project had doubled in cost even before commencing.

    Just like the schools, there are a number of unnecessary bells and whistles, (no pun intended)  ranging from the overall design to the kitchen, art studios, finishes etc. Similarly, this government is making the same mistake, driving up costs on the port by proposing a hotel and dozens of shops on the dock replicating what is already sold in George Town in the port upland development.

    It is common industry knowledge that stay over visitors prefer to visit George Town when there are few or no cruise ships in port, so why would they book a vacation to stay at a hotel on the cruise port with no beach within 3 miles? Not even a casino would make this project work!

    Guys its time to rethink. The Caymanian people are paying for this and that includes your children. Lets not build based on a wish list but instead, lets cut our cloth to suit our means and needs, not our wants. Scrap the hotel and upland retail and lets get the 2 docks built out there for a figure close to $100 million and lets get the tourists in here.

     

  7. Peter Milburn says:

    It is so amazing that Govt(not just the present one)cannot seem to do anything right when it comes to doing costing on the various projects that are undertaken.Yes we can allow for a bit of underestimating but to be so far out from the original costing exercise makes me really shake my head in disgust.Its never under budget but ALWAYS over budget and it leads me to ask is there anyone who can really do this job properly?

  8. Lachlan MacTavish says:

    Just about everything we talk about that is connected to Government leadership is a failure. I mean go through the archives and read up. Find a Government program or leadership decision that has created something positive for the people of the Cayman Islands in the last few years.

    Support the petition for change and for your ability to elect individuals that will re shape the country for the people. The Cayman Islands still have the foundations, faith, morals, caring spirit, and uniqueness to create a wonderful country for everyone.

    Over the past 3 decades individual leaders have morphed the country to suit their personal needs and goals using the guise, vehicle of politics and Government to achieve their goals.

    Get this petition to The Governor sooner than later. Demand change for you, don't waste time, we have wasted 30 years and allowed this horrible situation to occur. Take back your country.

    Lachlan MacTavish

  9. Anonymous says:

    We should not spend that much on something that is used maybe 6 times a year!  Spotts dock isn't great now by any means but a few more restrooms, seating and some shade (tents that can be moved, that don't cost 2 million) maybe widen the pier a bit because only three ships can stop right? When we know we have to go to Spotts send more people from DOT to help. THIS IS SO STUPID to spend that amount of money.

  10. EYE ON THE ISLAND says:

    What's new with this guy? Over and over again. When will it end? The UK never does anything but give lip service. Just think where we would be if we did not have the one two punch fighting for us? Ezzard & Arden.

  11. anon says:

    We need two concrete fingers into Hog Sty Bay, and a couple of restrooms. Nothing more. Jfc, why do we need to sell out our children’s future with this grandious bs! A grade schooler could solve this!

  12. Anonymous says:

    The costs balloon because the kick backs are a percentage of the total cost.

  13. Anonymous says:

    Who cares why! It's just another reason not to elect big mac or any of his stooges….. or any of the udp canidates…. there has to be a new generation of Caymanians that will stand up and run the Country for the people by the people. Stop the concrete and remember what this island used to be like…….what drew the people here who try to change the way of a Caribbean treasure……. makes me sick!

  14. Anonymous says:

    Give CHEC a break!  They have to pay for the GLF intellectual property now 🙂

    • Anonymous says:

      Which in turn means the head tax income to Government from the cruise lines, and/or the local residents will ultimately be paying for this, as CHEC ain't doing anything for free, anything they pay for they have to recover with interest BIG-TIME.  No such thing as a free lunch.  So all the rhetoric about this not coming from Government coffers is BS !

  15. Anonymous says:

    Gee, let me guess.   Could the extra costs be to purchase the "intellectual property" the Premier touted he would sell to cover the 2 MILLION to GLP that was settled out of court?  

    If a proposed project looks and smells terrible and disadvantageous to the people of the Cayman Islands BEFORE it has even broken ground, what it the world makes anyone think it will improve?  

    If we go down this road with CHEC, I believe it will be the ruin of our beloved country, and the ruination will continue for 50 years.    Great negotiations.    Even my children know you cannot spend your way out of debt.  

  16. Anonymous says:

    …and those 2 gigilos got the audacity to sit in Rooster studio this morning and castigate Alden for the Schools? Give me a break!  They critized him to no end and had the audacity to claim that the docks will be a money maker and the schools won't.  So…in actual fact, its not about educating our children, but about making money.

  17. Pineapple Express says:

    Perhaps it was an honest mistake and government scientists neglected to mention the dock would have to be built in the water.  This would obviously be more costly than building it on land.  CHEC noticed this later in the contract wording and has now informed government the dock would be a lot more expensive. Almost double the cost.  Premier Bush hadn't noticed this at all and is thankful to CHEC for pointing this out and has apologized. "At least they didn't build the dock in the wrong place."

  18. Bling man says:

    Tween $6 and $8 million???   Da include any kick-backs?

  19. nauticalone says:

    Don't even know what to say about this Govt anymore. The damage these clowns, expecially UDP (Unna Dumb People) have and are costing Cayman is HUGE!

    People who have not yet signed the Petition for One Person One Vote, please do so now! This will go a long way to more Accountability.

    And the Powers that be need to arrest, prosecute and convict all who engage in Corruption and waste the Public Money!..and make stupid decisions outside of proper processes.

  20. Anonymous says:

    Funny how we hate expats but invite the Chinese in. Are we going to convert them to Christianity?

     

     

  21. Anonymous says:

    This is exactly what happens with the CHEC contracts in Jamaica. Get foot in door with low ball price. Then hand out brown paper bags and double up. 

    Two UDPs were on the radio this morning. They said GLF couldn't come up with the finances. Based on government's track record, how would they know if someone could or could not come up with finances? Its not as if they even know how to produce a set of accounts. As for our Minister of Finance he doesn't know the difference between finance and fireants.

  22. Anonymous says:

    Could CHEC have failed to include certain important costs in their original build up of costs? I dont trust anything the UDP propose but this looks like to me as though they originally provided ROM estimate and then in firming up design & costs there may have been clear oversight on some vital elements.  We will see in the end what the delta of costs is all about.

    • Anonymous says:

      Any company worth their salt would not have been this far off the mark from the original guestimate – a professional company would have kept within a reasonable percentage increase.  But doubling in costs?   Please.   If this is a sign of anything to come, it does not bode well for the other docks / upland facilities planned.    Maybe the extra cost (which is yet to be explained by any member of government what makes up the extra cost),  is probably to help pay for the GLF settlement fiasco – which, by the way, will still end up costing this country no matter what sale of "intellectual property" will supposedly take place according to the premier.   No such thing as a free lunch.  Every single cent extra that is spent on these docks, will have to be recovered by the lender somehow.

    • Stiffed-Necked Fool says:

      Boy, family getting rich!

    • Peanuts says:

      Well if 3 Million  can turn in 6 Million, I shudder what 300 Million will Baloon in to. Looks like a Pig feed to me.

    • A Guilty Pleasure says:

      More untuths? Why can't we be told the absolute facts (or truths) from the beginning? How many (untruths by the government & it's mouthpiece) does this make it now?

    • Jah Herod says:

      Hail heathens the mou was described as 3 million to be paid to chec if a contract was not signed. All ya heathen go back and read, tell I how can you estimate costs of construction before you draw plans. Go read the mou again without out ona stinking prejudice.

      Hail Up People stop ona fighting and think positively create positiveness and ye shall prosper

    • Anonymous says:

      The delta is due to the fact that, unbelievably, there are still families in West Bay that haven't been cut a check.

       

  23. Anonymous says:

    The government of Malaysia built the world's largest twin structures, the Petronas towers, UNDER-budget and in advance of the stated deadlines because they understood the fundamental value of competition.  Instead of awarding the job to a single contractor, they hired two competing teams — one from South Korea — and the other from Japan.  These two teams were then told that whichever team finished first would be awarded a bonus on top of the contract price.  The teams from these two countries were bitter rivals and worked day and night to out-do the other.

    The South Koreans won and were awarded the bonus, but the real winner was the government of Malaysia who got exactly what they wanted, under budget and ahead of time.  

     

    Our 'government' should take a lesson from Malaysia and take advantage of simple human nature.  Competition produces better results and, if the proper incentives are in place, this can be used to our advantage to achieve desired results.

    Clearly, the clownsin government could not manage their way out of a paper bag and we, the Caymanian people, need to vote these clowns out of office next election before they are allowed to do irreparable damage to our country.

    • Anonymous says:

      Would that be a brown paper bag?

    • Anonymous says:

      Unfortunately the damage is probably already done, but who is in the wings to turn things around? Nobody, just more of the same old same old.

    • Anonymous says:

      This might work if the Cayman Islands actually had something to offer two competing companies. You forget that they are asking the contractor to do this on thier own dime..CIG is in no position pay for this themselves let alone offer any kind of bonus…

      • Anonymous says:

        There is hardly any project that cannot be split into equal parts and given to competing bidders. This type of arrangement should be the norm for any new project awarded.

      • Anonymous says:

        DEAD WRONG !  Even though CIG has no money upfront to offer as bonus, CIG could come up with a way to give a bonus, even if it meant giving the developer an extra few years' share in the revenues from the passenger head tax income earned from the cruise lines, or alternatively, a few more years' rental on the upland retail facility.    Why do you think so many companies competed for this project to begin with?   And they competed without even a bonus being offered, they were simply content to work for a normal profit margin.   By the way, CHEC was not among the original bidders – they only came in through the backdoor and negotiated this the same way, behind backdoors).

    • so Anonymous says:

      Perhaps the time has come to bite the bullit and realize the truth of things for the betterment of the future.  The brain trust that is CIG does not have the education, training or the ability to tell right from wrong.  This would explain how all that money is dissapearing and nothing is getting done with it.  Other than making a few richer and fatter.  Either the Caymanian people come up with some hidden assets to lead them or Cayman stays third world. But only for the Caymanian people, which it would seem is what they want.

  24. UDP Supporter says:

    We need to trust in our leaders, especially our Premier, as we would have trust and faith in God. They are only doing what is in the best interests of our island and its Christian people. That is the true Caymanian way!

    • Joe Pesci, please help us says:

      Ok,lets play it your speed, logic and intelligence will be thrown out the window.

      Ready…

      The Premier is Judas not the Messiah, case closed!

      B.T.W: We are not all Christians! Some of us are just decent human beings with no afiliation to religion.

    • Anonymous says:

      If this comment was not written in jest then you seriously need to learn about the sin of idolatry.

    • Anonymous says:

      You're havng a laugh… right??

    • Bushwacker says:

      UDP supporter Fri, 03/16/2012 – 09:21., I truthfully cannot believe that you wrote and it appears believe in such blasphemous words insofar as “we need to trust in our leaders, especially our Premier, as we would have trust and faith in God.” Frankly, how dare you compare a man riddled with “issues” clearly jotted down in the annals of this territory’s history to our Heavenly Father, which art in Heaven!

       

      It is evident that your fallacy is caused by moral decay inculcated throughout your unfortunate life thus far by listening to the repeated utterances of this mere extremely imperfect man. I hope your path is not on the same path as those that followed Jim Jones in Jonestown, Guyana in 1978.

       

      Frankly, I am extremely concerned if there are more that unfortunately think like you because everyone can kiss this island and its economy bye bye! For God does not take blasphemy lightly and woe to those who condone it.    

    • Anonymous says:

      I am sure the devil wouldn't trust him with the keys to Hell, so why should good citizens of this country trust him.  They have sold us out, lock, stock and barrell.

    • Empty Chair says:

      Trust? Trust in our leaders? Are you serious? Name just one thing that our UDP leaders have promised us that they have done, just one! How can we trust a leader who very recently told the Cayman people that the "less than $3 million" GLF settlement would not be paid by the Cayman people, that it would not be coming out of the government coffers, only to be told weeks later by a UDP Cabinet colleague of his that in fact the check to GLF was cut from the treasury? And this is just one example of many, many more in the last 2 years! And you want us to trust?

    • Another Anon says:

      Your beloved Premier doesn’t give a rat’s behind about this country and it’s “Christian” people. He has proven it over and over again.

    • Anonymous says:

      Caymankind to the end.  Soon come?

    • Anonymous says:

      So sayeth the grateful recipient of a fridge and paved driveway, with dreams and hopes for an even newer fridge and repaved driveway in 2013.

  25. Anonymous says:

    Same old same old. No one knows what you are really getting or what it will cost.

  26. Anonymous says:

    same old cig and civil service incompetence…..

    • Anonymous says:

      Do not blame the civil service for the screw ups of the Ministers of Cabinet.

    • Anonymous says:

      All people screw up from time to time but only ignorant buffoon politicians are capable of producing truly monumental screw ups including this. Civil servants don't have the authority to screw up this badly.