Archive for November 3rd, 2010

UK students face tuition fees rising to £9,000

| 03/11/2010 | 0 Comments

(BBC): Universities in England will be able to charge tuition fees of up to £9,000 per year from 2012, as the government transfers much of the cost of courses from the state to students. Fees will rise to £6,000, with an upper tier of £9,000 if universities ensure access for poorer students. Universities Minister David Willetts said this was a "progressive" reform. Labour’s Gareth Thomas said the fee hike represented a "tragedy for a whole generation of young people". But Mr Willetts said the fees package would "put universities’ finance on a sustainable footing with extra freedoms and less bureaucracy". He argued this would this bring "greater choice for students with a stronger focus on high quality teaching".

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Wine shop gets new decision

| 03/11/2010 | 8 Comments

(CNS): Local wine merchants Jacques Scott have moved another step closer to opening its new flag ship store in the district of West Bay after the Liquor Licensing Board (LLB) reconsidered its decisionsto refuse a transfer of license earlier this year. In a specially convened meeting as ordered by the chief justice last month, after a long courtroom battle, the board reconsidered the application this week based on the original information from a hearing in April. This time the board granted the change of location for a retail licence for the new store subject to planning approval. Jacques Scott confirmed they had been informed of the final outcome on Wednesday and were extremely pleased.

“We are delighted that the LLB have reconsidered, and thank them for so doing,” Peter Dutton the CEO of Jacques Scott said on hearing the news.

The wine merchants had first made their application in April of this year in order to begin the planning application process for a small commercial development next to Foster’s Republix in West Bay where Jacques Scott would be its own anchor tenant, with a flag ship wine and gourmet kitchen dining store at the heart of the development.

The application met with local objections and the board refused the license on various grounds including potential traffic problems, rising crime in the district and because it believed West Bay was already well served. However, the wine merchants applied to the courts for redress and after intense arguments before the chief justice the wine merchants prevailed in getting the board to reconsider its decision.

Throughout the courtroom wrangling JS had argued that the application was for a fine wine store not a bottle shop and there was no way it would add to the crime problems of the district as the store would close at 7pm, have a full time security guard and would not be selling single units of alcohol unlike any of the other West Bay package liquor stores.

The firm maintained throughout the legal process that the store would enhance the commercial opportunities in West Bay and boost the district’s fortunes bringing employment and new business.

 

 

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Mac claims actions legitimate

| 03/11/2010 | 31 Comments

(CNS): The premier has denied acting unlawfully in his decision to override the central tendering process over the financing of the CI$155 million loan. Speaking in the Legislative Assembly on Wednesday morning, McKeeva Bush said that Public Management & Finance Law gave him the power to legitimately abandon the tendering process and then act in the financial interest of the country. As controversy over the way the financing has been procured for the government loan mounted this week, the premier lashed out at the opposition and the local media saying their allegations could undermine the rate that the government will eventually get when the full deal is done.

As the Legislative Assembly opened for the third meeting of 2010/11 session, the premier dominated the morning’s business with two long statements. In his first he hit back at the opposition leader, Kurt Tibbetts, over a speech delivered while Bush was overseas that criticised government, and in the second he revealed a chronology of events, which he said led up to the selection of New York based Cohen and Company to be the entity that would supply the government loan.

Bush said that he did not see the tender documents before they were advertised on 1 July because of the way the system works. He said seven bids were received and these were opened on 28 July but the lowest bid of 3.5% was not recommended by the technical committee, which he said consisted of Financial Secretary Ken Jefferson, GloriaMyles and Debra Welcome. Following the opening of these bids four more financial institutions expressed interest in providing financing. As a result, the Treasury sought the CTC’s approval for an extension to allow these four institutions to submit their bids.

Bush did not say who the four extra bidders were but CNS understands that Cohen and Company was one of them as the firm had not been one of the first seven.

Bush said it was at that point that he discovered the original request for proposals didn’t include provision for the refinancing of all government’s debt, including Cayman Airways. As government is currently paying over $30 million in interest payments on existing public debt and other financing costs, the premier said he was right to concentrate on minimising the cost. Bush went on to say that the only way the new bids could legitimately be considered was to terminate the original tender and start over. On 24 August the Department of Treasury presented a report to the CTC that recommended the termination of the July tender for a new process to occur, which the CTC accepted.

The new request sought bids for the CI$155 million and liability management solutions for details of how government’s existing debt of half a billion dollars could be lessened and how bidders could assist statutory authorities and government-owned companies with their financing needs.

Bids came from seven institutions by the 9 September deadline, which were opened at a meeting of the CTC and handed to the technical committee for evaluation. Bush said on 22 September the technical committee presented a report to the CTC recommending a joint bid by two local banks. This was the second lowest bid as there were doubts, according to the technical committee, about whether the lowest 3.5% could deliver the money in the timeframe that government needed. Eventually, after ensuring this was the case the CTC accepted the second lowest cost bid from the two local banks.

Bush says it was at this point that  he indicated to the financial secretary that the bid did not represent good value for money, nor was it offering the refinancing for CAL as mentioned in the second request.

“At that point I … informed the FS that because we were not accepting that recommendation, as it was not providing the financing to CAL and others, the bid process had failed and I considered it abandoned,” Bush told his legislative colleagues. “As the minister of finance it is my ministry that asked the CTC … to undertake the process, so I considered that I had that authority. In other words, if I had the authority to start the process, I had the authority to stop it.”

Bush then revealed that he contacted Cohen and Company while he was in New York to ask if they could provide the funding to CAL and if they could to contact the Treasury. Bush denied going to the offices of Cohen and Co as he said he did not know where they were. Meanwhile, despite having abandoned the bidding process, Bush said the CTC went ahead and awarded the loan to the two local banks.

Bush said that one of the reasons that Cohen & Company was chosen was because the firm was willing to provide financing for Cayman Airways. None of the other bidders made such a commitment so Bush questioned if any of the bids were in compliance with second the RFP. He also noted that the two local banks accepted by the CTC had been asked and they were not willing to provide financing of CI$19 million to Cayman Airways.

Bush also told the House he had a legal opinion from constitutional lawyer Professor Jeffrey Jowell that as finance minister he did not have to accept the CTC’s recommendation, but when asked to read it by the opposition he said he did not have it with him.

He said under section 34 of the PMFL the minister of finance may borrow money, make a loan, give a guarantee, and enter into any financial transaction for the purpose of avoiding liabilitiesor expenses caused by interest rate fluctuations, or by credit, liquidity or funding risks.

The premier claimed the offer from Cohen & Company was accepted because it would enable government to benefit from the current very low interest rate environment but still did not reveal what that rate would be. “I have stated time and time again that when the process is completed the full rates and conditions will be made public. But let me repeat again for the benefit of the leader of the opposition: this information had been given to the public … and why is it that the leader of the opposition can’t understand? Why is it that he would want to mention the word corruption?” Bush asked of his opposite number rhetorically.

He said that Tibbetts and the rest of the opposition did not know what they were talking about and the fundamental lack of understanding of basic finance was what had got the islands into the financial mess it did under the PPM administration.

“I asked them all to wait until the process was complete, as we now go to a bond issue and I would inform the country at that time. If we lose out on rates now because of the kind of airing the wild and unfounded allegations this matter has got from the opposition on TV, on CNS and on Rooster, the loss of the savings in millions of dollars in interest for the country, can only be blamed on their reckless and damming behaviour,” Bush stated.

Bush said he had saved millions of dollars for these Islands with the deal already signed and sealed but now could not give any guarantee that even with the falling interest rates in the USA that rates would be improved because of the “stupidity – the viciousness – the recklessness of the leader of the opposition,” Bush said.

The premier insisted there was precedent for his actions, and while it might not be set down in law, the practice has always been, over the years, that if Cabinet, was not satisfied with CTC, they carried out the process themselves.

“I am not naive to the realities of politics nor am I insensitive to the concerns of our people. I understand why people in the community have concerns,” the premier added. “My government took a very grave but legal decision to disagree with a process which gives many a sense of safety. This matter has revealed to me that the central tenders process cannot be a one size fits all methodology for capital works, service contracts and financing.”

Bush revealed that he had expected debate about his decision but he said it was coloured by partisan politics, innuendos, rumours and misrepresentations of the facts. He said he welcomed the review by the auditor general and said his government had nothing to hide.

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UK Tory defends offshore tax havens

| 03/11/2010 | 0 Comments

(Bloomberg): Offshore financial centers, also known as tax havens, send “massive capital flows” to London and are unduly criticized in the UK for secrecy and helping tax avoidance, a Conservative party backbencher has said. Mark Field, defending financial centers including Jersey and Guernsey at a London debate, said they had “endured political attacks” that demonstrated “a fundamental lack of understanding of their function and the benefits.” Tax haven critics have included U.K. Business Secretary Vince Cable, a Liberal Democrat and government coalition partner of Field. In 2008, before the coalition was formed, Cable said British banks that received taxpayer funds during the financial crisis, should close their units in tax havens.

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Rehabilitation focus of future juvenile detention

| 03/11/2010 | 15 Comments

(CNS): The minister for community affairs says he wants to take a modern approach when it comes to the establishment of a young offender’s institution for the Cayman Islands. With no proper facility male juvenile offenders who are detained currently serve time in Eagle House at Northward prison where they come into daily contact with adult prisoners and female juveniles are housed at Fairbanks women’s prison alongside adult offenders with no specialist facility, trained staff or rehabilitative programmes. Mike Adam says government is looking at a model of institution which originated in Missouri, in the USA as a possible blueprint for Cayman’s facility that focuses on rehabilitation taking a treatment based approach to the troubled youngsters.

“This model is based on a community programme that emphasize rehabilitation, treatment and education, and is an interactive approach among youth, their families and staff,” Adam explained. “It is in essence a move away from the traditional correctional approach which has shown not to effectively rehabilitate young people.”

With no proper facility in Cayman government is under pressure to build a news centre for young offenders as a result of the constitutional requirement and the demands of the bill of rights that children convicted of crime cannot be imprisoned in adult institutions.

The minister admitted that the conditions of residential care for youth in Cayman are far from perfect for all at risk children convicted or not.

“Currently our children and youth in need of care and protection are being housed with those who exhibit delinquent and/or offending behaviour. To exacerbate the situation, overseas institutions are no longer an option due to international immigration restrictions and the closure of Tranquility Bay in Jamaica for economic reasons. However, even if providing overseas placements were still an option, the exorbitant cost and separation from family make this a less than ideal arrangement,” the Minister said.

He listed the government’s goals for young offenders saying it must support and empower those already on a positive path with education and their social, spiritual and physical development. “But we must also have effective intervention strategies in place, and we must have the programmes in place to correct and rehabilitate those showing delinquent behaviour,” Adam said.

He acknowledged that the plans to provide the proper rehabilitative programming and facilities for troubled children and youth is more urgent than ever, as a remand facility is now a Constitutional obligation. “The Cayman Islands Constitution Order 2009, Section (6) (3) states that juvenile prisoners shall be segregated from adult prisoners, and this sectionhas effect from four days after the appointed day. By 6 November 2013, therefore, the Cayman Islands must have suitable facilities in place in order to uphold this provision,” the Minister noted.

With the US model being the preferred option the Ministry has solicited the assistance of Mark Steward director from the Missouri Youth Services Institute as an overseas consultant who was on the island early in October meeting with key stakeholders.
 

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Free expo to offer pathway to healthy living

| 03/11/2010 | 0 Comments

(CNS): A local radio station and a number of business sponsors have come together with the Cayman Islands Health Services Authority to hold the country’s first every Health & Vitality Expo. Billed as a one-stop-shop for everything relating to health, exercise and overall wellness the event will take place at Camana Bay this weekend. The day long expo will feature the latest products, services and information for all interested in ensuring their overall health wellness. Organisers also promise “an abundance of free product samples,” as well as demos in everything from yoga to personal training.

Organisers dms Broadcasting have partnered with Progressive Distributors Ltd., Generali Worldwide, Foster’s Healthy Lifestyles Program and the HSA to deliver the health-related one-stop-shop on Saturday, 6 November at 10am. “Especially with the New Year soon upon us, it is an opportune time to get healthy living habits at the forefront of everyone’s minds,” said Market Manager Dan Charleston. “Well-known radio personalities from each of our stations will be on hand, heightening the enthusiasm levels and making some noise for the importance of healthy living.”

The hosts said guests will gain valuable insight, and have the opportunity to take advantage of the discounts on the products and services. Maureen Cubbon, Marketing Manager at Generali Worldwide said the firm was delighted to be one of the premier sponsors.

“We are all passionate about health and wellness and feel it is important to have an event that can show the people of Cayman the steps theycan take towards a healthier life. With more than enough room to accommodate the masses at Camana Bay, we hope to see a lot of familiar faces out there to see what all the excitement is about,” she said.

Sponsors for the Health & Vitality Expo include Beyond Basics, Cayman Islands Cancer Society, Cayman Pharmacy Group, Cayman Sports, ChiroSpa Clinic, dms Broadcasting, Energy Studio, Fidelity, Foster’s Healthy Lifestyles Program, Cayman Islands HealthServices Authority, GNC, Health Care Pharmacy, KRI Performing Arts School, K.Y. Imaging, Solutions and TrinCay Medical Services, and notably, Dunkin Donuts.

 

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MLA requests cash for poor

| 03/11/2010 | 37 Comments

(CNS): Despite the good news last night that the government deficit has been reduced to only $15 million by the UDP administration, some of the community’s poorest people have revealed that they are struggling to get any support from the Department of Child and Family Services and are being forced to wait months for an appointment. The opposition has submitted a private member’s motion asking government to reallocate funds to the department to help those most in need. George Town member of the PPM and former Cabinet minister Alden McLaughlin said he hoped the government would be prepared to sacrifice some of the benefits and expenses currently being enjoyed by the premier and deputy premier for needy people.

However, McLaughlin said his motion was rejected by the Speaker in its first presentation and was reworded to ask government simply to find more funds for the department to help those who are in genuine need. He said many of his constituents are in real difficulties but they are unable to gain assistance.

In the motion, which has been accepted, McLaughlin is asking government to meet the increased demand for financial assistance by reallocating funds from somewhere else in the current budget.

However, given the premier’s revelations in Bodden Town last night  that the government’s anticipated shortfall of over $50 million for the previous financial year was down to $15 million, if those operational expenditures are continuing into this financial year government could be in a better position to find the money for the county’s poor.

CNS has contacted the Department of Child and Family Services to find out how much of an increased demand the department is experiencing for its services and how much their current budget allocation for financial assistance for the needy but we are still waiting for a response.
 

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Tomas kills 14 in St Lucia, heads for Haiti

| 03/11/2010 | 1 Comment

(CNS): Updated Wednesday morning – Although Tomas, which has left a trail of destruction in St Lucia and fourteen people dead, had weakened to a depression on Wednesday morning, Jamaica remains under a hurricane watch and Haiti prepares for the worst. In St Lucia, Prime Minister Stephenson King declared a state of emergency and appealed for international assistance, local media reported. "Recovery efforts are very slow. Our efforts to get help to the ravished community have been weakened as a string of fires in homes brings us to our knees," a firefighter in the capital Castries told the BBC. Meanwhile in Haiti, where 1.3 million people are still living in tents following the earthquake in January, preparations for a reformed Hurricane Tomas are underway. (Left: A main road in St Lucia)

Tomas is expected strengthen again to a hurricane and parts of Haiti are in its projected path for later in the week. Relief workers in Haiti were trying to gather emergency shelter, water and sanitation supplies. Imogen Wall, of the UN Office for the Co-ordination of Humanitarian Affairs, said warehouses in Haiti were being emptied ofrope and tarpaulins to protect those in the camps. The US Navy ship Iwo Jima is heading toward Haiti to be on hand if emergency relief is needed, US officials said.

The St Lucia Star reports that when Minister for Communications Guy Joseph was asked to tell the nation some good news, the minister said he had none. Earlier in the day he had done an aerial assessment of the damage and he said it is “worse than we could think of”.

Some people in the south were still unreachable and accessing the west coast via the main road was impossible and this could remain this way for two to three weeks, the minister said, noting that there had been several landslides on the Barre d’Isle and that road was also in need of repair. "Sounding tired the minister went on to say that St Lucians should expect water problems as the Roseau dam was inaccessible," the Star reported.

At 7am local time Tomas was located around 305 miles SSE of Kingston with maximum sustained winds of around 35 mph. Tomas is moving WNW at 5mph. A turn toward the northwest, .north and north-northeast is still expected over the next 48 hours along with further strengthening. Local weather forecasters said that the storm poses no immediate threat to the Cayman Islands on its current track.

The local forecast calls for isolated showers with light to moderate easterly winds over the Cayman area with partly cloudy skies and a 30 % chance of a few showers and possible thunder. Temperatures will rise to the upper 80’s on Wednesday and winds will be east to northeast 5 to 10 knots. Seas will be slight with wave heights of 1 to 3 feet. The outlook is for moderate northwest winds and rough seas from Thursday evening as a new cold front approaches the southeast Gulf of Mexico.

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Deficit ‘reduced to $15million’

| 03/11/2010 | 102 Comments

(CNS): The premier has declared that the budget deficit for the financial year end 2009/10 has been dramatically reduced to only $15 million after predictions in June that it would be in excess of $50m. At a public meeting in Bodden Town on Tuesday evening Premier McKeeva Bush revealed that his government had managed to reduce spending by some $35 million less than expected. He compared this deficit figure of $15 million to the almost $81 million deficit left by the PPM administration in the 2008/09 budget year and claimed his government had made the dramatic $65 million reduction through hard work.

The premier said he expected people in the audience at the meeting would be accusing him of just blaming the previous administration when he talked about the financial turmoil his government inherited but he said he wanted to remind the country never to make the same mistake again and to compare the record of the PPM leaving behind an $81 million deficit with  the UDP government that had managed to cut the deficit down to $15 million in its first full financial year.

Although the premier did not reveal details of the dramatic cure of the country’s financial deficit, he said that the details would be revealed shortly and that the figures were accurate.

Bush said that central government’s deficit for its first full financial year in office — June 2009 to June 2010 — was down to $13.4 million and he said that government companies and statutory authorities were down to a deficit of around $1.6 million, making the total public sector deficit only $15 million. Bush said it was a “tremendously better result" than the previous budget gap and said that the first quarter of the news financial year was even revealing a government surplus.

He said the UDP government had achieved these impressive results through prudence and good management and were by no means an accident but down to deliberate efforts of the ministries.

“The road is tough going but government finances are showing consistent improvement,” he said. “And as we continue to make the right decisions the tough road will improve for everybody.”

He reiterated his commitment to the 90 day time line made just over six weeks ago for Cayman’s economic turn around and said there were several economic improvements already apparent. The premier told the people of Bodden Town that turning round the economy was not just about quick fixes but a sustainable approach to address structural problems about how government was run and how the economy operates.

The premier also revealed that the first phase of the government’s assessment to reduce public sector spending had revealed significant savings in the first four government entities examined. Bush said official reviews of CINICO, the department of tourism, the prison services and public works, which collectively spent $72 million could reduce their budgets by $17 million. Although he did not reveal what services would be cut to achieve the savings, he said government had accepted 90% of the recommendations made by the reviewers and would be reducing the budgets by over $15million

Bush explained that the review would continue with the next eight agencies, which collectively account for almost $200 million in spending, and government would be looking for similar results. He said government would look carefully at areas for potential cuts and saving including the possibility of privatisation and how services can be delivered more efficiently.

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Westin Casuarina resort faces financial turmoil

| 03/11/2010 | 27 Comments

(CNS): According to reports in the US media, Columbia Sussex Corp, which owns the Westin Casuarina Resort & Spa in the Cayman Islands, is facing possible foreclosure on the loan it has against the hotel after demand slumped and the borrower said it can’t cover debt payment shortfalls. The reports are based on information from the credit rating agency Realpoint LLC. The status of the loan on the Cayman hotel "was reported as ‘foreclosure’ for October as compared to current in the prior month," Realpoint said. Columbia Sussex is said to be requesting a loan modification. CNS has contacted the general manager of the hotel and is waiting on a response.

The 343-room Westin Casuarina on Seven Mile Beach is reportedly backing a $137.2 million loan that was transferred to a special servicer in February. The property was built in 1994 and is operated by Starwoods Hotels & Resorts Worldwide. The reports state that a slump in the tourism industry cut demand at the hotel, with revenue per room falling to $184 last year from $258 in 2008 and $293 in 2007.

"The borrower advised that it was no longer possible to cover debt service shortfalls and requested approval to use fund in the curtailment account to cover debt service shortfalls; however, the loan documents will not allow that request," Realpoint said in its report.
Columbia Sussex, which ranked as the largest privately owned business in Greater Cincinnati and Northern Kentucky on the Deloitte Cincinnati USA 100 list, is struggling with $2.4 billion in debt, according to Trepp LLC, a New York seller of commercial mortgage data. The company owns 66 hotels under brands including Marriott, Sheraton and Hilton.

Theodore Mitchel, Columbia Sussex’s CFO, said Tuesday the company had no comment, reports from Cinncinatti revealed.

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