The Cayman Islands government has paid for a settlement with the construction firm that was previously in talks to build a new cruise berthing facility in George Town.
However, Premier McKeeva Bush said government should eventually be able to recover those funds by selling “intellectual property”.
Education Minister Rolston Anglin confirmed Friday that Cabinet recently approved the settlement with GLF and, as part of that agreement, government would pay “less than $3 million” to the Italy-based contractor.
“Bottom line: We have written the cheque and we are moving forward,” Mr. Anglin said.
In December, Premier Bush indicated cash for the settlement with GLF would not come from public coffers. The Italian headquartered firm is one of five companies to enter into negotiations with government over a new cruise port project since 2003.
“Not only have we agreed [to a settlement], but these sums will not be coming out of government’s coffers,” Mr. Bush told the Legislative Assembly in December.
The Caymanian Compass contacted the Premier’s office Friday for a response to Mr. Anglin’s statements. The Premier responded Saturday evening, saying Mr. Anglin had not contradicted the statement he made to the house in December.
“Government settled the matter and paid the settlement on time,” Mr. Bush said. “Government will recoup the cost of the settlement from the sale of intellectual property related to the building of the cruise ship dock facility.”
When asked to explain the difference between his statements Friday and the Premier’s previous description of the situation, Minister Anglin said “circumstances change”.
“The government had to make a call,” Mr. Anglin said. “The Cayman Islands government has made a strategic decision that this was the best route.”
GLF was spurned in April 2011 as the potential builder of the cruise port in favour of a company that was later identified as China Harbour Engineering, partly because Premier Bush said he did not believe the Italian company could secure financing necessary to construct the berthing facility.
China Harbour and the government are still negotiating details of the proposed George Town cruise port. A deadline on those talks has been set for 31 March.
The premier has said his government had “good reason” to end a memorandum of understanding with Italy-based GLF last spring.
“The risks of non-performance were simply too high,” Mr. Bush said of the previous negotiating agreement, speaking before the assembly in December. “I wish to inform the public that a settlement agreement has now been reached with GLF; and not even remotely close to the astronomical sums of $35 million that have been bandied about.”
The final settlement amount was thought to be less than $3 million. Mr. Anglin said he could not remember the specific settlement amount that was approved by Cabinet. The Caymanian Compass has filed an open records request in attempts to determine the precise amount.
Since 2003, the Cayman Islands government has been in talks with different companies regarding the potential construction of a port berthing facility in George Town. Talks with Misener Marine, Atlantic Star, Dart Enterprises Construction Company, GLF and now China Harbour have been in various stages of negotiations, but no final deal has ever been agreed. Right now, cruise ships that come into George Town must anchor off shore and ferry passengers in by tender boat.
Mr. Bush said an independent business case analysis is now being conducted on the China Harbour proposal by the KPMG accounting firm. He set out a number of reasons for why Cayman’s government decided not to go with the Italy-based firm to build the port facility. Those included: No evidence that GLF would have the funds available to do the work, and requirements for GLF to bring in construction equipment – adding more cost, as well as greater cost of capital.
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