Fiscal prudence: The road not traveled

The stretch of asphalt connecting the Owen Roberts International Airport to Seven Mile Beach ought to be a grand entryway into Grand Cayman – a beautiful boulevard, fringed with fragrant flora and offering picturesque views to delight and soothe the senses of tourists and commuters alike.

Instead, we have the Esterley Tibbetts Highway, a two-lane, utility pole-lined stretch of highway that careens past the dump. It’s ugly. It’s dangerous. And it smells.

It is a most unsuitable welcome to the Cayman Islands.

The deficiencies in aesthetics and safety of the “Harquail Bypass” – the southernmost stretch of the Esterley Tibbetts Highway, that runs from the Butterfield roundabout to the Camana Bay roundabout – have been well-documented since the road opened in late 1997.

We return today to this oft-covered ground, courtesy of the National Roads Authority’s recent attempt, in our view, to shift responsibility for this particular public road to a private developer; i.e., the Dart Group, which intends to build a widened four-lane road (and underpass) that will abut its soon-to-be expanded Camana Bay development.

The Roads Authority aired concerns that the new four-lane road will create traffic bottlenecks where it meets the two-lane Harquail Bypass – in effect transferring the congestion that currently occurs when the northern, four-lane section of the Esterley Tibbetts narrows to two lanes at the Galleria roundabout. The Dart Group countered, couched in the politest of possible terms, that “The improvement of the road south of Camana Bay is not in [Dart’s] remit.”

In other words, it ain’t Dart’s problem. That being said, Dart and government have discussed Dart’s widening the Harquail Bypass in past years (as part of the ForCayman Investment Alliance), a conversation that was still very much alive as recently as this spring, according to Dart CEO Mark VanDevelde, who said the project would cost somewhere in the region of $10 million.

That’s not a large amount, in terms of road infrastructure, but it’s cash that Cayman’s government currently doesn’t have on hand – even though the public sector’s spending plan for the next year totals $735 million, with overall revenues of more than $850 million.

Here’s the rub: Years, even decades, of extremely poor fiscal management have resulted in our government, even when coffers are flush with revenue, being unable to pay for needed infrastructure projects because it is beholden to previous financial commitments, such as civil service payroll, debt-servicing and ongoing subsidies for quasi-governmental business ventures.

For example, the Harquail Bypass expansion could have been paid for several times over with the $57 million that government squandered from 2005-2014 on the unfinished sarcophagus of the new John Gray High School campus.

Dubious decisions made by government in the past often lead to bad results down the road.

So while Cayman’s public sector should have a nominal operating surplus of about $120 million next year, there won’t be enough left over to pay for a solution to the George Town landfill, a centralized sewer system for Grand Cayman, an airport renovation, a cruise dock, new major roads, a world-class college, or any of the above, after accounting for “outstanding bills” – much less preparing for the massive unfunded liabilities that loom for public healthcare. Forget about issuing a bond; Cayman has already maxed out its credit capacity and spent that money long ago.

That’s why Cayman’s government is in the situation it is now, approaching private entities (such as Dart, Ironwood developers, or the cruise lines) with hat in hand, variously begging or demanding that the private sector take on infrastructure projects that are normally thought of as the responsibility of the public sector.

By their very nature, all such deals between government and private business come with “strings attached” or, as we call them in Cayman, “concessions.”

Like it or not, the reality is that any major capital project that government wishes to pursue, in the near- to mid-term future, will have to be in partnership with a private entity. Since the private sector partner has the “gas money,” it deserves to have at least one hand on the steering wheel, and some entities – perhaps not Dart – may well insist on sitting in the driver’s seat.



  1. Sadly government and inefficiency seem to go together world wide. Just last night Greece accepted, reluctantly, its third EU bailout due to massive over-spending.

    Last week we learned that personal records of some some 22 million USA government employees and their families were hacked by the Chinese.

    Meanwhile the Mayor of London spent some $300,000 on used crowd control water cannons only to have their use banned by the UK Home Secretary.

    I do not think there is a country that is immune to this.

    Can the Cayman Islands do better? Of course. But they are sadly not alone.

  2. It’s funny to think that these same Government folks eventually have to go "hat in hand" to the same folks they derided to get them into office. They pandered to the people for votes with simplistic rhetoric ( No Dump in BT, etc ) only to have no solution for anything other than a secure Government job. If those same people came to me with hat in hand, I’d show them the door.

  3. After all the BS, broken promises and deals the CIG has backed out of or reneged on why would Dart partner up with them on anything knowing that it’s a good change the next administration will not willing support or live up to their end of any deals made by their opposition.