Earlier report warned of possible loss of US$72 million
The final business case for the cruise pier project estimates a potential economic upside of some US$439 million over 20 years for the Cayman Islands.
Even if the worst economic impacts associated with the loss of reefs in George Town harbor were realized, consultant PwC concluded in its report that the project would still deliver a net benefit to the economy of US$112 million.
However, an earlier analysis, also released Tuesday, put the potential net economic gain from the project at US$213 million and concluded that in the worst case scenario, the project could lead to a loss of US$72 million.
Those figures were revised upwards by PwC to reach the final conclusion based on additional research from Business Research & Economic Advisors, updating figures on cruise passenger spending.
The consultants acknowledge in both documents that an absence of solid data means there is a considerable disparity between the potential upside and the possible downside based on differing assumptions made about passenger spending and behavior in response to the port construction.
Tourism Minister Moses Kirkconnell said the government is confident that the final conclusions of the business case, which factors in the findings of nine other reports commissioned on the project, including the Environmental Impact Assessment, show it is in the best economic interests of the country.
He said there is still room for discussion about altering the design of the proposed port, potentially moving it into deeper water to minimize the destruction of coral reefs. Government is in discussions with cruise lines, and Mr. Kirkconnell said nothing is off the table, including alternative designs involving the use of cable cars or floating dock structures.
“The cruise lines are going to be our partners. They are the ones who have the most experience in building piers; they have to be involved in these decisions,” he said. “They are the ones who can say if these things will work or not.”
He said the release of the addenda to the business case meant that government had put all the available information before the public. He said the final addendum, which estimated an economic impact in the range of US$112 million to US$439 million, was the basis for Premier Alden McLaughlin’s announcement last month that government would move to the next phase of the cruise pier project.
Cabinet has still not rubber-stamped that decision, as Environment Minister Wayne Panton is off island, but is expected to do so next week.
In both documents, PwC warns that an absence of data on scuba diver spending, specifically associated with George Town’s reefs, and a lack of information on how they would respond to cruise piers being built, made it difficult to assess the potential economic downsides of the project.
The estimated losses to the dive industry as a whole differ considerably based on unknown variables, including how many divers actually use the George Town reefs, how much they spend on diving in the capital, and whether they would continue to spend that money in the Cayman Islands, diving on other reefs, if the George Town sites were lost.
The first addendum, dated July 31, 2015, notes, “The current data which underpin the economic and environmental impacts are inconclusive and do not provide the basis for drawing a definitive conclusion about whether or not to proceed with the Cruise Berthing Facility.
“Prior to continuing with the project, it would, therefore, be valuable to develop a more detailed understanding of the scale of the impacts put at risk by the [Cruise Berthing Facility] and the anticipated behavior of ‘divers’ in response to loss of parts of the George Town Harbor reefs.”
The second document, dated September 2015, factors in an additional survey about cruise ship passenger spending, though it contains the same disclaimer that more research on diver spending and response is needed.
The additional Business Research & Economic Advisors report analyzed passenger spending in ports with cruise piers, compared to Grand Cayman, and concluded that new piers would mean passengers spent longer time on shore and spent more money on island, resulting in an estimated additional economic impact of at least US$25 million a year.
The PwC addendum notes, “The estimated economic benefits of the Cruise Berthing Facility now exceed the environmental costs associated with the damage to the reef under the ‘low’ and ‘high’ environmental impact scenarios. Further, if BREA’s scenarios for increased spend per passenger with the CBF are taken into account, the net benefits increase substantially.”
Mr. Kirkconnell said proceeding with the project is in the best interests of the country. He said government had put all the information out there and was doing everything it could to ensure the balance between the economy and the environment. He insisted moving the pier to deeper water and reducing coral damage is still an option.
Ahead of a planned protest of the cruise project on Saturday, he said, “The protesters are saying the same thing we are saying. They are for cruise berthing, but they want the least possible environmental impact.”