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CUC denies benefitting from rising fuel costs

| 11/07/2011 | 55 Comments

(CNS): The local power company has said that its profits do not increase when the fuel factor goes up as a result of global oil prices. In a statement released Monday morning, President and CEO of the power firm, Richard Hew, denied that CUC gained in any way as he urged people to conserve energy. He said that the fuel factor adjustments on bills takes place over a two-month period when the prices are reviewed and approved by the Electricity Regulatory Authority. The total cost of fuel to CUC in April, including government duty of 75 cents per gallon, was applied to customers’ bills in June and the cost of fuel in May will be applied to customers’ bills in July. (Photo Dennie Warren Jr)

“CUCdoes not benefit in any way from high fuel costs as only actual fuel costs are recovered without markup,” Hew said. “While we always encourage customers to use electricity efficiently, with fuel costs rising to the highest levels since 2008, coupled with warmer temperatures, we are encouraging customers to be especially vigilant of their electricity consumption during the summer period.”

He said that when there is a reduction in the price of fuel, customers will also see a decrease in fuel costs on their bills.  “CUC’s per kilowatt hour base (non-fuel) rates (kWh) have remained unchanged at an average of CI$0.1039 for the past two years, and are in fact lower today than they were in 2002,” Hew added.  

CUC purchases fuel through a competitive bid process using long term contracts based on world fuel prices, the power company stated in the release as it explained that fuel costs, driven by world fuel prices, are at their highest levels since summer 2008.

“Customers receiving their June bill would have seen a spike in the fuel cost line item related to fuel purchased by CUC in April when the cost was CI $4.00 per imperial gallon. This translated to a calculated fuel cost factor of 25 cents per kWh. In March fuel costs were at CI $3.78 per imperial gallon which translated to a calculated fuel factor of 23 cents per kWh.  The calculated fuel cost factor for July is also 25 cents per kWh,” CUC said.

The high cost of fuel was compounded over the last year through a combination of the international price of oil and the removal by government of the rebate on bills that was put in place by the previous administration. Last year the government also increased the fuel duty by another 25 cents adding to the cost of CUC bills, fuel at the pump and a knock on effect to the price of most consumer goods. In this year’s budget delivered last month the premier said that he would be setting aside $4.5 million from a new hedge fund regulatory fee to subsidise residential fuel bills. The ERA said last week that it was in the process of working out how the money would be allocated to help reduce customer’s bills

The graph supplied by CUC shows the fluctuation in the fuel cost factor compared to the stability of the CUC base rates betweenJune 2008 and June 2011.


 

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CUC price cut ‘soon come’

| 08/07/2011 | 122 Comments

(CNS): The country’s Electricity Regulatory Authority said that the recently announced fuel rebate on CUC bills is currently being worked out and will be launched in the next few weeks. Responding to concerns that CUC had increased its charges, the ERA said Thursday that the local power company had only changed the formatting of its bills but had not imposed any additional charges. The authority explained that CUC cannot increase rates or add new charges without regulatory approval and the next change to come would be a reduction, not an increase.

“It is the intention of the Cayman Islands’ government to launch within the next few weeks a monthly rebate which would show up as a credit on your CUC monthly invoice. The final details of that rebate are currently being worked,” the ERA said in a release.

The announcement was made by the premier last month when he brought the long awaited 2011/12 budget to the Legislative Assembly. McKeeva Bush said in his budget address that he would use some of the money government would earn this financial year from a new regulatory fee imposed on hedge funds to cut duty on CUC bills.

It is not clear how the $4.5 million which he said would be taken from the expected earnings will be allocated to CUC’s residential customers, as Bush made it clear it would be domestic rather than commercial bills which will benefit from the government rebate.

During the budget debate in the week that followed the premier’s announcement, the opposition asked the government to roll back the extra 25 cent duty placed on fuel import duty and questioned how this rebate would be allocated and what it would equate to for the consumer. It was also revealed that CUC had not been informed of government’s plans.

Bush had said he was under no obligation to inform CUC about the duty rebate until he had got the money to do it. The premier said the only reason why he had imposed the duty increase was because there was no money to run government and Bush said he had always said he would find a “way to take it off” when the government’s financial situation stabilized. He also hurled accusations at the opposition bench accusing them of giving the local power firm a sweet heart deal.

Since the announcement regarding the forthcoming rebate, CUC have changed the format of bills to reflect the spike in international oil prices. “CUC has chosen to separate the portion of fuel charges that represent import duty charges on CUC fuel purchases used in the production of electricity,” the ERA said Thursday but acknowledged that it could be confusing for the consumer.

“The Electricity Regulatory Authority understands the potential confusion that this new billing format may have caused. It is important to realize that these are not additional charges to your CUC bill and that these charges have always been included in the overall fuel cost charge item of previous CUC bills,” the authority noted. “No new charges can be added unilaterally by CUC without proper regulatory approval.”

Ironically,in light of government’s failure to notify CUC of its intention to offer residential customers a rebate, CUC did not give prior notice to the ERA of its intention to make the change to monthly bills.

The increse in the cost of electricity bills has been having a significant impact on the cost of living and according to the latest Annual Economic Report, average electricity inflation was at  21.3 percent during 2010.

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Businesses trade illegally

| 08/07/2011 | 35 Comments

(CNS): Government is issuing a warning to the local business community that they need to pay their Trade & Business licenses otherwise they are operating illegally. The Department of Investment and Commerce said Thursday that the board had identified a number of outstanding company licensing fees for 2010 and that is a criminal offence, liable to prosecution, to be trading without one. Anyone convicted can be fined up to $5,000 or serve 12 months in jail. The DCI secretariat said it intends to take action against those not complying with the law. CNS asked the DCI how many licenses had not been paid but the department said it was unable to supply that figure.

There are at least 4,000 licenses registered with the Trade & Business board. The office could not say what percentage were outstanding but said there were concerns that people were not paying the fees due for last year.

“The Trade and Business Licensing Board is currently consolidating all outstanding payments for 2010/ 2011 and reminding all licensees that it is an offence to operate without a valid Trade & Business License,” the DCI said in a release Thursday.

“The Trade and Business Licensing Secretariat plans to take serious action against those companies who are operating illegally and would therefore encourage those in contravention of the Law to take the necessary steps to bring (their) licensing fees up to date.”

In May this year the Department of Commerce and Investment announced the Trade and Business License Board, which moved to that department from immigration last year, had addressed the backlog of applications and was up to date. Having introduced more efficient methods for processing applications, DCI Head of Business Licensing Ryan Rajkumarsingh said significant progress had been made.

“We have made small but significant changes to the handling and processing of applications and the results are such that from January to March this year alone, a total of 1,593 decisions were made by the Board, 232 of which related to new issues, 1,266 to renewals and 9 to local companies control grants,” he revealed, adding that turnaround time had been reduced by as much as 40 percent. 

Board Chairman, Garth Arch, said all the board members were extremely pleased with the enhancements to the system and was confident that the changes were working. “In spite of the fact that we review more applications at each sitting, the board now meets every two weeks instead of weekly, we get through them far more efficiently as we have more consolidated documents to go through,” he added.

With the improvements allowing the board to deal more efficiently with those complying with the law, the board appears to be in a position to turn its attention to those who are not.

The DCI will also be hosting a workshop on the T&B law next Thursday (14 July) The class costs $10 in advance or $15 on the day and will be hosted by the deputy chair of the board Lynn Bodden.

In order to address outstanding payments traders are asked to contact the office at Cayman Corporate Centre, 27 Hospital Road, George Town or call 945-0943. Forms are available online at www.dci.gov.ky

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More new money enters local circulation

| 07/07/2011 | 19 Comments

(CNS): The next two denominations of new notes to hit the streets are the $50 and $1 D series. The Cayman Islands Monetary Authority (CIMA) will introduce the notes into circulation today (Thursday, 7 July) joining the $25 and $5 notes which were the first to be released during the initial launch in April 2011. The $100 and $10 redesigns are the last to be circulated and CIMA said a date has yet to be set before the last remaining notes are released. The newly designed $50 combines purples with hints of green and red, bearing images of stingrays on the front and a single stingray cruising through the water on the reverse.

The $1 has the colours of sea blue with violet and orange, and displays a school of Angel fish on the front and an image of the Cayman Brac Bluff, viewed from sea level, on the reverse. Each note bears an updated portrait of Queen Elizabeth II, along with the Cayman Islands crest, and all the notes now carry an outline of Grand Cayman, Cayman Brac and Little Cayman.

In accordance with the new constitution, the signature of the Minister of Finance now appears on each note, rather than that of the Financial Secretary as was the case with the C series of banknotes. The signature of CIMA’s Managing Director also appears on each note.

The $50 and $1 notes along with all of the other denominations in the new D series of Cayman Islands banknotes have been redesigned and include the latest security features.

“Much thought and work went into enhancing the security elements and increasing the number of different features on each denomination,” said CIMA’s MD Cindy Scotland.  “While counterfeiters will always try, the new notes will be significantly harder to forge, especially if people know what to look for and are vigilant.  I urge everyone to take time to get really familiar with the notes so they can better identify attempted counterfeits.”

For more information on the common features of each note and the security highlights of the D series, please visit the CIMA website at: www.cimoney.com.ky

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Building materials remain duty free till year-end

| 01/07/2011 | 10 Comments

(CNS): Government has announced that it will be continuing with the duty concessions on building materials it introduced last year. A release from the premier’s office said the concession would be extended for another six months until the year end 31 December in what it said was a an effort to “further stimulate economic activity.” McKeeva Bush urged developers to accelerate their projects to take advantage of the duty free period. “The extension of these concessions is consistent with the government’s ongoing efforts to stimulate growth in the economy, and I encourageall developers and other stakeholders to accelerate their construction activity during this further concessionary period,” he added.

Under the extended concessions imports of building materials to Grand Cayman will be charged a flat rate of 15% for the period 1 July to 31 December 2011. The normal rate of duty is 22%. Imports of building materials to Cayman Brac and Little Cayman will be on a 100% duty free basis for the period 1 July to 31 December 2011.

For the purpose of these concessions building materials have been defined as: “All physical components and substances, whether solid or liquid, used in the construction, renovation or restoration and forming a permanent part of any building or related structure,” the release stated.

Items such as furniture, accessories, electronics and appliances are specifically excluded.

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Dart to get $45m in waivers

| 16/06/2011 | 92 Comments

(CNS): The Cayman government is entering into a massive partnership deal with the Dart Group that includes land swaps, public infrastructure projects and road building, as well as regulation changes and duty waivers of up to $45 million. The premier has said the deal is designed to facilitate the development of a new resort and further expansion of Camana Bay and stimulate the local economy. Government has confirmed that it will be allowing a stretch of West Bay Road to be closed and in turn Dart will pay for the development of the extension of the Esterly Tibbetts by-pass to Batabano in West Bay. Dart has also given land in Bodden Town to government in exchange for the current landfill in GT which it intends to cap and redevelop.

As part of the new "For Cayman Investment Alliance", McKeeva Bush announced that government will soon be signing the deal with the country's largest investor, which will see Dart offered various concessions, regulation changes, and re-zoning, plus tax and duty waivers. In return the group will be making significant investments in both private sector and public sector development projects.

Dart will be contributing land to the new Barkers National Reserve — and will in return receive land from government in Viste Norte (the Salt Creek area) –  funds to Grace Christian Academy to build a new school, central mangrove wetlands for conservation and a new public beach north of the new resort on the site of the former Marriott Courtyard, as well as some $18 million in cash for community project s such as parks and educational programmes.

Although the values of the quid pro quo deals have not yet been detailed, it is understood that Dart will have to spend over $1.2 billlion to get back the $45 million in duty waivers. Another 50% rebate on any further duties will be given to Dart if its spending exceeds that amount.

Government has also promised other fee reductions and waivers, such as planning application and infrastructure fees, tourism tax abatements directly related to the new hotels and various other concessions. It has also been offered regulatory andprocedural changes to facilitate its development programme.

Speaking at a press conference held to announce the broad details of what is not only the largest ever public-private deal in Cayman but a complex one as well, the premier said Dart would be investing US$3 billion over the next 25-30 years in the Cayman Islands, with more than US$200 million of that being spent in the next two years.

“Nothing from nothing is nothing,” the premier observed as he announced the myriad concessions given and benefits he said would be gained for the country. “So before people start crying about our giving away duty concessions, if Dart does not spend their money here, there will be no duty accruing and nothing to collect.”

He added that if the developer was incentivized to spend money in the short term the country would benefit through other government revenue and the stimulation of the economy and the multiplying effect of the investments. Bush said the projects and investment by Dart would create hundreds of jobs for local people and trade for local businesses.

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Sewerage bids in re-review

| 07/06/2011 | 12 Comments

(CNS): Government’s derailed plans to sell off the country’s waste water system were apparently back on track Tuesday when a newly formed technical committee met with government officials from the ministry and other agencies to look again at the bids which have been waiting for several months to be reviewed. CNS understands that a number of conflicts of interest arose with members of the previous technical teams having direct connections to the bidders and others resigning for undisclosed reasons. The UDP administration has cited the privatization of Grand Cayman’s sewerage system as a public policy priority but the process has been littered with what the premier has often called stumbling blocks.

Government first asked for expressions of interest before putting out an official request for proposal (RFP), in February 2010, but received few takers and soon after toyed with the idea of selling or leasing the entire Water Authority. However, in the face of opposition and concern that selling one of the government’s most profit making assets might prove to be a short sighted move, among other unspecified problems, it reverted back to selling the wastewater management system as a separate entity.

An official full request for proposal was eventually published in October 2010 and legislative changes to facilitate the sale were passed in December of the same year.

Since then, however, the first technical committee convened to examine the ten bids submitted during the RFP process, which closed by the end of last year, was disbanded. It was understood that the chairman became the first member of the committee to be conflicted and resigned.

He was replaced soon after his departure but then another board member was reportedly also found to be conflicted — the details of which have never been disclosed. Shortly after that it is understood that all members of the technical committee, including the new chairman, resigned — which has also never been explained — leaving the bids in limbo.

CNS has contacted the ministry on a number of occasions about the problems plaguing the technical team, why the previous committee resigned and what the conflicts of interest might have been, but we are still waiting for answers to the questions. The role of any technical committee in a government procurement or sale is to examine all the bids based on the RFP documents and the technical elements and then make recommendations to the Central Tenders Committee, which in turn ensures the selection provides value for money for the public purse.

Since the last technical team departed in the middle of the reviews, the bids have been left hanging until Tuesday morning, 7 June, when a new technical team reportedly met to begin looking again at the bids.

Government is understood to be looking for at least CI$20 million for the sewerage system, which was valued by HSBC back in 2009 as part of the government’s bond offering at around US$23.3m. KPMG is understood to have undertaken another evaluation in April last year when it valued several of government’s assets but that document has never been released to the public.

Whoever eventually buys government’s sewage will be expected not only to manage and operate the existing system but to make investments for future improvements under an exclusive twenty-five year lease.

Aside from complying with all applicable local laws and regulations, the successful bidder will be required to satisfy all insurance, financial, and bonding requirements as specified in the RFP document; have no less than ten years prior experience with providing wastewater services for public authorities for systems serving at least 60,000 people, and demonstrate their ability for independent financing without the need for government guarantees.

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Local money store closes as remittances decline

| 03/06/2011 | 23 Comments

(CNS): Reports in the Jamaican Gleaner Friday revealed that Capital and Credit Financial Group (CCFG) has now decided to close its Cayman Islands subsidiary, Express Remittance Services by mutual agreement with its partners. The firm which operates the Reggae Money Express stores cited declining business and high operating cost. The company also said the robbery in January at its Elizabethan Square branch aggravated but it did not reveal how much was taken. The RCIPS have since charged four people in connection with the holdup which they believe was an inside job. (Photo Dennie Warren Jr)

"The decision by Capital & Credit to cease business in Cayman was taken due to the increasingly unfavourable market conditions in that territory, which has seen significantly declining remittance numbers, increasingly higher operational costs, and was further aggravated by the recent robbery of the ERS offices in Grand Cayman," spokeswoman Michelle Wilson-Reynolds told The Gleaner.

CCFG, which owns 40 per cent of the company, had initially attempted to sell its stake. Wilson-Reynolds said the negotiations to sell fell through and that the owners of the remaining 60 per cent of the company were not up to going it alone.

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Cayman entrepreneur designer loved in Montserrat

| 02/06/2011 | 0 Comments

(Yes Caibbean): A new word was coined this week Caymanserratian as Cayman Island entrepreneurs Luigi Moxam and Susan Barnes brought their energy and ideas to YES Caribbean, a conference for entrepreneurs held on Montserrat last week May 25 -28, 2011. Fashion Designer Luigi Moxam shared his entrepreneurial story during various sessions over the four-day event and got local teens to model some of his gear as part of his presentation. Moxam showcased how he merged his love for the Cayman Islands, his passion for social and humanitarian causes with his fashion label One Tree Four Five Collection.

By the end of the four days, Moxam and Montserratian-born actress Dionne Audain had coined a new word Caymanserratian to define the new found connections and passion that was being shared and spread.

“I really felt the love and at home,” Moxam said. “I’m definitely coming back and want to see how we can collaborate more with the young people here.”

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TV to charge for paper bills as part of ‘green’ plans

| 02/06/2011 | 23 Comments

(CNS): WestStar TV the islands' television service provider is encouraging customers to sign up for its e-billing service in order to cut down on paper – and of course posting costs. Taking a carrot and stick approach the firm said customers who sign up now are being offered the chance to win prizes but by September people who are still asking for paper bills will be charged a fee. The e-billing, is the firm said, part of the company’s goal to reduce its carbon footprint. This month, customers who sign up for e-billing will be entered to win one of three 64 GB Apple iPads.

“We are encouraging customers to sign up now for e-billing as we prepare to add a service charge for printed bills as of September 1st,” Director of Operations Traci Bradley said.

Internally, WestStar officials eliminated the use of disposable cups for water and coffee, giving each employee a canteen and travel coffee mug encouraging staff to avoid unnecessary waste. The company’s headquarters at Television Centre are being outfitted with motion sensors so lights will only come on when someone is actually using the space. This is in addition to the energy-efficient lighting which was installed last year.
And most recently, an internal “Green” committee was formed to continue to find and implement new ways to reduce, re-use, and recycle.

WestStar is the third telecommunications provider in the industry to introduce a fee for printed bills with Digicel leading the market in 2010 and Logic announcing last month they will be charging for printed bills.

“We’ve seen the supermarkets successfully implement ‘green’ shopping bags,” Bradley, added. “The community has responded well and we must also do our part.”
WestStar officials hope the community will support this initiative and sign up for e-billing by emailing a request to support@weststartv.ky or by calling 745-5555. The draws for the Apple iPads will be done on Daybreak June 30th, August 2nd and August 31st.

The firm said customers can also save gas by signing up for direct debit, or paying their WestStar bills at any of the Islands’ District Post Offices.

 

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