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Cayman Islands Government

LOGB Press Briefing Statement

LOGB Hon. D. Kurt Tibbetts, JP

Press Briefing Statement

Hon. D. Kurt Tibbetts, JP, MLA, Leader of Government Business

Thursday, January 8, 2009

Today I am pleased to announce that the second round of negotiations with the UK on a new Cayman Islands Constitution is now scheduled to commence here next week, beginning Tuesday, January 13th through Friday, January 16th starting promptly at 9:00 a.m. daily.

These talks will take place at the Westin Casuarina Resort and the format will include an opening session wherein all participants are welcome to deliver an introductory statement. This session will be open to the public and the media and a final concluding session on Friday morning will also be open to the public and media. The sessions in between will continue to be held in private. The outcome of these talks will determine whether the final round will take place in London in early February.

Update on Redevelopment Plans of Cruise and Cargo Facilities

As you will be aware, the Port Authority has for the past two years been exploring the redevelopment of port facilities in the Cayman Islands. In July 2008 the Government reached a major milestone with the project when it entered into a Memorandum of Understanding with the Port Authority and a local developer to negotiate terms for the establishment of separate cruise and cargo facilities.

I am pleased to report on the progress that has been achieved since then in respect to conceptual design work, the Environmental Impact Assessment Process, stakeholder consultations and the ongoing ownership and financial model analysis.

As you are aware, the present Port Facility is shared by both cruise and cargo operations. This creates serious user conflicts. Under the current system the Port Authority can only conduct cargo operations at night with limited utilisation and unfavourable working conditions. These operational constraints regularly result in delays and additional expense for cargo operations. Further, the Port Authority projects that the current facilities will not be adequate to cope with anticipated cargo volumes in the very near future. Projections call for the capacity of the existing cargo facilities to be exhausted as early as 2014 with significant inefficiencies being experienced as early as 2012.

The primary goals and objectives for this project are to establish facilities that will separate cruise and cargo handling to avoid conflicts, improve the management and carrying capacity of cruise and cargo facilities and cater to forecasted demand over the next 25 to 30 years in a cost effective and environmentally responsible manner.

The new facilities aim to preserve Cayman's market share and to significantly reduce (albeit NOT eliminate) weather-related business interruptions within the cruise sector. For cargo, the goal is to provide infrastructure which caters to future growth as cargo imports remain the lifeline of our country.

Proposed New Cruise Terminal

With respect to the cruise berthing facilities, preliminary marine-based concepts exist highlighting a range of three different construction methodologies to be considered during the environmental testing phase. All of the concepts under consideration are designed to accommodate the new Oasis class ships but the environmental assessment will help determine how each design performs under actual testing.

Current cost estimates for the cruise project range from US$109 to US$117 Million depending on the design option. These are high level costs only and they do not include upland work nor any cost savings which may be achieved once detailed designs are completed. These plans will establish facilities which have the capacity to serve a maximum of 8 vessels - 4 berthed and 4 utilising tenders. The facilities will provide a passenger capacity at the cruise terminal of up to 23,500 passengers per day. However, just as the current facility has the capacity to cater to up to 20,000 passengers as we have done in the past, the actual capacity will be governed by a management plan such as is used today. At present, the Port Authority has in place a management system that restricts the total number of persons in port on any given day to a maximum of 6 ships or 15,000 passengers, which ever is greater. This capacity is not static but is dependant upon both the capacity of the facility and the visitor experience as monitored by exit surveys and feedback from other stakeholders. The point here is that we are building cruise infrastructure to allow for some future growth, but the actual policy will then as it is now, be determined by analysing both the carrying capacity of the facility in terms of what is possible as well as the experience of visitors and residents in terms of what is optimal and responsible. This may alter as road networks improve, the staging area of berthing significantly improves the way that passengers access pre-arranged tours as well as independent transport once they arrive. These features will be given priority to ensure the visitor experience is preserved.

Proposed New Cargo Terminal

With regards to our Cargo Operations -- the Port Authority estimates the existing cargo terminal has a very limited lifespan before inefficiencies significantly increase including longer delays with handling cargo.

The proposed new cargo terminal is designed to accommodate the projected growth of cargo traffic including larger ships to encourage economies of scale.

The Port currently handles approximately 270,000 tonnes of cargo per year. The new cargo terminal will have the capacity to process cargo volumes up to 2.3 million tonnes per year through to the year 2030.

Cost estimates for the proposed construction and relocation of the cargo terminal are in the range of US$71 Million.

The project also allows for the option of establishing the new cargo port in two stages.

Financial Models

KPMG has been engaged to conduct financial and ownership modelling on behalf of the Port Authority and the Government. This review is nearing completion and provides an independent basis for the Port Authority and Government to assess options for achieving this critical infrastructure.

Stakeholder Consultations

As public consultation on the environmental impact assessment is due to begin, preliminary meetings were held with targeted end users who are familiar with cruise and cargo operations as a means of obtaining their feedback on the operation feasibility of the conceptual plans. Through the FCCA and as a result of meetings with individual cruise lines, input has been received from senior captains who are familiar with navigational and operational conditions in Cayman ports. The cruise lines overwhelmingly approved of the project reiterating that while further detailed analysis should be conducted, conceptually the plans are acceptable and will facilitate berthing and tendering operations. Consultations have also occurred with local stakeholder from the Cayman Islands Tourism Association, the Chamber of Commerce and the Association for the Advancement of Cruise Tourism. Again, the Associations have indicated in principle, unanimous support for the project but have also emphasised the need to ensure that proper environmental studies are conducted and that the best interests of the Cayman Islands are preserved. The next rounds of discussion are due to begin next week with the general public who are being asked to comment upon the terms of reference for the environmental impact assessment.

Environmental Impact Assessment

The process for the EIA has been developed by the Department of Environment (the DoE). The EIA will be done in two phases with the first phase being the scoping exercise on the terms of reference and the second phase involving the actual testing of the conceptual designs. Three names of three qualified firms were submitted to the DoE which selected CH2M HILL as the most qualified firm to conduct the Environmental Impact Assessment. CH2M HILL is well known to the DoE and the community, having worked on a prior environmental project locally.

The two phased EIA process is quite extensive; it takes into account the overall effect of the project on daily life in the area; from potential impact on our marine environment to the customer service experience of cruise passengers to the resulting traffic issues flow of nearby roads.

It is important to say that the EIA, while not a decision maker, is a decision informer. It is meant to provide a sound basis upon which decisions can be made.

As you know, ALL construction projects have some kind of impact on our environment. The EIA will tell us what can be done to minimise the impacts and explore options to offset any negative outcomes which are anticipated.

Phase 1 of the Environmental Impact Assessment will begin with meetings on 13 January for the general public and on 14 January for stakeholders from within both the public and private sectors with a view to elicit ideas on the proposed parameters for the scope of the assessment. In addition, information will be provided on a website to allow for public input via email to the DoE over the period of one week.

It should be noted that even prior to the public consultation, the DoE has proposed as a starting point an extensive list of 14 different indicators or effects to be studied during the EIA. These include the following points which have been edited for brevity:

  • Sediment transport within the influence of the project,
  • Wave energy under worst case and typical conditions and potential impact on shore
  • Water quality including the potential for generating turbidities during and after construction
  • Effects on existing coastal ecosystems and resources within the footprint and adjacent area of the project
  • Effects of any construction blasting should this be required
  • Effects on the existing operations of the port and other maritime related stakeholders
  • Effects on adjacent historical/archaeological resources
  • Extent and scale of impact on the adjacent downtown waterfront business district
  • Effects of the proposed near shore berthing and operation of ships at berthing facility,
  • Effects of the proposed cargo facility on the road network
  • Hazard vulnerability due to flooding, hurricanes, and storm surge
  • Socio-economic analyses to identify possible negative economic impacts of project with respect to initial funding of the project and operation of the project.
  • Analysis of Alternatives to the Proposed Project
  • And identifying possible measures to prevent or reduce significant negative impacts both during and after construction.

As the list I just read suggests, the DoE has cast a very broad net in terms of the factors which are to be considered and these impact the triple bottom line - that is the environmental, economic and social well being of the country. CH2M HILL and the DoE will discuss public suggestions and determine if previously defined study terms should be modified. Decisions will be made based upon reasonable scientific judgment and appropriateness.

Phase 2 of the EIA which involves actual testing is due to commence once the terms of reference have been finalised.

CH2M HILL will prepare a final Terms of Reference for Phase 2 of the EIA project. The final scope will clearly define the tasks to be accomplished and the effects to be studied.

Conclusion

To recap, to date conceptual plans have been developed and there are two major work streams happening right now on this project. First is the financial and ownership modelling which is about to be concluded by KPMG who is conducting this study on behalf of the Port Authority and Government.

Secondly, Phase 1 of the Environmental Impact Assessment or EIA is about to begin. CH2M HILL has designed and will conduct this study at the request of the Port Authority and under the direction of the Department of Environment. Phase 1 of the EIA, which is the public consultation on the scope of matters to be considered, will commence next week.

For further information contact: Bina Mani