Development Strategy & Dragon Bay
Statement from the Leader of Government Business
The Hon. McKeeva Bush, OBE, JP,
Infrastructure Development Strategy
In order to start to address the very serious economic position in which the country finds itself, government will pursue the following initiatives:
Government will immediately start the process to begin privatising and developing private partnerships for some of the functions of Government immediately. For instance, selling the sewage system with the right for the purchasing party to expand the system; also the government must immediately look at the establishment of Public Private Partnership Initiatives for the development of Roadway and Highway infrastructure, cruise ship port development, a new cargo port, new airport as well as plan to handle the country's municipal solid waste as well as the reclamation of the George Town dump and landfill.
These initiatives will inject a significant amount of new capital and will lead to significant employment. It is estimated that these projects could inject over CI$700 million into the economy.
The PFI initiatives for the GOAP building and the schools should be put into place immediately. This will result in the Government getting approximately US$120-125 million in cash, removing its liability to pay for the completion of the building out of cash flow and resulting in a long-term lease payable over 15-25 years.
The government should also seek to generate additional revenues through an aggressive divestment strategy of certain government assets. By divesting certain assets, but at the same time having some ownership through the partnership, the government will be able to ensure that the country will maintain an acceptable level of reserves, which conforms to the local Public Management Finance Law and regulations, and international scrutiny.
It is imperative that we move forward with these initiatives immediately, to ensure that we can put the country back on the right track economically. We don't have the luxury of time; we must act immediately to ensure that the country can reap the benefits of these projects.
In order for this country to grow and have continued economic growth we cannot simply be reactive, we must be proactive by developing infrastructure that will enable revenue growth in a sustainable manner. However, these developments cannot at this time be funded through government's reoccurring revenues.
During these times of economic downturn it is imperative that the government plan to implement our economic development policy, which will promote inward investment by encouraging private investors to participate in these much needed infrastructure projects. We must become creative in addressing the country's current and future capital expenditure requirements.
We have a number of entities interested in doing these projects and the government will be working diligently to finalise all the necessary processes including laws and regulations.
The government will be seek to finalise all the necessary agreements for the entities interested in doing these projects within the coming weeks so that the developers can start the construction phase of these projects immediately.
This additional expenditure from these projects will add a significant amount of much needed capital into the economy and will create jobs and opportunities for Caymanians in the short and long term. Additionally these new projects will provide the economy with the ability to develop additional revenues streams to allow for diversification of the economy and create a more stable and sustainable revenue base.
Statement Regarding the Dragon Bay Project
Since taking office, there have been repeated requests for information on the deal that the previous administration did with Mr. Michael Ryan for the Dragon Bay Project.
The information I'm about to give are the commitments given by both sides, Mr. Ryan and the Cayman Islands Government. Mr. Ryan purchased the old Safe Haven Golf Course and the following is the arrangement he made with the PPM Government.
- Build new Port Authority Marina and associated facilities
- Provide golf membership opportunities for Cayman residents on new course
- Clean up and replant two mangrove islands adjacent to project
- Develop expansion of existing Ritz-Carlton resort onto the former Safe Haven development land.
Of course it's a huge development of hotel, condo and related development.
- Extend Safe Haven lease to 99 years
- Lease developer small and large mangrove islands adjacent to the project
- Provide dedicated space in airport terminal for resort residents and guests
- Provide dock at airport for use by resort owners and guests
- Waive import duty for alternative energy generating, recycling and other eco-friendly operations/equipment
- Provide 50 work permits for key staff necessary in creating the new development and staffing the hotel
- Reduction of stamp duty on all land transfers to first time Caymanian owners to 4%
- Reduce import duty on hotel, golf and related construction to 10% for 8 years from date of Main Agreement execution
- Waive import duties on pre-opening and opening supplies for the new hotel
- Reduce import duties on residential construction to 10% for 8 years from date Main Agreement execution
- Waive import duty on construction materials to build new schools
- Waive import duty for construction materials to build a church or churches
- Waive import duty for construction materials to build public beach facilities
- Waive import duty for construction materials for public roads and related elements
- Waive import duty for construction materials for new Port Authority marina
Since the last Government gave these concessions, we as the new Government must now make the best of it. We must now move ahead to get as much as possible out of the project, as there can be significant revenue to come from that development.