UK says it will squelch FFR Bill, port plan
Cayman Islands Premier McKeeva Bush’s office released a communication Friday – dated 30 October – concerning a number of issues that remain unresolved between the local government and its British overseers.
The letter was addressed to newly-appointed British Overseas Territories Minister Mark Simmonds, who wrote in a letter to Mr. Bush on Friday that he had received no such communication from the Cayman Islands regarding the outstanding issues.
Those issues involve what form a financial management agreement known as the ‘Framework for Fiscal Responsibility’ will take when it is passed into law later this month, whether Cayman should proceed with its current port redevelopment project, and the respective roles the governor and an appointed budget delivery committee should take on.
“Sir, you will find the government of the Cayman Islands may be led, but are much more difficult to push,” Mr. Bush wrote in the letter dated 30 October. “I think you will find that we stand by our convictions, unless and until proven wrong (even if that must be in a court of law which I will not hesitate to undertake)…”
The ‘framework’ bill
Mr. Simmonds told Premier Bush Friday not to push ahead with a plan to bring a revised version of the Framework for Fiscal Responsibility to the Legislative Assembly next week.
In a letter to the premier from the minister, which the Office of the Governor made public Friday afternoon, Mr. Simmonds stated that he understands Mr. Bush plans to proceed to the Legislative Assembly on Monday “to transpose a version of the FFR which does not accord with that which you have signed”.
“This is not acceptable,” Mr. Simmonds wrote.
He continued: “Should you go through with this course of action, I will have no choice but to conclude that you are disregarding good governance and continue to be in breach of a series of commitments you have made. This is disappointing for the Cayman people.”
The minister said he told Mr. Bush in an earlier correspondence on 1 October that the “continued breach” of commitment left Mr. Simmonds with “no alternative but to give detailed consideration to alternatives”. He did not state what those alternatives would be.
Mr. Bush, in his letter dated 30 October, said that the fiscal framework – which he signed as an agreement with the UK last year – would be passed into law at the next meeting of the Legislative Assembly.
The Premier said the bill that transposes to the Framework for Fiscal Responsibility into law will meet “the necessary requirements to which we are committed”. However, Mr. Bush said that the two documents – the signed agreement and the law – cannot be identical.
“In the transposition, essential commercial tests must be passed for the mandatory performance that the legislation, as a law, would require,” Mr. Bush wrote. “We cannot afford the collapse of our entire structure of budgetary obligations under the weight of unwieldy processes.”
In his Friday letter, Mr. Simmonds also said he would not allow Mr. Bush to proceed with the procurement of the new cruise ship terminal “unless the proper procedures have been followed”.
“Should you push ahead regardless, I will have no choice but to ask the secretary of state to instruct the governor to reject the proposals,” Mr. Simmonds said in the letter.
The Cayman Islands government is in talks with China Harbour Engineering Company to expand cruise ship facilities in Grand Cayman.
According to a statement from the governor’s office, both Mr. Simmonds and his predecessor, UK MP Henry Bellingham, raised the concerns over the cruise ship project procurement a number of times in meetings and in correspondence with Premier Bush over the past year.
“Mr Simmonds has now found it necessary to write to the Premier again about this and the outstanding issue of the transposition into law of the Framework for Fiscal Responsibility,” the statement from Governor Duncan Taylor’s office read.
The statement said Minister Simmonds had asked that his letter be made available to the people of the Cayman Islands so that there is “no misunderstanding of the UK government’s position on both issues”.
“The UK Government supports the aim of enhanced cruise ship facilities and fully understands the potential economic benefit to the Cayman Islands. The nationalities of the parties involved have no bearing on this case. We encourage investment in the Cayman Islands by China and other countries. It is of critical long-term importance to all parties that proper procurement processes are followed in line with international best practice,” the statement continued.
Mr. Bush assured the UK in his letter of 30 October that “value for money” on the cruise project would be achieved, and that an outside review, undertaken by the KPMG accounting firm, would assist in providing support for those claims.
“I disagree that the auditor general or chairman of the Central Tenders Committee (useful though their input will be) can be the final arbiters of how we should achieve such fundamental objectives,” Mr. Bush wrote. “I believe KPMG, who is doing our ‘value for money’ test, to be much more competent in these matters.”
Mr. Bush said “micro-management” of a project like the port proposal by the UK Foreign and Commonwealth Office “is no more necessary, nor desirable at this time”.
“Your concerns over contingent liability are duly noted, but with all due respect, Cayman has not got this far through the micro- management of the FCO, nor its successive commissioners, administrators or governors from the 1930’s until today,” Mr. Bush said.
Although Governor Taylor appeared to be attempting to stay on the sidelines, deferring to comments made by Mr. Simmonds, he was lambasted by Premier Bush in the letter of 30 October.
“His job should be to help the Islands,” Mr. Bush wrote. “So far, the only ‘help’ coming from the present governor has been to keep our economy flat, people unemployed and unable to pay their mortgages and lose their homes; all of which has exacerbated the rise in the level of crime at gunpoint.”
The Royal Cayman Islands Police Service reported a 13 per cent drop in overall crime as of 30 June, 2012.
Mr. Bush again reverted to the port project in the section of the letter dealing with Governor Taylor: “To stop the project will cause hundreds of people not to be employed which would be yet another effort to stop our economy from any growth of jobs, and loss of revenue, which the government badly needs.”
Mr. Bush also sought to clarify the role of the recently-appointed Budget Delivery Committee, led by Cayman Islands Deputy Governor Franz Manderson.
“Cabinet must and will retain authority to steer the budget,” Mr. Bush wrote to Mr. Simmonds. “Their analysis and reporting functions must support the work of Cabinet accordingly. If this is the sort of understanding you share, then the [committee] may be encouraged to get on with it, without further questions as their terms of reference.”
Opposition Leader Alden McLaughlin questioned earlier this year whether the budget committee would be taking away one of the key responsibilities of the Minister of Finance – namely, future financial planning.
Mr. Bush said in a statement released after Mr. McLaughlin’s comments that he would remain Minister of Finance, despite the formation of the committee and that his office would appoint the committee’s members.