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.