|Editorial (August 16, 2012)|
|Thursday, 16 August 2012 09:19|
Tender on ports project a good step
Kudos to government for halting the proposed cruise ship pier expansion so that the project can be transparently tendered. This step is clearly necessary if the government is to remain in compliance with the Protocols for Effective Financial Management that Premier Dr. Orlando Smith signed in April.
In March, the National Democratic Party government initially announced plans to extend the pier and to develop an adjacent parcel of land. Communications and Works Minister Mark Vanterpool told reporters at a press conference that officials were formally negotiating with Tortola Port Partners, a consortium of United States-based companies.
About three months later, Mr. Vanterpool and consortium representatives held a public meeting and gave a detailed presentation about their proposal, which involved a $75 million investment and a guarantee that the Virgin Islands would receive at least 425,000 cruise passengers annually in exchange for a 48-year lease of Crown land and a unspecified portion of passenger tax revenues.
The plan drew mixed reactions from the public. Some residents agreed with Mr. Vanterpool’s assertion that the proposal is precisely what is needed to continue attracting major cruise lines at a volatile time in the cruise industry. Others balked at the idea of turning over Crown land to a foreign company, insisting that VI investors should be given a chance to be included.
Without more information on the costs and benefits of the proposed plan, we are reluctant to take sides, but we applaud Mr. Vanterpool for engaging the public at the proposal stage rather than simply announcing what government had agreed after a contract was signed.
However, an open and transparent tender process will better satisfy the public’s legitimate concern about whether government properly considered all of its options before committing the territory to a long-term arrangement. There likely is potential to expand and improve the territory’s cruise ship facilities in a way that will benefit residents, government, investors, visitors and local businesses. Inviting other companies to submit their proposals is the best way to ensure that the territory gets the best deal possible.
While Financial Secretary Neil Smith said he believes that the negotiations to date were “an attempt to create a credible restrictive bidding procedure,” his review of the process found that it wasn’t in line with “international best practice.”
Government, then, was right to go back to the drawing board. When he signed the Protocols in April, the premier committed the territory to following “internationally recognised” standards for planning and executing capital projects.
To that end, the Protocols specifically state that public-private partnerships, like the proposed cruise ship pier, must be “suitably appraised” with a “robust” cost-benefit analysis that includes independent experts’ advice. Then an open tendering and procurement process with the “highest levels of transparency and fairness” must be carried out, the Protocols stipulate.
The Protocols tie VI policymakers’ hands, but in a good way: The agreement will help ensure good governance. It is also in keeping with standards that lawmakers imposed upon themselves eight years ago when they passed the Public Finance Management Act. That act and accompanying regulations set out the rules for government procurement, creating a Central Tenders Board that advises Cabinet on which contractor to select.
Dr. Smith’s government campaigned heavily on promises of transparency and good governance. Public meetings and press conferences were a good start. The recent decision to begin posting detailed tender documents on the Ministry of Finance website is another welcome step.
But officials can continue on this path by requiring an open tender process for all major projects and by presenting the public with developers’ proposals in full. Dr. Smith has said that the project “has the potential to be a major, long-term success story for our people and our economy.” He may be right. But, conversely, the project could have serious negative implications for the territory for decades to come if done badly. That’s why government’s recent decision to tender the cruise ship pier project is welcome.
|Last Updated on Thursday, 16 August 2012 09:20|