Remarks to Cruise Berthing Facility press conference

By Premier Hon. Alden McLaughlin, MBE, JP, MLA

9 a.m., 28 October, 2015

CIGTV studio

Good morning,

Thank you for joining us today as we share with you some exciting news concerning the cruise berthing facility project.

I am pleased to confirm that yesterday Cabinet formally approved the cruise berthing facility recommendations regarding project delivery so the project can now progress to the next stage. In my address to the Chamber of Commerce in late September I outlined what some of the next stage would comprise and the Deputy Premier will go through this as well when he speaks momentarily.

This Government is very aware that our natural environment is integral to the viability of our tourism product. As I have said several times before, we are committed to ensuring that any berthing facility built under our watch will be done carefully and responsibly to cause the least possible environmental impact.

But as I stated at the Chamber luncheon, we have spent 40 years building an important cruise tourism economic driver and we are duty bound to ensure that we do not sit still and allow it to move to Cuba or other destinations in the region.

We have a clear understanding from the cruise ship companies that over time, as they continue to move to larger ships, fewer cruise passengers will visit Grand Cayman as the larger ships will not stop here unless there is a berthing facility.

And I will add that this Government was elected by the people of the Cayman Islands to deliver on our campaign pledges, one of which was to responsibly build a cruise berthing facility in George Town Harbour that would help ensure the country’s continued economic success including ensuring that existing local jobs that cater to and depend on cruise tourism are kept intact, and retained into the future.

These include hundreds of Caymanian tour and taxi operators as well as employees of George Town merchants and restaurants, and indeed employees of businesses of all sizes across Grand Cayman that benefit from cruise tourism.

But in addition to protecting our important cruise tourism business, enhancing key port infrastructure, securing jobs today and creating

new jobs in the future – this project will also serve as a needed economic boost.

According to the full Pricewaterhouse Coopers report, the anticipated positive economic impact from capital expenditure during the construction of the cruise and enhanced cargo berthing facility, over a three-year period, is estimated to be at least $156 million.

The Outline Business Case estimates that about 500 jobs would be made available during construction as the project would require administrative staff, labourers, divers, skilled tradesmen, project management, engineers, foremen and operators among other positions. This will mean real, tangible opportunities for Caymanian businesses, professionals and trades people to be involved in this historic and economically important project.

At the end of construction, the port would have been built mainly by

Caymanians for Caymanians and will be owned by Caymanians.

The large nature of the project is such that local businesses will also benefit, seeing an increase in sales and revenues.

Insofar as local labour is not available, there will be a need for guest workers who would also contribute to the economy for the time they

are in Cayman. They will need places to rent, they will buy food and goods from grocery stores, restaurants and local merchants.

Once the facility is up and running, the increased economic impact is expected to continue, adding about $245 million to our GDP as well as employment for about 1,000 people over the next 20 years, assuming at least a 1 per cent growth in cruise visitors. Net benefits increase to a potential $1.2 billion if cruise visitors grow by at least 3 per cent per annum.

This project would also give entrepreneurs an opportunity to develop new tours and attractions for the increase in visitors; we’re giving them a three-year lead time! And I am certain they will come forward.

Of course all of this assumes that we will be able to pass all the hurdles, and tick all the boxes, as we move forward with consideration around financing and mitigating the environmental impact of the project.

I am hopeful that we will be successful in getting to the construction phase because I am convinced of the long-term benefits of this
project for Cayman and Caymanians. But I assure all we will get there by following a process.

This is the approach we have taken with all of our infrastructure projects – the airport, the landfill, the revitalization of George Town, and yes the cruise and cargo port. In everything we do, in every project we are shepherding along, we are doing so methodically using best practice methods and at all times being open and transparent.

The country has never before had a Government this open with its projects and willing to accept challenge and consider options where practical. But that is expected of us as a progressive government. Openness, transparency, coupled with accountability, has always been our modus operandi.

I would like to take a moment to thank everyone who has contributed to the conversation on cruise berthing – those who have written letters, spoken to us in person, in favour or against, written on blogs, marched in protest, or who perhaps quietly encouraged or patted us on the back for being brave enough to take this forward in the
transparent fashion that we have. Governments must make decisions but it is important to ensure that all voices are heard and this we have done.

I can assure the country that this Administration, which I have the honour and privilege to lead, continues to be a Government that is
thinking carefully and seeks to get things done but we are also a

Government that acts with the long-term benefit of our country and our people uppermost in mind.

I also invite all to compare this Government, and where we are today, with any previous Government that sought to build cruise piers but failed and in the end costed the country millions of dollars.

Yes I believe we are a Government that gets things done – but we get things done by following due process and being open and honest with the Caymanian people. The process with respect to this project is not concluded, it merely continues to the next stage. And as I have said before, there will be no dredges in George Town Harbour tomorrow, next week, or next month. Instead we will proceed carefully to ensure the minimum environmental impact as well as discussing with the cruise lines their participation in the financing so as to ensure the success of the project as well as to guarantee the long-term viability and benefit of the industry to local people and businesses.

I will now turn the briefing over to the Deputy Premier and Minister for

Tourism who will provide a bit more detail.

Hon. Moses Kirkconnell, JP Deputy Premier of the Cayman Islands

Remarks for CBF Press Conference
28 October, 2015

Good Morning everyone,

As the Premier has said, this media briefing has been called to share the news that Cabinet has formally approved the cruise berthing facility recommendations, allowing the project to move to the next stage. This decision was not taken lightly and has involved long hours of deliberation.

Ten reports from some of the world’s foremost experts in their respective fields have been reviewed and discussed. And several major factors have been taken into account in weighing the benefits to the Country.

We are all aware that successive governments have wrestled with the provision of a cruise berthing facility and several million dollars have been spent with little to nothing to show for it.

Today, that has changed because all the reports, studies and intellectual property gathered under this PPM-led administration belong to the people of the Cayman Islands. Furthermore, all of the reports have been released for public review.

The cruise berthing facility is the largest government infrastructure project ever to be considered for our Islands and I am proud that the procurement decisions associated to this project have followed international best practice.

Having campaigned on the premise of a berthing facility, this government could conceivably say that we have a mandate from the people of the Cayman Islands to deliver on that pledge. Rather than take that as a hard and uncompromising line, we adopted a best practice approach and sought to gather as much data, information and statistics as possible, to make an informed decision.

In 2013, PricewaterhouseCoopers (PwC), a world recognized and respected firm, was contracted by Government to develop a Business Case for the berthing facility. PwC were tasked to assess the project and provide an independent opinion of the socio- economic benefits and the environmental risks.

The business case identified that two piers would be most suited to our needs and recommendations included having the cruise lines involved in the finance modeling.

The next big piece of work was the EIA which confirmed early on in the process that the cruise pier development would not impact Seven Mile Beach. PwC then updated the original Business Case with the EIA’s findings and provided a cost benefit analysis of the overall project.

In other words, calculations were done to quantify the economic value and also place a dollar figure on the impact to the environment, so that an assessment could be made of the economic benefits the piers could bring to the Country.

Shortly thereafter, Government also received the 2014/2015

Business Research & Economic Advisors Report (BREA) report that had been commissioned to provide data on cruise passenger volumes and their spending patterns in Grand Cayman. The BREA report is based on figures from 2014, allowing comparisons to be made virtually in real time.

In September 2015 PwC delivered their economic assessment of the project to government. This was presented as an addendum to the OBC outlining the findings of the EIA, and a supplementary report which included their assessment of the BREA report. In their final analysis, PwC came to the conclusion that the estimated economic benefits of the cruise berthing facility exceeded the environmental costs associated with the project.

I have taken the time to lay out these various steps to illustrate the volume and scope of information that has been scrutinized, analysed and provided to government so that the very best decision for the future of these islands could be made.

Having carefully considered this information, Cabinet has approved this project proceeding to the next stage. And we are committed to providing a facility for our Islands that will deliver the greatest economic benefit with the least environmental impact.

While there is much to be proud of with respect to the process that has been followed, it has been disconcerting to see this project polarizing the community.

This is somewhat surprising considering a berthing facility has been on the cards for development in the George Town harbor for over a decade. I can only surmise that some of the trauma is due to the realization that we are a government that gets things done, and when we say we’re going to do something, something happens.

Even with the studies, statistics and feedback from the cruise lines themselves confirming the need for these piers, this has not been an easy decision for Government. We are fully aware that our tourism product is supported by the natural beauty of our environment. Therefore it bears repeating that we remain committed to identifying the best possible option that will deliver the most economic benefit with the least environmental harm.

I hope that the supporters and opposers to this project will be somewhat reassured to hear that Government is reviewing the proposed designs to see how we can achieve even less environmental impact. Included in this is consideration to moving the piers to deeper waters to minimize dredging.

We cannot lose sight of the fact that cruise tourism contributes

24% to our Islands GDP and of the 2 million tourists who visit our

shores annually, the vast majority – some 1.6M of them arrive by sea.

Grand Cayman is operating in a fiercely competitive regional and global marketplace, and the only hope we have of maintaining and growing our market share is by providing infrastructure which is on par or better than our competitors.

This is why this government has not shied away from tackling this project head on. We are taking the necessary action to lay a solid foundation that will support the economic and social growth of our country well into the future.

At the functional level, cruise tourism in our Islands is made up of a growing number of Caymanians who rely on this industry for their livelihoods. They are not nameless, faceless statistics. They are the taxi drivers, tour operators, retailers, restauranteurs, tours, attractions, and a host of other service providers that work very hard to support this business.

In light of the decision to move forward, the Ministry of Tourism is speaking with cruise lines to identify a funding model that will

deliver the best possible outcome for the country, while ensuring that the piers are owned by the People of the Cayman Islands.

Assuming the Ministry is successful in securing agreements with the cruise lines, we would realistically expect passenger volumes to be maintained or increased. This would effectively allow the project to continue on to its next phase of development; which will be approval by the FCO and the issuing of tenders for the design/ build aspects.

Looking to the future, I am confident that this decision will grow our business environment; foster economic development, bring increased business opportunities; create jobs; and over the longer term, it will enhance and sustain the cruise tourism industry in the Cayman Islands.

On behalf of the Government I would like to say thank you to our consultants, stakeholders and partners, members of the public and to all who contributed to getting us to this point.

By moving forward, we are doing what is right for this country and securing opportunity for generations to come.
I thank you for your attention.