Politics
Archer gets back $6M interest
CNS): The ministry of finance has managed to reduce government’s interest on the lifetime of its loans by more than $6 million by renegotiating the loans it currently has with the lenders. Government officials said that these “efforts and strategies implemented” will save the public purse some CI$6.2 million in interest costs over the next ten years. The ministry has negotiated lower fixed term interest rates for five of government's existing loans held with a local commercial bank that totalled CI$88.4 million as at 30 November 2013. The new and lower fixed term interest rates range from 1.25% to 2.71% per annum, down from levels of 2.82% to 4.25% annually for the preceding five years of 2008–2013.
The interest rates are now fixed for the remaining life ofeach of the five loans.
"The government is very pleased with the negotiations and the achievements of the ministry in meeting the goals and objectives of the government to be fiscally prudent and reduce expenditure,” Finance and Economic Development Minister Marco Archer said. “For fiscal year 2013/14, CI$0.6 million in interest cost savings will be realized and will have a positive impact on the 2013/2014 budget surplus and debt service ratios, while building public trust and confidence in the government’s fiscal performance."
Archer had promised to renegotiate all of government’s debt in an effort to reduce its annual interest payments, which are in excess of $30 million. The previous administration had also made efforts to do so by trying to move the loans with new closed door deals. However, there were concerns raised about those efforts, ultimately costing the public purse as a result of penalty clauses. By negotiating with the existing lenders, Archer has managed to avoid penalties and the cost of re-tendering.
However, this renegotiation only represents a fraction of governments existing debt, which is in excess of half a billion dollars.
Five man delegation spend $19K on JMC trip
(CNS): in keeping with the PPM administration’s travel policy and commitment to transparency over expenses for overseas trips, government officials revealed that the recent trip to London by the premier and his delegation to the Overseas JointMinisterial Council (JMC) in London in November cost the public purse around $19,000. Premier Alden McLaughlin, Financial Services Minister Wayne Panton, Cabinet Secretary Samuel Rose, Joint Ministerial Council “Sherpa” Jennifer Ahearn and Home Affairs Chief Officer Eric Bush all attended the annual meeting for discussions with the foreign and Commonwealth Office (FCO). The JMC was hosted by the FCO Minister for the Overseas Territories Mark Simmonds.
The five man Cayman Islands delegation ran up a bill of just $19,316.80 for the four day trip between the 25 and 29 November. The airfares for McLaughlin, Panton, Rose and Ahearn totalled $13,316.80, while the governor’s office footed the bill for Bush’s flight. The per diem allowances for McLaughlin, Bush, Ahearn, Rose and Panton totalled $6,000.
This year the annual meeting focused on promoting the security and good governance of all the overseas territories as well as economic diversification, attracting investment, vocational education and employment.
Miller queries wisdom of port
(CNS): The independent member for North Side has questioned the perceived position that the majority of people in Cayman are in favour of a cruise berthing port and that the business case has been made. Ezzard Miller said he has never been convinced that Cayman should be spending anything from $150 to $200 million on a facility for the cruise industry and noted that while this may be a private sector partnership, Cayman will be giving up the fees to cover the cost and will ultimately pick up the tab. As government seeks proposals from qualified engineering companies to do the environmental impact assessment on the proposal, Miller warns that it may not be a beneficial project for very many. (Photo Dennie Warren Jr)
Disappointed that the business case had not considered alternative proposals, such as improving the tendering system and the facilities at the existing terminals, he said a dock would not necessarily benefit downtown merchants the way government has suggested and that many are hoping for. Miller suggested that assumptions that ships would stay longer was not a forgone conclusion as it was the time of arrival in the next port and the opening of the casinos that controlled cruise ship timetables.
The independent member also said that more passengers would not necessarily mean more spending. Following his own observations on busy cruise ship days, he said there may be lots of people going in and out of stores in downtown George Town but few of them return to the ship carrying many bags. The MLA pointed out that the larger ships had been developed to carry more passengers, which has cut the cost of cruising. As a result, that type of vacation is no longer the preserve of the rich and, he said, the disposable income of cruise visitors declines as the ships increase in size.
Miller said he was concerned that while the new government was at least following the spirit of the Framework for Fiscal Responsibility (FFR), the business case for the project had not been made out in a report by consultants PricewaterhouseCoopers.
"I do not believe that a proper business case has been made out for the development of cruise berthing facilities, despite Cabinet’s position,” he said. “The business case seems to have been made around a decision that was already made rather than the other way around. It did not consider any alternative proposals, such as improving the tender process or even a floating dock.”
Miller pointed to the need to improve the treatment of passengers once they arrived and said it was impossible for anyone to enjoy the visit when they are shoulder to shoulder in George Town.
“We want quality over quantity,” he said, pointing to decisions by past governments to limit the number of ships in port on any given day because of that.
Miller warned that while the cruise industry is going to press for the dock, the ships can and will still come regardless and that the government should be more cautious about the conclusion it has come to that the cruise berthing would offer any distinct advantage for the local economy to any significant degree.
He pointed to the direct risks to the environment, the potential threats to Seven Mile Beach, the strain on infrastructure of so many people disembarking at the same time and the control that the cruise lines would ultimately have were they to finance the project in the first instance, especially when there were other possibilities.
Although potential serious environmental risks have already been identified in the business case and the government is now seeking a firm to undertake the assessment, it is likely to be seeking ways to mitigate those threats rather than stop the project. Having campaigned on the issue of developing a cruise port in George Town with a private sector partner, the PPM will, having won the election, claim a mandate for the project regardless of any opposition to it or potential environmental risks.
See tender details below.
No sign of $6.2M in Ritz deal
(CNS): The owners of the Ritz-Carlton, Grand Cayman have settled their legal dispute with the former owner, Michael Ryan, the developer of the resort, but the hole in the public purse to the tune of $6.2 million remains as the missing duty is not part of the deal. Five Mile Capital Partners LLC, the company which acquired the five-star resort following the loan default by the former companies owned by Ryan, said the obligation still lies with the former owners. Finance Minister Marco Archer told CNS that it appears there is little recourse for the Cayman Island Government over the missing cash. The debt relates to the remaining balance of a more than $10 million duty waiver given to Ryan during the development of the hotel.
Following a closed door settlement between Ryan, the former owner of Cesar Hotelco (Cayman) Ltd, one of the companies he created which owned the hotel, the new owners made it clear they were not responsible for the balance of the outstanding duty.
“The obligation to pay the deferred duty to the Cayman Islands Government was solely the obligation of the former owner Cesar Hotelco (Cayman) Ltd,” Five Mile said in a statement to CNS Friday.
“It is not an obligation which created any lien on or otherwise encumbered the hotel or associated properties. The role of the receivers was to act as agents for the companies over which they were appointed and to collect monies owed from debtors to those companies. If any recoveries were made by the receivers they would be used to defray the costs of the receivers and the debt owed to the lender as secured creditor. They had no responsibility for collecting any monies owed to the Cayman Islands Government,” the company added.
Two lawsuits were filed in 2012 by RC Cayman, one of Five Mile's firms, against Ryan and the various companies related to the development and ownership of the resort. They were looking for US$234 million over the loan default and other funds from the companies they acquired as part of the default. The new owners had accused Ryan of taking money from those companies without explanation, which he had denied, claiming the transactions were all legitimate.
Speaking to the Caymanian Compass last week, Ryan said he was “very pleased” with the outcome of the secret deal between him and Five Mile but he still denied owing the duty.
This debt to CIG came about as a result of the former UDP administration’s decision to allow Ryan and the companies that owned the Ritz to freeze the payments being made to government in 2009. The former owner was paying back the cash up until March 2009 following the opening of the hotel in 2005. However, with the tourism slump and other problems, Ryan had requested time and tied the debt with other possible development proposals and stopped paying, when more than $6 million remained outstanding to the cash-strapped public purse.
In the end, other debts to the hotel’s financiers caught up with Ryan and as a result the hotel was acquired by the creditors before any new agreement had been made between him and the CIG over the debt.
Archer, who became finance minister in the PPM administration last year, has criticized the random and inconsistent waivers that had been given by the previous government on duty and other financial obligations. Having inherited this problem, he said that the Ritz deal does not appear to have changed anything for government, which will remain out of pocket. The minister said that there does not seem to have been any legal opinion sought by the previous government over the issue relating to any possible recourse it may have.
McKeeva Bush, who was premier when Five Mile Capital acquired the Ritz at auction, questioned at the time the value of that sale and how it was acquired by the creditors. He has also insisted that, as the new owners, they were and are responsible for the debt. Bush confirmed to CNS this week that his position on the issue had not changed and said that Five Mile Capital and their related companies "should pay".
Activists fear delay in dump solution will fuel Dart PR
(CNS): A group of activists in Bodden Town, who campaigned hard against the relocation of the George Town landfill to their district, have raised concerns that the Dart Gourp's public relations machine is using a local newspaper to manipulate the public and government into backing the idea, even though the minister responsible has statedhis emphatic position that the dump will be tackled on site. In the wake of the major fire at the dump, a.k.a. "Mount Trashmore", the Coalition to Keep BT Dump Free said things would have been even worse had that happened in their district but voiced concern that if government delays in getting started on the dump, the Dart proposal may return to the table.
One of the coalition leaders said that unless government acted quickly to resolve the ongoing issue, the proposal to move the dump to Bodden Town could continue to influence the community.
“Government must act quickly, not only because of the dangerous state of the dump, but because further delay will strengthen the Dart PR machine and its apologists in the media,” said Arlene Whittaker. “They’ll try and claim that the delay means there’s no other solution than Dart’s.”
However, the activists point out that the Dart solution was emphatically rejected at the polls by the district and the recent fire should not fuel the arguments to move the landfill. The Coalition said it has long warned of the dangers of fire inherent to a dump and the potential toxic fallout and has continued to call for a solution to the GT dump problem with waste-to-energy, in tandem with a comprehensive recycling programme.
“The Coalition has repeatedly insisted that moving the dump — to get it out of Dart’s 'backyard' so that it can proceed with a planned residential project for the wealthy – is not a solution and certainly no protection against further fires,” said Gregg Anderson, one of the founders of the group.
The activists stand by their position that establishing a new landfill anywhere on the island, and in particular in BT, would be a disaster for the island’s environment, defying all common sense as well as current world practice.
“We’d be ruining a pristine area with possible toxic air emissions, the risk of fire and explosions, disease through rodents and contamination of the water table into the wetlands,” he said. “Given the wide open spaces around Midland Acres and the winds from the east, the area is much more vulnerable to fires and natural disasters like hurricanes.”
This position was also adopted by the minister with responsibility for the dump, Osbourne Bodden, who said the recent fire at the GT dump would have been much more difficult to contain at the BT site proposed by Dart. Bodden campaigned against the move and has said publicly on many occasions that the landfill will be dealt with where it is.
The Coalition accused local newspaper, the Caymanian Compass, of assisting the Dart PR machine and the proposal to move the dump to their district when the paper said government was being “parochial, politically expedient and short-sighted” in opposing Dart’s proposal. The activist said they fear the district could still be threatened, despite the minister’s position, and urged Bodden to act quickly and even consider some of the local proposals that are much less costly than what has been touted in the past.
“Local engineers and waste management entrepreneurs on Grand Cayman have outlined possible options to eliminate Mount Trashmore in less than eight years, using small, modular, affordable air burners for waste-to-energy, like those currently used on Aruba, together with recycling, recuperation and resale of what’s valuableat the dump,” Anderson said. “Structures for sorting and recycling are already in place, although still never used, and there’s neighbouring crown land for expansion.”
Anderson added that establishing a new landfill and contaminating another site “are never the solution to fixing an existing landfill, certainly not when the alternative site is environmentally, so far from the source of most of the island’s waste, with absolutely no infrastructure for theincreased traffic.”
BT MLA launches jobs drive
(CNS): Concerned about the number of college students returning home from university who, despite their qualifications, are not getting a foot into the door of the workforce, PPM Backbencher and Bodden Town representative Al Suckoo has launched an initiative to directly assist young Caymanians to find suitable jobs. Based on the many representations to him from college graduates, he believes that many are being denied work because they have no experience. Suckoo, who experienced the same thing himself in the past, said that one of the reasons he went into politics was because of the concerns he had about too many young people cast aside by employers and not given that opening chance.
Promising to lobby Cabinet and harass immigration until things change and there is a level playing field, Suckoo said he wants his young constituents who can’t find work to call or email him directly to book an appointment at the MLA’s office in Bodden Town and get the ball rolling on their future careers.
“I am taking the initiative to meet with our students and assist them because of the growing number of complaints from young people stating that they are not being given entry level opportunities when they make applications,” he told CNS. “A large number are unable to get interviews and when they do attend interviews they are told they have no experience.”
Suckoo said no one could convince him that this is a myth as he too has experienced it, despite his own credentials.
“I made representations to the previous government and pleaded with them to address it,” he said. “Many of our young people feel they have no representation within government and many point to the events of years gone by as evidence that they were not considered a vital part of our society. We cannot have the future of this country starting off their lives feeling as if they are not a key ingredient for a safe, prosperous and united Cayman Islands.”
Suckoo said government has a responsibility to the young people who have fulfilled their end of the bargain, received their qualifications and returned home to contribute positively to society.
“We have to ensure that our young people are able to transition to the labour force and I will continue tolobby Cabinet and harass the Immigration and labour boards and departments until the situation changes.”
Appointed as chair of a task force to review the new National Workforce Development Agency, Suckoo said that review is now in the final stages of examining the operations and policies of the agency and he said it will be presenting its recommendations to the government within a few weeks.
“The objective of the task force is to ensure that NWDA is able to fulfill its mandate as a workforce development agency and to ensure that the mandate given to the agency is realistic and achievable. I am confident, however, that the end result will be very positive and will assist in reducing the level of unemployment among Caymanians.”
He explained that with this jobs drive he will help graduates become clients of the NWDA but above all press government where necessary to remove some of the obstacles that these young people face.
Meanwhile, North Side MLA Ezzard Miller, who held a jobs drive at the end of last year to place some of his constituents in the posts held by workers holding term limit exemption permits, said that some had managed to find work but not all.
He told CNS that he will be organising a door to door assessment of his constituents' employment needs and will press employers holding permits to take on local people.
Pointing to one particular employer in his district, he said he was very concerned that the HR manager gave glowing reviews about how well several young North Siders interviewed but not one was given a job because the employer claimed to have no vacancies when they held at least eight work permits.
“This is unlawful,” he said, as he too made a commitment to ensure employers consider local workers for any existing post held by a work permit holder.
Miller said that this was one of the reasons why business staffing plans should be public so that local workers can see where permits are held and they can ensure they have the right experience and qualifications for the jobs that they would like to try out for.
The independent MLA also called on government to reveal the results of the job drive efforts and partnerships with the private sector, such as CITA and local recruitment agencies, that surrounded the immigration reforms last year as he asked what happened and how many unemployed Caymanians got work as a result.
To contact Al Suckoo for assistance finding work, college and university leavers are asked to call him on 943-7652, email: alvas@ppm.ky or stop by the BT PPM MLA office at 8 Homestead Crescent (Behind Wendy’s Savannah).
North Siders seeking work can contact Ezzard Miller during his office hours at the district's civic centre or email him at nsmla@candw.ky.
Miller to press on OMOV
(CNS): The independent member for North Side has singled out two issues that he will be pushing hard for during 2014. First ishis intention to immediately press government to meet its commitment to deliver on one man-one vote in single member constituencies before this financial year is out. Ezzard Miller told CNS that, along with the introduction of a minimum wage, the changes to the elections law need to be implemented sooner rather than later. Therefore, he said, he and his legislative colleague from East End, Arden McLean, will be presenting two private member’s motions when the Legislative Assembly meets later this month to push government’s hand on both issues.
Talking about the need to make the changes to the election law as soon as possible, Miller said he expected the government to welcome the motion but he had been disappointed with the “shocking absence” of this and the minimum wage issue in the government’s legislative agenda presented during the budget debate for this year.
“The election campaign took place less than one year ago and every person elected in the current government, including the C4C members, campaigned in favour of one man, one vote, in single member constituencies almost as a matter of urgency,” he said. “On that basis, coupled with the fact that there are members of Cabinet who launched their political career with the OMOV campaign and who got elected … as a result of that involvement ahead of the referendum in 2012,I expect this motion to be welcomed with open arms at the next meeting,” he added.
So, keen to ensure that the necessary amendments are made to the election law as quickly as possible, Miller said that if the necessary legislation is not on the floor of the LA before 30 June, he was prepared to take on the necessary time and expense of tabling his own private member’s bill. This would see Miller finance the cost of drawing up the necessary amendments to the legislation and present government with a ready to use white paper.
while the next election may be well over three years away, an unexpected by-election could happen at any time if a serving MLA were forced to step down, chose to resign or pass away.
The Elections Office has said it is ready to implement single member constituencies but there are some boundary issues to be addressed over constituencies bordering George Town and Bodden Town. Kearney Gomez, the former supervisor of elections, had stressed a preference for the maximum time line possible for an education and awareness campaign about that, as well as the general changes that OMOV in single member constituencies would bring for voters.
Miller said the time was now and he would do everything in his power to drive the necessary legislative changes within the next few months.
All of the PPM and Coalition for Cayman members, as well as both Miller and McLean, have expressed their full support for the change, even if at this stage no time line has been spelled out by the government. Even Opposition Leader McKeeva Bush has accepted the fact that the new voting system is coming, which leaves the government with no reason to postpone the legislation.
However, when it comes to minimum wage Miller has a greater struggle on his hands. Despite support from key PPM members of government during the election campaign, Coalition for Cayman member Tara Rivers, who is now the labour minister, has expressed her opposition to it. Nevertheless, given the support of Premier Alden McLaughlin, Miller said his motion on this issue should also be welcomed by the government.
“The premier is on record as saying that not introducing the minimum wage is one of his major regrets,” Miller told CNS this week, noting that McLaughlin was now in a position to put that right.
The independent member said he expected there would need to be some research into the lowest possible wage rate. Acknowledging that this would not be high, he pointed to government’s lowest hourly rate of around $7 as a probable starting point.But whatever was considered reasonable, he said, it was important to implement the rate as a social policy and deliver a message.
The North Side member was convinced, he said, that the way the labour law was written, as a result of pressure from the business community and its lobby groups, had created difficulties for successive governments, who have all supported minimum wage in principle, enacting the necessary changes to the law.
He said Cayman needed to put a stop to unscrupulous employers who know full well that paying someone $4 an hour makes it impossible for them to live in Cayman. Miller said that the lack of a minimum wage had driven down wages over the years to such an extent that more and more people were forced into poverty and had fuelled the increase in foreign cheap labour, which is at the heart of local unemployment.
“Businesses should not be allowed to rely so heavily on constantly reducing their labour costs to provide a source of profit,” he told CNS.
Illustrating his point, Miller explained that in 1969 a bartender at the Holiday Inn was paid around $8 per hour and allowed to keep the tips he earned. At that time the cost of a beer was a $1. Today, he said, at the Ritz Carlton, which sits on the site of the former Holiday Inn, beer now costs $8 while jobs for bartenders are advertised at $4 per hour with just a share of gratuities.
“There is something very wrong with that equation,” Miller said, as he called on government to seize the opportunity to do what government after government since the 1980's has been unable to do.
Worst behind us, says Alden
(CNS): Pointing to a feeling of optimism for 2014, Premier Alden McLaughlin said there was “a feeling that worst is behind us and that 2014 will bea good year” in his New Year message. “There is a new spirit of unity, a sense that all of us – Caymanians and residents, visitors and investors, government and private sector, government and opposition – can and will work together in pursuit of what is best for Cayman,” he said after reflecting on the recent events since the May General election when the PPM won the majority of seats and formed an inclusive government. McLaughlin also pointed to the historic vote just before Christmas when all members of the Legislative Assembly came together, despite differences of opinion, to vote unanimously for the National Conservation Law.
“This was indeed a triumph for our democratic process and a testament to what I hope is a new spirit of cooperation and compromise among the elected members of the House,” he said. “There is much to be done in this New Year and I am fully cognizant that the government will have significant challenges to meet. But meet them we will, just as we have done these past seven months, with courage, conviction and a willingness to listen and compromise.”
Rejecting recent talk of independence, the premier spoke of the renewed relationship with the UK and the country’s acceptance of the government’s long term plan to return public finances to the black and develop the economy.
See full message below.
Lower early deficit revealed
(CNS): Government had expected to be running a deficit of almost $38 million for the first four months of the 2013/14 financial year but instead it is more than $12 million less, which was described by Finance Minister Marco Archer as “encouraging”. Although government finances are facing a hole of some $25 million, the figure is considerably less than predicted in the budget. Archer said Thursday that government coffers always suffer in the early half of the year because it collects a significant part of its revenue in the second half. Nevertheless, government has a long way to go to reach its ambitious surplus target of over $100 million and Archer said the situation would be monitored closely.
Explaining the public sector’s financial results for the four month period from 1 July to 31 October, he said that, against expectations, they were very encouraging.
The public sector typically experiences a deficit during the first six months of its financial year from 1 July to 31 December and then a surplus during the last half of the year from January to the end of June. The latter half of the year is the period in which substantial revenue is received from the financial services sector and highly seasonal sources of revenue, such as Tourist Accommodation Tax.
The budget expectation for the four-month period was $12.2 million more than the current amount of $25.6 million, far better than budget expectations. Government has forecast an overall year-end surplus of $100.3 million, with central government having a budgeted surplus of $95.3 million; and the remaining $5.0 million surplus is budgeted to arise from the activities of its statutory authorities and government-owned companies.
“The government is understandably pleased with the actual results for the first four months of the current fiscal year,” Archer said. “Vigilant monitoring of results for the remaining eight months is required to make a reality, the substantial budgeted surplus for the year to 30 June 2014.”
UDP no longer ‘united’
(CNS): The United Democratic Party (UDP) will be no more when the opposition party ratifies a change in its name at a planned party conference in the New Year, party officials said. The new Cayman Islands Democratic Party (CDP) has been registered under the Elections Law (2013 revision) as a political party and it will replace the UDP, which was formed in 2001 by the opposition leader and former premier, McKeeva Bush, when the infamous coup overturned Kurt Tibbett’s government and introduced the era of party politics. However, officials said Wednesday that the re-naming of the party was in response to public encouragement to modernize.
The UDP had a rough ride in 2013, starting the year with a cloud hanging over its future following the party split after Bush was arrested and charged on allegations of fraud, corruption and misconduct. A no confidence motion after his arrest in the LA saw the fall of the UDP government but five former UDP members retained the Cabinet under the People’s National Alliance banner until the general elections in May, sending Bush and three of his remaining UDP members to the crowded opposition benches.
The split did neither party any favours at the election, with Juliana O’Connor Connolly, who had served as a short term premier, being the only PNA candidate returned. After the election she joined the PPM when it won the majority of seats and accepted the offer from party leader, Alden McLaughlin, of the speaker of the House position.
The United Democratic Party was unable to win any seats outside of its stronghold base of West Bay and even lost one of the four seats there to Tara Rivers, who had run on the Coalition for Cayman platform but also joined the government and Cabinet.
Though she has not yet formerly joined the PPM, she has already made an appearance at the party conference.
Although the party has just three members, Bush is still the opposition leader with members Eugene Ebanks and party deputy leader, Bernie Bush, who share the opposition benches with the two independent members from the eastern districts, Arden McLean and Ezzard Miller.
With the party rebrand, McKeeva Bush will remain as leader of the CDP and leader of the opposition, while Bernie Bush also retains the deputy leadership of the new party.
Tessa Bodden remains as chair of the new party and Dr Joe Marzouca as deputy chairman, despite his position as the honorary consul for Jamaica. Renard Moxam has also been confirmed as the second deputy chair of the re-named party.
Bodden said the party has also renewed its constitution. That and the amended name were viewed as necessary by the party's General Council in response to overwhelming public encouragement to modernize and move forward.
Following the announcement, McKeeva Bush said he welcomed the opportunity for the party to continue the process of growing and addressing the needs of the people of the Cayman Islands.