Statement
25 January 2016 - 3:45pm

STATEMENT BY MINISTER FOR COMMUNICATIONS AND WORKS HONOURABLE MARK VANTERPOOL
AT THE SIXTH SITTING OF THE FIRST SESSION OF THIRD HOUSE OF ASSEMBLY
OF THE VIRGIN ISLANDS ON MONDAY 25TH JANUARY 2016

10:00 A.M.
A MAJOR ACCOMPLISHMENT FOR THE ECONOMY OF THE VIRGIN ISLANDS

Madam Speaker, as the Minister responsible for Sea Ports in the Territory, it is with great pride and joy, that I give this Honourable House, a Report on the Cruise Pier Marine and Landside Development, to date.

Madam Speaker, as I visit this development almost on a daily basis over the past month or so, I am filled with pride, to see that we have accomplished a well-designed, well-engineered and well-built new Cruise Pier, along with a Cruise Pier Park, that is considered second to none in the Caribbean, by most standards, observers and cruise ship users of the Pier and Park, to date.

Madam Speaker, the genesis of this Report, requires me, to give a historical perspective, on why it was necessary, the process taken to get here and on the product achieved so far, as a result of the Government’s determination and efforts, through the BVI Ports Authority.

Madam Speaker, from a historical perspective, having received the portfolio of Sea Ports in November 2011, the Cruise Pier and its environments appeared to me, to be, in a deplorable condition.

The previous Government, towards the end of its Administration, made an attempt and signed an Agreement, with Disney Cruise Line Company, to make repairs to the then Cruise Pier.

Madam Speaker, no arrangements were made for the Landside Development.

In consideration of the rapid decline in our cruise ship industry here in the Virgin Islands, I urgently requested a meeting with the Executive Committee of the Florida Caribbean Cruise Association FCCA, in February 2012.

At this meeting, I was accompanied by the Chairman of the BVI Tourist Board, Mr. Russell Harrigan.

Madam Speaker, I can best describe my meeting, as being greeted with shock from the cruise lines, with regards to the state of the cruise ship facilities in the British Virgin Islands.

Some companies made it clear, that 2011 was their last year of visits to the BVI and others were emphatic, that following the 2012 Cruise Season, unless drastic changes were made with regards to the cruise industry facilities in the BVI, they too, would also find other destinations to visit.

Madam Speaker, one President of one of the major cruise lines, made the observation, very emphatically to me, that “obviously, the BVI has no interest in Cruise Tourism”.

Madam Speaker, I quickly gathered my wits about me and made it abundantly clear, that I was there, on a mission, ordered by the Premier of the Territory, Dr. the Honourable D. Orlando Smith.

Our message was, that, the BVI, is extremely interested in Cruise Tourism and we were ready to do whatever was necessary, urgently, to respond to the needs of the Cruise Tourism industry, before the end of our Term in Office, or earlier, if possible.

The Executive Committee expressed their appreciation, for a Minister of Government from the BVI attending their meeting, to express our intentions and they said they looked forward to us executing what was promised.

Madam Speaker, henceforth, the ball was in our court.

The matter was urgent, if we were to stay in the cruise ship business.

From this historical perspective, Madam Speaker, as Minister responsible, I forged the way forward, to follow up with discussions that were previously in train with the previous Government, with Disney Cruise Lines and others, with regards to the development of the BVI Cruise Pier and Landside Development.

As you may be aware, Madam Speaker, the initial procurement process was executed prior to the Protocols for Financial Management Agreement and was not considered sufficiently open.

Therefore, the project went out to a full bidding process in August 2012.

This resulted, Madam Speaker, in the selection of a group called Tortola Port Partners Limited, for the development of the Park.

Madam Speaker, Tortola Port Partners Limited failed to meet the criteria set within the deadline, to proceed with the contractual arrangements for the development of the Park.

One key component, was their failure to meet the funding requirements.

This resulted in the Government terminating the agreement and deciding through the BVI Ports Authority, to purchase the Design and Engineering drawings of the development, from Tortola Port Partners Limited, for a pre-arranged sum of $1,772,450.00.

A decision was made, Madam Speaker, by the Government, following this, to raise its own funds, through the BVI Ports Authority, and execute the development on its own.

This decision was buttressed by two Berthing Agreements from Norwegian Cruise Lines and Disney Cruise Lines, guaranteeing a total of 425,000 passengers per annum, over 15 years, at $15.00 per head tax.

The BVI Ports Authority raised $35 million through a loan from CIBC/First Caribbean International Bank, with an additional $15 million later, totaling $50 million, as the main financing for the project development.

$6.528 million was raised through a Public Offering and the balance of funding is being provided by the BVI Ports Authority and the Central Government.

Madam Speaker, a Request for Proposals for a Design and Build upgrade to the existing Cruise Pier, was launched in January 2014.

This Request for Proposals required the lengthening of the dock from 1,017 feet to 1,312 feet, widening the dock from 33 feet to 45 feet and strengthening the dock to accommodate ships with a tonnage of up to 180,000 Gross Registered Tonnage (GRT).

The Request for Proposals required the extension and widening of the existing pier; development of a boardwalk; development and enhancement of the excursion dock facility or floating dock; installation of a slope protection mattress; dredging of specific areas within the vicinity of the cruise pier and depositing of dredge material on the land to be used as fill; and the development of new lands by bulk heading and filling, at specified areas within close proximity to the Pier.

Madam Speaker, five local and international companies bid the following amounts:

1)         Caribbean Ports Construction for a total of $46,063,058.00;

2)         American Bridge Company - $39,926,278.97;

3)         Weeks Marine Inc. - $35,533,509.22;

4)         GLF Construction Company - $34,614,670.75; and

5)         IDL Projects Limited/Meridian Construction for $30,774,535.00.

Through the Government’s procurement process, the company IDL Meridian, whose bid was $30.7 million, was selected to build the Marine side of the project, in February 2014.

A contract was signed to commence work on 22nd April 2014, to execute the following:

1)         The design and construction of an estimated 97,000 cubic yards of dredging and reclamation;

2)         Minor demolition;

3)         Approximately 13,050 square feet of cruise pier improvements, including 14 breasting structures, 4 mooring points and 3 mooring dolphins;

4)         Approximately 37,000 tonnes of rip rap scour protection (rock mattress);

5)         814 lineal feet of concrete retaining wall; and

6)         A boardwalk.

The scope included all supporting items, for example piling, walkways, safety ladders, fenders, bollards and utility lines, to be fit for purpose, to accommodate two large modern cruise ships.

In addition, it included the reclamation of 4.5 acres of land.

Through the Design/Build proposal, IDL Meridian offered, in their proposal, to widen the dock to 60 feet, recommending from an engineering standpoint, to build two new docks on each side of the existing pier, instead of attempting to repair the existing pier.

This offer was made for the same price that they contracted for - $30.7 million.

Madam Speaker, by April 29th, 2015, IDL Meridian delivered a dock with one side useable by that date, on which date, the Marine side of the development was officially opened, with the berthing of our first 4,000 passenger ship – the Norwegian Getaway.

Madam Speaker, this was a glorious day for us here in the Virgin Islands.

As you would recall, we had a spectacular opening ceremony.

Norwegian Cruise Lines were very pleased, as stated by their CEO during the Opening Ceremony, and so were we, as stated by His Excellency the Governor, The Honourable Premier and yours truly, as Minister responsible for the subject, along with the Chairman and Managing Director of the BVI Ports Authority.

As I said, Madam Speaker, this was a milestone for us, on April 29th, 2015, in the history of the Virgin Islands, where we were able to accommodate, for the first time, the newer class of cruise ships now being built and sailing into our Caribbean region.

Madam Speaker, as a result of this, 2015 was the first Summer Tourism Season that saw so many visitors to our shores, during the months of May, June, July, August and September.

Norwegian Cruise Lines visited our shores every week during that summer, a first in the history of Cruise Tourism in the Virgin Islands.

Madam Speaker, I must reemphasize, that this was a major feat for the economy of the Virgin Islands and touched many, many lives economically.

This is expected to continue for a long time, as we will have a 12-month long Cruise Tourism Season, from hereon in.

Madam Speaker, continuing with the construction of the Cruise Pier, more dredging and the finalization of the other side of the Pier, along with reclamation works for approximately 4.5 acres of land in Road Town, were completed at the end of July 2015.

By then, we had a new Cruise Pier, 60 feet wide, completely resurfaced, an extended catwalk, as well as additional dolphins which resulted in a variation to the contract by $2.875 million, plus an additional two mooring bollards, at the request of the BVI Ports Authority.

The bollards cost an additional $1.9 million, bringing the total cost of the new Cruise Pier development, to $35.5 million.

Madam Speaker, I repeat, the final cost for the Marine side of the Cruise Pier development, under the specifications and Design/Build Agreement, between the BVI Ports Authority and IDL Meridian, totaled $35.5 million.

This comprised $30.7 million as contracted, $2.875 million additional variation and $1.9 million for the additional request by the Ports Authority, summing up to the final cost, of $35.5 million.

In addition, Madam Speaker, a floating dock, consisting of 5 finger piers, is contracted to be built by May 2016, for a total of $1.3 million, bringing the total cost of the Marine side of the project, to $36.8 million.

Madam Speaker, I express my gratitude to the BVI Ports Authority, the building contractors - IDL Meridian and its many subcontractors.

I was very delighted to see the amount of products procured through our local companies, including concrete companies, quarry stone companies and many other suppliers, to this project.

There is no doubt, Madam Speaker, by anyone, that this Marine project, for $36.8 million, was a major boost to the economy of the Virgin Islands, over a record less than 12-month period, for its development.

Madam Speaker, I now turn to the Landside Development.

History would recall, Madam Speaker, my visit to an inaugural call of a cruise ship here, in March 2012, accompanied by Deputy Premier, Dr. the Honourable Kedrick Pickering, along with my Ministry and Ports Authority staff.

Madam Speaker, I looked from the deck of that ship and it struck me, immediately, that we were presenting a deplorable and unwelcoming sense of arrival for cruise passengers to the British Virgin Islands.

The first thing cruise passengers were greeted by, Madam Speaker, was an ugly site, with old trailers and derelict vehicles strewn all over, to be further greeted by a bunch of old tents, with their sails flying in the wind and a jumbled group of vendors hustling them to buy their wares, in the most untidy conditions one can imagine.

Madam Speaker, this was not what, we, as Virgin Islanders, should be offering, as we welcome guests to our home – the Virgin Islands.

In the spirit of that moment, Madam Speaker, I disembarked from the ship, held a meeting with my Ministry staff right there on the dock and immediately ordered a first step, to completely clean up the area, getting rid of all trailers, derelict vehicles and other junk that occupied the area.

This effort was urgently and very ably headed, by Mr. Andrew St. Hilaire, from the Ministry of Communications and Works.

I must thank him and his team, under the leadership of the then Permanent Secretary, Mrs. Arlene Smith Thompson.

Soon after, Madam Speaker, I commissioned Ms. Avalyn Potter of AR Potter and Associates, to quietly visit the then Crafts Alive Site with me, with a view to expanding it, so that we could urgently get rid of the old tents in the Cruise Ship area.

You would recall, that this was completed and in 2013, the tents were dismantled, the area cleaned and preparation began for the Landside Development of the Tortola Pier Park.

The vision, Madam Speaker, was to create an aesthetic West Indian sense of arrival, in the spirit of our old Main Street design and feel.

Most of the buildings sit on 80 foot long pile foundations, allowing for their sustainability in storm or earthquake conditions and allowing for upward expansion in the future.

They are mostly built of concrete and steel, with certain heavy wooden features, to create the historical ambience, as envisioned.

Madam Speaker, the Tortola Pier Park will not only be open to cruise ship passengers, but our local residents are welcome to utilize all of the facilities there, as well.

Madam Speaker, I am pleased today, to report to this Honourable House, that in the next 21 days, the Tortola Pier Park will be officially opened.

All are welcomed to attend the Official Opening Ceremony on Tuesday 16th February 2016 at 5:15pm.

Madam Speaker, a description by me, of this Park, would not do justice.

One has to personally visit the site, to get a full appreciation of its beauty.

It is a whole new Town in the Capital City of Road Town.

This site, Madam Speaker, consists of 11 buildings, 18 kiosks or huts and one gazebo, for a total of approximately 102,358 square feet, at a total building cost of $24,135,276.00.

This averages a building cost on the Pier of approximately $241.00 per square foot.

Madam Speaker, this compares favourably, to a Bill of

Quantity estimate, provided by BCQS, of $250.00 per square foot, for this project.

The Tortola Pier Park includes an entire underground and over-ground infrastructure.

The civil works consist of drainage, water and sewerage infrastructure, electrical and plumbing infrastructure, for a total of $6,183,561.00.

The external works consist of roads, sidewalks, public lighting, park benches, boardwalk, a performance stage and other works, at a cost of $3,559,491.00.

The landscaping was done at a cost of $607,776.00.

Auxiliary equipment and services, consisting of a 750 kilowatt generator, switch gear, electrical transformers and pumps on site, came in at $1,056,579.00.

Wayfinders and Signage estimated at $500,000.00, communications infrastructure is $609,039.00, temporary bathroom facilities - $176,600.00 and miscellaneous expenses at $204,368.00.

All of these costs on the Landside Development total $37,032,690.00.

In addition, Madam Speaker, the project carried a soft and administrative cost of $9.0 million, which includes costs for architectural, engineering, project management, legal, accounting, bank interest and charges.

This represents 10.9% of the total project cost, which is in line with industry standards.

Madam Speaker, in summary, the total cost of the project is as follows:

1)         Marine side - $36,850,000.00;

2)         Landside Development - $37,032.690.00;

3)         Soft and administrative costs - $9.0 million

This means that the total estimated completion cost for the Cruise Pier Development and Tortola Pier Park project, is $82.9 million.

Madam Speaker, the project is expected to be funded as follows:

Funding Sources for Cruise Pier Expansion and Tortola Pier Park

CIBC - Senior Lender Tranche A - Pier

$32,857,143 

CIBC - Senior Lender Tranche B - Pier Park

$17,142,857

BVI Port Authority   

$8,179,359

Advances from BVI Government 

$8,000,000

BVI Social Security Board - Pref. Shares           

$5,000,000

Financing through Public Offering         

$1,528,000   

 

$72,707,359

Total Costs to Completion 

$82,915,557

To be funded by BVIPA

$10,208,198

Madam Speaker, funds paid to date on this project amounts to $71.9 million.

Madam Speaker, I now turn to the operations and viability of the BVI Ports Authority and the Tortola Pier Park, as well as outlining its economic impact on the Territory, as a result of our investment in the new Cruise Pier and Landside Development.

Firstly, Madam Speaker, the guaranteed revenue for this Park, is, on an annual basis, 425,000 passengers x $15 per head equaling $6,375,000.00 GUARANTEED.

The anticipated amount of revenue from Head Tax is expected to reach to $15 million by Year 3, as a result of an anticipated one million cruise passengers arriving to the Territory by that time.

The anticipated figure, already for this year, Madam Speaker, based on bookings, exceeds 650 thousand passengers.

In addition, Madam Speaker, the Pier Park Lease Agreements is expected to generate an annual revenue of approximately $2.5 million, plus an additional revenue of $300,000.00, totaling approximately $2.8 million annually.

Madam Speaker, the scope of businesses operating within Tortola Pier Park, includes:

1)         Three tour operators, including auto, scooters and helicopter tours;

2)         Six art, pottery, souvenir and gift shops;

3)         One travel accessory store;

4)         15 fashion clothing and accessories;

5)         Three beauty, perfume and cosmetics stores;

6)         1 telecommunications company;

7)         Three jewellery, watches and accessories stores;

8)         Two cafes/restaurants;

9)         Six food and beverage stores;

10)      Two health and medical services facilities;

11)      One VIP shopping lounge/jewellery store;

12)      One information service centre;

13)      One ship’s crew club;

14)      One conference service facility;

15)      18 multi-use kiosks and a gazebo;

16)      One flagship restaurant with all of the amenities; and 

17)      One Administrative Office.

The Tortola Pier Park project has created hundreds of jobs, including around 250 store clerks and another 50 workers, to include TPP management team, ambassadors, translators, tour guides, dispatchers and additional security guards.

Madam Speaker, the taxi operators’ demand has increased significantly, as well as vendors at the land and sea destinations.

I will, at a future date, present to this Honourable House, a full Operations Budget of the BVI Ports Authority and the Tortola Pier Park Limited, for the knowledge of Honourable Members and the public. 

Madam Speaker, any public project of this size should be audited, under the direction of the Government’s Auditor General.

Companies, annual performance and any project of this size, especially a public project, requires a complete audit.

Audits are always very instructive and lessons can be learnt by this Government and any future Governments, in the execution of such projects.

Therefore, Madam Speaker, I fully support that such an audit be executed as early as possible, to provide all the necessary audited information to the general public of the Virgin Islands.

Such an audit is expected to receive the full cooperation of the BVI Ports Authority, the Tortola Pier Park Company Limited, the Ministry of Communications and Works and the Ministry of Finance, of the Government of the Virgin Islands.

Madam Speaker, I am extremely proud of this development, that has been executed in a very short time, to respond to the need for the Virgin Islands to remain and grow as a key Caribbean cruise tourism destination.

I assure the public that they have received value for their investment in this crucial project.

Madam Speaker, this is the closest gauge that I can offer or recommend, in reality, for what is: value for the people’s money.

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