Port berthing facility
One of the big stories in April was the announcement that the Cayman Islands government had terminated an exclusive negotiating arrangement with a Florida-based construction company brought in to design and build a port berthing facility for the George Town harbour.
The framework agreement, signed between government and GLF Construction Corporation in December, was effective for a four-month period ending on 14 April, 2011. It allowed GLF and the government to negotiate exclusively the terms of the berthing project.
Two days before the agreement expired, GLF President Francesco Senis sent a letter to Cayman Islands Premier McKeeva Bush, providing an update on the project including a “complete master plan” and possible project financing. The company said a commitment letter for the full project financing had been received from Citibank as well as some private equity firms, and that it was awaiting final project plan approval from government prior to executing any deals for the finance.
Premier McKeeva Bush said in a statement that “It was in the best interest of the country that we give ourselves other options by ending the exclusivity clause with GLF as provided for in the Framework Agreement of 14 December 2010,”
“This route was taken in the best interest of the country to ensure that this project moves ahead successfully in a much more timely manner. The cruise ship berthing facility is vital to the future of our tourism industry. We must therefore move forward with high confidence that this project will get underway with the least delay possible.”
S
alary and a pension
At the beginning of April it was revealed that three elected members of the Cayman Islands Legislative Assembly were receiving parliamentary pension payments while continuing to serve in the LA.
Premier McKeeva Bush, George Town MLA Kurt Tibbetts and Bodden Town MLA Anthony Eden all were receiving pension payments in addition to their monthly salary.
“I have paid my pension for over 25 years, and by law I am now eligible to receive my pension,” Premier Bush said. “I now receive it.”
Premier McKeeva Bush said that they were saving the country money.
“Opting to receive these benefits at this time, in effect, has closed the defined benefit plan to those of us who opted out, thereby reducing the future cost to government that would have resulted in some cases, from additional years of service specifically in my case, as well as the others, cost of living and any future salary increases. We can’t be paid on any of these things,” he said.
Government loan
After months of behind-the-scenes wrangling, Cayman Islands government financing was settled in mid April.
In a statement the Ministry of Finance announced the award of a long-term financing deal for the government to First Caribbean International Bank (Cayman) Ltd.
The financial arrangement was in respect of government’s 2010/11 fiscal year and was for US$185 million in borrowing through 30 June.
The United Kingdom has not allowed the Cayman Islands to make any new borrowings for the next two fiscal years, those being the 2011/12 financial year and 2012/13 year.
The Government confirmed later that bids for US$185 million in financing were not publicly advertised as part of an open tendering process.
Government officials stated that a number of companies were contacted by the Ministry of Finance in writing to invite them to bid on Cayman’s public financing needs. Twelve local and overseas firms were contacted; six submitted bids and a seventh missed the deadline for the bid by a few minutes.
US Foreign Account Tax Compliance Act
Many US citizens and others subject to US taxes here, were concerned about the ramifications of the US Foreign Account Tax Compliance Act.
Enacted in March 2010 as part of the Hiring Incentives to Restore Employment – HIRE – Act, FATCA will require, as of January 2013, foreign financial institutions to agree to report information on bank accounts held by US taxpayers to the Internal Revenue Service or face a 30 per cent withholding tax on payments made to them from US financial institutions.
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