A tender for a new cruise and cargo facility will likely go out in December once the final engineering study is complete, according to Tourism Minister Moses Kirkconnell.

He said that study, due early next month, would inform the specifications for a request for proposals which should result in a contract being awarded by March next year for the two piers. The piers would be able to accommodate four cruise ships, including the larger Oasis class vessels.

Dutch firm Royal HaskoningDHV is working on technical designs and costing for moving the piers into deeper water to reduce the impact on coral in George Town harbor.

The pivotal issue of how the piers will be funded and the financing formula will be finalized during the bid process, according to Mr. Kirkconnell.

He said nothing had changed in terms of government’s preferred funding model since the business case for the project was published last year. The fundamental principle, he said, is that it will be built without any government guarantee.

The business case envisaged that the project could be funded through a combination of the fees that currently go to tender operators, around $5 per passenger, and a share of the $14 per-passenger “head tax” charged by government for every cruise ship visitor.

Based on an estimate of two million cruise passengers per year, the $5 tender fees would provide a revenue stream of $10 million annually for the dock, which has an estimated cost of between $150 and $200 million.

If government sacrifices a share of passenger taxes to cover construction costs, it would likely have to satisfy the Foreign and Commonwealth Office that there would be a sufficient increase in the number of passengers to divert those fees without seriously affecting overall annual revenues.

The cruise berthing facility was a key campaign issue for the Progressives at the last election and Mr. Kirkconnell said it was still the government’s intent to get it done.

Despite the fact that cruise arrivals are projected to have grown by 425,000 by the end of the year compared with 2013, Mr. Kirkconnell said that upward trend would not continue without new piers.

He said the broader industry trends, including a switch to larger ships, still indicated that without cruise piers, Cayman’s share of the market would decline substantially over time.

“We know what the cruise lines are saying, we know what our competitors are doing. Taking into account all those factors, and knowing that we have to increase cargo, we have taken the decision to do the cruise facility,” he added.

He acknowledged it had taken longer than he had hoped, but indicated the project would soon go out to bid.

“We are right in the middle of the last engineering study and we are hoping to get that back early December,” he said. “That should give us the specs for an RFP in December.”

He added, “It is long, it is cumbersome, we have discussed with the Foreign and Commonwealth Office about the progress and the time it takes. We are very aware of the time it takes and the studies that have to be done. That’s best practice, we have to follow it and we have followed it.”

As a result, the minister said, the Cayman Islands was in a better position than at any time in the past to get a good deal.

6
5

1 COMMENT

LEAVE A REPLY