On June 7, The BVI Beacon turned 40. To celebrate, it is re-publishing some of the biggest stories from its archives over the past four decades. The article below was written by Ken Silva which originally ran Feb. 18, 2016.
The moment the BVI Ports Authority signed berthing agreements with Disney and Norwegian cruise lines in January 2014, the government was effectively put on a ticking timer to build one of the largest capital projects in the territory’s history.
If government couldn’t deliver a quality extended dock and a brand-new shopping centre in a timely fashion, it would lose the cruise lines’ 15-year guarantees to bring 425,000 passengers here annually – and the millions of dollars of tax revenue that comes with those guarantees.
Moreover, some in the tourism industry would argue that the Virgin Islands risked being shut out of the cruise industry altogether if it didn’t deliver on its obligations.
But those potential disasters didn’t occur.
In spite of ongoing delays and a $30 million cost overrun, BVIPA and cruise line officials agreed that the government fulfilled its end of the bargain Tuesday with the grand opening of Tortola Pier Park.
Celebration
During a daylong celebration, thousands of people took in music and cultural parades and browsed through the roughly two dozen stores at the $83 million complex.
At the official opening ceremony around 5:30 p.m., praise was heaped on the development by government and cruise line officials alike, with Premier Dr. Orlando Smith saying the park is a “living testimony to the creativity, the individual spirit, and, yes, the daring spirit of our business community.”
Even so, the park wasn’t finished by Tuesday: Only about half of the businesses slated to operate there were open; only one of the 18 waterfront kiosks was occupied; a $650,000 signage and wayfinding contract still hasn’t been awarded; and one of the buildings has yet to be constructed.
But officials said full completion will come by early summer.
And despite the delayed work, Norwegian’s director of destination development, Andrew Duckworth, told the Beacon that the cruise line started paying its full $15 head tax on Tuesday — up from the reduced $7 fee it has been paying since last April due to multiple missed construction deadlines for the project.
“We made a commitment to the BVI and to the government here, and it’s a part of our partnership,” Mr. Duckworth said, adding that the berthing agreement between the BVIPA and Norwegian was not affected by the missed Dec. 1 “substantial completion” deadline. “They gave it their best effort and they got it to this point. We’re happy with it.”
Disney is also paying the full $15 head tax, and has been since December.
Communications and Works Minister Mark Vanterpool — who has received criticism for the cost overruns, which were kept from the public since 2014 — may have been the happiest per- son at Tuesday’s event, thanking those involved for helping deliver the capital project.
“What you see here today stands as a testament to the re- solve of the government of Premier Dr. Orlando Smith to develop the infrastructure of these islands and guarantee a better tomorrow for generations now and those to come,” he told a crowd of several hundred people.
Mr. Vanterpool said the park will be receiving around one mil- lion passengers annually within two years, and that projected annual revenue from businesses’ rents at the park will be $2.3 million. Already, he said, $350,000 was collected in the second half of 2015.
History repeats itself
The minister also called Tuesday a “red-letter day” for the territory, and mentioned earlier historical dates of the development, including the day the cruise dock first opened some 22 years ago.
“It would be remiss of me if I didn’t remember the initial works done on this cruise pier by the late chief minister, honourable H. Lavity Stoutt, when he first opened it in 1994,” Mr. Vanterpool said. “It would also be remiss of me if I didn’t paint in the annals of history the one individual who was most instrumental in the development of cruise tourism in this territory: the late honourable Cyril B. Romney.”
The minister can likely identify with Messrs. Stoutt and Romney, as those two legislators and others after them were also subject to criticism over the cruise development in the early and late 1990s.
On Oct. 29, 1991, Mr. Stoutt, who was chief minister at the time, signed an $8.3 million ports development contract that included the construction of a 600- to 700-foot cruise ship dock at Wickhams Cay – despite receiving a letter months earlier from the Hotel and Commerce Association stating that 109 of 142 members who cast ballots opposed the proposal.
The ink was scarcely dry on that contract before officials called for the planned dock to be expanded.
In a letter to government, which was obtained by the Beacon in February 1992, then-opposition leader Mr. Romney criticised the design for a 600- to 700-foot dock as “out of date” and called for the proposed pier to be extended another 200 feet.
Mr. Romney was criticised by project opponents who said he had a conflict of interest because he owned a travel agency that handled cruise ship bookings, and his proposal for a larger dock was not accepted by government. A 554-foot dock was opened more than two years later, in November 1994.
Still, the calls for a longer pier to accommodate larger ships persisted throughout the years, and in 1998 work began to extend the pier to 755 feet.
That $4.2 million project was also subject to scrutiny, and underwent what would be the first of several investigations when former Governor Frank Savage ordered an inquiry to be conducted into allegations of corruption and misconduct surrounding the project.
That probe was commissioned after the government rescinded a letter of intent to one company and awarded the contract to another firm.
The inquiry found no criminal conduct or corruption, but did state that the government “acted contrary to normal” procurement practice. It also recommended that the government enact a Tenders Board Act, which would clarify and legislate the process through which bids are requested and accepted.
New questions
More than 10 years later, similar investigations of the current project have been making similar findings and recommending comparable remedies.
In January 2013, then-Auditor General Sonia Webster released an audit detailing government’s efforts to expand the pier between 2007 and 2013.
Ms. Webster found that proper procurement procedures were largely ignored then, too. For example, she wrote, a memorandum of understanding was signed in 2012 with a private consortium of investors to undertake the development before a business appraisal was completed or stakeholder consultations were held to assess the desirability of the project. (The deal with that consortium was later scrapped, and the BVIPA took over the project.)
In 2014, the House of Assembly’s opposition-led Public Accounts Committee released a report of its own, making similar findings as Ms. Webster and calling for then-Governor Boyd Mc- Cleary to order a commission of inquiry into the project.
Shortly after replacing Mr. McCleary, Governor John Duncan announced in March 2015 that he would not order that inquiry. He did, however, commission an independent study into the procurement process for major projects in the VI, and he said he “supported” Dr. Smith in commissioning a separate study.
The study commissioned by Dr. Smith was carried out by the Caribbean Development Bank, and an independent investigator named ND Hearnden conducted Mr. Duncan’s. The latter report has been made public and the former hasn’t, but both call for legislation to shore up the territory’s procurement process.
“The Caribbean Development Bank’s report makes 13 separate recommendations to strengthen the existing procedures to bring them into line with best practice in other island economies,” Mr. Duncan said last March. “The independent expert consultant confirms these recommendations, and both agree on the need for the Virgin Islands to enact a standalone Public Procurement Act.”
Though the reports have not laid the blame at the feet of any one person, former BVIPA Managing Director Claude Skelton-Cline, who oversaw the cruise pier development between 2012 and 2015, did not have his contract renewed when it came up last November, and he was not a speaker at Tuesday’s grand opening ceremony.
New audit
While no Procurement Act has been tabled in the HOA — despite recommendations from consecutive studies — the premier announced last month that yet another audit will be conducted into the project.
That probe will be conducted by an independent firm that officials haven’t yet identified, and will investigate recent “rumours” sur-rounding the development, Dr. Smith said.
Mr. Vanterpool conceded that “some things could have been done better” in terms of procurement, but he insisted that he’s confident the audit will vindicate him and the project.
Many of the mistakes had to do with project officials rushing to meet the deadlines of the cruise lines, he said.
“If we had the luxury of time — and we didn’t have it because the cruise ship companies were asking for it — 12 months should have been taken to plan it, prepare it, do a proper bill of quantities,” he said. “That’s the one thing I regret we didn’t have time to do, … [but] timing-wise, in our view we’d be out of the market if we didn’t have [the extended cruise pier and landside development] by now.”
Ongoing work
While government finalises details of the new audit, work continues at the landside development, where businesses are working to fill out tenant spaces and kiosks, and construction is ongoing at the remaining unfinished building that is expected to house an international chain restaurant.
One major contract — a $650,000 deal to install signage and wayfinding around the park — also hasn’t been signed yet, though Mr. Vanterpool said discussions are taking place with a Puerto Rico-based firm and that the deal should be finalised soon.
TPP Chief Executive Officer Dona Regis said more than 50 businesses will be open by April — this reporter counted 26 on Tuesday — and Mr. Vanterpool said the final buildings should be mostly constructed by June.
At the end of his speech on Tuesday, he also asked for the public’s assistance: “One very important thing we do ask is that you do your part to help us to maintain this investment for what it’s worth to our immediate and long-term future.”
