The $85 million-plus cruise pier expansion is facing an audit and its former leader is suing government, but legislators aren’t waiting on the results of those proceedings to debate the development.
On Monday in House of Assembly, opposition member Andrew Fahie (R-D1) reiterated his allegations that government illegally transferred to the Tortola Pier Park $8 million of a loan from FirstCaribbean International Bank intended for the East End/Long Look sewerage project.
In turn, Communications and Works Minister Mark Vanterpool defended the transfer, saying that central government didn’t simply transfer the funds, but loaned them to the BVI Ports Authority.
The BVIPA will pay back the loan to government from the proceeds of the development’s rental and head tax income, he added, though he admitted the BVIPA is currently delinquent on the loan.
Mr. Vanterpool also provided a spreadsheet in response to a question from Opposition Leader Julian Fraser detailing the rent that vendors have paid to Tortola Pier Park as of March 31, and those numbers are far less than what officials projected in 2014 and 2015 (see sidebar).
Mr. Fahie originally challenged the loan transfer during government’s 2016 budget debate last month.
In that sitting, Premier Dr. Orlando Smith defended the action to move the $8 million from sewerage work to the pier project, citing the Public Finance Management Act, which states that “money in the development fund received by way of a grant or loan shall be used by the government for the purpose for which it was received unless the donor or lender of the money agrees that it may be used for some other purpose.”
Government then brought a notice to the current sitting of HOA on Monday, showing exactly when the funds were transferred: $5 million in April 2015, $2 million in May 2015, and $1 million in July 2015.
But before Dr. Smith could table that notice, Opposition Leader Julian Fraser made a motion to debate the document, arguing that the public should be apprised of the reason for the transaction.
During that debate, Mr. Fahie maintained that the loan diversion was illegal, calling for documented proof that government and CIBC agreed to the transfer — though he did not formally request such documentation in the question-and-answer portion of HOA.
“The House needs a commitment letter from the bank for the original loan and for the varied one,” he said.
CIBC Manager Malcolm Whetnall declined to comment on whether the bank and the government agreed to the diversion.
“As is our policy across the board with all of our clients, we do not comment on the business of our clients as a matter of confidentiality,” he stated yesterday.
Mr. Vanterpool, meanwhile, insisted during the debate that the loan diversion was a necessary step to carry out the pier project.
“I would not say it was done correctly in the way the $8 million came through,” he said. “But it is important to understand the $8 million was raised urgently to ensure that this project was completed on time in order to achieve and accrue the benefits from it.”
Mr. Vanterpool added that the $8 million will be paid back from the rental and head tax income received from Tortola Pier Park, and that such income will far exceed all the project’s expenses.
However, the notice states that the loan was supposed to be paid back by Dec. 31, 2015 — something that has not happened yet.
“The Ports Authority has put the case forward that they will pay it back as soon as they’re able to totally complete the project and have the revenue coming in,” Mr. Vanterpool said of the BVIPA’s loan delinquency.
Government’s $8 million diversion isn’t the first time money has been transferred from sewerage projects to other purposes.
In July 2013, Dr. Smith told the HOA that the entirety of a $45 million loan from Banco Popular would go to the construction of the new hospital, according to Beacon archives.
The 2009 loan was originally supposed to be split, with $15 going to the sewerage project and $30 million going towards the hospital.
This article originally appeared in the April 21, 2016 edition.