Government appealed to the Port Authority for help to cover a $1.8 million shortfall in funding for the environmental impact assessment on the proposed cruise pier project, according to Port Authority meeting minutes.
Tourism Minister Moses Kirkconnell attended a Port Authority board of directors meeting to make a personal plea to the authority to help out.
Mr. Kirkconnell told directors if they did not agree to provide the money, the port project would be stopped, according to the minutes of the April 2014 meeting. Some board members expressed concern that the move would have an adverse impact on the solvency of the Port Authority.
Those concerns appear to have been allayed through an agreement to allow payment of insurance debts owed by the authority to the government to be deferred. The directors ultimately voted unanimously to approve a contribution of $1.8 million to help pay for the environmental impact assessment. The minutes, which provide a summary of Mr. Kirkconnell’s pitch to board members, indicate that the minister suggested that the signing of the contract for the environmental impact assessment and engineering report would signal the official start of the building of cruise piers. He said the EIA would identify mitigating environmental factors but would “most likely” not stop the project.
The minutes indicate that Mr. Kirkconnell said, at the time, that the future of the project hinged on finding the extra money.
The summary of his statement, says, “There is a current and immediate shortfall of some $1.8 million that is needed to cover the consultancy contract that is about to be signed.
“A commitment of having these funds available is needed before the consultancy contract can be executed and all this has to be done immediately. All possible other government revenue avenues have been exhausted and it will now be up to the Port Authority to cover this cost.
“If the board of directors does not agree to provide this money then the project will be stopped and he did not want to see this happen. Members were urged to approve the funds.”
The minutes indicate that the Port Authority’s deputy director of finance, who at the time was James Parsons, raised concerns about the impact on the authority’s financial position.
He highlighted some $2.6 million in insurance debt owed by the Port Authority to government and noted that the auditor general had raised concerns about its finances in a report on the solvency of the port. Since then, he said, the Port Authority had made significant strides in paying insurance monies to government and the financial ratios were now back within acceptable accounting levels.
“The board of directors was concerned about the ability of the Port Authority to financially operate with paying down on insurance debt and at the same time being requested to contribute an additional $1.8 million,” the minutes state.
The discussions involved a deferral of the insurance debt and the potential for Port Authority land, which was being used by the Customs Department and was valued at around $3 million, to be officially transferred to government as payment for the debt. Later publicly available minutes indicate that the formal paperwork was being prepared for a deferral of the insurance debt payments, but make no mention of the land exchange going through.
Mr. Kirkconnell said there was nothing unusual about the situation.
“The construction of the cruise piers and the revitalization of George Town are projects that the PPM campaigned on and pledged in its election manifesto to deliver for the people of the Cayman Islands. Government believes it has the mandate of the people to deliver on those pledges and these projects are consequently considered a government priority.”
He said the Port Authority’s profits belonged to the people of the Cayman Islands and it made sense that they would be used to help fund the environmental impact assessment. He said the minutes clearly indicated that the contribution of $1.8 million would be moved forward with the Finance Minister Marco Archer, through the Senior Assistant Financial Secretary Michael Nixon, which was the normal process for cash transfers from statutory authorities to the government’s general fund.