Ironwood: Road project to create 200 jobs

Developer says it is close to deal with government

Developer Ironwood says local companies and workers will be hired on all aspects of the highway construction project, estimating that the public private partnership will create around 200 jobs. 

David Moffitt, owner of the company, said he is hopeful the outline business case for the infrastructure project can be published in March, paving the way for the $360 million golf resort development to proceed. 

The 10-mile extension to the East-West Arterial Highway is considered crucial to the success of the planned resort, and work on the road will begin as soon as a formal agreement is reached between the developer and government. 

A business case is required for large public-private partnerships to demonstrate value for money and ensure the deal falls within the parameters of the Framework for Fiscal Responsibility laid down by the United Kingdom. That process has been in the works since February last year, when the two parties signed a memorandum of understanding on the project. 

Mr. Moffitt said that final business case would demonstrate that government and the Caymanian people are getting a good deal. 

He said Florida construction firm GLF has been hired as lead contractor as there was no local company that could meet the $50 million performance bond required by Ironwood’s financial backers.  

But he insisted there is an agreement, which will be incorporated in the final deal with government, that GLF will provide technical oversight and subcontract much of the work to Cayman companies.  

He said there would be an open tender process for all subcontractors, and the deal with government would be structured to maximize work for Cayman firms and employment for Caymanians. 

He said the road construction is expected to create approximately 200 jobs over two years, 95 percent of which could be for Caymanians. 

He added, “This infrastructure project will put 75 percent of its dollars directly into local hands. That equates to nearly $40 million going to local quarries, truck drivers, equipment operators and contractors. They in turn will be spending on local services, which will have a direct and immediate impact on the entire economy.” 

Mr. Moffitt said the road project is different from other major public works, which typically require a competitive tender process to ensure government gets best value for the people’s money. 

Ironwood had obtained financing and would pay for the road, he said, recouping some of its costs from government through an annual user fee. But he suggested the company would take a net loss on the project. 

Ironwood wants the road in place to create fast access from George Town to its resort and is willing to take a financial hit that other contractors would not, he believes. 

“This is being done according to the Framework for Fiscal Responsibility,” Mr. Moffitt said. “Ironwood has proposed to build and finance a road previously planned by the National Roads Authority as an infrastructure project that obviously would not be built until government has the funds available.  

“Since there are no companies lining up to pay government to build government’s road, it would be futile to request a tender. The result would be no different than when government issued a tender asking someone to pay them to take the two million tires out of the landfill.” 

He said the NRA did its own independent assessment of the road costs, which were pegged at $50 million. 

“Ironwood is financing and paying to build the road,” he added. “Ironwood is committing a generous portion toward the use of the road and not receiving concessions from government, details of which will be announced at final negotiations. 

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  1. Hopefully, should this project ever progress beyond the media smoke and mirrors stage, Government will conduct appropriate due diligence on the 50 million Performance Bond that the developer, GLF, will purportedly be able to provide.

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  2. I hope and pray that the formal agreement will finally reach fruition soon. We have been waiting a long time for a large project to finally come to the eastern districts. It is well over due. Every time I read about new developments it has been George town or West Bay. We have been waiting over 40 years. If there were more infrastructure going east we wouldn’t have the traffic congestion going west. It will be a win-win situation for all residents.
    This is the time to plan for designing a well conceived town plan in the middle of the island for hundreds of years to come. That will include proper infrastructural design that will include pedestrian, parking,landscaping, shading , recreation, competition, zoning . Raising the height of the land while quarry product pricing is low. Placing it next to Ironwood and Dr. Shetty’s hospital and close to the High school would be the most logical sense.
    I hope more developers will build there and get some incentives like other developers on island.

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  3. An independent sub committee needs to be set up to review government involvement into this project and also complete due diligence on the contractor and developer. Cayman cannot take another black eye like the scrap metal deal that went wrong with these same guys and government a few years ago. Why weren’t there any charges for this deal that went sour?

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  4. Please correct me if I’m wrong but I thought they were getting duty concessions until the cost of the road was paid back. I read that these concession would be during the construction stage and the road usage fees would be collected to pay the balance.

    They say that the developer is getting no concessions just road usage fees. Can anyone add any clarity on what the deal actually entails such as what type of usage fees will the government have to pay, how long and how much they might be, Also if the government will be paying usage fees for the road who will be maintaining it..

    Usage fees are actual payments the government has to pay unlike concessions which are savings on payments by the developer but not the CIG putting out money, it’s sound to me like concessions would be better unless the CIG putting out the money saves a hell of a lot.

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  5. The 200 jobs are good , but I read that these concessions would be during the construction stages, and the road usage fees would be collected to pay the balance, and is there interest on that balance? If the investor does 1 or 2 more deals with the Government like this, then the Government gets more stressed out in the debts, and default in paying the investor, then there’s more trouble for the Government. The Government should not hang it’s hat higher than they can reach.

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  6. I am am a little confused now. He says that they are not getting any concessions and the road would be paid for through Road usage fees paid by the CIG. This sounds more like a loan than concessions do because the CIG will be required to make yearly payments to the developer. Are they saying that they are no longer getting the duty waivers during construction? The deal was that they would get a 100 Percent duty waiver on all imports during construction until the money for the road was paid back.

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