Carnival Cruise Lines says it is “open to playing a role” in the development of new piers in George Town harbor.
Premier Alden McLaughlin announced Wednesday that government plans to proceed with the project despite concerns over damage to coral reefs in the harbor.
He said the next step would be consultation with the U.K.’s Foreign and Commonwealth Office and the cruise lines over a funding model for the piers, expected to cost at least $150 million.
He said the cruise lines must have “skin in the game” in order to guarantee passenger numbers over the life of the project.
The company, whose ships account for roughly 60 percent of cruise ships visiting Cayman, tentatively welcomed the announcement on Thursday.
“There is a benefit to our guests, and to the community, through the undertaking of any type of activity that modernizes our port of call and enhances the attractiveness of the destination for our guests onboard the ship,” Roger Frizzell, chief communications officer for Carnival, said Thursday in response to a series of questions on the Cayman port project.
“We remain open, as always, to playing a role in these types of activities as a partner in the community,” he added.
Mr. Frizzell did not respond directly to questions about whether the cruise line would make specific guarantees about passenger numbers.
Royal Caribbean, the other major player in Cayman’s cruise industry, did not respond to requests for comment by press time.
Michele Paige, president of The Florida Caribbean Cruise Association, said it would be a matter for the individual cruise lines to decide whether they want to be involved in building piers in Cayman and whether they are prepared to make commitments on passenger numbers. Ms. Paige said the FCCA is supportive of Grand Cayman finding an “environmentally friendly” way to develop a cruise pier.
The final Outline Business Case, produced by PwC, on the port project has not yet been publicly released.
The Cayman Compass understands it will not be released until Cabinet has formally ratified the decision to proceed with the port project, which could be several weeks away.
The initial draft of the business case outlined a preferred model of partnering with a cruise line or consortium of cruise lines to build the dock.
It states, “A cruise line or consortium of cruise lines could sign a long-term agreement (say 20 years) with the Cayman Islands Government to design, build and control the two piers.”
The report says the basis of the deal would be for construction costs to be refunded through a mixture of berthing fees (equivalent to the fees currently paid to tender operators) of around $5 per passenger, and a share of the $14 “head tax” collected by the Port Authority on every cruise passenger who comes through the terminal.
“In order to make the partnership viable, government would need to, as a minimum, contribute a portion of future head tax revenues. The cruise lines would therefore be greatly motivated to maximize the use of the piers to better profit from their investment,” it states.
In an earlier interview with the Compass, Giora Israel, senior vice president of Carnival’s global port and destination development, said Cayman needs cruise piers if it wants to stay in the business. He said Carnival would be interested in the project if it made economic sense for the company.
He added, “The question of whether or not piers should be built? We are way beyond that. Anyone who questions that has to question their understanding of this business.
“Whether you want cruise ships or cruise passengers in your country or not is a different matter. That’s a perfectly legitimate question and a legitimate decision for the government to make. But if you want to be viable as a cruise destination, then a pier is critical.”