The Cayman Islands government will have to issue a bank guarantee on behalf of the National Recovery Fund before the islands see the remaining portion of their Hurricane Ivan reconstruction money from the European Commission, the executive branch of the European Union.
A grant contract for the second batch of hurricane relief funds was signed on Thursday. The financing agreement for that second grant award totals Euro 3.3 million (US $4.58).
The Cayman government received its first set of EC funds in March, totalling Euro 975,000 (CI$ 1,238,835) but because of European Commission requirements, couldn’t receive the remainder of the funds until a bank guarantee was in place.
Lawmakers approved a motion last week which gave approval for government officials to seek that guarantee.
Under the agreement with the EC, after the bank guarantee is in place the National Recovery Fund can ask for the remaining funding amounts under the grant contracts which total Euro 3,876,199 (US$5.3 million).
Government officials hope the application for the bank guarantee will speed the finalising of the Ivan recovery process. The massive storm struck the Cayman Islands in September 2004 and damaged an estimated 90 per cent of the buildings in Grand Cayman.
The government applied to the European Commission in June 2005 for monetary assistance in reconstruction efforts. The EC agreed in late 2006 to the request making a total of Euro 7,000,000 (US $9.7) available.
Since then, Caymanian officials have faced seemingly interminable bureaucratic delays in receiving the funds. Leader of Government Business Kurt Tibbetts recently said those delays were not the fault of local government officials.
The islands are keen to receive the remainder of the EC funding since a deadline of 31 March, 2009 has been set to have that money committed to specific projects.
National Recovery Fund managers had earlier sought to have that deadline extended until December 2011 from the previous date of December 2008. However, European Union officials have only agreed to extend the initial deadline for three more months.
Mr. Tibbetts recently told a People’s Progressive Movement National Council Meeting that Grand Cayman residents should prepare for a ‘flurry of activity over the next six months’ as contractors make repairs on more than 150 homes that still have Ivan-related damage.
The NRF said earlier this year that more than 1,000 homes have either been rebuilt or have received some level of repairs from the programme. That work has mainly been paid for by private donations or by Cayman Islands government grants.
This spring government officials attempted to side-step European Commission requirements for banking guarantees by requesting less than Euro 1 million at a time. However, EC officials persisted with the claim that a guarantee was needed for any funds requested above Euro $1 million.
NRF Executive Director Mark Laskin said in April that the first round of repair jobs based on the Euro 975,000 already received were in the process of being bid.