US$185 million loan

| 19/02/2009

(CNS): The government is borrowing US$185 million on a long-term loan from Scotia Bank and Trust (Cayman) Ltd and JP Morgan following the awarding of the contract on 6 February by the Central Tenders Committee (CTC). The loan is for government’s approved 2008/09 fiscal year capital expenditure and will be used to fund a wide range of capital projects and investments across government. The tender was open to A rated (or equivalent) banks and financial institutions.

According to the CTC website, 6 February was also the deadline for tenders for a loan to the National Housing Development Trust (NHDT) for US$14,500,000 over a minimum period of twenty years for the acquisition of land and the development of the properties for future affordable housing projects.

The CTC has also announced the awarding of three other contracts, worth over CI$1 million collectively.

On January 23, a contract was awarded to Scott’s Equipment Ltd in the sum of CI$134,477 for phase one of the National Housing Development Trust’s East End Earth Works project. Scott’s Equipment Ltd is expected to complete site preparation works in just four weeks. On the same date. a second contract was awarded to Millennium Construction Equipment LLC for the sum of US$523,450 for the provision of a new primary tire shredder for the Department of Environmental Health. This piece of equipment will assist with the George Town landfill operations.

On 6 February, DSS Contractors was awarded a contract in the sum of CI$413,031 for phase two of the Sister Islands Affordable Housing Project in Cayman Brac. The company is expected to construct two 3-bedroom houses and two 2-bedroom houses in Cayman Brac’s West End within forty weeks of commencement of works.

Awarded contracts can be viewed on the CTC’s website, www.centraltenders.gov.ky. For further information, contact the CTC Secretary, Daun Alleyne on 244-2102 or email daun.alleyne@gov.ky.

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Comments (6)

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  1. Anonymous says:

    The government was not FORCED to do anything. They chose to try to take on EVERY SINGLE capital project in a 4 year period which shows lack of long term planning.

    PPM time to go!

    • Anonymous says:

      Actually, it showed a lack of long-term planning by previous govts. which failed to do their jobs and created dire needs that had to be addressed. If the govt. had not undertaken these projects you would be screaming:

      • that they had done nothing.
      • that govt. had allowed traffic had come a complete standstill
      • why couldn’t they see that traffic in the air terminal had exceeded its capacity
      • why couldn’t they understand that the high schools were overcrowded which had led to disciplinary issues
      • why are the continuing to pay millions in rent rather that build a new Govt. admin building.  You can’t fool all the people all the time.
  2. Anonymous says:

    No one likes to look back to the past. But that is the origin of the problem. The government does not have any funds available partially because they have not managed their spending well over the past 4 years. They do have a narrow revenue base. but they are not the first government to face a narrow revenue base. The fact is their wasteful spending is a large part of the problem. this new loan is being pushed as part of the need to spend on infrastructure to help the country. But lets all be real here…we are 3 months away from a General Election and clearly this spending is meant to make some voters happy.

     

    They have almost doubled the national debt in one political term..this is a record in the history of Cayman.  This level of borrowing is not only unbelievable. It is actually irresponsible.

    • Anonymous says:

      The Govt. has been forced to spend on infrastructure throughout its term because the development of infrastructure was neglected by successive governments. Had they done their jobs the required spending would have been spread over a much longer period, now the same people who failed to do the necessary are criticising the Govt. for what they have to do.  The critics are also the same people who did indeed waste public funds, e.g. Boatswain’s Beach project, Pedro Castle project.

      I do not see that any of the infrastructure spending is wasteful. Certainly there has been no Auditor General report that I am aware of that says that. These projects are needed and will only become more expensive, not less.  This is simply alarmist political rhetoric to trick the electorate before an election.

           

  3. Anonymous says:

    "Govt. interference in the private sector". What "interference" are you referring to exactly? You do understand that govt. has a proper role to introduce policies and legislation to regulate private sector activity in the long term public interest, don’t you? A completely unregulated private sector will soon choke on its own greed. I would have thought that the revelations of this economic crisis that would have made that obvious to everyone.  

    The truth is that there are major infrastuctural demands upon govt. and govt. does not really have the revenue base to support it. Everyone is looking to govt. to provide al sorts of benefits but our contributions to the cost of govt. are small. Is it time to consider a small income tax (e.g. 2%) for those with top incomes, say US$250,000+?   

  4. Friend of Cayman says:

    What is the interest rate on this new US$185 million loan, which is so huge that it is about one quarter of the Govenments annual income?

    What proportion of our annual income is being already eaten up by interest payments?

    Could it be that Cayman is living beyond its means, and is trying to spend its way to prosperity?

    Surely, by now, everyone should know that this is a proven recipe for disaster.

    This is not what Cayman needs. We need new sources of income, and a dramatic increase in productivity. We need to remove Government interference in our private sector, and fast.

    Printing or borrowing money is the NOT the way forward, unless your goal is poverty.