Ex-port director responds to Compass article

I refer to the story in the Thursday, Feb. 26 Cayman Compass newspaper titled, “Letter alleges port staff face ‘hostility’.”

It is perhaps fitting that I take the opportunity to clarify some apparent misconceptions which also would appear to reflect negatively on the my tenure as port director and/or the port operations.

First, the Port Authority incurred losses in two years only, namely 2009 and 2010, due to the reduced imports and lower cruise numbers, the main sources of revenue for the port. Government fared not better as it was a global economic recession.

Secondly, and it goes without saying therefore, the port posted net profits from 2011 to present and also prior to 2009. This can be confirmed from the port’s audited financial statements.

Thirdly, the finances of the port are the responsibility of the board of directors/government. Port management only carries out the day-to-day operations; in fact, the port’s annual budget has to get final approval from the government/Cabinet. Port management has no control over revenue as fees are set by the government and the state of the economy cannot be controlled by the port.

Management also has relatively limited influence over fixed expenditures as management is charged with getting goods to the public and operating safe cruise facilities, thus ensuring that the Cayman economy is functioning. The port is the engine that drives the whole Cayman Islands economy and it has met and exceeded this over the years. It is one of the best operating ports in the Western Hemisphere.

Fourthly, the negative $2.6 million that is consistently referred to in the press is not a net loss but rather an accounting ratio termed “working capital” (current assets less current liabilities).

The main reason for this is that the port owes monies to the government for annual insurance premiums (buildings, etc.) that the government pays on behalf of the port and is charged back to the port for repayment. It is accounted for in the port financials as a current liability. But the port assets are ultimately owned by the government.

The reason the port owes this money is that the government, who as I said owns the port, has over the years required that the port use its funds to finance the legal and consultancy fees to the tune of millions of dollars for the cruise port project and agreed for the port to forego paying the insurance premiums until a later date. This is a policy of the government and the management of the port can only carry out such, which it has.

To put this working capital (the current liability) in another perspective: You (port) owe $100 to your father (government) but when you go to repay him, he says not now, use that money and buy some clothes; but you still have to pay back the $100 at some point.

In 2000, as deputy port director I was ordered to check the temperature of a full Foster’s Food Fair reefer container that was sitting unplugged on the dock for an unacceptable period of time. I never then questioned orders from my superior and in the process of carrying out this order I fell and was injured. This resulted in two knee operations, a major back operation and permanent physical disability which still require doctor visits. I have quietly worked through constant pain ever since but this serves to illustrate my commitment to the work. However, being made aware of certain things later on, I have always questioned if this really had to happen.

Over the last 13-plus years and under numerous boards (UDP and PPM) I have never once been approached about any significant deficiencies at the port. Indeed, with the resources we have had to work with and especially during the lean economic times, the port has performed admirably well. This is largely because I quietly took, and without fanfare, a very conservative and prudent approach to the operations of the port and was ahead of the government in the ongoing cutting of expenditures and inefficiencies. For example, in 2001, I inherited three official port director offices; two within 200 feet of each other. I immediately closed two and used these offices for other purposes that improved operations. The list goes on ….