Gov’t restarts search for lender

$155M in borrowing needed

The Cayman Islands government has
scrapped six initial bids it received for the financing of its proposed $155
million (US$185.1 million) in borrowings for the current budget year.

According to Central Tenders
Committee Chairman Ronnie Dunn, those bids were received during a tendering
process earlier in the year.

“That process concluded without
government choosing any successful bidders,” Mr. Dunn said, adding that the new
bidding for lenders has since been initiated and a closing date of 9 September
set for submissions. 

The recently released bid document
seeks long-term financing for the same amount to support various government
operations over the next fiscal year, which ends on 30 June, 2011.

According to details of the
borrowing released by Premier McKeeva Bush’s office, more than half of the sum
will go toward work on the two new public high schools on Grand Cayman, as well
as the completion of the new government office accommodation project.

About $53.8 million of the
borrowing has been earmarked for the new John Gray and Clifton Hunter high
school campuses, as well as work on some primary schools.

Another $30 million has been set
aside for the completion of the government office building on Elgin Avenue in
George Town. 

The completion of the new
administration building is expected to save the Cayman Islands between $8
million and $10 million per year in lease payments the government now makes on
the various offices it is renting in Grand Cayman.

Some $29.4 million will go to meet
the day-to-day operational needs of government, such as funding the operating
deficit and other obligations. Cayman is expected to end the 2010/11 fiscal
year with something close to a $32 million deficit, which means its revenues
are again expected to fall short of what it is spending.

About $18.5 million has been
earmarked to support the operations or assist with purchases for a number of
statutory authorities and government-owned companies. Those include $5.1
million for Cayman Airways, $1.8 million for the Health Services Authority,
$9.7 million for the Cayman Turtle Farm and $1.9 million for the National
Housing and Development Trust.

Some $16.1 million will be
borrowed, mainly for purchasing expenses, for the Portfolio of Internal and
External Affairs, judicial administration, legal affairs, Ministry of Health,
Ministry of Community Affairs, the Ministry of District Administration and the
Ministry of Finance.

The remaining $7.2 million will be
borrowed for a number of public works projects, including:

•A secured remand facility for
juveniles who are criminal suspects

•An emergency shelter for Cayman
Brac, as well as payment for Brac land acquired for roads and the bluff play
field

•Various road construction projects
around the Cayman Islands.

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1 COMMENT

  1. I thought that we borrowed $300 million last November for these same projects? $155 mil more. At 6% it will cost $27 mil/year in interest. This means we now have debt of $20,700 for every Caymanian! Can we just keep issuing more bonds every year like they did in Greece? How will this money ever be paid back?

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