UPDATE: Has the UK stopped the Cruise Ship Pier Development Proposal?
The Government of the Virgin Islands, through the Ministry of Communications and Works has already announced publicly in meetings and on talk shows, that the project will be executed via Tortola Ports Partners consisting of a consortium of US-Based United Infrastructure and Cashman Groups.
It remains unclear what will happen now with the UK enforced public tender process, if another company comes with a better proposal as there are legitimate expectations from the Ports Partners, and whether the process at this stage can be transparent.
Minister for Communications and Works Hon. Mark Vanterpool told a media site that there will be no scaling back of the project and claimed that his government invited the UK Government to review the project, however, sources close to the project contradicted his claims and the Premier himself reportedly contradicted his Minister who continues to insist that “the project was full speed ahead”.
“The project could not be full speed ahead if the Premier has now announced a public tender process, so who is fooling who?” a senior government official told this news site.
Meanwhile, this news site’s sources close to the project, had stated that the UK Government had registered its opposition to some aspects of the project. The source inside Government had further said that a Steve Johnson from the Foreign and Commonwealth Office (FCO) visited the Virgin Islands (VI) recently to deliver the UK’s position to Premier Smith and Hon. Vanterpool.
Minister Vanterpool, who is the government chief spokesman for the initiative and continues to suggest that this project is vital and would revitalise our stagnant economy, when contacted by this news site, said through the Government’s Director of Communications that he was “not aware of the proposed initiative being squashed”.
It is this news site’s understanding from its team of reporters and well-placed sources close to this project that the FCO opined that the project was not allegedly compliant and not within the spirit of the recently signed Protocols for Effective Financial Management penned in April of this year, between the Smith Administration and the UK Government through Hon. Henry Bellingham, the Parliamentary Under Secretary of State and Minister for the Overseas Territories.
It was believed the FCO objections were related to section 10 of the Protocol and the issue of ‘Delivering Value for Money’. While some are saying the project is squashed, according to a high ranking NDP source, “that is not the case, however, we have to go back to the drawing board on many aspects of the project.”
The same source told this news site that a high level meeting was held on July 25, 2012 which included the Minister for Communications and Works, the Financial Secretary, the Ag. Permanent Secretary in the Ministry of Communications and Works and the Ports consultant Claude Skelton-Cline, to iron out a revised proposal and approach that fits what the UK requires.
Many other meetings are scheduled to ensure that the Cruise Ship Pier Development Project stays on track and it is this news site’s understanding that contacts were made recently by Premier Dr. Smith with MP Henry Bellingham, the Minister for the Overseas Territories to register the importance of this project to the VI.
The many other meetings expected by Government are planned to iron out a new revised proposal to convince the UK Government that the project is vital to the VI Government and all rules will be followed.No tender process was held on this project which was a campaign issue for the NDP over the Biwater (water) purchase agreement where they demanded that projects of this size goes out for public tender, however, the same standards and position were not applied on the Ports project by the NDP.
However, two other proposals were submitted, reviewed and analyzed according to the Minister Hon. Vanterpool at a public meeting.
Managing Director of BVI Ports Authority shut out?
Another source when asked about the involvement of Vincent O’Neal, the Managing Director of the BVI Ports Authority, said he has been virtually shut out of the project, however, the same source claimed members of the Ports Board are involved and had to approve some of the aspect of the project including the purchase of $3.5M of piles for the project from Ports funds.
When contacted by this news site, Mr. O’Neal confirmed that he was never a part of the negotiations on the Ports project and therefore was not aware of any report of the UK’s concerns.
Gregory Adams, the Chairman of the BVI Ports Authority Board when contacted said he could not give any comment on anything relating to the Ports since his contract expires on Monday July 30, 2012.
A call to the Trade Department about a Trade License approval for Tortola Ports Partners confirmed no such trade License exists.
What is the Cruise Ship Pier Development Project?
According to information provided and research done by this news site, the development which is referred to as the Tortola Pier Park is an investment that will come from Tortola Ports Partners consisting of a consortium of US-Based United Infrastructure and Cashman Groups.
The participating cruise lines are Disney and Norwegian, who under the proposed plan, Government will have to lease the land for 48 years in exchange for Disney and Norwegian Cruise Lines guarantying a large number of passengers over the next 15 years and an increase in passenger tax. The guaranteed amount of passengers is reported to be 425,000 minimum passenger arrivals per year.
The total investment is around $75M, coming primarily form the head tax of $15 per person, with $6.00 going to the BVI Ports Authority. Currently, the BVI Ports Authority Act has them receiving $7.00 per person head tax which means with the new proposal for the Cruise ship project will see a reduction in head tax for the Authority.
After 15 years, according to the proposal, the head tax will increase to $38.00 and by year 48, it will be shared 50/50 between the BVI Ports Authority and Tortola Port Partners.
The investment also includes another $25M for pier and excursion dock; $25M landside development; and $25M community investment all over the life of the project and will not be an immediate direct investment.
Unbalanced deal?
Tortola Ports Partners will only be investing 2 million dollars up front in the project, however, the Virgin Islands Government via the Ports Authority will be surrendering 4.1 acres of prime land on Wickham’s Cay I, via a lease for 48 years, valued at between 9 to 11 million dollars.
The Tortola Ports Partners will get 100 percent concession revenue for the first 15 years, meaning all monies for rental of stalls or vendor’s boots will go directly to Tortola Ports Partners, and thereafter shared 50/50 between them at the BVI Posts Authority.
The rent by vendors at the Ports will increase by 2 percent every three years.
In addition, a local consultant was also hired to crunch the numbers on the project and was reportedly paid over $50,000.
Hon. Vanterpool said there can be a buyout clause, and according to sources, it can be in excess of $100 million dollars in year 15.The then Virgin Islands Party Government of Ralph T. O’Neal, OBE signed last year Heads of Terms with Magical Cruise Company Limited to improve the same facilities. The Heads of Terms proposal was to be amortized over 10 years. The scope of the works included the extension of the existing pier, dredging of the habour and construction of a welcome centre with rest room facilities. This heads of terms were squashed by the NDP Government.
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