Island Council approve
harbour expansion work
~New pier to be widened by six metres~
PHILIPSBURG--A six-metre width increase of the planned genesis-class pier at Dr. A.C. Wathey Cruise and Cargo Facilities was unanimously approved by the Island Council Tuesday afternoon along with the complete US $97.5 million harbour expansion project.
The pier was first designed to be 445 metres long and 15 metres wide. Based on the size and design of the new genesis-class cruise ship, an increase was necessary, Harbour Affairs Commissioner Theo Heyliger told the council.
The exact dimensions of the vessel being built by Royal Caribbean Cruise Lines (RCCL) were only shared with the island in May as the company kept it top secret. Adjusting the designs instead of widening the pier later was more cost-effective and practical, the commissioner said.
To stay within the budgeted US $97.5 million, the breakwater attached to the cargo section of the port will be shortened now to cut cost and lengthened later when more funds are available.
Funding for the expansion will come from a US $34.5 million loan from Carnival Cruise Lines, a US $5 million from Royal Caribbean Cruise Lines (RCCL) and via refinancing of three harbour loans for US $86 million from RBTT Bank. The loan agreements have also been approved.
Carnival’s loan will be at a fixed rate of 5.9 per cent per annum for 20 years. The loan payments will be guaranteed by a commitment of an annual passenger arrival with Carnival of approximately 700,000. If the entire loan is not repaid by the end of the term, Carnival will waive the remaining amount.
RCCL’s loan is for 15 years, at an interest similar to Carnival’s. Loan repayments will start in year ten as the company has agreed to allow the harbour to start paying off its other loans first. The company also guarantees a passenger arrival of 340,000 annually with the possibility of a three per cent increase over the years.
RBTT has already accumulated a US $1.2 million late fee due to delays in approval and signing of the refinancing agreement. This fee has been deferred to the end of the 2-year payment term. A further delay would have occurred if the agreement were adjusted, with the government accounting bureau SOAB needing to peruse the documents again.
Both companies will receive fixed berthing allocations alongside the two piers. Carnival will get the number one, two and three berths on the existing pier and the first berth on the new pier. RCCL will get the remaining two.
The harbour has always been a controversial topic in the Island Council where members have often been at loggerheads over details, the necessity of expansion and investment. However, this meeting saw a departure from this, as members acknowledged the importance of the island maintaining a competitive edge with harbour improvements while funds are generated for the island.
The eight council members present also approved a 40-year Concession Agreement that gives St. Maarten Harbour Group the right to operate the facilities. Also tagged to this was an annual concession fee of NAf. 5.2 million, paid to government for ten years, after which a new agreement will be negotiated. The concession payment comes into effect at the last quarter of the year.
NAf. 4 million of the concession fee will be allocated to government projects and the remainder will be absorbed into government coffers.
In her speech, Democratic Party (DP) Island Councilwoman Maria Buncamper-Molanus suggested that NAf. 4 million be allocated to combat crime, which has increased significantly in the past months.
If no investments are made in combating crime, all investments will be in vain as this can cripple or handicap the island, she said.
National Alliance (NA) Island Councilman George Pantophlet suggested some rephrasing and additions to the documents such as outlining the course of action the government-owned harbour company can take if its concession is not renewed.
During a ten-minute recess, the suggestions were discussed by Pantophlet, Heyliger and Buncamper-Molanus with government’s legal counsel and a consultant of KPMG. When the meeting resumed, Heyliger informed the council that the agreement would remain the same. If government does not give a written explanation for cancelling the concession in ten weeks, the next step involves heading to court.
Pantophlet said he hoped government had not painted itself into a corner by not defining the steps.
NA Councilman Hyacinth Richardson urged government to ensure that the taxi drivers were well taken care of as the harbour expands.
Present at the meeting chaired by Lt. Governor Franklyn Richards were: Commissioners Heyliger, Roy Marlin, Franklin Meyers and Louie Laveist, Council members Buncamper-Molanus, Pantophlet, Frans Richardson and Hyacinth Richardson. Absent were Commissioner Sarah Wescot-Williams, NA Leader William Marlin and Peoples’ Progressive Alliance (PPA) Leader Gracita Arrindell.
