Government understood as early as May 2014 that the cruise pier project was facing major cost overruns, but it kept that information from the public until last week, according to recent information provided by Communications and Works Minister Mark Vanterpool and other officials.

This timeline suggests that a 2015 prospectus designed to entice residents to invest in the project used outdated cost estimates.

On Jan. 25, Mr. Vanterpool stated in the House of Assembly that the total cost of the project is now estimated to be $82.9 million, nearly $30 million more than original projections.

The minister blamed the overruns largely on “incomplete” designs by the former developer, but he did not tell the HOA when government realised that the development would cost far more than originally expected.

However, in an interview with the Beacon the next day, Mr. Vanterpool estimated that the new cost information was gleaned around November 2014.

Now it appears that the increased costs may have been known even earlier: In response to a reporter’s question at a Tuesday press conference, Tortola Pier Park project manager Dion Stoutt said that revised estimates were received in May 2014.

Prospectus

Nonetheless, an investment prospectus issued in January 2015 seems to use the original estimates.

The prospectus estimated the total landside development to cost about $23 million – some $14 million less than the current projection – with the buildings estimated to cost about $13 million; the infrastructure and civil works $3.4 million; landscaping $2.5 million; and demolition, piling and foundation $4.2 million.

Those figures are similar to original cost estimates contained in a financing commitment letter between FirstCaribbean International Bank and Tortola Ports Partners from August 2013, which was obtained by the Beacon.

NCL not paying full head tax after all By KEN SILVA Last week, Communications and Works Minister Mark Vanterpool told the Beacon that Norwegian and Disney cruise lines started paying their full $15-per-passenger head tax in December. However, in a press conference on Tuesday, Mr. Vanterpool revised his statement: Norwegian, he said, will not start paying the full head tax until Feb. 15, the day before an opening ceremony is scheduled at the park. “That may be a correction on what I told you [last week],” he told this reporter. Norwegian has been paying a reduced tax of $7 since April due to multiple missed construction deadlines at the Tortola Pier Park. Disney, however, is paying the full $15 head tax, a spokeswoman confirmed last week. Norwegian officials have not returned phone calls and e-mails.

That document estimated the total cost of the landside development buildings to be about $24.3 million. It also accounted for tenant build-out and design costs, which were estimated to be about $1.1 million and weren’t included in the prospectus estimates. 

Former Tortola Pier Park placement agent Clarence Faulkner, who oversaw the public offering and put together the prospectus, said this week that he used the estimates that were provided to him by the BVI Ports Authority.

“We didn’t do anything without a formal legal document provided by [the BVIPA],” said Mr. Faulkner, who is no longer involved with the project.

Outdated estimates?

When Mr. Vanterpool was asked why the prospectus seemed to use outdated estimates, he replied that officials may have been concerned that they didn’t have an accurate picture of the total cost at the time.

“We got estimates from BCQS, and we were a bit alarmed even at the estimates we got at that point,” he said. “And we wanted to verify and finish the drawings and so on. It would be nice to see what date those [final] estimates were [made].”

Mr. Vanterpool also explained that much of the increased costs occurred in 2015 after the prospectus was issued, the public offering was closed, and construction was well under way.

“Building Two and Three, we had to adjust the foundation cost by about $1 million because when we started piling we met unexpected rock that was originally a revampment when the old Wickhams Cay was built,” he said, adding, “When we started engaging possible tenants, some of the major tenants requested redesigning to buildings we already started.”

The minister also downplayed the importance of potential investors knowing the development’s exact cost, saying that their returns are “guaranteed” by the BVI Ports Authority.

“The pier park cost doesn’t have any relevance on their return. Investors’ returns are heavily dependent on the leases and uses of the buildings, and we’re more than subscribed on that already,” he said. “So we’re comfortable we can pay investors.”

Under the terms laid out in the prospectus, however, the investment is not guaranteed. In fact, the document includes multiple caveats warning investors of the risk of losses if the scheme doesn’t play out as planned.

This article first appeared in the Feb. 4 print edition.

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