New cruise pier to be built in
US $97.5M expansion project
~ Carnival, RCCL give US $40m loan ~
POINTE BLANCHE--A new 445-metre-long, 15-metre-wide cruise pier to accommodate two 220,000-tonne genesis class cruise ships will be built parallel to the existing pier at Dr. A.C. Wathey Cruise and Cargo Facilities.
The US $97.5 million expansion will be covered by a $40 million loan from Carnival Cruise Lines and Royal Caribbean Cruise Lines (RCCL) and funds from the refinancing of existing loans by RBTT Bank for $86 million.
The remaining funds coupled with a contribution of $14.2 million from the harbour facilities from existing cash flow and $13.7 million from projected income will be used to complete infrastructure projects such the beautification of Back Street and Festival Village and for upcoming projects such as upgrading of St. Peters and South Reward.
The expansion plans and loan refinancing will be presented to the Island Council for approval today, Tuesday, at 3:00pm.
Harbour Affairs Commissioner Theo Heyliger told The Daily Herald, the new pier is necessary because the existing pier, built in 2001, was not designed for the new class of ships. With the new pier, six ships will be able to berth alongside the two piers.
To link the pier to the main thoroughfare in front of the John Craane Cruise Terminal Building, two acres of land will be created in Great Bay.
The second part of the expansion is a 260-metre extension of the cargo facility quay wall that will add 8,400 square metres of container storage and handling space. A breakwater will be built to protect cargo ships docked at Captain David Quay where the waters tend to be a bit rough and could make it dangerous for offloading.
Container traffic has increased “drastically” over the past years especially due to trans-shipment that capitalises on the island’s strategic geographical position, Commissioner Heyliger said.
This business growth needs to be matched by improvements to the facilities, Heyliger said. Improvements will guarantee continued cruise and cargo business and enable the facilities to pay the NAf. 5 million concession fee to government annually.
NAf. 4 million of the concession fee will be used for projects and the remaining NAf. 1 million will be added to the government’s coffers. The concession fee will also be formalised by the council today. In the past, loan agreements did not allow payment of any funds to government. The new agreements already have this clause allowing payment of the fee.
Carnival Cruise Lines will provide a loan of $34.5 million for the project at a fixed 5.9 per cent per annum rate for 20 years. No other island in the Caribbean has ever received an investment in its infrastructure upgrades from the cruise industry.
“We had to give up none of our assets to Carnival to guarantee the loan. We just have to guarantee our harbour rates which we are also allowed to increase over time with Carnival’s approval,” Heyliger said.
To make the investment lucrative, Carnival also guarantees an annual passenger arrival approximately 700,000 to St. Maarten.
Some $5 million will be provided by Royal Caribbean Cruise Lines (RCCL) at a rate similar to Carnival. The loan details are being finalised. RCCL will also guarantee 300,000 to 400,000 passengers annually for St. Maarten.
“Between the two cruise lines, St. Maarten would not only have an investment for the two largest cruise partners but also a guarantee of more than a million passengers annually to ensure business is sustained and funds are created via the head tax and other fees,” the commissioner said.
Funding from the cruise lines was acquired after some two years of negotiations.
RBTT Bank will provide $86 million for the expansion, via the loan refinancing, at a fixed seven per cent interest for 20 years. The refinancing will encompass the Harbour Shares Buyback covered by Windward Islands Bank, Cargo Facility loan of RBTT Bank and the cruise loan from ING Fatum.
The expansion work will start once the project is approved by the Island Council and all the funding is in place.
