Cruise and Cargo Port Project Announcement of Preferred Bidder News Conference

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

29
July, 2019

Good
afternoon and thank you for joining us here today for what is a
highly significant milestone for the future of the Cayman Islands.

As
I promised in the House on Friday when formally announcing the
selection of the Preferred Bidder, we are now able to provide the
country with more details of the cruise and cargo dock project – a
project that secures the future of Cayman’s Cruise Tourism industry
and protects the well-being of the thousands of Caymanians who
benefit directly or indirectly from cruise tourism.

I
would also acknowledge and thank those members of our Government
Caucus who have taken time out of their busy schedules to attend here
today.

The
winning bid received from the Preferred Bidder contained three
options, which Cabinet was able to consider. The differences in the
three bids essentially involved the extent to which new cargo docking
facilities would be improved as part of the project. Having regard to
the concerns that have been voiced about the project while looking to
secure long term benefits for the country, the Cabinet selected the
option that minimises the environmental impact and delivers the best
overall financial deal for Country. The established cost for the
selected option will be less than CI$200M, subject to the final
contract negotiations. The Deputy Premier and Chief Officer Stran
Bodden will provide details of this option and the financial
arrangement in a few minutes.

As
I stated on Friday, Verdant Isle Port Partners consists of:

• McAlpine
  Cayman Ltd.
  
• Orion
  Marine Construction
  
• Carnival
  Corp.
  
  
• Royal
  Caribbean Cruises Ltd.
  

All
of those involved are trusted, world class companies and all have had
a Cayman connection for decades. As I mentioned on Friday, Orion
Marine Construction purchased Meisner Marine Construction, which is
the company that previously built the Royal Watler Cruise Terminal as
well as the Creek Dock in Cayman Brac.

This
is a moment that the majority of the people in our Islands have been
aiming to get to for at least 20 years if not longer. Certainly,
every Government elected since 2000 has had promises of a cruise port
in their election manifesto or as part of their delivery plans.

It
is the hard work done by the last two Administrations that means we
are now, finally, able to announce that we are in a position to
proceed with the delivery of the new port facilities this country
needs for the future.

When
we took office in 2013 we set out on a complex process that we knew
was necessary to bring us to this point. It was at a press
conference like this on 28th
October 2015 that I, the Deputy Premier, and Chief Officer Bodden
announced to the country that Cabinet had carefully considered the
various professional reports on the project and had agreed the
previous day to move the Cruise berthing facility forward. This
included starting conversations on a workable financing model:
conversations that included independent legal and accounting experts,
the major cruise lines, the United Kingdom Government as well as
Government officials.

It
has taken almost four years to achieve what we have today:

• A
  unique financial structure that does not expose the finances of the
  Country to risk;
  
• A
  cruise berthing facility with no one single major cruise company
  controlling it, but instead one that will be managed and owned by
  the Port Authority on behalf of the people of the Cayman Islands;
  
• Enhanced
  cargo port facilities;
  
• No
  new upland development other than to modernise the existing
  facilities;
  
  
• A
  final design that significantly reduces the environmental impact of
  the project – building in deeper water as well as relocating
  coral;
  
• A
  financial model that binds the cruise lines to the long term
  delivery of the port;
  
• A
  project structure that has ensured that at every stage along the way
  we have followed the strict requirements of the Public Management
  and Finance Law and the Framework for Fiscal Responsibility.
  
  
• And
  finally announcing today the preferred bidder along with the other
  information that we promised would be made available at this
  juncture.
  

During
this process we have been unable to say very much – but the process
took as long as was needed to ensure that we arrived at the best
outcome without any political interference. And this we have done.

I
accept that our inability to answer questions definitively up until
now has been frustrating. It has been frustrating for us in
Government and as frustrating for the thousands of Caymanians who
support the project just as it has been frustrating for those who
oppose it. Many Caymanians have had perfectly legitimate concerns
and questions that Government was unable to address while the
procurement process was under way.

Perhaps
inevitably, over the past year in particular, Government has been
bombarded from various quarters, including by some media platforms,
with a plethora of questions that we could not discuss till the
process was completed.

However,
we always promised that as soon as we were able to do so, we would
answer the questions people have had. We explained over and over why
that could not happen until now.

Put
simply, this is a design, build, finance and maintain procurement.
That meant we could not show the country the port design because it
was for the bidders to propose the final design. We could not
discuss the final financing of the project because it was for bidders
to come back with their proposed financing model.

Yet
despite the explanations we provided there are those who were
determined to prevent the port project proceeding and who took
advantage of our inability to comment fully to put forward several
unfounded allegations that were just wrong – indeed, some would say
they were downright untruths.

Sadly,
those proponents of untruth, notably Cayman News Service (CNS) and
some
of the leaders of the CPR group, were not content with casting doubt
on the project but they also threw in for good measure allegations of
corruption on the part of elected members of Government, with
supposedly secret deals having been made, particularly with China
Harbour Engineering.

This
continued even after I announced the Preferred Bidder on Friday, with
CNS noting that supposedly “The
other finalist bidder was China Harbour Engineering Company, which
many people thought would secure the deal because they had been
prepared to offer financing to government for projects beyond the
George Town Harbour cruise piers and cargo port expansion”.

I
do not know who the ‘many people’ are that CNS highlighted but I
can say that I suspect the reality is that if any such people do
exist then it is a limited number who thrive on conspiracy theories.
In any event they and CNS are wrong, very wrong – there were no
secret deals with anyone and we have never been in discussions for
anything other than the port project itself.

While
there have been a small number of opponents who were willing to do or
say anything to cast doubt over this project, most Caymanians who
have expressed their concerns or asked questions have done so for
perfectly understandable reasons. They are concerned that if the
country is to embark on this project then we must get it right –
the right design, the right costs and the right balance between the
economic benefits and the environmental impact.

I
am pleased that we are now in a position to answer those legitimate
questions and to put to rest the concerns people have. In short, I
am confident the chosen bid option gets it right.

By
the end of today’s press conference I am hopeful that those parts
of the media that are challenged in getting the facts right will now
report factually what has been said here today and what is being done
to move this project forward.

In
recent days another question has been raised to challenge the
validity of the procurement process, this time by the Leader of the
Opposition. As I said earlier, it was the Central Tenders Committee
that approved the tender. The question then arises as to why Central
Tenders Committee when the new Procurement Law, 2016 calls for major
Government Projects to be dealt with by a new body, namely the Public
Procurement Committee.

The
reason for this is very simple – The Procurement Law 2016 only
applies to projects that were not started when the law came into
force. Specifically, section 21(1) of the Procurement Law states that
the law will apply to every procurement project being carried out
that has
not been started
when the law comes into force.

The
new Procurement Law came into force on 1 May 2018. The Project
started some years prior to this date but certainly the Procurement
process started in 2017.

Independent
legal advice was taken and the guidance provided was that the
Procurement Law did not apply to this project, nor did the Public
Procurement Committee have jurisdiction to deal with it. Prior to
the new Law the Central Tenders Committee (CTC) formerly dealt with
all matters relating to projects of this size and did in fact deal
with this project in previous years. It was thus the CTC that could
adjudicate on this project.

On
the basis of independent legal advice, Cabinet appointed the current
members of the Central Procurement Committee to a re-constituted
Central Tenders Committee. This allowed the procurement of the
project to continue legally. I hope that explanation puts this
particular issue to rest.

Part
Two

Let
me move now to discuss briefly the matter of a people initiated
referendum.

I
want to first note for anyone who is not aware that a People
Initiated Referendum is made possible by Section 70 of the Cayman
Islands Constitution because it was a part of the Progressives’
Constitutional proposals in the 10 years of negotiating with the UK
on the constitutional order. It was me and my Progressive colleagues
who fought to have this included in the 2009 Constitution. Because
of my direct involvement I know very well what was intended by the
language in the Constitution.

Specifically,
Section 70 of the Constitution states, in part, that “before
a referendum under this section may be held there shall be presented
to the Cabinet a petition signed by not less than 25 per cent of
persons registered – registered - as electors in accordance with
section 90”.

The
intention was exactly as stated; the test was to be ‘not
less than 25 per cent of registered electors’.
It does not say ‘almost
25% of the electors’, and
so the only way one can validate whether the test of ‘not less than
25 percent’ is truly met is to validate
every signature.
We are small enough and have the ability to carry out this
necessary verification to conform to the requirements of the
constitution. Undoubtedly despite the early noise this is proving
true with no issues and with no interference or intimidation as some
proffered as inevitable in this process.

My
Government respects the provisions in the Constitution and most
importantly we respect the people of the Cayman Islands who have
signed the petition for a referendum.

And
so, I will again repeat what I said on Friday. Notwithstanding
Cabinet’s approval of a preferred bidder, the Government will not
proceed to execute a contract before the 1 October, 2019, in order to
allow for the completion of the people-initiated petition
verification of signature process.

Despite
the unfounded accusations, at no point have we interfered with the
process and this will continue to be the way we operate.

I
can also confirm to the public that there is absolutely no truth in
reporting by CNS on Friday that “it
has become increasingly apparent in recent weeks that it is the
government’s intention to challenge the call for a people’s vote
in the courts”.

It
is absolutely untrue. I really despair at these tactics but I do
believe that the public is coming to see through it all and
understand the real intent is to sow suspicion and discord and to do
anything and everything possible to stop the project from proceeding.

I
have always been of the view that the vast majority of people in
these Islands have for decades supported cruise berthing as well as
the need for improving our current, very old, cargo dock facilities.

Now
that we are in a position to provide the information we promised I
have no doubt that even should we go to a referendum that it will be
won overwhelmingly in favour of us completing the project and placing
our Islands in the best possible position to maintain and grow an
important part of our economy.

The
announcement we have made today demonstrates that this project is
delivering on the promises we made to the country:

• Cayman’s
  new port will deliver jobs and income for Caymanian families;
  
• The
  project will be delivered by a trusted developer and partners;
  
• The
  project is proceeding because we have secured an excellent funding
  deal;
  
• The
  current proposed design minimizes the impact on the environment; and
  
• The
  project has followed and will continue to follow best practice in
  procurement and delivery.