AAdvantage Standard Mastercard AAdvantage miles 5,000 AAdvantage miles AAdvantage Platinum Mastercard 10,000 cayman compass Your most trusted news source Established 1965 75 CENTS | Funding local journalism | Tuesday, 26 November 2019 News Two killed in separate collisions Page 2 News National Trust files for judicial review on port vote Page 4 Cayman Compass journalist Carol Winker passes She was respected for dedication to her craft. She was loved for her empathy to those she was closest with. There will never be another quite like long-time Cayman Compass journalist Carol Winker, who died Monday morning after a long battle with cancer. She arrived in the Cayman Islands as a teacher and became a revered journalist who was granted unprecedented access to court officials thanks to the trust she established through accurate, objective reporting. Beach Bay plans unveiled Developers aim for 2022 opening date Page 5 See full story on page 3• Matinees Daily (matinee price before 6pm) • Seniors $8.00, Mon-Fri Before 6pm • Additional charges apply per 3D/VIP tickets Cayman Cinema@cbcinema6cbcinema6 SATURDAY NIGHT: For your viewing pleasure, minors under the age of 18 will not be admitted to any film starting after 6pm, unless accompanied by their parent. - TUESDAY - 640-FILM (640-3456) 21 BRIDGES (R) 1:30 | 4:20 | 7:00 VIP | 10:15 CHARLIE’S ANGELS (PG13) 12:30 | 6:40 FORD V FERRARI (PG13) 12:20 VIP | 3:20 | 6:50 | 9:30 VIP | 9:30 FROZEN 2 (PG) - 3D 12:15 3D | 1:15 | 4:00 VIP 4:10 3D | 7:00 | 9:30 3D LAST CHRISTMAS (PG13) 5:10 | 10:05 PLAYING WITH FIRE (PG) 2:45 | 7:40 MALEFICENT: MISTRESS OF EVIL (PG) 1:00 | 3:45 | 9:30 KIDS CLUB OFFICE SPACE (R) 7:00 VIP Open daily 10am-10pm | West Shore Center, SMB Turkey! Turkey! Happy American Thanksgiving! Thursday, 28 November GET YOUR ORDERS IN EARLY TO AVOID DISAPPOINTMENT! Partly cloudy skies with less than 20% chance of showers WINDS Northeast at 10 to 15 knots with higher gust SEA STATE Slight to moderate with wave heights of 2 to 4 feet. weather Forecast today 87°F75°F HIGHLOW PRINTED AND PUBLISHED BY: Cayman Compass Ltd. Compass Centre, Shedden Road, George Town, Cayman Islands SEND US YOUR VIEWS OR NEWS: P.O. Box 1365 Grand Cayman, KY1-1108 Cayman Islands Telephone: (345) 815-0095 Email:newsdesk@compassmedia.ky ADVERTISE WITH US: T: (345) 949-5111 E: sales@ compassmedia.ky W: caymancompass.com PUBLISHER KATHLEEN CAPETTA NEWS PRODUCER AND OPERATIONS MANAGER KEVIN MORALES A MEMBER OF THE INTER-AMERICAN PRESS ASSOCIATION “Give light and the people will find their own way” RESHMA RAGOONATH rragoonath@compassmedia.ky Government is no longer considering the transition of Government Information Services TV (CIGTV) to a public broadcasting station. Opposition legislators on Monday raised the issue of the absence of a local television to inform the community about general news and events following the closure of Cayman 27, the only local free-to-air TV station in the Cayman Islands. When Cayman 27 folded in August, Premier Alden McLaughlin said then that government would move to help fill the void left through CIGTV. “We certainly, but very briefly, considered whether it would be viable to develop CIGTV into something like a public broadcasting company, but there are costs involved in that and with the length of time all of that will have taken we just decided that some other government will have to do that,” McLaughlin said, as he addressed Finance Committee. He said government has decided to continue to operate CIGTV as it is, which he contended in “some way addresses some of Gov’t shelves public broadcasting TV plans CAROLINA LOPEZ clopez@compassmedia.ky A motorcyclist and a pedestrian were killed hours apart in two separate road collisions in Bodden Town. The motorcyclist died after being involved in a collision with a school bus Monday morning on Bodden Town Road. The Department of Education Services confirmed in a press release that there were no students on the bus at the time of the accident. The incident happened when the bus, owned by JerNat Transportation, was entering the main road after leaving the company’s Mimosa Lane compound, according to the release. The accident prevented other buses in the depot from exiting the compound, leading to delays in school bus services in the eastern districts, according to DES. The other death occurred after a hit-and- run Sunday night. A community member reported that a man was found unresponsive around 7pm in the vicinity of Leroy Fredericks Drive off Anton Bodden Drive, according to a police press release. The man appeared to have been struck by a vehicle, and police believe more than one car was involved in the collision, the release said. Both drivers left the scene before police arrived. The incidents led to widespread traffic congestion as police had cordoned off the main road into and out of the eastern districts. Police also confirmed a pedestrian received serious injuries to his arm and head after being struck by a vehicle on Keturah Street in George Town. The man was transported to the Cayman Islands Hospital and remains there in stable condition. The driver of the vehicle involved in that incident, a 37-year old George Town man, was arrested on suspicion of driving under the influence. He has been granted bail as investigations continue. Two men killed in separate road incidents Three pedestrians struck in 24-hour period the deficits in the overall media reporting framework or apparatus caused by the closure of Cayman 27”. Government also entered into a content- sharing agreement with the Cayman Compass. Opposition Leader Arden McLean and George Town Central MLA Kenneth Bryan expressed concerns about that agreement. The premier assured neither he nor his ministers have any knowledge or involvement in the content used on GIS and that includes whatever is sent to the station from the newspaper. Cabinet Secretary Samuel Rose said the agreement with the Compass was simple in that the newspaper provides three to five videos stories daily. GIS, he said, decides if and when the content is used. News provided, Rose explained, comprises community events that GIS would not necessarily cover. “It is soft news,” he added. A motorcyclist was killed Monday morning after a collision with a school bus. cayman compass 2 news N news TUESDAY, 26 NOVEMBER 2019Compass journalist Carol Winker passes away Winker was a stalwart reporter and champion for journalism in the Cayman Islands The Cayman Compass journalist known for riding her bicycle between the newsroom and Cayman’s courthouse where she was a respected fixture, Carol Winker, died on Monday morning. Her dedication to Cayman’s community and to upholding a free press left a lasting mark on the islands. Her deep knowledge of Cayman’s courts and history made her an invaluable asset to promoting public knowledge and ensuring accurate news reporting. Although renowned for her reporting of Cayman’s courts during her 34 years at the Compass, Winker covered every type of story – from hurricanes, to nature, to politics and beyond. Compass reporter Kayla Young interviewed Winker last year about her coverage of Hurricane Ivan, where she remembered how the community came together and the role journalism played in informing the public. “I realised that news isn’t entertainment and news isn’t information you can use to support your prejudices or preconceived notions,” Winker said. “News is valuable information that you need.” She played a major role in getting that information out. And she worked alongside others – both colleagues and competitors – to make sure the community received the most accurate information. “Ms Winker was a wonderfully complex human,” said Tara Bush, Winker’s long-time friend and host of Radio Cayman’s ‘For the Health of It’. “She taught me to write for a newspaper. She worked for the Compass and I worked for a competing newspaper. Our lessons were at the Thompson Bakery in George Town. “I often left our sessions crying. But my determination kept me going. One day I asked her why she was being what I thought was harsh. She said, ‘They will eat you alive in a newspaper. So I need to work on your confidence and get you ready for bigger things.’ She was right. “Her ethos was, ‘Be first but be right.’ She was impeccable with her words and she expected nothing less from those around her.” While she was a mainstay in Cayman’s media scene, journalism didn’t define her as a person. She also worked as an election monitor and a school teacher. She proudly lived off the grid - without electricity - at her home in North Side, where she would give visitors a tour, reminiscent of a visit to a museum, pointing out bits of pottery she had uncovered in her yard and original touches to the wooden house she lived in. Her sincerity and empathetic nature made her close, life-long friends. "Words don't come easy now," said long-time friend Frank Roulstone. "She was there for my children and me when we suffered our loss and I am honoured to have been a part of her life and able to give her care and comfort when she needed it most." The sight of ‘Miss Carol’ arriving daily, always punctually, outside the courthouse was well known to the court staff, and to many of the defendants. “I am deeply saddened by the news of the passing of Ms. Carol Winker for whom I have the highest regard,” Chief Justice Anthony Smellie said in a statement provided to the Compass. The chief justice first met Winker in the early 1980s when he would appear in the courts on behalf of the Crown. “She was always very careful to ensure the accuracy and fairness of her reports and to that end would from time to time ask for clarification of legal points,” he recalled. “That kind of ‘consultancy’ relationship continued between us after I became a judge and I ensured that whenever she felt the need to have clarification on issues that I or another colleague should be available. So high was the regard with which Ms Winker was held that she was never denied audience. We were all assured of her objectivity, fairness and dedication to getting the story ‘right’.” Her reports on cases were so reliable they came to be cited in court under the affectionate moniker the ‘Winker Law Reports’, Smellie said. “She was the consummate professional,” he said. “Cayman has lost a journalist of the highest order.” Judicial Administration will be announcing a tribute to mark her contributions to the reporting of court proceedings, Smellie said. She worked as a teacher before taking up her second career as a journalist. For many years, she would return to the Compass office from court, lamenting that another student whom she had taught years earlier had appeared before the judge. A native of Milwaukee, Wisconsin, Winker graduated from Messmer High School in 1958, and then earned her bachelor’s degree from Mount Mary College in 1962. Later, she accepted an internship at Marquette University where she gained credits toward her master’s degree, which she earned from the University of Wisconsin-Milwaukee. She then travelled to Belize and British Honduras for two years as a papal volunteer. Afterward, she returned to the US and worked for the postal service before teaching at Lincoln High School in Milwaukee. She moved to the Cayman Islands in the mid-70s to continue her career in education as a peripatetic reading teacher. Her battle with cancer began around two years ago. She underwent a number of treatments in that fight, never losing her sense of humour and indomitable spirit. Not surprisingly, she would speak of returning to the job she loved once she recovered. Winker was 79 years old. Premier: No deliberate plan to grow population, work permits RESHMA RAGOONATH rragoonath@compassmedia.ky Premier Alden McLaughlin has denied there is a deliberate policy by his administration to increase both the population and the number of work permits. Instead, he told legislators the pains being felt on local roadways and in the rental market is a result of Cayman’s economic success. McLaughlin made the comment in response to questions from George Town Central MLA Kenneth Bryan in Finance Committee on Monday. Bryan pressed the issue of traffic congestion and the increase in work permits as legislators deliberated on the $3.46 million allocated to Cabinet Office for development and coordination of government policy. Speaking on the funding, Bryan questioned whether any “Strengths Weakness Opportunities and Threats (SWOT)” analysis was done to determine the negative impacts of increasing the population. The premier said no such studies were conducted as government did not have enough funds to expend on that analysis. He said the focus was on reducing Caymanian employment from the high of 10.5% when he first took office to the current 5.1%. He argued that he would prefer to deal with the present challenges with infrastructure and rental costs than to grapple with thousands of Caymanians looking for employment. “I wish there was some convenient tap that we could turn off and say we have had enough now. Mr. Supermarket owner, Mr. Construction owner, you cannot get any more work permits so you cannot expand your business, you cannot grow. What we are dealing with are the challenges of success. There are challenges without a doubt,” the premier said. According to the latest Workforce Opportunities & Residency Cayman data, work permits increased by more than 3,000 in the past 10 months. The numbers, released in November, showed a record-high 30,298 work permit holders compared with 27,263 in February of this year. This, as a knock-on effect, has driven costs in the local rental market up by some 20%. McLaughlin said government is not “insensitive” to the challenges being experienced by those in the community, and was looking for solutions through studies into what can be done to incentivise developers to build for the lower- and middle-income bracket. “Because with a booming economy we have a scarcity of land, developers are tending to build for the upper end of the market,” he said. In the interim, he added, government has renewed the Government Guaranteed Home Assisted Mortgage programme and removed stamp duties to help Caymanians buy their own homes. 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 Workpermitsreachnewrecord Carol Winker at her desk in the Compass offices in June 1985. cayman compass 3 news N news TUESDAY, 26 NOVEMBER 2019Researcher says green light depends on referendum ANDREL HARRIS aharris@compassmedia.ky A coral researcher working with Verdant Isle Port Partners said Cayman could soon welcome a ‘world-class’ coral-growing facility, if the referendum on the construction of the cruise berthing facility gives the green light for the project. Dr. David Vaughan spoke of the plan at a public meeting organised by government and Verdant Isle held Saturday, 23 Nov. in Savannah. The 90-minute meeting was attended by fewer than 10 members of the community, however, who were outnumbered by government and consortium representatives. Vaughan, who would head the research centre, has worked in Cayman’s waters on multiple projects dating back to 1975. “I hope to build an effort that is an educational demonstration, for not just the schoolchildren here, but for those 2 million people that come here,” said Vaughan. “It could be like the [Cayman] Turtle Centre [which shows] people how you have done so well with turtle conservation.” He was speaking at a pro-port public meeting in Savannah on Saturday, 23 Nov. Vaughan is in the process of establishing an approximately 30,000-gallon microfragmentation laboratory that has been commissioned by the nature conservancy in St. Croix, US Virgin Islands. In about three and a half weeks, Cayman will head to the polls to vote on the proposed cruise berthing facility. As the vote nears, those both for and against the project are ramping up their public outreach. Premier Alden McLaughlin led the community discussions on the topic at Savannah Primary School. He was joined by members of Verdant Isle Port Partners, the consortium which was awarded the contract to design, fund and build the new cruise berthing facility. The meeting also featured a video presentation which outlined the need and potential benefits of the project, as well as proposed mitigating measures that will be deployed should the project gets approved. Following the presentation, the floor was opened to written questions. In responding to a question on a possible alternate location for the cruise port, such as Pedro St. James, McLaughlin said all options pointed to the George Town harbour as the best site. “As long as Cayman has been settled, the harbour has been in George Town,” he said. “There is a reason why those old people decided that’s where it should be. … If you think we are having trouble building it down there, you tell the people in Savannah that you are going to put a massive cruise facility up at the end of Pedro Castle Road.” The premier and members of the Verdant Isle group dismissed rumours that the cruise ship companies would provide their own tour buses and taxis, which would compete with local operators. The next public meeting with government and Verdant Isle representatives will be held at the Bodden Town Civic Centre on Tuesday, 26 Nov. Coral-regrowing facility planned Legislative Assembly to run its own affairs Law for full LA autonomy coming RESHMA RAGOONATH rragoonath@compassmedia.ky Government will be bringing legislation early next year to give the Legislative Assembly full autonomy to run its own affairs, said Premier Alden McLaughlin. McLaughlin, speaking with the Cayman Compass on Thursday, said the planned law will complement the UK’s proposed constitutional changes that legislators agreed to last week. Contained in that package of changes was the renaming of the LA to the Parliament of the Cayman Islands, which the premier said will give the legislature the respected position it deserves. He said the intention is to publish a bill which will finally make the legislature independent of the executive. “I am hoping that we get that here in the first quarter of next year so these things again will work together to improve Cayman’s position on the role and stature of its legislature,” McLaughlin said. From an administrative standpoint the legislature is actually controlled by the Governor’s Office and that responsibility has been devolved to the deputy governor, he added. “The plan is to move that authority from the Governor’s Office and for the Legislative Assembly to become an autonomous body with its own administration separate and distinct from the executive,” McLaughlin explained. He said what this means is the Speaker of the House will essentially be the controlling officer for the administration of the legislature and the Clerk of the House would be like the chief officer handling all of the administrative matters. It is an issue House Speaker McKeeva Bush has raised on several occasions. Added to that, the premier said, the aim is to create a board composed of elected members who will essentially make the key decisions concerning administration, budget proposals and other business related to the LA. “The plan is to move that authority from the Governor’s Office and for the Legislative Assembly to become an autonomous body with its own administration separate and distinct from the executive.” Premier Alden McLaughlin Government is planning to set up the legislative framework to give the Legislative Assembly the power to conduct its own affairs. RESHMA RAGOONATH rragoonath@compassmedia.ky The National Trust for the Cayman Islands has confirmed it has filed for judicial review of government’s decision to proceed with a referendum on the $200 million port project before an updated environmental impact assessment is completed. In a statement issued late Monday evening, the Trust said it was not satisfied with government’s response to the legal letter it issued two weeks ago outlining its concerns about the project and its environmental impact. The Trust pointed out that it delivered in confidence a letter to members of the Cayman Islands government expressing its concern with the project’s potential impacts on sites of environmental and historical significance, and again calling for updated information to be released to the general public prior to the referendum. “The National Trust values the close working relationship it has with the Cayman Islands Government and therefore does not take this decision lightly,” the statement said. It said it has not taken a stance in favour of or against the port project and believes that there is currently insufficient information to do so. “The National Trust's request is that prior to proceeding, further studies such as an updated Environmental Impact Assessment be performed, and the resulting information made available to the general public before the referendum is held,” it said in the statement. Cruise Port Referendum Cayman issued a similar letter to the government advising of its intention to take legal action on the referendum. CPR said it is in the process of reviewing the government’s response to its concerns. Both entities said they will seek a stay of the 19 Dec. referendum until the matter is dealt with. “The National Trust is duty bound to its members and to the general public to act as the guardian of matters of the environment and places of historical significance and has been doing so for over 32 years. The Trust stands proud of all its achievements to date and remains fully committed to preserving all that makes Cayman Islands unique,” the statement said. Nat’l Trust files for judicial review Orion group's Barry Loudermilk addresses government's pro-port meeting in Savannah. 4 news N newsChristmas Community bring the entire family to the Compass Media Parking Lot call penelope 949-5111 december 7, 10am - 2 pm meet santa 11am-1pm live music crafts & jewellery Lots of christmas gift ideas Lots of christmas gift ideas Five-star Beach Bay resort slated for 2022 opening JAMES WHITTAKER jwhittaker@compassmedia.ky New designs have been unveiled for the Mandarin Oriental resort approved last week for the Beach Bay area of Bodden Town. Work on the two, nine-storey buildings, which will comprise the resort and residences, is scheduled to begin next year, with a 2022 opening date set for the hotel. The project is the first of its type in the eastern districts. Architect’s impressions shared with the Cayman Compass show a tiered, multi-level building surrounded by a lagoon-style swimming pool and dotted with beachfront cottages and restaurants. Despite some objections from residents on the scale and size of the resort, developer Ryan Melkonian said he believed it would be a great addition to the Cayman Islands tourism product. “We are confident that the Mandarin Oriental Grand Cayman will be an exciting and welcomed addition to the already bustling and historic Bodden Town,” he said. “We look forward to continuing our work with the local government and community in making this remarkable project a reality.” The plans were modified to deal with community concerns about beach access and to relocate the “back of house” facilities away from neighbouring residences, before they were approved by the Central Planning Authority. While some residents remain concerned about the size and scale of the development, Spencer Levine of RAL Development Services, which is partnering with Melkonian on the project, said he believed the developer had done its best to compromise and come up with a project that would enhance the area. For Cayman’s tourism product, he said it was a new direction and the first five-star offering outside the Seven Mile Beach corridor. “I think it presents a really different experience than what you have on Seven Mile Beach, especially at the luxury level. With an operator like Mandarin Oriental we will be able to offer an experience that doesn’t exist on island right now.” He added, “Our revised plans, now approved, were the direct result of the inclusive planning process, incorporating public comments from other property owners. We appreciated the thoughtful feedback we received from the CPA and we look forward to continuing to work with the community as we build and operate this one-of-a-kind resort.” He said the revisions included improved beach access through both new and expanded pathways and a reorganised and more comprehensive parking design. Mandarin resort designs unveiled “We are confident that the Mandarin Oriental Grand Cayman will be an exciting and welcomed addition to the already bustling and historic Bodden Town.” Ryan Melkonian , Developer This is the site for the planned Mandarin Oriental Resort in Beach Bay. This artist rendering depicts what the new Mandarin Oriental resort is expected to look like. cayman compass news N news TUESDAY, 26 NOVEMBER 2019 51234567 8 910 111213 14 15161718 19 2021 1234567 8 910 111213 14 15161718 19 2021 ACROSS 1 Fervid (7) 5 A valuable quality (5) 8 Brief illusory success (5,2,3,3) 9 Purport (5) 10 To free from guilt (7) 11 Evasive (6) 12 Bad-tempered (6) 15 Rice-based dish (7) 17 Imagine (5) 19 Grandly (2,1,5,5) 20 Smooth and glossy (5) 21 Held up (7) DOWN 1 Be suitable for (5) 2 Extremely slowly (2,1,6,4) 3 Receive by bequest (7) 4 Kindly (6) 5 Remains of fire (5) 6 Additional (13) 7 Leather factory (7) 11 Grave (7) 13 Denial (7) 14 Stubbornly determined (6) 16 Course for racing (5) 18 To produce (5) The Compass Crossword Puzzle The Compass universal kakuro Puzzle 16232 The numbers in the black cells are clues. Numbers above the slash are across clues. Number below the slash are down clues. The goal is to enter digits 1 - 9 in the white cells to add up to the number clues. You cannot enter any digit more than once when adding up to clue. YeSteRDAY'S SOLUtIONS Puzzle 16231 ACROSS: 1 Holly, 8 Backdoor, 9 Stiff, 10 Confront, 11 Minor, 12 Orb, 16 Thread, 17 Anorak, 18 Don, 23 Gaudy, 24 Below par, 25 Byway, 26 Above all, 27 Angel. DOWN: 2 Outright, 3 Left over, 4 Valour, 5 Skiff, 6 Motor, 7 Grate, 12 Odd, 13 Ban, 14 Go easy on, 15 Hard case, 19 Orally, 20 U-boat, 21 Gloom, 22 Sweep. provide a great source of communication, especially in times of disasters, he added. “We were the only one operating after Hurricane Ivan. All communications were down,” Eden said. “When there is a hurricane coming, we [are] always out there communicating directly with the National Hurricane Centre. We provide a tremendous service for the health and welfare of many places and we are happy to make a contribution to helping out the community. It’s all voluntary,” he added. Recently a group of nine amateur radio operators from as far away as Japan visited Grand Cayman to improve and test the emergency communication capabilities of the radio station at Eden’s home. Eden said visitors often travel to Cayman to use his radio shack for their broadcasts. “When the guys come down, they help me by putting up new antennas and all of that in the station to make it better for everyone and, in times of disaster, when all communication is down, we are here to help everyone,” he said. Over the weekend of 26 and 27 Oct. Eden’s station was used to participate in a major worldwide amateur radio-operating event. Keeping the station on the air for 48 hours, the international visitors contacted thousands of amateur radio stations in more than 100 different countries around the globe. Ham radio operators compete for two days straight In memory of our much-loved brother PHIL PRITCHARD who sadly passed away five years ago 26th November 2014 Words can never express how much your family misses you. Julie, Roy and Louise Pritchard The contest started at 7pm on Friday and ran until Sunday. RESHMA RAGOONATH rragoonath@compassmedia.ky Local amateur radio operators joined ham enthusiasts worldwide over the weekend to compete in a Morse code contest for 48 hours nonstop. The competition, called the CQ Worldwide CW contest, tests the speed and endurance of ham radio operators around the world. Andrew Eden, former president of the Cayman Islands Amateur Radio Operators Association, explained that participating operators are adjudged points on their length of communication and the distance of the connections made. “It’s exciting. I got amateurs from all over the world who come down here to compete,” Eden said during an interview at the Savannah home on Saturday. The contest started at 7pm on Friday and ran until Sunday. Eden said while the local ham radio community is small, it is quite active. Amateur radio operators cartoon Last words - By Caymanman Amateur radio operators Daniel Craig (seated) and Andrew Eden competed in the contest at Eden's Savannah home Saturday. 6MICHAEL KLEIN mklein@compassmedia.ky A government video released earlier this year that promotes the planned cruise berthing facility offers a simple answer to the question of who would pay for the project: “It is the cruise passengers who will be paying for the cruise berthing facility and for the redevelopment of our cargo port. Verdant Isle, the preferred bidders, are merely advancing the funds to construct the facility and they will be repaid over 25 years.” While this statement is correct in theory, things are more complicated in practice. Details of the financing model for the project were presented at a government press conference on 29 July. Currently, government is collecting three types of fee for each cruise passenger: A departure fee of US$7.32, a Port Authority fee of US$3 and an Environmental Protection Fund fee of US$3.90 for seasonal vessels (US$1.95 for year-round vessels). Passengers must also pay a fee to the tender boat operators of US$5.25, bringing the total amount to between US$17.52 and US$19.47 per head depending on the type of vessel. To fund the project, government will introduce a new fee of US$8.05 for year-round vessels and US$6.10 for seasonal vessels. At the same time, government will reduce its departure tax from US$7.32 to US$5 and passengers will no longer have to pay a tendering fee. Both the port fee and the Environmental Protection Fund fee will remain. The total amount per cruise passenger disembarking in Cayman will thus be US$18, irrespective of the type of vessel (see table). This means that while cruise passengers are technically paying for the project, US$5.25 that would otherwise have gone to the private tender operations and US$2.32 that would have been collected by government as revenue would go to Verdant Isle through the new project fee. While the $5.25 is not an expense for the taxpayer, it comes at an initial cost to the economy. According to the economic impact study that was attached to the Outline Business Case for the proposed port, the direct net economic impact of the cruise berthing facility is a loss of $67 million in gross value added over 20 years, due to the loss of the tendering business. However, the impact study noted that the indirect effect of more tourists spending more money over time in Cayman, as a result of the cruise berthing facility, would outweigh the net direct economic loss over time. Loss of future tax revenue Government has argued that the loss of future departure tax revenue of $2.32 per passenger would be recovered over the years by a larger number of passengers arriving in Cayman because of the cruise berthing facility. Mathematically this formula makes sense if there is an Financing model analysis: Who is paying for the cruise berthing facility? Current head tax Proposed head tax Departure fee$7.32$5.00 Port fee$3.00$3.00 Environmental Protection Fund$1.95 - $3.90$1.95 - $3.90 Tender fee$5.25- Project fee-$6.10 - $8.05 $17.52 - 19.47$18 Cumulative Head Tax Over 25 Years At Net Present Value — CHART 1 US$ MILLIO N 400 350 300 250 200 150 100 50 0 Head Tax $9.95 Annual Passenger Increase of 1% Head Tax $12.27 Annual Passenger decrease by 1% Y e ar 1 Y e ar 2 Y e ar 3 Y e ar 4 Y e ar 5 Y e ar 6 Y e ar 7 Y e ar 8 Y e ar 9 Y e ar 10 Y e ar 11 Y e ar 12 Y e ar 13 Y e ar 14 Y e ar 15 Y e ar 16 Y e ar 17 Y e ar 18 Y e ar 19 Y e ar 20 Y e ar 21 Y e ar 22 Y e ar 23 Y e ar 24 Y e ar 25 PLEASE TURN TO PAGE 8» cayman compass 7 I issues TUESDAY, 26 NOVEMBER 2019 The chart shows projected tax revenues over 25 years in two possible scenarios. The red line represents the net tax revenue at the new rate, factoring in a 1 % annual growth in arrivals if the cruise pier is built. The green line represents the net tax revenue at the current higher rate, factoring in a 1 % decline in arrivals if the cruise pier is not built. In this scenario government would come out marginally ahead, over the life of the project, if it did not build the pier.One of the concerns highlighted by those opposed to the cruise port is that a private company, Verdant Isle Port Partners, stands to make significant profits from the project. While the company can expect to make a healthy return on their investment if it is successful, the likely profits are not spectacular in the context of a 25-year investment. To fund the construction of the cruise piers, the preferred bidder for the project receives between US$6.10 and US$8.05 per passenger, adjusted for inflation by 2.5% each year. Based on an expected 1.8 million passengers in the first year and a 1% annual increase in that number, as assumed by the economic impact assessment, the Verdant Isle consortium would make between US$429 million and US$566 million in passenger fees over 25 years. The slated cost of the berthing facility is CI$196.53 million (US$235.83 million). This means the consortium would receive between US$193 million and US$330 million more than construction expenditure over the life of the project. This may sound a lot but over 25 years it only equates to a compound annual growth rate of between 2.4% and 3.6%. Moreover, the cost of financing has to be deducted. Verdant Isle, which is funding, financing and guaranteeing the debt, has indicated that about 60% of the project costs would come from loans. Maintenance expenses for the facility, estimated to be US$100 million, would also have to be recovered from the per- passenger fees. In an interview with the Cayman Compass, Royal Caribbean CEO Michael Bayley said the fundamental business of the cruise industry is to offer cruise vacations. Cruise lines must be engaged in infrastructure projects such as ports, terminals and piers, he said, but added that this is neither their main business nor a profit centre for those companies. “Our business is the cruise lines. That’s where we make our revenues and profits and that is what our shareholders are investing in,” Bayley said. “Our objective is not a profit motivation in terms of the project in Grand Cayman. We obviously don’t want to lose money on it, so we try to carefully project out what we think the expenses, revenue will be to maintain this operation and build the cargo space.” These factors are all built into the financing model, he added. How much money is Verdant Isle going to make? Cumulative Head Tax Over 25 Years At Net Present Value — CHART 2 U S$ MI LL I O N 400 350 300 250 200 150 100 50 0 Y e ar 1 Y e ar 2 Y e ar 3 Y e ar 4 Y e ar 5 Y e ar 6 Y e ar 7 Y e ar 8 Y e ar 9 Y e ar 10 Y e ar 11 Y e ar 12 Y e ar 13 Y e ar 14 Y e ar 15 Y e ar 16 Y e ar 17 Y e ar 18 Y e ar 19 Y e ar 20 Y e ar 21 Y e ar 22 Y e ar 23 Y e ar 24 Y e ar 25 Head Tax $9.95 Annual Passenger Growth 3% to 2.5 Million Head Tax $12.27 Stagnant Passenger Numbers at 1.9 Million CONTINUED FROM PAGE 7 The financing model: Who is paying for the cruise berthing facility? An architect’s impression of how the new facility will look. The chart shows projected tax revenues over 25 years in two possible scenarios. The yellow line represents the net tax revenue at the new rate, factoring in a 3 % annual growth in arrivals if the cruise pier is built up to 2.5 million. The blue line represents net tax revenue at the current higher rate if passenger numbers remain stagnant. Again the revenues are slightly higher if the piers are not built and current passenger numbers are maintained. immediate jump in cruise arrival numbers to 2.5 million passengers per year – the number at which the net tax revenue would overtake what is currently levied from 1.9 million passengers. But there is no certainty that this level of growth will happen overnight or that it would be sustainable in the long term, given potential fluctuations in the global economy and other geopolitical factors which can impact tourism generally. If we use the more conservative growth projections of government’s business case reports, the issue is less clear cut. Do the math In ads on social media and its own brochure on the project, government encourages voters on the referendum to do the math. They are told that 2.5 million passengers paying $9.95 to the government would bring in more tax revenue ($24.8 million) than 1.9 million passengers paying the additional $2.32 for a total of $12.27 per person ($23.3 million). This is true, but Cayman does not currently have 2.5 million cruise passengers. Therefore, if we apply the base case of the economic impact study to this example, by contrasting a 1% passenger increase with a 1% passenger decline starting at 1.9 million passengers, the initial head tax revenue loss is not recovered after 25 years (see Chart 1 on page 7). This are two reasons for this: Firstly, a 1% passenger increase per year amounts to only 2.41 million passengers after 25 years, while a 1% decline would result in just under 1.5 million passengers. Secondly, the cash flows must be compared at net present value. Because of the time value of money, cashflows of equal size are more valuable, if they are received earlier. As a result, initial losses have a stronger impact than future gains of the same size. If we stay closer to the example given in government’s promotional material and assume a passenger growth rate of 3% per year, Cayman would see 2.5 million passengers in the ninth year of the project. If passenger numbers stay at 2.5 million for the remainder of the 25 years and we compare this to a stagnant 1.9 million passengers, given in the example, the tax loss would again not be recovered fully during the life of the project (see Chart 2 above). To recover the initial loss of tax revenue, passenger growth – or decline, in the alternative scenario without a cruise berthing facility – will have to be stronger than originally assumed in the financing plan of the Outline Business Case. Additional tax revenue could also come from head tax increases. During the 29 July press conference, Chief Officer Stran Bodden said the $18 total head tax “will be indexed at 2.5% per year as well”. Tax indexing is the adjustment of rates of taxation in response to inflation. In other words, it is anticipated that the fee will increase by 2.5% each year. 8GUEST COLUMN CENTRAL CARIBBEAN MARINE INSTITUTE The Central Caribbean Marine Institute is responding to the letter sent to the Cayman Islands media by Polaris Applied Sciences, (above) questioning the information in the presentation that was made by CCMI president Dr. Carrie Manfrino, at the Cruise Port Referendum launch on 21 Nov. Polaris feel that CCMI has misconstrued the results from their work in the Cayman Islands, according to their press release, and that the CCMI team has misunderstood the nature of the projects conducted. This is not the case. CCMI merely want to help the voting public and Caymanian stakeholders to understand the context for discussing the measures of success in relocation and restoration work from an ecosystem perspective, undertaken in the Cayman Islands and further afield. Corals do not always grow and recover, as stated by Mr. (Greg) Challenger in his release, and it is exactly this point that CCMI is trying to convey. CCMI is not trying to discredit Polaris, just highlight that the way restoration projects are measured (in this case, the ones conducted in Grand Cayman) is not a clear, direct comparison to the coral relocation project being proposed for the George Town port project. GUEST COLUMN Greg Challenger As the marine biologist from Polaris Applied Sciences Inc who attached the corals at the Tatoosh anchor damage site in West Bay, Grand Cayman, and the container vessel Saga grounding at Eden Rock, Grand Cayman, I am responding to the statements made by Dr. Carrie Manfrino at the official launch of the Cruise Port Referendum campaign on Wednesday, 20 Nov. 2019, as reported in Cayman News Service on 21 Nov. 2019. Dr. Manfrino is incorrect in her inferences and lacks a basic understanding of what occurred and what was completed at the vessel-damaged sites. It is unfortunate that misinformation is being communicated to the public. On 14 Jan. 2016, the anchor chain of the 303-foot mega yacht, MV Tatoosh, owned by Paul Allen, destroyed approximately 14,000 square feet of protected coral reef in the area of West Bay, Cayman Islands. The team at Polaris Applied Sciences successfully attached all the corals that remained after the anchor and chain damage in the MV Tatoosh case. If we had more available corals that had not been crushed by the anchor and chain, we would have been able to have attached them successfully as well. Dr. Manfrino claims 80% of the site is dead. In their own study, CCMI identifies coral cover in Grand Cayman as 17% average. That sounds correct. After a ship grounding on a 17% coral cover site, we would have been fortunate to attain a small percentage of live coral cover. However, there was approximately 20% live cover of benthic organisms, which is a very good result. Smashed or damaged corals from a vessel hull or anchor are in greater danger of mortality than those removed carefully, yet survival was high for reattached corals in this instance, as it has been in all of our cases. Dr. Manfrino also claimed in another article published in the Cayman Compass on 21 Nov. 2019 that the coral restoration work undertaken by Polaris at Eden Rock, to repair damage caused by the Saga container ship, was unsuccessful because coral cover was lower than surrounding areas. Of course it is lower. The cargo ship crushed most of the corals in the damaged footprint. Again, all the available undamaged and partly damaged corals were attached successfully. I assume a scientist would be aware that a large vessel crashing into a coral reef would likely kill most corals and reduce the numbers available to reattach. It is disingenuous to say the vessel damage projects were unsuccessful because coral cover is lower than surrounding areas. Coral cover is lower because the large vessels crushed them, not because Polaris did not attach all remaining corals in the vessel- damaged rubble successfully. The coral relocation project for the proposed port redevelopment is a very different project to these as this is carefully planned relocation rather than repairing significant damage. We plan to attach all Polaris: ‘We expect strong survival of relocated corals’ The promise of repairing our reefs Clarifying CCMI commentary on Polaris corals successfully, as we always have, and expect strong survival of those corals. This project is an environmental project in our view. Reducing anchoring on many acres of corals in Grand Cayman, as a result of the building of two piers, will start a recovery process for a much larger area than that proposed to be affected in George Town harbour. The anchor-damaged areas can be restored as has been done in the past. There is a net benefit of ecological gains in the longer term, even if relocation is only partly successful. We fully anticipate success as we have in every other similar project. The net environmental benefit, of many acres of reef no longer damaged by anchors, coral relocation and the coral nursery, could be substantially greater than no action. I have never worked for a cruise company. I have no affiliation with the industry. This is an environmental project. I’m not saying this because Polaris want to do the job - hire someone else and I still say this is an environmental project. Greatly reducing the anchor damage that has pulverised a much larger area of reef will have benefits in perpetuity. Polaris has just returned from Bikini Atoll where the US dropped a thermonuclear weapon in WWII. Coral growth is amazing. Grand Cayman isn’t the Marshall Islands, but corals grow and recover. With some assistance, recovery can be enhanced at the anchor- damaged areas to proceed faster. I am happy for Dr. Manfrino to communicate with me directly to avoid misinformation in the future. READ THE FULL RESPONSE FROM CCMI ON WWW.CAYMANCOMPASS.COM. Dr. Carrie Manfrino Greg Challenger cayman compass 9 I issues TUESDAY, 26 NOVEMBER 2019Next >