Archive for November 15th, 2011
Gas station owners deny high margins
(CNS): Two of Cayman’s 21 gas station owners have written to the press denying being the source of problem when it comes to the high cost of fuel at the local pumps. Johnny Brown of Brown’s Esso in George Town’s industrial area and Osbourne Bodden, the owner of Lorna’s Texaco in Bodden Town, said it is not true that station owners are making profits as high as $1.78 per gallon, as reported by a local newspaper. The owners said that there has never been a good margin for dealers on petrol in Cayman and it is the convenience stores at the stations that have subsidised fuel sales. Bodden and Brown say their margins are between 15-20%, from which they must pay all their overheads.
“With the rising cost of doing business in the Cayman Islands, one does not have to be an accountant or an economist to figure out that a 15-20% margin, the accurate figure, is not something to boast about,” the two station owners stated in their letter to the editor of the Caymanian Compass. They said the margins cannot sustain a business which must pay staff costs, licences and utilities.
Bodden and Brown said it was their convenience stores that sustained their businesses and the high cost of doing business with the low margins on fuel is what makes the goods in these convenience stores more expensive. The premium people pay on items in the small stores is down to the twenty-four hour, seven day per week access. “This added mark up in c-stores is what subsidises the fuel sales and allows gas stations to survive,” the men wrote.
The two owners said that at present most stations are struggling to keep going, having to make cut backs in staff and expenses and looking towards self-serve only pumps. With local fuel prices consistently high even when the world prices appear to be coming down, the question regarding the real source of the problem continues.
The price of fuel in Cayman is impacted by a number of issues, which includes the size of a gallon. Cayman stations dispense fuel in imperial gallons, which is twenty percent more than a US gallon. Regular grade gas is not available here, which means the lowest grade is premium, adding more money to the cost of fuel. Government duty now accounts for 85 cents of every gallon sold and in most stations the cost of full service also pushes up the pump price.
The owners also noted that from their 15-20% margin they must also cover Port Authority fees and the bulk fuel distributer annual license fee, as well as the usual utilities and personnel costs.
With the rising cost of fuel, consumers are reducing consumption but the station owners said they continue to do their “best to absorb rising cost and only pass on what is absolutely necessary” in order to survive, they said. Denying that the petrol stations were the “big bad wolf”, they said they were paying their way but struggling like many others.
They said the price of fuel was down to the supply chain and government policies, which significantly adversely affected the price, which Bodden and Brown said was where the public and the media needed to direct its attention.
See full letter below.
‘Snorkelling squad’ cost less than CI$3000
(CNS): The answer to a freedom of information request submitted by CNS has revealed that the recent short visit by senior police officers from Merseyside in the UK cost the public purse well under CI$3,000. The visit by the officers stirred up considerable controversy, especially in the UK, when British journalists pictured the senior cops lounging on the beach and on a day trip aboard the police commissioner’s boat. The three officers stayed in Cayman for four days and the RCIPS picked up the tab for their car, hotel and daily expenses but did not pay their flights or a fee for their time. (Photos by Splash News)
The FOI request reveals that the three men stayed at the Marriott Hotel, which cost a total of CI$1,386 for three rooms for four nights. The car hire cost for the officers was CI$249.26 and each of men also received $75 expenses per day, which came to a total of CI$1,125 for the duration of the visit. In total the cost of bringing out the three officers was $2760.26.
The RCIPS said it had been willing to pay the cost of the three offiers' flights but the information manager said that Cayman had not received a bill from the UK for them.
They later sent 20 UK officers to assist the RCIPS in the five murder and one attempted murder investigations opened in September as a result of a spate of gang related killings,
According to Police Commissioner David Baines, the short visit was designed to allow the Chief Constable of Merseyside Jon Murphy, Det Chief Supt Brian McNeill from the Association of Chief Police Officers (ACPO) and Det Chief Supt Tony Doherty, head of the Merseyside force’s Matrix gun and organised crime squad, to not only review where they would be sending their twenty UK officers but to advise the RCIPS how best they could be used. They also reviewed the investigations and offered some advice on gang crime, the commissioner said.
During the four-day visit journalists from the Daily Mail tailed the officers and took snaps of them enjoying down time, which appeared to conflict with the official timetable of the work the men were said to be doing.
The British tabloid reported that the photos showed the officer “sunbathing, snorkelling, sightseeing, reading novels and soaking up the sun in 84F heat”, which it said was unlikely to go down well with colleagues back in Liverpool as they worked in a chilly 55F. “Over two days, they were seen relaxing on the beach, enjoying a four-hour boat trip and swimming with giant stingrays on a beautiful coral reef,” the Daily Mail said of the senior officers during their Cayman trip.
The three UK top cops reportedly arrived on in the evening of Monday 3 October but were followed by the Daily Mail through Wednesday 5 and Thursday 6 October. The paper reported that the officers were involved in meetings with the RCIPS from around 9pm until before 4pm on Wednesday, when the police were on the beach at their hotel but on Thursday the reporters watched the officers enjoy almost a full day of leisure activities.
Murphy accused the reporters of spying on him, while the commissioner said all three officers had on average worked 12 hours a day. "I think it's a travesty that it's being presented in the way that it is," Baines told the UK media in the wake of the Daily Mail report.
Since the visit, twenty officers from different police forces in the northwest of the UK have reportedly been partnering with local detectives working on the September shootings. So far, police have charged one man with the last of the murders which took place in East End. Chakame Jamelle Scott (18) was charged last month with the murder of 21-year-old Asher Williams McGaw.
Although officers also arrested two men on 2 November in a special operation in connection with the fatal shooting of 24-year-old Andrew Baptist in West Bay, no charges have been announced against these two suspects and police have not yet confirmed if the men have been released from custody.
The murder investigations are continuing into the five incidents and the UK officers are expected to remain in Cayman until the end of this month.
Investors want transparency not new rules
(CNS Business): Cayman hedge funds need to be more transparent for their investors but the industry does not need further regulation, according to Gary Linford, managing director of Highwater, a company that specialises in providing governance services. He said that investors are looking for transparency incorporate governance and competency when assessing directors. The former Head of the Investment & Securities Division of the Cayman Islands Monetary Authority (CIMA) says the authority has been talking with local directors and the allocators for two years but they believe the industry can provide effective solutions which will be better than CIMA coming up with new rules. Read more on CNS Business
No drugs in plane wreck
(CNS): The RCIPS said Tuesday that officers are still unable to say why the private light aircraft which crashed in Cayman Brac this weekend was in local airspace. The police revealed that so far no drugs have been discovered in the wreckage of the plane, which smashed into the Bluff late on Sunday night after clipping a light-pole located at a new sub-division. Throughout the day the RCIPS was engaged in scene preservation and officers commenced a full search of the area, supported by customs colleagues, which began at 6.00 Tuesday morning. A UK aviation investigation team will arrive in Grand Cayman tonight and will travel to Cayman Brac tomorrow to begin their investigation, the police stated. (Photo courtesy Cayman27)
“We cannot speculate at this time as to why the planewas in our jurisdiction. However, a full investigation is underway looking into all of the circumstances,” an RCIPS spokesperson said Tuesday.
Earlier on Monday the police confirmed that the pilot and his passenger, the two occupants of the plane killed in the air crash, were from Colombia and Mexico but they will not be able to reveal their identitiesas police are now working with the governments of the two countries to determine who the men are and why they were attempting to land on a secluded road on Cayman Brac.
The plane was not expected in Brac airspace and officials said they still do not know where the flight had come from or where it was headed. The Cessna 210 crashed in the bush off Booby Bird Road; the two men were killed in the smash and the aircraft extensively damaged.
Although there were unconfirmed reports of fuel containers on board, officials said that the plane did not ignite at the point of impact.
New group of Cubans intercepted in local waters
(CNS): Government officials have confirmed that the department of immigration intercepted a vessel carrying seventeen Cuban migrants on Saturday night. The sixteen men and one woman were picked up by officers when their boat ran aground off Cayman Brac. All of the refugees were said to be in good health, according to a government statement. The group was expected to be transferred to Grand Cayman this week for processing, where they will join a group of nineteen Cuban migrants who arrived last month but are still being held on Grand Cayman. (Photo supplied by GIS)
Local contractors sought to build radar tower
(CNS): The local airport authority has issued a request for proposal for the construction of a four-storey concrete tower that will house the planned Doppler weather radar on part of the former Prison Farm in East End. Two contracts have already been awarded to German companies to manufacture, supply and install the digital radar itself and for the technician. The Cayman Islands Airports Authority (CIAA) said SELEX Systems Integration will make and put up the radar while the Icon-Institute won the bid to provide a Technical Assistant on contract, for the duration of the project.
Reporting to the Cayman Islands Airports Authority (CIAA), the Technical Assistant is responsible for ensuring that all financial and procedural activities of the project are in accordance with the requirements of the European Union (EU) – the scheme’s primary sponsor, the CIAA said in a release from government Tuesday.
The local contract for the concrete tower is now open the CIAA’s Chief Executive Officer, Jeremy Jackson said. “It is anticipated that the construction tender will be awarded in December and the tower should be completed by July next year, to coincide with the radar’s arrival. The final phase will be the set-up of equipment within the building and staff training.”
He said the facility will benefit the public and airlines by providing accurate weather information to forecasters and pilots and it will also serve the region by filling “a black hole in terms of regional radar coverage,” Jackson added.
Minister for District Administration, Works, Land and Agriculture Juliana O’Connor-Connolly added that the radar station would serve the country’s long-term national interest and described it as “an invaluable opportunity for the Cayman Islands to become an integrated regional player in respect of hurricane preparedness,” she stated.
The early warning system is expected to improve disaster risk management and reduction in the Caribbean region but it has faced some controversy.
The decision to site the radar project at the East end location on the former site of the prison farm was also the site that had been earmarked by CUC as the potential home of Cayman’s first wind farm to address the country’s oil dependency problem and take a first step towards sustainable energy provision.
The government opted to prioritise the radar over the wind farm which is being mostly funded through the European Union which government said had taken the Cabinet office years to secure.
“With increasingly volatile weather we sorely need improved forecasting abilities – something this project will deliver,” O’Connor-Connolly who is also the minster with responsibility for energy, said.
The CIAA and the EU signed a contract for the radar more than two and a half years ago in March 2009, when the EU agreed to provide Cayman with a grant for €4.16 million (about CI$4.6 million) to construct the early warning weather radar. The Cayman Islands Government is making its own contribution to the project by providing the site, the access road, and funding a technical consultancy service from the Caribbean Meteorological Organization.
“Apart from giving Cayman access to real-time local weather information, the radar station will also strengthen regional severe weather forecasting, linking with radar stations in Belize, Barbados, Guyana, and Trinidad and Tobago,” Cayman Islands National Weather Service (CINWS) Director General, Fred Sambula, said. “This means that Cayman will get more accurate, timely and up-to-date information when storms or any other weather systems threaten our area, and, as such, our residents can better prepare.”
According to the central tenders website the four storey reinforced concrete tower will cover approximately 800 sq ft in and be around 55.5 ft high and the open tender process will end on 2 December details of the bid can be found at www.centraltenders.gov.ky
FCO tightens financial screws
(CNS): The British government is seeking to pin down the local government to sign a "Framework for Fiscal Responsibility", which was presented to the premier in London yesterday, in an effort to restrict the UK’s exposure to fiscal irresponsibility in Cayman. In a statement issued on the government website, the premier says he supports the concept but has some concerns about the demands being made by the UK and is in talks with FCO officials to suggest changes to the document before he signs the agreement. The framework will affect how the local government spends and borrows money in future as well as the consequences for not sticking to the deal. (Photo Dennie Warren Jr)
The agreement asks the Cayman Islands Government to undertake effective medium-term planning to ensure that the full impact of fiscal decisions is understood, that it put value for money considerations at the heart of the decision-making process, that it demonstrates effective management of risk and drive the delivery of improved accountability in all public sector operations.
In his statement McKeeva Bush said that while he supported the principles he had “reservations about some of the important methods” of achieving them that have been put forward in the document.
He said that with the UK’s demand for effective management of risk, the Cayman government would be restricted to only borrowing money to fund capital projects which will bring in money to service the debt. This, Bush said, meant that government would not be able to borrow money to fund projects in future such as the separate juvenile remand facilities, which are required in order to comply with the islands' Bill of Rights because such a facility would not generate a revenue stream to fund the debt.
He also pointed to the problem of government’s responsibility to build and maintain schools and provide free education and that it may need to borrow funds to finance additional facilities. But, he said, the FFR would not allow the local government to borrow money for any new school facilities because they would not yield revenue.
“Government has concerns with respect to this provision of the FFR, and are robustly questioning its application,” Bush said in his public statement.
The premier has also questioned the FFR’s position to achieve effective management of risk, which indicates that the entire debt servicing costs by government and its companies and statutory authorities cannot exceed 10% of government's revenues — excluding the revenues of the authorities and government companies, despite including their debt servicing costs.
“It is Government's view that this definition is overly restrictive,” Bush said in his short statement, adding that he believed the public would appreciate his position and that an opportunity had to be provided for the public to review the document before he agreed to sign.
“I urge everyone in the Cayman Islands to make themselves familiar with it, so that they will better understand any debate on this which may follow,” he added. The document was reportedly presented to Bush by the UK’s OTMinister Henry Bellingham when Bush was called to London this weekend.
The premier said the issue had the potential to impact not only government's financial policy-making but Cayman’s broader economic status and government's overall performance in terms of good governance. “This policy document, which we are negotiating with the UK, therefore has the ability to affect the quality of life and the standard of living in these Islands,” he added.
Despite having presented three budgets of his own, the UDP leader still blamed the opposition when he revealed the details of his UK visit.
“As everyone well knows, this government took over from a previous government that had borrowed and its overspending had placed this country in a dangerous financial position,” Bush stated. “Because of this, the United Kingdom Government (UKG) has asked us to sign an agreement with them. Based on the historical evidence of what can happen when a financially irresponsible government spends without any thought process or a carefully thought out plan, I am in favour of signing such a mutually agreed Framework for Fiscal Responsibility.”
He said it was understandable that the UK had seen the need to restrict their exposure in such circumstances as there is no guarantee as to what kind of spendthrift government would be elected in the future.
Once the Cayman Islands signs the fiscal commitment, if it is not in compliance the deal would open the way for the UK to make greater demands to remedy the breach. The UK will require the local government to gain approval not just for borrowing but for the whole budget as well as any projects that are planned over CI$5 million or to use any public asset as collateral for any arrangement with a party outside of government. This element of the framework agreement could prevent future deals such as the ForCaymanAlliance.
The framework will tie this and any future government into more responsible and transparent financial practices with greater reporting requirements to the UK and it will also require government to make a proper business case to spend any public money and provide far greater accountability to the people for its spending.
It is not clear when the parameter of the agreement would begin to bind government once it is signed or whether the requirements in the framework will impact any of government’s current proposed projects.
Go to premier’s full statement here
See Framework for fiscal Responsibility Agreement here.
Warning issued as local email account hacked
(CNS): E-mail hackers made an unsuccessful attempt to get into a local man’s bank account recently the RCIPS has revealed as it issued another warning to the public to keep an eye on their e-mail accounts and to immediately report any suspicious activity. Police said they received a report that an e-mail account had been hacked into and people on the man’s contact had been receiving e-mails, purporting to be from him, asking for cash. “It also appears that people who had hacked into his e-mail also tried to get into his bank account, but were unsuccessful,” the police from FSU stated.
The RCIPS is advising email account owners who spot any suspicious activity to change their password immediately and to contact their bank to ensure that their accounts have not been compromised.
Anyone who wishes to speak to the RCIPS about how to avoid becoming the victim of online scams should call their nearest police office or the Financial Crime Unit on 9498797.
Bush pays respects to merchant seamen in UK
(CNS): The premier was not alone when he made his most recent trip to the UK this weekend to talk to the UK minister about a new fiscal reform agreement. Although the itinerary and number of people on this trip has once again not been revealed to the public, despite the last minute visit being at the request of the UK, Bush was accompanied at the very least by his West Bay legislative colleague Cline Glidden, as the two men were photographed at the Merchant Navy Memorial at Tower Hill in London on Remembrance Sunday. The men paid their respects to Caymanian merchant sailors who lost their lives in World War II, Cayman27 reports. (Photo courtesy Cayman 27)
Hazma Ebanks and Desmond Neulison Ebanks and Terrence Theodore Ebanks who served aboard the S.S. Holmside and the S.S. Culebra during World War II are all remembered on the monument. The Culebra was sunk by a German submarine on 25 January 1942 en route to Bermuda and Jamaica carrying a general cargo, while the Holmside went down on 19 July 1942 when she was torpedoed northeast of the Cape Verde Islands.
On Monday the premier met with OT minister Henry Bellingham to discuss a new financial agreement, which is expected to be made public today.
The document has not yet been signed but it will give the UK greater control over local finances should the local government breach the conditions of the agreement in future once it is signed. It reportedly focuses on a tighter procurement process and requires that all projects undertaken by government are properly appraised and cost-benefit analysis carried out before the procurement stage. It also prevents government from borrowing any more money for capital projects in future unless they yield a profit and will be able to pay back their own debt.
Check back to CNS later for details of the proposed framework agreement between the UK and Cayman regarding its future finances.