Cruise Berthing Facility – Correcting Inaccuracies

Despite repeated attempts to communicate clearly and concisely with the public about the proposed cruise berth facility, its funding and the procurement process currently taking place, several inaccuracies continue to circulate. This post will address some of the most common misconceptions which have emerged following the Minister for Tourism, Hon. Moses Kirkconnell’s appearance on Radio Cayman’s For the Record.

The tender process has been conflicted by “side deals” with the cruise lines

This is incorrect. The government has always been clear in its view – and the Premier reiterated this point in his speech to the Chamber of Commerce Luncheon – that the involvement of the cruise in financing the port is critical to securing the future of the cruise industry for decades to come.

For the cruise lines to make a return on their investment they must keep bringing passengers to our island. In this sense, the cruise lines have ‘skin in the game’ – they are not going to abandon something they have just invested in.

Contrary to what has circulating, CIG has not sought a funding commitment from Disney because the bidders were unable to raise the funds, but rather it has sought funding commitments from cruise lines because this secures the return of their ships to Grand Cayman. In no way do the funding commitments from the cruise lines compromise the procurement process.

The government is being dishonest in claiming that no public money will be required to construct the proposed cruise berth facility.

In no way is the government being dishonest. CIG has been clear that the port will be built based on the ‘Design, Build, Finance, Maintain’ model. The successful bidder will be required to finance to construct the port. This will be funded by part of the passenger fee being reimbursed to the cruise lines (who will pay the construction company) that would today be passed on to the tender company. No government money will be spent to pay for construction and the government will not be out of pocket in the future.

The government is withholding information relating to a passenger guarantee made by the cruise lines

The Premier has never said that the cruise lines have made a commitment to passenger volume so any suggestion that the Premier is withholding this information is false. The cruise industry has always been clear that they cannot give a passenger guarantee (the market does not operate in that way) but their investment ensures that they will continue to return if they want to earn back their money. Opponents have often asked for a commitment to passenger volume, knowing full well that it could not and would not be given.

The economic benefits are disputed and details of the jobs that will be created have never been outlined

Some have questioned where the figure of $245 million comes from, demonstrating a willful lack of engagement with the plethora of publicly available documents relating to the port. The source for the estimated net economic benefit of the proposed cruise berth facility of $245 million is global financial consultants PriceWaterhouseCoopers (You can read the updated economic summary here). No reputable source has ever disputed the conclusion of their economic assessment.

There is a huge amount of information available relating to the port and we encourage people, especially those who are publicly campaigning against the port, to read this information in order to fully inform themselves. For clarity, we have provided a link at the bottom of this article to the Support our Tourism website where you can access all of the reports, including the PWC report on the economic case for the port, the environmental assessments, including the EIA and a Benthic Survey of the seabed in George Town harbour which concluded that a significant portion of affected coral can be successfully relocated.

Claims that the government has failed to outline the exact number and type of jobs that will be created at construction phase and beyond fail to appreciate that economic forecasting does not work in that way. Economic forecasting compares different scenarios using different assumptions to arrive at conclusions about economic impacts. More granular estimates of job creation are extrapolations from those fundamental calculations about changes in overall GDP. It is this methodology that PwC has used to arrive at their conclusion that in the long term, the port redevelopment will create around 1,000 jobs and an additional 500 jobs at construction phase.

It is simply not possible to say, for example, that 223 waitressing jobs or 146 roles for bus drivers will be created by constructing the port. That would be absurdly specific, and no credible economic expert would ever make such a claim. Besides, consumer patterns are always changing as our tastes change and the job market reflects this.

Some have even suggested that the government are reluctant to share with the public what business opportunities will be available. This is a somewhat strange thing to say. The government does not micro-manage the economy, it creates the conditions which allow for the economy to flourish, including creating the conditions for people to seek out opportunities and set up businesses where they see a gap. It seems quite obvious where the business opportunities will lie – restaurants, cafes, bars, shops, tours, transport. But it is for the Caymanian people to go and seize those opportunities. In this sense, the exact number of jobs that will are created by the port construction depends in part on the entrepreneurial spirit of ordinary Caymanians and this government intends to create the conditions that allow that spirit to flourish.

There is, however, one statistics on jobs that we can be sure of – 4,500 jobs are currenly reliant on cruise and this government will not stand idly by when a threat to people’s livelihoods is on the horizon.

The cruise lines are not building big ships

In recent days it has been remarked that the cruise lines are not building that many big ships and that the majority that are on order are smaller ships that can be tendered. Of the large ships on order with a capacity of over 5,000 passengers it is claimed that just one is due to sail in the Caribbean. This is used as evidence that the government is misleading the public in claiming that Grand Cayman must build the port to secure the cruise industry.

It is not CIG that is misleading the public on this. Of the 70 cruise ships on order with a passenger capacity of over 1,000, 19 are ships with a passenger capacity of 5,000 or more. One of these is confirmed as destined for the Caribbean. However, the destination of 12 of them is yet to be announced, two are destined for Europe and four are to sail in China.