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.
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.
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.
Your questions about the cost of the cruise berthing facility answered.
The bid establishes a capital cost for the CBF project in the range of CI$200M to CI$230M and this includes enhancement of the cargo port.
The CBF project is being carried out under an arrangement called Design, Build, Finance, Maintain (DBFM) which is financed by the preferred bidder. The country will receive a two pier berthing facility and enhanced cargo port without the government having to provide any loans, bonds or guarantees.
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.
Passenger fees are charges that are bundled into the cost of a cruise in much the same way that passenger taxes are bundled into the cost of airline tickets. A portion of the fee which currently pays for tendering services will be used instead to repay the preferred bidder for financing construction of the CBF. 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 Port Authority receives per passenger.
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.
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.
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.
No, the country is not providing any loans, bonds or guarantees with respect to the cruise berthing development.
No, there will be no changes to direct taxation as a result of this project.
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.
Your questions about the environmental aspects of the cruise berthing facility answered.
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
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.
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.
Cruise lines have been clear they will not consider using tenders for their mega ships.
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.
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.
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.
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.
Your questions about jobs answered.
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.
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.
Your questions about the cargo port answered.
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.
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.
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.
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