PROCUREMENT

Who is the preferred bidder?

The selected preferred bidder is a consortium called Verdant Isle Port Partners (VIPP) which consists of four businesses in partnership. The consortium includes McAlpine Ltd, Carnival Corporation, Royal Caribbean Cruises Ltd and Orion Marine Construction Inc.

Together they offer a high degree of local and technical expertise and have the relevant experience and key personnel who are familiar with working on projects of similar scope and scale as the Cruise Berthing Facility and cargo facility enhancement (CBF) proposed for George Town.

Was the Procurement process open and transparent?

Yes, the procurement process for the proposed CBF followed best practice and transparency as outlined by the Public Management and Finance Law, and the Framework for Fiscal Responsibility. Throughout the process, the PWD’s Major Projects Office has been leading the CBF project team in collaboration with the Ministry of Tourism and Port Authority.

How was the preferred bidder selected?

VIPP were selected as the preferred bidder after a careful analysis of their bid by the Ministry of Tourism, the Port Authority Cayman Islands (PACI), PWD’s Major Projects Office and specialist consultants KPMG, Hatch, Royal Haskoning DHV, and Appleby/Pinsent Mason’s who provided technical, financial and legal services during the procurement process.

The bid was assessed against established evaluation criteria and a recommendation was made to the Central Tenders Committee which granted approval to select a preferred bidder.

Which company was chosen to build the port?

Verdant Isle Port Partners (VIPP) was chosen through an open procurement process. VIPP is a consortium which consists of four businesses in partnership – McAlpine Ltd, Carnival Corporation, Royal Caribbean Cruises Ltd and Orion Marine Construction Inc.

Together they offer a high degree of local and technical expertise and have the relevant experience and personnel who are familiar with working on projects similar to the Cruise Berthing Facility and cargo facility enhancement project (CBF).

Was the procurement process open and transparent?

Yes absolutely. The procurement process followed best practice and transparency guidelines as outlined by the Public Management and Finance Law, and the Framework for Fiscal Responsibility. Throughout the process, the PWD’s Major Projects Office has been leading the CBF project team in collaboration with the Ministry of Tourism and the Cayman Islands Port Authority.

How was Verdant Isle Port Partners selected?

Verdant Isle Port Partners (VIPP) was selected after a careful analysis of their bid by the Ministry of Tourism, the Port Authority Cayman Islands (PACI), PWD’s Major Projects Office and specialist consultants KPMG, Hatch, Royal Haskoning DHV, and Appleby/Pinsent Masons who provided technical, financial and legal services during the procurement process.

The bid was assessed against established evaluation criteria and a recommendation was made to the Central Tenders Committee which granted approval to select VIPP as the preferred bidder.

FINANCING

How much will the cruise berthing and cargo port enhancement project cost?

The actual project cost approved by Cabinet CI$196.5 million.

Is government borrowing to pay for the project?

No, the Cayman Islands government is not providing any bonds, loans, guarantees for this project. All of the costs for constructing the cruise berthing facility and enhancing the cargo port are being paid by Verdant Isle.

How is the berthing facility being financed?

The CBF project is being financed through an arrangement called Design, Build, Finance, Maintain (DBFM). This means all of the costs to design, construct and maintain the cruise berthing facility and enhance the d cargo port are being met by Verdant Isle Port Partners (VIPP).

How will the CBF be paid for?

The CBF will be paid for using passenger fees over a period of 25 years. The financial investment required to build the piers will be repaid to the preferred bidder using a portion of the passenger fee that is charged for each passenger brought to the new CBF.

What are Passenger Fees?

The cruise lines pay a fee for every passenger aboard whether cruise passengers disembark or not. These fees are bundled into the cost of a cruise in much the same way that taxes are bundled into the cost of airline tickets and they are allocated to different services related to the Port and tendering operations.

Who is paying to construct the CBF?

In actual fact, it is cruise passengers who are paying for the CBF. The preferred bidder is merely advancing the funds required to construct the piers now and will be repaid over 25 years.

How will Verdant Isle receive a return on their investment?

Verdant Isle will be repaid from passenger fees over a period of 25 years.
Verdant Isle will not begin receiving payments until the facility is available for use by cruise passengers.

How are passenger fees distributed now?

Cruise passenger fees are currently divided in four ways:
o The Port Authority
o Environmental Protection Fund
o Cayman Islands Government
o Tender boat service

How will passenger fees be distributed after the project is completed?

At that time, passenger fees paid by cruise lines will still be divided four ways but the portion previously used to pay for tender boat services will instead go to Verdant Isle to repay their investment.

This will be supplemented by a portion of the passenger fee that government receives. At present, the supplemental amount is $2.32 per passenger but that is a worst case scenario. Negotiations are underway and that figure will decrease.

If government is contributing a portion of their fee to Verdant Isle, doesn’t that mean Caymanians are paying for this project?

No, we are not actually paying anything because even with the $2.32 going to Verdant Isle government is still not losing revenue.

Here’s why:
Without cruise berthing government currently receives a passenger fee of $12.27 per passenger. On 1.9M passengers, that amounts to $23.3M per year.
When the cruise berthing facility is built, passenger numbers will rise to 2.5M. – that’s an increase of 600K.

Even with a $2.32 reduction in the passenger fee (to $9.95), the increased volume of passengers’ means government will receive more on an annual basis than it currently does now.

2.5M passengers contributing $9.95 each in fees amounts to government receiving $24.8M.

Instead of receiving $23.3M per year without the piers we will receive 24.8M per year with them.

Will the passenger fees paid to the Port Authority or Environmental Protection Fund change?

The dollar amount paid to the Port Authority and the Environmental Protection fund from passenger fees will not change. But because passenger numbers are increasing they will actually receive more revenue annually.

After 25 years what will happen to the passenger fees paid to Verdant Isle?

After 25 years, passenger fees that used to go to Verdant Isle Port Partners will go to the Port Authority as a new revenue stream and will be used to maintain the piers.

Why must we provide berthing facilities?

The Cayman Islands is a popular cruise destination and cruise lines want to keep calling here. But they will not be able to do so in the future the way they do now if we don’t have a berthing facility. Mega ships are changing the face of tourism in the Caribbean and require berthing. If we cannot service their needs the mega ships will simply sail past the Cayman Islands to other destinations as they do now.

Why do we need a cruise berthing facility? Isn’t it better to be unique?

The cruise industry is evolving and more mega size ships are planned for the Caribbean region. Cayman is distinct from all the other destinations for not having a berthing facility. Rather than this being an attribute and something positive for our cruise industry, it presents a serious risk and will ultimately place our cruise tourism industry in jeopardy.

Will the cruise berth facility place the country in long-term financial hardship?

No, the country is not providing any loans, bonds or guarantees with respect to the cruise berthing development.

Will the cruise berth facility lead to the implementation of direct taxation in the Cayman Islands?

No, there will be no changes to direct taxation as a result of this project.

How will the preferred bidder get their money back for building the CBF?

The cruise berthing facility will be paid for by the cruise passengers who use it. Passenger fees are bundled into the cost of a cruise in much the same way that passenger taxes are bundled into the cost of airline tickets. The fee for tendering services plus a portion of the Governments fee will be used instead to repay the preferred bidder for financing construction of the berthing facility. After 25 years when the investment has been repaid, that portion of the passenger fee will be remitted to the Port Authority, increasing the revenue that PACI receives per passenger.

Passenger fees currently paid to the Port Authority and the Environmental Protection fund will remain unchanged.

ENVIRONMENT

What does the cruise berthing facility consist of?

The CBF will consist of two-finger piers constructed on pilings to allow the sea and marine life to move freely underneath. Pilings are commonly used all over the world in the construction of piers and bridges situated over water. The existing cargo facility and quay walls will be upgraded as part of the works

How will the environment in George Town Harbour be impacted?

The design of the new pier reflects Government’s mandate with respect to minimizing the environmental impact. Locating the piers in deeper water has resulted in the need for less dredging and less coral relocation than previously considered in the 2015 scheme submitted for environment impact assessment and there will be no dredging in Hog Sty Bay. Government gave the mandate to minimize environmental impact and this has been achieved.

Will the berthing facility increase flooding in the George Town harbour front?

The proposed CBF will not increase the likelihood of flooding in the areas to the North and South as a result of the new development. Furthermore wave walls have been incorporated within the footprint of the design for extreme weather conditions which will further reduce potential flooding and wave overtopping into the road and will add more protection to the central George Town area.

Why can we not keep tendering cruise passengers to and from the ship?

Cruise lines have been clear they will not consider using tenders for their mega ships.

What is upland development?

Upland development is the term used to describe the on shore facilities that are located at a cruise terminal and the retails units are typically owned or operated by cruise lines but this is not the case in the CBF as the new retail units will be owned and operated by the Port Authority.

Does the Cayman Islands proposed CBF include additional upland retail development?

No. Government has been clear from the beginning that under no circumstances would there be any additional retail upland development. George Town is our upland retail development which means the money cruise passengers spend on shore will continue to circulate in our economy and provide maximum benefit to Caymanians.

Will the EIA and Business Case be updated based on the bid?

The plans put forward by the preferred bidder will be submitted to the Environmental Assessment Board for a scoping opinion and a final business case will be submitted prior to execution of contract.

How will we accommodate the increased passenger numbers?

The Construction of the CBF will allow better management of passengers and cruise ship arrivals. What will be immediately noticeable is the flattening of the arrival schedule, as the cruise lines will schedule their arrivals on the days that they have access to the berthing facilities. Arrivals at present are variable – there are days with no cruise ships and other days with as many as six or seven in harbour. Levelling out our passenger arrivals will allow for passenger numbers to grow sustainably. Further, this will benefit companies and workers in the cruise sector as it will mean fewer days of the month with no work and fewer days with overcrowding as arrivals will be spread more evenly across the week.

CORAL RELOCATION

Why does the coral in George Town harbour have to be relocated?

The coral needs to be removed in order to protect it. However, it is important to note that the total area of impact is 32.5 acres along the coast, which is barely 1% of the coral reef habitats in Cayman. The Benthic Habit Characterisation Study in 2015 confirmed this.

Sadly, damage has already been done to the reef in George Town. Decades of dropping and dragging anchors have resulted in accidents and extensive damage to the coral reefs and seabed. The marine environment in the location earmarked for the piers has suffered and is no longer pristine. It is a working harbour.

How will the coral be protected?

A coral relocation plan and comprehensive mitigation measures have been put in place to make sure we do this right. The plan is ambitious, and we are drawing on global best practice and utilising the most cutting edge scientific and technological advancements to maximise positive results.

What exactly does the coral relocation process consist of?

First, all of the existing coral will be mapped by hand by divers. Coral directly impacted from construction and dredging will be relocated to an area similar area nearby which offers very similar conditions to the area where the coral was originally located. This increases the displaced coral’s rate of survival.

Where will the coral be relocated to?

The coral relocation area is approximately half a mile north of the project site and away from the working port.

Why was that location chosen as the coral relocation site?

Two sites were chosen out of 15 possible sites due to their similarities to the donor site as it relates to depth, wave action, habitat, biodiversity and nutrition.

How will the coral be attached in the new location?

Natural Caymanian limestone boulders will be placed on the sea bottom to provide a foundation on which to attach the coral in order to grow new coral structures.

Who will be relocating the coral?

Renowned coral relocation experts will be overseeing the transplanting of the coral. The team includes Polaris Applied Sciences Inc., a specialised team that has extensive experience working on coral relocation. Polaris has previously worked on coral relocation projects in Grand Cayman with an 89% success rate.

What else is being done to protect Cayman’s coral?

In addition to relocating coral impacted by the project, Verdant Isle plans to significantly increase the overall cover and diversity of corals around Grand Cayman through a long-term partnership with Dr. David Vaughan and the Plant a Million Corals Foundation.

Dr. Vaughan is a world-renowned coral reef scientist and one of the pioneers of the micro-fragmentation technique. His research and knowledge are being brought to Grand Cayman to supplement the coral relocation initiative. To date, most coral gardening techniques successfully grow only a handful of coral species. However, Dr Vaughan’s technique of micro-fragmenting is able to grow and outplant all 28 coral species found throughout the Caribbean.

What is micro-fragmentation?

This is a technique that consists of breaking the corals into smaller pieces of 1 to 5 polyps. This stimulates the coral tissue to grow and heal 25 to 50 times the normal growth rate.

What is the coral nursery I’ve been hearing about?

Verdant Isle’s plans also include a coral nursery that will be located in the vicinity of the port on a site that will be open to the public and will also serve as an educational opportunity for ship guests, local schools, and the wider local community. The community and visitors to Grand Cayman will also have the opportunity to outplant these corals to help achieve the goal of planting one million corals across the Caribbean.

If we displace the coral will it be lost forever?

The goal of the coral relocation and restoration project is to replace 10 times the amount of coral that is removed from the project area.

Can coral be successfully relocated?

Yes, it can. While it is true that success rates vary, several cases of successful relocation projects similar to the George Town Harbour exist worldwide. For example, after 1000 coral colonies were removed from a site in Broward, Florida, the coral stability and health at the reattachment site over a three-year period showed a 97% success rate.

The largest coral relocation project was done in Dubai where over 20,000 coral colonies were transplanted in 2008. Today the success rate is 69%.

Can coral IN CAYMAN be successfully relocated?

Yes, and it has been done before. Shipping incidents have dislodged and fractured large sections of the limestone reef and damaged thousands of corals in West Bay and Eden Rock. Polaris Applied Sciences Inc. – Verdant Isle’s coral relocation partner – restored both of these sites in 2016 and 2017.

Coral fragments broken and disturbed by vessel anchors and ship hulls should arguably have lower survival than those removed more carefully. Yet monitoring studies have reported 89% survival of tagged specimens in the West Bay site two years following the restoration compared to 93% of unaffected coral colonies.

JOBS

What jobs will become immediately available?

Once pre-construction and construction gets underway, it is estimated that 100’s of new jobs will be created. The kinds of jobs that will become available range from unskilled, semi-skilled and skilled jobs in construction such as labourers, electricians, welders, masons, heavy equipment operators, ironworkers, planners, crane operators, etc. The project will also require a variety of specialist jobs specific to marine engineering and marine construction.

How will government ensure that these jobs go to Caymanians first?

The recruitment process will be overseen by Workforce Opportunities and Residency Cayman (WORC) to ensure that jobs go first to Caymanians who have the requisite skills.

CARGO PORT

Why is the cargo port being upgraded at the same time?

The current port is 40 years old and operates under conditions that are cramped, inefficient and less than ideal. It needs to be upgraded and enhanced to accommodate the higher volumes of cargo that we need for our growing population. The Cargo distribution centre has recently been enhanced but the Cargo facility also needs to be enhanced to keep pace with a growing population.

Will the Consortium also pay for the cargo port?

Yes, the Verdant Isle consortium will be financing the entire project which includes the enhancement of the cargo port as well as construction of the cruise berthing facility. The expansion of the cargo port is included in the project because it makes practical and economic sense to handle both at the same time.

Who will manage, operate and maintain the piers?

The Cayman Islands Port Authority will manage and operate the piers. The cruise lines will not be involved in the day to day operation of the facility. The CBF will be maintained by the Consortium.

CRUISE TOURISM INDUSTRY

How can we be sure cruise ships will not keep coming here if we don’t build the piers?

For many years cruise lines have been telling us that they would be upgrading their fleet to include bigger ships which would not dock in Cayman if we did not have a berthing facility.

Royal Caribbean now has four of these larger vessels serving the Caribbean and more are planned for the future.

Since 2009 when Royal Caribbean introduced its first mega ship to the Caribbean, it has sailed past Grand Cayman just as we were told. There are now two Oasis ships serving the Western-Caribbean route and their itinerary does not include Grand Cayman.