Cayman's long and difficult berth still causing pain

The latest development in the long-standing cruise berthing situation requires the Islands to reassess the approach that had been followed to date. Current Minister for Tourism, Cline Glidden, explained the new process that is being followed. 

“We have established a steering committee, chaired by Stran Bodden, the chief officer in the Ministry. It has a makeup of members of the civil service, economists, accountants, representatives of the legal team and the port authority to create a clear path in terms of establishment of our business plan, which will drive a competitive tender process,” he said. 

“Their responsibility is to create a model that allows us to fulfil the model of best practices of procurement. They are not charged to identify a partner; they are charged to identify a process the achieves the policy directives given to them by the government of the day.” 

Those guidelines, he said, are that Cayman would like cruise berthing facilities, non-traditional financing without government guarantees, a George Town mixed-use cargo/cruise facility. 

Having defined the procurement process, a tender process will begin with interested parties then bidding at that stage to take it forward. 

“It is an important part of the infrastructure. What the cruise lines have said to me is that they still see Cayman as a demand destination. Their passengers still want to come to Cayman and that is a significant benefit for Cayman. 

“We have had indications as far back as 2003 that the new ships coming forward were going to be too large to tender. There were claims that all lines were not going to follow suit. Carnival was responsible for 70 per cent of our cruise passengers but we are now seeing that their new ship is larger and it will not be tendered. So our largest business partners continue to order larger ships. 

“So we had to decide whether we still wanted to be in the cruise business.” 

The larger ships also attract higher-paying passengers, he added, so spending power on island has also been affected. 

However, the good news, said the minister, was that Cayman had seen interest from developers over the years. 

“From a worldwide perspective, we have seen that confidence in Cayman is there and that we are able to attract investment at those levels. Four cruise lines have also expressed significant confidence in the way forward; in a clear, transparent, open tendering process they would all be interested in participating if allowed to do so,” revealed Mr. Glidden. 

The public management finance law, the central tenders process and the framework for financial responsibility would all need to be satisfied but it was not a matter of asking the Foreign and Commonwealth Office for permission to borrow money, he clarified. 

An issue has been that the Cayman Islands has talked about building facilities for 12 years but nothing has transpired. Mr. Glidden also noted that the former Premier had said that the UK ‘had stopped’ Cayman from getting facilities. The cruise lines, being told this, would say that they made plans to redeploy their ships elsewhere. 

“On taking over as minister of Tourism I had to assure [the industry] that was not the case. I got an indication from Her Majesty’s Government, through the governor, to say that was not true and that they were willing to support it as long as it was a clear and transparent process that followed best practice. 

“I also made a point of keeping other members of the Legislative Assembly, namely Mr. (Arden) McLean, Mr. (Ezzard) Miller and Mr. (Alden) McLaughlin, aware of the plans. This process is important enough that it should not depend on what happens with the election. Everyone should be able to look and say that as long as we follow the process we will have the facilities to enable us to remain in this industry. Other members of the Legislative Assembly have been very supportive of the progress that has been made and the direction that has been followed,” said Mr. Glidden. 

Enhancing the product  

Former Premier McKeeva Bush said that the need for Cayman to have a cruise port ‘had not gotten any less.’ 

“The need for an enhanced cruise product has grown tremendously. The UDP stands behind its policy that cruise tourism is tremendously important to Cayman. We are now far behind and I could have been further ahead had I been given cooperation by the governor.  

“We need to have proper berthing facilities. George Town was never the ideal place. There was never any support for any kind of facilities in North Sound. That is out of the question. South Sound, when we started to poll residents round there that have million dollar homes there, it was never supported and there would be a tremendous battle to get any of the owners up there to agree with that.” Mr. Bush alluded to the private facility in East End proposed by developer Joseph Imparato, which would have included a berthing facility. However, that project ‘was torpedoed as well,’ he noted. 

“He had a very good plan; I supported that plan. It would have taken some time, of course but that would have been a safe harbour for cruise. That didn’t happen so the only place for a harbour is in George Town. Our policy is that we move forward if we can get a proper deal that utilises and leverages that tremendous asset that the country has. 

“It is the only port and we need other facilities so we must leverage it; we must not jump at every first chance. We must get things for the future or we may never get them.” 

Mr. Bush also questioned what exactly the tender would look for. 

“You can make a tender to suit anything. That is what I am worried about. Is it just going to be a pier and nothing else? How do you leverage those things to get real development for cruise tourism in this country? We need a tender that enables us to use the port as an asset and that we can leverage that asset to get the things that we need for the future – not just today. 

“Cruise tourism is not dying in the world; it is growing. The Chinese are going to build cruise ships now. We had the huge battle in the Caribbean about cruise tourism and where [organisations] once opposed cruise tourism they have now done a complete U-turn because they know that the first visitor for the hotel can be that cruise visitor that comes for that one day. I have always known that and supported FCCA on that. The whole thing has turned 360 degrees and cruise tourism is now supported in the Caribbean because they see the value of it.” 

The days of stayover tourism versus cruise tourism are over, he said, because the two can work together. 

“The bread and butter is the hotel industry but the cruise industry supports it, particularly in Cayman where there is not a proper hotel school. Our people have drifted now, become entrepreneurs and now are in the cruise industry. They have the buses, they have the taxis and they have the tours. There are innovations where I see younger people starting and that is good. That shows why we need tourism.” 

Good governance  

Independent Winston Connolly said that it was a matter of ‘good governance.’ 

“Although many people equate good governance with honesty and integrity in office, it also means competence and effectiveness in getting things done. The history of the port redevelopment project has been a case study in governance failures,” he told the Compass. 

“There seems to be a broad consensus in the tourism community that our market share has suffered. This means lost revenue for government, George Town businesses, their workers, taxi drivers, boat operators and many other tourism stakeholders, all with less money to spend in other businesses around the Cayman Islands. The interconnectedness of
our economy ensures that a decline in one sector will be felt in all sectors. Therefore it is in everyone’s interests to ensure George Town remains a high quality tourist destination as well as a centre for commerce.” Mr. Connolly said there are ways to finance such projects at little or no cost to the public purse, including private-public partnerships. 

“However, infrastructure projects need to be appraised the same way any proposed investment should be, using a thorough cost benefit analysis to ensure that the needs of all stakeholders are being met and that money is being invested wisely.” He added that the degree of involvement of local companies and workers in any proposed redevelopment should be taken into account. Should there be an upland element, he said, that would also need to be looked at. 

“I am not in favour of any proposal that disenfranchises the business owners of George Town and puts Caymanian employees out of work,” he said. 

Employment contribution  

Stefan Baraud, also a George Town Independent candidate, is a former chairman of the board of the Port Authority of the Cayman Islands. 

“Undeniably cruise tourism contributes $175 million to the local economy, over 4,000 people are employed in the industry from watersports to merchants, retailers and the like. We are now starting to see the ill-effects of not having berthing facilities,” he said. 

Mr. Baraud explained that Oasis-class ships pass Cayman by and that is the loss of 8,400 passengers and crew to the destination. 

“They and Norwegian Cruise Lines’ Epic require infrastructure, which we do not have. Some of the lines are building bigger and better ships to offer better passenger service and tendering simply does not bode well. It is a logistical nightmare and diminishes the passenger experience due to the sheer time it takes for embarkation and disembarkation. 

“We have been talking about cruise tourism for 20 years… regrettably through interference and other things we have squandered opportunities and every day we do not have a berthing facility is a lost opportunity for Cayman. There used to be only two [berthing] ports in the Caribbean and now there are 20. We are losing market share to these countries.” 

Due to previous stalled attempts to negotiate a deal for a port, the UK has stepped in. 

“As a result of some of the previous experiences … and the absence of clear procurement process it obviously created clear concern for the Foreign and Commonwealth Office. Now we have the implementation of the FFR (Framework for Fiscal Responsibility) and it is now going to be a process that is going to cost more time. 

“The truth is that this could all have been avoided; we could have had construction workers at work out there, ships berthing at this very moment. It would have rectified a lot of issues right now in a stagnant economy,” noted Mr. Baraud. 

He added that he is an advocate of public-private partnerships as per the previous longlist of 13 potential partners. 

“I would like to create, through a bond issue or similar, the opportunity for Caymanians to buy shares and invest in the project. Not only are we inviting local investors into a project but also, we as Caymanians are investing in our own infrastructure. 

“It is a very technical project and I do not think that just the cruise lines being involved in the project would be ideal. Some of the guarantees they put in place elsewhere such as TCI, Falmouth makes them effectively exclusive cruise lines operations. They benefit from every dollar spent on shore and those are the things we want to avoid. We must find the right balance. This is a viable project, it can be done and we need more transparency, a proper process that can stand a test of public scrutiny so that we all know we have received value for money.” 

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