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The Finance Deal for the Cruise Berthing Facility is a WIN for Cayman!

After years of discussion, hard work and negotiation, last week the government announced that it had selected a preferred bidder to construct the cruise berthing facility and enhanced cargo dock in George Town.

The government was clear throughout this process that they would release details to the public at the earliest opportunity. Now that the preferred bidder has been selected, the need for strict confidentiality has ended, giving way to the announcement of the finer details and the project cost.

Following careful analysis of the options included in the proposal by the Ministry of Tourism, Port Authority, the Major Projects Office and industry partners and after approval by the Central Tenders Committee, the preferred bidder selected by government was announced to be a consortium called Verdant Isle Port Partners (VIPP).

VIPP comprises four companies in partnership and is led by local and trusted construction company McAlpine, marine engineering experts Orion Marine Construction Inc., and cruise industry partners Carnival Corporation and Royal Caribbean Cruises Ltd. Caymanians should know that together they offer considerable local and technical expertise and are familiar with projects of this nature and scale.

The bid that was selected by government comes in at CI$196.5m and includes the enhanced and expanded cargo facility.

However, crucially the upfront cost of construction will be met entirely by the consortium, including any overspend that occurs. Government has offered no loans, issued no bonds and provided no guarantees to the Verdant Isle group. The total cost of constructing the cruise berthing facility and enhanced cargo facility – as well as the maintenance for 25 years – falls entirely on the consortium.

Verdant Isle will get their money over this time from a portion of the passenger fee that currently pays for tendering services. Passenger fees are paid by cruise lines for each individual passenger aboard. These fees are wrapped up in the cost of a cruise, in much the same way taxes are included in the cost of an airline ticket. What this means is that cruise passengers will be paying for the piers with the consortium merely advancing these funds for construction.

The deal that government has negotiated is certainly unique. It is rare for two cruise lines to join forces to build a single berthing facility and exceptional for cruise lines not to own or operate any retail space within the cruise terminal, which is the case in this instance. This is a win for Cayman!

But there are many other benefits. The planned facility will secure the future of the cruise industry in the Cayman Islands; it will protect the 4,500 jobs that are supported by cruise passengers; it will transform the George Town Harbour front and will finally put an end to Cayman’s dubious distinction as the only Caribbean destination without berthing facilities.

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