Over the last several months, the cruise pier project has been enveloped in rumours, speculation, and unanswered questions regarding budget overruns and the financial implications of missed construction deadlines.
Many of the outstanding questions were finally answered this week.
On Monday in the House of Assembly, Communications and Works Minister Mark Vanterpool provided a detailed statement on the development’s estimated cost – he said the total is $82.9 million, up almost $30 million from original projections – and the next day he sat down with the Beacon for a nearly two-hour interview about other aspects of the project.
His disclosures closely followed an announcement by Premier Dr. Orlando Smith last Thursday that an international firm will audit the development, and that the results of the audit will be made public.
Rather than silence critics, though, the recent announcements have spurred further backlash.
Opposition members equated Dr. Smith’s order for an audit with the government “investigating itself,” and former project consultant and pier park designer Hugh Darley claimed he could have completed the project for tens of millions less than Mr. Vanterpool’s $82.9 million (see sidebar for cost breakdown).
For his part, Mr. Vanterpool strongly disputed Mr. Darley’s claim — and in fact laid much of the blame for the $30 million cost overrun on the former consultant’s shoulders.
Minister: Cruise lines now paying full head tax
By KEN SILVA
Following more than two months of near silence from the BVI Ports Authority, it came as a surprise Tuesday when Communications and Works Minister Mark Vanterpool told this reporter that the Tortola Pier Park has achieved “substantial completion” and that Norwegian and Disney cruise lines have been paying the full $15-per-passenger head tax since Dec. 19.
Since April, Norwegian had been paying a reduced $7 head tax due to missed construction deadlines, and because the project hadn’t achieved substantial completion by October Disney has had the right to reduce its annual guarantee to bring 75,000 passengers for the first year of its 15-year contract.
However, Mr. Vanterpool said Tuesday that both cruise lines are now paying the full head tax, and that Disney will not defer its first-year annual guarantee.
The minister’s announcement comes at a time when significant work remains to be completed at the pier park, where a delayed “grand opening” is now scheduled for Feb. 16.
On Tuesday, two of the planned buildings had yet to be built, work on the 18 kiosks was just getting under way, and landscaping and hardscaping still seemed to be in progress as well.
The government’s berthing agreements with Norwegian and Disney list several specific requirements for “substantial completion” – 90 percent of the food-and-beverage and retail infrastructure must be completed, for example, and more than half of the retail stores must be filled — but Mr. Vanterpool said the work completed so far was enough to satisfy the cruise lines that the benchmark had been met.
“Whatever we finalised on the project there, Disney and Norwegian has agreed to,” Mr. Vanterpool said. “Those negotiations were had, and they agreed to pay the fee based on the fact that it was agreed 90 percent was completed.”
However, documentation proving that the project has achieved “substantial completion” has yet to be produced.
According to the berthing agreement with NCL, the cruise line is to issue a certificate of substantial completion to the BVIPA once the benchmark has been achieved.
When this reporter asked for a copy of the certificate, Vance Lewis, a ministry consultant who was also present at the Tuesday interview, left the room to look for it.
Several minutes later, he returned and said that no certificate has been produced.
“We do not have it in writing from Disney or Norwegian, but on the 19th of December, they gave us an indication that they’re comfortable with the rate at which we’re proceeding, and based on that we could commence billing them [at $15],” Mr. Lewis said.
When this reporter then asked for a copy of an invoice to Disney or NCL that documented the $15 head tax, he was told he could not see that either.
“Norwegian and Disney would sue us for that; we can’t do that,” Mr. Vanterpool said.
The minister added that he would talk to BVIPA legal counsel Vareen Vanterpool about providing the Beacon with some form of evidence proving that substantial completion has been achieved and the full head tax is being paid, but that documentation had not been provided before this issue’s deadline.
A Disney spokesperson did, however, confirm to this reporter that the cruise line is paying the full $15 head tax.
NCL officials did not respond to e-mails and phone calls seeking similar confirmation.
This article was updated after its original Jan. 28 publication to reflect Disney’s confirmation that the cruise line is paying the full $15 head tax.
“To be frank, I don’t know how Mr. Darley could build a project of that size for $50 million,” the minister told this reporter. “If you can show me, I’ll be happy to see how he could have done that.”
Mr. Vanterpool explained that the government originally estimated that the project would cost around $53 million, but this estimate was based on Mr. Darley’s designs, which the minister called “incomplete.”
“The project was only 50 percent completed in terms of drawings, and the marine side [design] wasn’t complete either,” he said.
The minister added that design changes that contributed to the cost overrun included adding deep foundational pilings for all the buildings, adding extra pilings for the pier, and redesigning buildings to meet the requests of potential tenants.
“Mr. Darley was not piling his buildings,” he said. “He said you could build them on a floating foundation. That’s an option we decided we didn’t want.”
Mr. Darley, who was involved with the project until early 2014, maintained that the plans drawn up by his firm International Design and Entertainment Associates were “sound:” The landside blueprint was complete, he said, and pilings were included where they were necessary.
“We designed piles only for two-storey concrete and steel buildings, estimated at $2.7 million,” he said. “We investigated the need for piles with the soils, which are poor. However, you do not place piles of greater value under buildings of lesser value.”
The former project consultant also suggested that Mr. Vanterpool increased the number of pilings in order to pass out benefits to private contractors.
“The minister wanted his contractor to get pile and slab contracts, so he expanded the piles for all buildings, which [isn’t] required, at $5.7 million,” Mr. Darley said.
Mr. Vanterpool did not disclose exactly when he learned that the project would need the expensive revisions, though he did say that the cost increases came last year.
Though officials admitted last July that the cost of the pier extension had reached $36 million – $5.3 million over budget – they remained silent until now about the overruns on the landside construction.
Even when Mr. Darley alleged in December that the total cost of the project had exceeded $70 million, no response came from government.
When Mr. Vanterpool was asked why the escalating costs weren’t made public as soon as they were discovered by his ministry, he replied that he wanted a comprehensive cost report before he divulged any information.
“We felt we needed to get a complete cost of the project before we gave it out,” he said. “If I gave it out six months ago what the project cost would be without getting all the details of the admin costs, soft costs, completion of all other things, I’d be giving you another number, then another number,” he said. “Now we’re comfortable with what the number is.”
The audit Dr. Smith announced may reveal when exactly government knew that the scope of the project would be increased by nearly $30 million.
For now, though, officials haven’t disclosed when the audit will start or who will conduct it.
“We are still having discussions,” Dr. Smith said Thursday before declining to provide further information.
Opposition members were quick to criticise the announcement that the audit will be carried out by an international firm, calling for the Foreign and Commonwealth Office or a commission headed by Governor John Duncan to conduct the forensic exercise.
“This insult of a proposal our premier is making, by ‘ordering an audit of the cruise pier and landside development, to be carried out by an internationally-recognised firm,’ will be a disaster, and an abandonment of the people’s trust,” Opposition Leader Julian Fraser commented on his Facebook page in response to the announcement.
Even Mr. Vanterpool seemed to disagree with Dr. Smith’s order that the audit be conducted by an international firm, saying in HOA on Monday that he thinks the investigation should be conducted by the territory’s auditor general.
However, the minister clarified his statement the next day to this reporter, saying he’s not against an international company conducting an audit as long as the auditor general does one, too.
Breaking down the costs
Below is the breakdown of the cruise pier project’s total cost, as outlined by Communications and Works Minister Mark Vanterpool on Monday in the House of Assembly.
• Pier expansion and dredging: $35.5 million
• Floating dock: $1.3 million
• Other marine expenses: $50,000
• Building cost: $24,135,276
• Civil works: $6,183,561
• External works: $3,559,491
• Landscaping: $607,776
• Auxiliary equipment: $1,056,579
• Wayfinders and signage: $500,000
• Communications infrastructure: $609,039
• Temporary bathroom facilities: $176,600
• Miscellaneous expenses: $204,368
• Administrative costs: $9 million
“Let me put it this way: At the end of the day, whether the premier orders an international company to do it or not, the auditor general normally would, and should, do an audit,” he said. “Even if you end up with two audits, the auditor general will audit the [BVI] Ports [Authority], and I think that’s a useful thing.”
The audit won’t be the first time the project has been subject to intense scrutiny.
In 2013, the Office of the Auditor General probed the development, and the Public Accounts Committee followed with its own investigation in 2014.
Both the auditor general and the PAC alleged that officials involved with an earlier version of the development sidestepped proper procurement practice, wasted public money, ignored tendering and transparency rules, and gave rise to concerns about conflict of interest.
Vanterpool opens up
“Officials have not responded to questions” and similar phrases have been peppered throughout the four reports the Beacon has published on the cruise pier project since Dec. 3.
Queries typically were directed to the BVI Ports Authority, but that agency’s leaders have not granted interviews, and by December the BVIPA’s public relations team had stopped answering questions as well.
This week, however, answers were forthcoming: Communications and Works Minister Mark Vanterpool gave a nearly two-hour interview about the project on Tuesday.
“Forgive us for being naughty, but sometimes we don’t want you good reporters getting out in front of us,” Mr. Vanterpool said in explanation of officials’ recent silence.
A future edition of the Beacon will include excerpts of the interview, which covered a wide array of topics related to the development.
New BVIPA chairwoman named
Jennifer Potter-Questelles has been promoted from deputy chairwoman to chairwoman of the BVI Ports Authority, replacing former chairman Edward DeCastro, who left the post in September.
Ms. Potter-Questelles, who was acting as chairwoman between September and January, was given a two-year contract to assume the top position effective Jan. 16, according to Communications and Works Minister Mark Vanterpool.
Meanwhile, Al Henley continues to serve as acting managing director of the BVIPA, filling in for Claude Skelton-Cline, whose contract hasn’t been renewed after it came up in December.
This article first appeared in the Jan. 28 print edition.