Opposition Leader Marlon Penn has now weighed in on the heated debate over the BVI Ports Authority’s ongoing fee increases, which have caused consternation among business owners who were already struggling to keep their heads above water due to fallout from the Covid-19 pandemic.
“This is simply not the right time,” Mr. Penn (R-D8) said Monday, claiming that the cost of doing business in the Virgin islands is already high and the increase “will only result in inflation of those costs, the consequence of which will have a detrimental impact on our economy.”
The BVIPA has said the increase is needed to upgrade port operations and to improve service, including upgrading facilities to meet more modern standards and comply with international regulations.
But Mr. Penn accused the BVIPA of wasteful spending and said the fees are coming at a time when business owners and consumers can least afford the expense. He also expressed concern that the fees for construction materials could halt construction projects in the territory and send the economy into a recession.
“For those business owners whose businesses are already on life support, this fee increase will only create undue hardships for those already struggling businesses,” he said.
Owners will have no other choice but to pass those same fees on to consumers, he added, calling on Premier Andrew Fahie to rescind the adjustments.
Last week, Mr. Fahie had hinted that he might take such action.
During an appearance on March 31, he told residents to stay tuned for “a more amicable way forward with the port fees.”
He added that “plenty of consultations with many stakeholders and the government” are “ongoing behind the scenes” and told listeners to expect a new announcement this week.
However, no announcement had come as of press time.
BVIPA’s view
Ports officials, meanwhile, say the hikes, which will see some costs more than triple, are not as drastic as they seem.
BVIPA Director of Finance Claude Kettle said in a Tuesday interview with 284 Media that the increases had been scheduled since January 2020 and were not a direct result of the pandemic, but rather an effort to keep up with inflation.
“If you look at the larger scheme of things, you will realise that increase that did not happen over the last 25 years, the rate of inflation in BVI on average is about three percent, and … those fees would bring you into the present time, where we should be,” he said.
However, he acknowledged that the business community felt blindsided by the suddenness of the hikes, and said the BVIPA “may have missed the ball in terms of getting the information out to the public.”
Announcement
The fee hikes — the first for the authority in at least 20 years — were announced in January and included nearly across-theboard increases for licences and fees scheduled to begin March 1.
However, the BVI Chamber of Commerce and Hotel Association immediately slammed the move, calling it “borderline madness” and more evidence of government’s bungled recovery plan.
Last month, the BVIPA announced an attempt to appease critics and ease the pain by phasing in the adjustments.
Under the new plan, revised licence fees for customs brokers and agents took effect last month, as did new fees for storage, wharfage, line handling, and container and vehicle access. The other increases are scheduled to take effect May 1.
The authority also promised to inform stakeholders of its progress by engaging in a series of information-sharing meetings with staff, clients and members of the wider business community.
Land, salaries addressed
But on Monday Mr. Penn maintained that businesses and consumers “should not have to pay for the mismanagement of the BVIPA.”
He was particularly critical of the recent moves by the agency to “purchase property and rent space throughout the territory,” accusing the BVIPA of “increasing its expenses while cutting salaries to daily paid workers; all the while executives of the port maintained their salaries.”
During the meetings of the Standing Finance Committee in November, which are not public, Deputy Managing Director Oleanvine Maynard revealed the authority paid $2.5 million for a parcel of land purchased from the Flax family in St. Thomas Bay, Virgin Gorda in October, according to a summary of the closed-door SFC proceedings issued by the House of Assembly.
She stated that two appraisals had been done and the property was bought at fair market value, the report paraphrased.
In last week’s interview with 284 Media, Mr. Kettle called the purchase “very strategic” and said the agency got a good deal on the land.
“If it was not during the pandemic, the pricing of the property would have been a lot more costly,” he said.
In regard to salaries, Ms. Maynard told the SFC that after the territory’s borders closed in March 2020, most of the ports were closed with the exception of Port Purcell.
“The staff was not occupied or not needed,” the SFC report paraphrased.
Reduced hours
As a consequence, some staff ’s hours were reduced to 30 hours a week, though full-time salaries resumed Dec. 1.
However, the report stated that Ms. Maynard did not have the exact number of employees hit with reduced hours. The cuts saved the ports approximately $400,000, she told the SFC.
Mr. Kettle stated during the same SFC hearing that per-passenger charges from cruise ships made up more than 50 percent of ports revenue before the pandemic, according to the SFC report.
“Once that ended, the ports [were] tasked with trying to operate,” he reportedly said, adding that they “started dipping into the cash” after cruise ships halted.