Port outlook remains poor

| 20/09/2013

(CNS): Officials from the Cayman Islands Port Authority said there is not much more they can do to address the major losses other than increase cargo fees after several years of the board ignoring warnings from the management team about the serious fall in revenue. James Parsons, the financial controller at the authority, said that despite his warnings, in the last two years the directors had invited him to just one board meeting. He explained this was to present a special reportfrom KPMG that had offered some suggestions about how the port could turn around its losses. However, he was given only 15 minutes and when he got there, they cut that to ten.

Speaking before the Public Accounts Committee (PAC) on Thursday, Parsons spelt out the dire situation at the port as the MLAs made enquiries regarding the concerns raised by the Office of the Auditor General in his report The Financial and Performance Reporting of Statutory Authorities and Government Companies for the year ending June 2011, which was published this June. Alastair Swarbrick’s team had found a catalogue of problems at the authority, not least the fact that the port was running at a significant loss.

Parsons revealed that the port’s income from cargo was down some 50% since the economic slump began to bite around 2009, and with cruise revenue also falling, the authority was no longer a viable concern. Governmentis not officially injecting cash into the port, as it does with Cayman Airways and the Turtle Farm, but because the port owes government for several years of its costly annual insurance cover, it is indirectly subsidising the authority to the tune of over $3.5 million.

As a result of the labour intensive nature of the port and the need for expensive security, Parsons said the management had cut staff down to its bare minimum, but any more would risk the safety and efficiency of operations.

“There is not a whole lot more we can do,” he said. With warnings going unheeded and what Parsons said was something in the region of a million dollars spent by the board on consultant and legal fees over the last few years, things were bad.

Attempts to increase fees to the tender operators was rejected by the board just weeks after the increase was passed into the regulations. Parsons  explained that when the tender owners tried to push the increase on to the cruise lines, the FCCA complained because it had an agreement with the Cayman government not to put fees up as part of its contribution to the construction of the Royal Watler pier. Parsons said the only place left was an increase in cargo operation fees.

Pressed by the committee about what the board had done about the warnings, Parsons implied that no one had listened or heeded his warnings that action needed to be taken. However, Parsons and Port Director Paul Hurlston said that they had begun discussions with the new board about a gradual phasing of fee increases for cargo operations because, both men told the committee, based on the recommendations by KPMG there was little else to be done.

Several other issues were discussed by the committee, including the revelations in the report that former premier McKeeva Bush had directed the hiring of two men to oversee and report on issues relating to the Sandbar, which had caused considerable controversy because politicians should not be involved in hiring staff.

However, Hurlston said that over the years he had served at the port, he was aware of politicians directing certain people be hired at the port on many occasions. As director, he had been told several times to hire certain people for certain things who didn’t necessarily answer to him.

Forced to discuss this issue with McKeeva Bush sitting on PAC, even though it was Bush in his role the tourism minister who had made the directive, Hurston was reluctant to elaborate and the PAC government members were also reticent about the issue. It was established, however, that the two men never reported to eitherthe director or the board.

Bush defended the hiring and told PAC that had the auditor general asked around, he would have learned that the men were reporting to the ministry every month. He said he didn’t hire them but the ministry did, and what was more, they had addressed the problems at the Sandbar of boats not following the rules and things had improved.

Making a point about the newly elected members of the Legislative Assembly, Bush said, “If people weren’t paying attention to this country until recently,” they would not be aware of the headaches at the Sandbar. “We spent every month dealing with trouble at Sandbar and we asked for something to be done but no one could get anything done,” the former premier and current opposition leader said.

Although a member of the committee, Bush became a witnesses as he was the centre of the issues in the report —  a problem that had been pointed out by the former PAC chair, Ezzard Miller, who had said that the committee risked being dysfunctional, given how frequently the former finance minister would be implicated in the work of the committee.

Regardless of the unusual situation, Bush took the opportunity to explain himself and the action taken in his role as tourism minister in the previous UDP administration 2001-2005. He said a decision was made to hire people to address the Sandbar problems following complaints from the cruise industry about what was happening at the attraction, from damaged boats and overcrowding to other boats damaging the Sandbar itself.

“At one point we had some boats capsize as they were overloaded with people,” he said, adding that nothing he could do seemed to prevail. “So we came up with idea to have trustworthy people keep an eye on it.” He said that had helped and further plans were developed to control the area before Hurricane Ivan in September 2004 derailed them.

The two men were let go during 2005-09 “for political reasons”, Bush stated . However,the trouble started again, so when he returned to the tourism ministry in 2009, the ministry directed that the men were re-hired. “We had monthly reports and the board had agreed to the decision,” he said. “Today the situation is much better … systems were put in place where boats anchor away off from the Sandbar.”

He justified the $1,000 paid per month to each of the men, saying, “You think you get stuff done for nothing? We expect people to come work for us for nothing but government charges people for what they do.” 

He said the men, who were experienced trustworthy people, were not overpaid and the situation improved.

“They call it interference, but it was good interference; it was something done by me; it was agreed, and by the looks of it, you should all be hiring a whole lot more people as Caymanians are out of work,” he added directly to the government PAC members.

It was established, however, that no one on the board or the management at the port had seen the reports or knew what the two men were doing, even though the money, which amounted to over $90,000, was being paid from the cash-strapped government company.

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  1. Anonymous says:

    LMAO… All the coments on this page and no one can really see the end game. In case you dont know it is all a political game in which the Cayman Islands become a tax paying country. Need money for crime fighting, need money for the port, need money for immigration, need money for job creation. Where will it all come from? Can we afford to raise fees on any of the normal revenue items?

    read the headlines daily and see where we will end up. 

  2. Anonymously says:

    Caymanians are their worst enemies and continue to be until they change their attitudes and realise that what they have is goog that is why every one is trying do hard to get it.  Do your own investments and stop relying on people to do it for you.  Think about the money that this country could have saved if they had the balls to implement the Master Ground Transportation Plan, Social Service review, Immigration review of 1982, Education review and the list goes on. As long as someone is not going to benefit big time then to hell with the country mentality need to stop. What happened to the Atlantic Star deal with the dock?  We would have gotten the dock for virtually free but there was nothing in it for the person of the hour.  Cayman has played with fire for too long and we are about to get burn real bad if we don't stop being greedy.  Just look at what greed has done to this country. Think about future generations and what will be left for them if we don't manage what we have carefully and stop the greed.




    • J Salasi I. -111? says:

      Awo ground transportation plan. We must a change the lay of the land. Anyway, the expenditure of the port according to good good sources; salaries is 60% of the total expenditure a no that a recipe fe disaster? Come on people now an FOI is needed scene!. 

  3. Anonymous says:

    Adding to what has being said on this forum the problem is with expenditures. The Port staff are highly paid. The entire finance team is fatly compensated. The post of Accountant  is paid more than a chief officer. Before any increases in fees are passed expenditures ought to be cut. Surely, there are qualified people who would take less to run the organisation. 

  4. Anonymous says:

    The Port fees and charges from the Port Authority are the highest in the region and the real cost of every service provided for those fees and charges by the port is is highly profitable in itself. The fees have increased a number of times over recent years to the point that further increases will almost place the costs from the port at higher levels than shipping costs. Add the cost of customs duty to the equation and we are destroying our selves in that the cost of doing business in the Cayman Islands and the cost of living for the ordinary person has surpassed all sound business and national economic sense. KPMG and Mr Parsons lose all credibility for focusing on the revenue side of the business at the port when their fees are already exhorbitant and the highest in the region when their costs are totally out of control. Top heavy, highly paid, ineffective management with the highest salaries in Govt well over CI$200,000+ annually (higher than the Premier and Deputy Governor) for being predominently abscent from work together with paying time and a half to port workers on the dock, paying ghost employees recruited by McKeeva Bush and paying multi million dollar settlements to contractors for McKeeva Bush's blunders, NO WONDER THEY HAVE FINANCIAL PROBLEMS. Why should the public and the business community at large have to subsidize the port's mis-management and business incompetence??????  They state a 50% reduction of their earnings because of economic downturn, what a lot of hogwash as they are obviously comparing their earnings in the post Ivan boom for the port which is totally a false and unnaturally inflated time of extreme imports which should be completely discounted from any comparisons in their accounts. Our population and our business economy has steadily grown over the years which equates to the expansion of the ports business over those years being clearly evident in the port having to also expand their facilities and the service they provide. It is past time that the port is operated like a real business and not as an avenue for hidden taxation on all our people. It is time to remove dead wood and place qualified business people into positions of Govt authorities which should be operating like any normal private sector business.

  5. Anonymous says:

    On the issue of the sandbar, I have always wondered how the government can 'control' the use of that area of the North Sound? The entire North Sound is unregistered "Queen's Bottom' and has been open to the public ever since it was 'discovered' and promoted as a tourist attraction. The question of public prescriptive rights comes to mind. I would venture to say that it could be that the public has acquired a prescriptive right to use the sandbar, on the basis of common law 'long user', and it may well be that whilst the Port Authority (that is to say, properly appointed officers of the Port Authority) and the police can use their statutory authority to ensure that no one engages in any conduct that may constitute a boating hazard or poses a reckless and dangerous risk to safety for other members of the public, neither the Government or the Port Authority, nor the Police, for that matter, have the right to cordon off the Sandbar, any more than they have a right to do so to any publically accessed area, including roadways, the beach etc. The public needs to do some basic research and reasoning to determine whether I'm right on this. I have a feeling though, that with the advent of the new bill of rights and two cases now pending before the courts regarding public prescriptive rights of access, that the uthorities are going to get some guidance from the courts. Lets hope, for the sake of liberty and justice, that they make the right decision there. 

  6. Anonymous says:

    Yes, privatizing the Port would make it cheaper and more efficient. I can already see the headlines and comment section… Caymanians are loosing our country! We are selling out for the almighty dollar!

    Could you imagine if Dart took it over, the Lynch mob would be out in full force. 

    • Anonymous says:

      But it would finally get done.  And it would not have to be subsidized forever to work.

    • Anonymous says:

      I think the Port shoud be partially privatized with Government owning  about 49 % and the remaining shares being offered  for sale to the public and the Port ran as a private company. . Another option would be for the 51 % to be purchased by a consortium of local Caymanian business persons who are greatly involved  into the importation of goods. There  would still be a need for a governmental  Port Authority to provide regulatory and oversight functions.Caymanians who have capital need to come together to own and operate assets that are of national significance as Goverrnmenty seems incapable of operating businesses efficiently and profitably.

    • Anonymous says:

      They may be "loosing "it, but are they "losing' it? 🙂

  7. Anonymous says:

    I don't think Port Authority fees are the problem.    I have had occasion to ship an inflatable boat here, and I was shocked to discover that upon consulting with the shipping agents, Federal Express was cheaper.    The shipping charges are killing our economy, or contributing to its suppression.   FedEx was always the faster, but more expensive way.   For my 110 lb. boat, FedEx was approximately $1200 cheaper.   

    • J Salasi I. -111? says:

      CNS what is a call out fee, ya readers need to know this and what the management of the Port make. So will  you in the interest of the public as you have done so many times, do an FOI on this. Jah people thank you. Airi.

  8. Anonymous says:

    One way of raising revenue is to tax everyone (residents, Caymanians) coming in from overseas having done shopping!!!  Over and over when I travel (and pay duty) I see people going through with hugh amount of baggage without paying a cent in duty!!! 

  9. Anonymous says:

    So what was done when those mysterious two men reported on the sandbar?

    A month ago some guests went on an excellent Red Sail breakfast cruise to the sandbar, and loved every minute of it. But they were very worried indeed about how overcrowded some of the other boats were. Tourists were packed on board by shouting crew members, kids were swimming unattended in the sea, the water was black with swimmers, and overall the place was a dangerous, disorganised accident waiting to happen.

    Which it will, mark my words. Unless the sandbar is properly regulated and safety rules enforced (ha ha), there's going to be a tragedy very, very soon. And we'll be lucky if it's not a multiple one: it's not hard to imagine one of those overcrowded boats toppling over.


  10. Anonymous says:

    Ask Paul how much call out allowance he gets a month?

    Then ask him how many times he has been called out.

    • Anonymous says:

      You right, and how much is his salary and what he does for that amount?   That is what is breaking the authority.  Enormous salaries and no management!

  11. Anonymous says:

    Dont worry Now that Mr Dart owns Tropical shipping thru his company AGL  Things will surely change. I know because he recently cut off my shipping because I workedagainsed one of his ideas. and for that matter he cut me out of the T&C market .You people are really in for a good time  

  12. Knot S Smart says:

    It cost the customer $504 for government to take a 20 ft container off the boat and deliver it to the Port Authority Terminal in Industrial Park.

    The cost of security and unloading is listed as $120, and the real cost of truckage from the port authority at commercial rates is $100 – so therefore the customer is paying $284 more (or 129% more) than the real cost to government.

    So I would suggest that while government is trying to ensure 'value for funds spent' by government,  they should also look at 'value for funds spent' by the customer for government services…

    And my question is – what has the port authority done to improve efficiency, and lower costs,?

    And also may I suggest that a private company could handle this job much more efficiently than government, and thereby reduce government employees and the ultimate tax burden to the people…

    • Anonymous says:

      That must be the Shipping Companies charging a Security fee, because as far as I know the Port doesn't.  I don't believe that any of the shipping companies here stores any of their containers.  I think it is all done at the port, but the shipping companies are charging a security fee.  I think a lot of the bashing the port is getting is mainly because the public is confused about who is charging what and who is doing what.  Anyone looked at the cost of shipping a container to the Brac?  The port in Grand Cayman charges nothing for loading it, but look at the cost of taking it 80 miles by barge?  The port fees for unloading it in the Brac are small in comparison.  I think one needs to have a true picture of all the Port does for what it charges and then compare it to some other ports and what they charge and then you will see that the Port here is not so bad after all.  The worse thing is to make an il-informed judgment.

  13. Anonymous says:

    port authority is just another classic example of the epic failure that is the civil service……

  14. Busta Brown says:

    The port Dilemma and its hegemony dynamics will never change so therefore its future and progress will always be arduous, infact any change that  occurs is usually minimal and with the kind of salary paid to the port director which by the way is higher than the deputy Governor why would you? The influence controlled by the port board which this government has turn into a Family dynasty it would appear is even more serious and makes any change near impossible now. Those despicable persons who are now government ministers who granted virtual job for life status to port authority employees are also to blame for the position we now find the port in too.

  15. Anonymous says:

    Truly, we have been resigned to becoming the banana republic that McKeeva aspired we should become. The real irony is that he was put on the PAC by the currentPremier, who successfully ran his party's campaign on accusations of financial misconduct by the very man that he put on the Committee that would be asked to investigate theses kind of matters!! Could somebody please explain to me how the hell that could happen??! Or is current government reticent about discussing that issue too???

  16. Anonymous says:

    I hope there are transcripts of these meetings. The should be useful to some of the police inquires.

  17. Anonymous says:

    Rope off an area about 75 yards east, west, and south of the Sand Bar extening out to the reef and charge $1 per person for entry, including locals. It could remain free on weekends for all residents and guests.

    I can't understand why we let millions of tourist urinate on the stingrays for free each year, but I had to pay 20 euro to the Italian government for a quick 5 minute visit into the Blue Grotto on the Isle of Capri.

    Make no mistake, the cruise lines collects money for every cruise ship tourist who visits the Sand Bar. It's time we get something as well.

    • Anonymous says:

      You are so correct.

      The cruise lines know the value of our natural environment.

      Besides Mr. Norman Bodden, not one Tourism Minister understands the true value of our natural environment, and that goes for the current Tourism Minister too.

      The cruise lines charge on board ship $60 per passenger for the sand bar trips.  Caymanians get $10 for transport and $10 to the sand bar if they are lucky. 

      Government should charge a fee like the Kittywake fee for cruise ship passengers to go to the sand bar – a minimum of $15 per person when books on the ship or on the dock.

      Stop selling our Cayman Islands cheap.

  18. Anonymous says:

    can't cig do anything right?

    cig and the civil service is a rats nest of incompetence…….

    • Anonymous says:

      For a small island, that port is busy and in my experience actually looks to be efficient in unloading ships. Suspect the issues are over staffing, perks, and maybe even some strange "procurement".

      I think this port should be privatised with a Government golden share that means it can be put under government control in times of emergency and returned to its owners thereafter (major hurricane for example).

    • Grandfather Troll says:

      Please don't insult the rats.

  19. Anonymous says:

    The solution is not always on the revenue side James, more often than not, it is on the expenditure side. The Port Authority is the only Government body that pays time and a half to workers because they work "unsociable hours" This is different from overtime, the workers still work the same hours as you and I in the private sector, however, because those hours are worked at night, they get one and a half times the compensation.

    The police don't get that, the nurses don't get it, neither does immigration, prison officers or any one else, just the Port workers, let's first ask why that is and talk about the tons of money that could be saved if that one situation was to be regularized.

    The Port Director is paid more than the Premier in this country and there are also a number of other fat cat salaries being doled out over there. The Port is hugely wasetful in its expenditures on an annual basis. Raising Port fees increases the cost of just about everything on this Island since just about everything is imported.

    The Port brings in millions in revenue every year, its about time people start cutting their suit to fit their cloth and stop demanding more and more and more. This is getting ridiculous now!!!!

    • Anonymous says:

      Has anyone considered that they pay far more to the Shipping Companies to move their freight 500 miles and to Customs than they pay to the Port Authority?  On a recent import of a small item, the shipping company charged me $60 alone for paper work.  My Customs Duty was nearly what I paid in freight, but my Port fee was less than $10.  When I imported a vehicle from Wisconsin, I paid $500 to truck it 2,500 miles to Miami and the 500 miles from Miami to Cayman cost me $2,500 in freight charges.  My port fee was a little over $100 as far as I recall; a pittance compared to the actual shipping charges and the Customs Duty.

  20. Anonymous says:

    Increase cargo fees! Are you kidding? They are already outrageous, and it will simply be another cost of living increase on the public. How about working smarter and more efficient for a change. Here are some examples. 

    Everyone working there makes $20 an hour or more, they are lazy and they spend most of the day "on break". Get some supervision and make them work a real 8 hour day like the rest of us. Oww, and $20 an hour is crazy, wouldn't $15 an hour still be a good wage?

    Why is it I walk into Customs and there are 4-5 people sitting around chatting and doing next to nothing. After I wait the mandatory wait period of 20 minutes or more, I finally pay my duty fees, then I have to walk outside that building to the Port Authority office, where 2-3 people are sitting around doing nothing, and pay the Port fees. Now couldn't you combine these fees to be paid at one location? There are 8 people in 2 seperate buildings doing the job of 2-3 people max.

    I realize this is government so inefficiency is mandatory, but before you raise your taxes (sorry, we call them "fees" here in Cayman) please exhaust all other measures first. 

    • Anonymous says:

      Delete this comment above please this person clearly has no idea what there talking about.

      • Anonymous says:

        I had similar experience when staff are lazy and do nothing just like at the port, it is over staff and over pay. Let Mr Dart take over port and run as private company. He will do it on time and on budget like the new bypass road.

      • Anonymous says:

        So sayeth the pirates.


    • Anonymous says:

      Welcom to Pirate country.

    • anonymous says:

      The problem is,Customs, the port, the post office and most other government money pits are run along the lines of welfare day care centres.

      Count up the number of employees to the population and then have a close look at results achieved. It truly is safety in numbers.

      The urgency is on, release these people back to their seats and benches in town. Privatise the posts quickly.


    • anonymous says:

      Make all government workers reapply for their jobs under a new performance related pay scheme. Bring in expats to oversee the process on a. short term contract.

      Make all welfare payments linked to community services completed.

      For once, let the concept of real work for realistic pay shine through.

    • anonymous says:

      The problem is, Customs, the port, the post office and most other government money pits are run along the lines of welfare day care centres.

      Count up the number of employees to the population and then have a close look at results achieved. It truly is safety in numbers.

      The urgency is on, release these people back to their seats and benches in town. Privatise the posts quickly.


  21. Anonymous says:

    Cayman Islands, the third world country with its hidden agendas.

  22. Anonymous says:

    I wonder when last one of the two men mentioned has been to the Sandbar?  Every day that a cruise ship is in port, he is driving his Taxi Cab up and down in front of the Port hustling fares to the beach.  I know he hasn't been near the Sandbar solving any issues out there.  Mac can tell that to those who don't know.  And he calls that money well spent?  He must mean money well wasted!  Ms. Kilpatrick, if the UK is still looking for Robin Hood, he's right here in Cayman; alive and well.

  23. Truth says:

    Now THATS the stupicest thing I have ever heard.  

  24. Anonymous says:

    Where is the evidence?


    We are left with a bunch of "he said, she said" stuff that cannot be substantiated.


    When will these morons grow up and start running the coutry in a professional manner?

    • Grandfather Troll says:

        20:07, "In a professional manner?"  Hmmmmm….    Probably not in your lifetime.

  25. Anonymous says:

    Hold the directors personally liable for any obvious breaches of their fiduciary duties. Done.