Two long-debated national infrastructure projects recently came closer to fruition as government took the first steps in a lengthy process toward building a cruise pier and revamping Cayman’s airports in the era of “fiscal responsibility.”
Discussed for decades without result, plans to develop new cruise berthing facilities and refurbish the Owen Roberts International Airport are slowly inching toward the start line as government attempts to make good on its election promise to revitalize George Town.
An era of supposed austerity in government spending hasn’t prevented progress, with public/private partnerships emerging as the new formula for getting major infrastructure projects done in the Cayman Islands.
The painstaking process of compliance with the Framework for Fiscal Responsibility means the People’s Progressive Movement will not likely see either project through to completion in this term.
A timeline for the port project, the more advanced of the two, targets 2015 as the likely start date for construction, assuming there are no roadblocks identified either in the Environmental Impact Assessment or in the bidding process.
The process of bringing berthing facilities to George Town harbor has shown the FFR process in action for the first time.
Critics have commented that much of the work being done now, including the business case produced by PwC and the Environmental Impact Assessment which is about to begin, are essentially duplicating work already done on past plans.
But officials point out that these steps are necessary to meet the strict regulations now required for financing major projects.
Finance Minister Marco Archer outlined the importance of public/private partnerships to the Cayman Islands in his medium-term fiscal strategy address in the Legislative Assembly last month.
“With the current restrictions on borrowing, major infrastructure projects such as a cruise berthing facility will only be possible in the short term through partnerships with private sector developers.
“In pursuing these development opportunities, the government is committed to open, transparent and robust processes that deliver value for money and which accrues maximum benefits for the people of the Cayman Islands.”
One of the first requirements is for a business case to be produced, demonstrating the need for the project and the likely economic impact.
That process has already been completed for the cruise berthing facilities, with PwC estimating that new piers would create nearly 1,000 jobs and inject $250 million into the economy over a 20-year-period.
A series of public meetings have followed, and the project has moved toward the next step – a full environmental impact assessment. That will take place in tandem with an open-bidding process, inviting qualified companies to apply to partner with government on the pier project.
Each phase is being overseen by law firm Applebys to ensure “international best practice” and compliance with the Public Management and Finance Law.
The airport project, in comparison, is still in its infancy, but moving slowly along the same road.
On the same day that government published the business case for the cruise piers (Nov. 1), the Cayman Islands Airports Authority began inviting bids from consulting firms to produce a similar document to determine the scope and size of the redevelopment required at all three islands’ airports.
The business case will determine whether runway expansion is required to accommodate long- haul flights at Owen Roberts International Airport, and what level of renovation is required at the cramped passenger terminal.
A strategic outline case, the first step in the procurement process, argued: “Growth in passenger numbers over the years has meant that the existing capacity of the airport is inadequate. The provision of an expanded terminal and associated infrastructure is consequently overdue.
“The airport terminal reflects a combination of aged and cramped facilities and a severely congested and uncomfortable environment, providing a poor level of service to travelers passing through the airport.”
The knock-on effect of both projects and the expected increase in tourist numbers is likely to have an impact in other areas. Moses Kirkconnell, minister of district administration, tourism and transport, has acknowledged that up to $20 million may have to be spent improving the road network around George Town and potentially converting some downtown areas for use only by pedestrians. He suggested this could be funded by government.
The addition of more than a million tourists, predicted in the PwC report, also could have an impact in other areas.
Managing the delicate balance of the two key sectors of Cayman’s tourism industry – air and cruise – may represent the biggest challenge going forward.
A report by engineering consultants Mott McDonald on the cruise project cautioned, “One side sees a large volume of relatively low-spending cruise visitors deterring stayover visitors and seriously diminishing the quality of the experience for everyone. Another side sees the growth of cruises as a chance to create additional wealth and opportunities for local entrepreneurs.”
It adds: “The carrying capacity of the natural environment and nature-based tourism attractions is limited, and may struggle to cope with potential increase intensity of use arising from tourist spending a longer time on shore.”