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INSIDE:

In their Words Island Weekend & Culture — page 7

Thursday, October 24, 2013 |

The light that comes from wisdom never goes out.

| bvibeacon.com | 50 cents

Mental Health SPECIAL REPORT: CRUISE TOURISM Policy to guide reform

Set for growth or sinking fast?

New law, association are in the works

TPP partners dispute reasons behind pier deal’s failure

By CHRYSTALL KANYUCK ckanyuck@bvibeacon.com In the early 1970s, Virgin Islands residents who suffered from a serious mental disorder had to travel to Antigua for treatment. Some of them never came back. Of those who did, some would live comfortably back home in the VI for a few months before having an episode of illness and returning to Antigua for treatment.

“The community was hurt by that,” said Rita Frett-Georges, who served as the territory’s psychiatric nurse at the time.

She was the only qualified mental health professional working full-time in the territory, she said. Besides her care, patients’ only option was to see a visiting consultant or to leave the territory.

Mental health care in the VI has changed a lot since then, and officials hope to see it continue to Policy see page 12

Firm claims funding was nearly finalised

By JASON SMITH jsmith@bvibeacon.com

Photo: TODD VANSICKLE Carnival Breeze, which government hailed as the first cruise ship of the tourism season, docked in Road Town last Thursday.

It may not return next season.

Cruise deal prompts concern; Carnival pulls ’14-’15 VI calls

By JASON SMITH jsmith@bvibeacon.com

C

INSIDE Beacon Business..........................8 Vol. 29 No. 19 • 2 sections, 56 pages Road Town, Tortola, British Virgin Islands © 2013, The BVI BEACON

ommunications and Works Minister Mark Vanterpool considers himself a long-term planner. So to achieve his vision of a “solid and strong” cruise tourism industry for the Virgin Islands, he will not be steered off course by “distractions,” he said last Thursday night.

He spoke before an audience of taxi drivers who were infuriated with the news that Carnival Cruise Lines, which brought more than 53,000 visitors here during the recent tourism season, plans to stop calling in the VI during the 20142015 season. The company, which took the action due to its concerns about government’s plan to sign a preferential berthing agreement with two

rival lines, had heard of the announcement only two days earlier.

Mr. Vanterpool tried to strike a reassuring tone.

“There are things that try to pull you one side or the other. But you must have your goal in mind and you must set sail toward that goal. And that is exactly what we’re doing,” the minister said, adding that 15 years from now he would like to see current passenger levels double to at least one million visits per year.

But a taxi driver in the crowd — who sat in the back row with a faded orange life preserver clasped around his neck — used a different nautical metaphor to describe what many in the audience fear is a threat to their livelihoods.

“Ship sinking, buddy,” he said. “Ship sinking.

Husky Salvage can’t right this ship. The ship done sink.”

The chasm between those contrasting points of view is likely to grow wider in the coming months as more cruise ships cancel their 2014-2015 bookCruise see page 18

The Tortola Ports Partners’ $75 million plan to improve the territory’s cruise ship facilities has died. That much is clear. But the reason for the failure is now being disputed by the players involved.

Communications and Works Minister Mark Vanterpool has blamed TPP, saying in part that the consortium didn’t get funding in time.

But the CEO of one TPP partner claimed this week that his team had finalised funding in mid-September, and the project was unexpectedly cancelled at the government’s request.

And in interviews about the now-aborted partnership, former TPP members have contradicted each other about the answers to some key questions: What role did each partner play? Did TPP ever have enough capital to pull off the project? And why did the deal fall apart?

Deal-making The name Tortola Ports Partners was first introduced to the

Dispute see page 21

Page 18 | Thursday, October 24, 2013 | The BVI Beacon

Special Report

Cruise: Carnival cancels 2014-2015 calls Continued from page 1 ings or threaten to do so.

Carnival’s parent company, Carnival Corporation, is close to “walking away” entirely and stopping all of its Tortola port calls, a company source said Tuesday.

More than 185,000 passengers from seven of the corporation’s cruise brands stopped here last season, and three of the seven brands — Carnival, P&O and Costa lines — have already cancelled their bookings.

At issue are the “assured berthing” rights that the territory plans to give to the Norwegian and Disney cruise lines in exchange for a long-term guarantee to deliver at least 425,000 passengers annually or compensate the BVI Ports Authority for the lost tax revenue. Carnival and its rival, Royal Caribbean Cruise Lines, which control a combined 70 percent share of worldwide cruise passenger traffic, are upset over what they describe as an unprecedented arrangement. They will be forced to ask Norwegian and Disney, which control about 10 percent of the global passenger volume, for permission to use the VI pier, a company source said.

But Mr. Vanterpool, who asserts that the BVIPA, not private cruise lines, will ultimately control access to the pier, and Hugh Darley, who formerly was a representative of the aborted Tortola Ports Partners consortium, remain steadfast in their belief that a passenger guarantee with the relatively smaller cruise lines is the right choice for the VI’s industry.

To hear Mr. Darley tell it, three steps will best safeguard the VI’s cruise industry: extending the pier to accommodate larger ships; reaching a guarantee with Norwegian and Disney; and developing nearby land along the lines of TPP’s previous proposal.

These steps will also help “change the paradigm” by forcing a change in the way major cruise lines operate in the region, he said.

That’s because it will give the smaller rivals the chance to improve their Eastern Caribbean itineraries “without having to beg for days from Royal and Carnival” to enter ports where those lines

Cruise see page 19

DECADES IN THE MAKING: CRUISE TOURISM AND DEVELOPMENT PROPOSALS THROUGH THE YEARS Dec. 29, 1960:The Meteor, a 115-passenger liner sailing from New York, becomes the first cruise ship to visit Road Harbour, according to a 1998 history printed in the Island Sun. Cruise ships would continue to visit the Virgin Islands in later years, disembarking alongside cargo ships at Port Purcell or anchoring in the harbour where passengers could be transferred ashore via tender. However, compared to the resort and yachting sectors, cruise ships make up a relatively small portion of the territory’s tourism industry for decades to come.

Oct. 8, 2011: Then-Premier Ralph O’Neal announces at a Virgin Islands Party campaign rally that his government is in negotiations with Disney Cruise Lines to “do something” about extending the pier. Those discussions result in a non-binding memorandum of understanding under which Disney would loan the BVI Ports Authority an undisclosed amount of money to make “improvements in exchange for preferential berthing rights,” according to Government Information Services.

Nov. 16, 1994: A ribbon-cutting ceremony is held to inaugurate the 555-foot cruise ship pier at Wickhams Cay I, which cost about $6 million to complete.

Because it is extended by another 300 feet with a mooring dolphin, the pier can accommodate 1,500-passenger ships such as the Costa Classica, the first to use it. Then-Chief Minister H. Lavity Stoutt said at the time that the territory would pursue a policy of attracting upscale medium-sized ships as opposed to the largest vessels making port calls in St. Thomas and St. Maarten. When the decision to build the dock was made in 1990, there was considerable public opposition from residents concerned that mass tourism would harm the VI and that the dock’s costs would dwarf its anticipated benefits.

June 27, 2012: Communications and Works Minister Mark Vanterpool announces that the United States consortium Tortola Ports Partners will extend the territory’s cruise ship pier by 300 feet and develop a four-acre parcel of nearby land. TPP includes the design firm IDEA; developer United Infrastructure Group and its subsidiary Malphrus International; and the construction firm Jay Cashman Inc. In exchange for investing $75 million in the project, TPP would receive a 48-year lease and an unspecified percentage of the per-head tax generated from passenger visits, officials explain. Mr. Vanterpool says that in exchange for “assured berthing,” Norwegian Cruise Lines and Disney would guarantee that at least 425,000 cruise passengers would visit the VI each year. In the event of a shortfall, the companies would compensate the territory for lost passenger taxes, he explains.

April 25, 1999: A $4.2 million project to widen the pier and extend it to 755 feet — plus an additional 164 feet with a mooring dolphin — is completed. The new length, which continues to this day, allows the territory to receive ships such as the 3,690-passenger-capacity Carnival Breeze. The expansion project is marred by delays and allegations of corruption and political interference in the bidding process, which a commission of inquiry later deems unfounded.

January 2004: A group of vendors with long-established tents near the dock are told by the government of then-Chief Minister Dr. Orlando Smith that they will be evicted and moved to a new location. The action is prompted by plans to build office buildings and a judicial complex on the site. These developments never occur, and the vendors aren’t relocated until 2013, when the Crafts Alive Village is enlarged to accommodate them.

Oct. 19, 2010: A $6 million tender dock is built at the pier to cater to smaller tenders used by cruise ships that anchor in the harbour and boats that offer excursions to passengers. The project is needed to ease congestion in Road Harbour, officials say at the time. Then-Communications and Works Minister Julian Fraser had announced in 2008 that the project would also include a 127-foot extension of the dock to accommodate larger ships from Disney Cruise Lines, but this element of the project is put on hold for reasons that aren’t explained publicly. Further expansion of the dock, and the promise of larger ships and more passengers it would bring, is roundly criticised by some residents, who say it will bring the wrong kind of tourism to the VI.

Aug. 1, 2012: Though initially the government entered into negotiations with the TPP group without going through a public tender process, officials belatedly decide one is needed. Three firms — Royal Caribbean Cruise Lines, TPP and GLF — submit bids, and TPP is chosen. RCCL Vice President John Tercek later writes to Governor Boyd McCleary, blasting the tender process as unfair and nontransparent, alleging that it was designed to favour TPP.

Sept. 27, 2013: About a month after announcing that officials had written to the United Kingdom seeking permission to start the pier development, Premier Dr. Orlando Smith announces a halt to the partnership with TPP. He says that the consortium has accepted the decision “as conditions precedent to the agreement were not concluded in a timely manner.” Mr. Vanterpool later adds that government “cut negotiations” with TPP after the group was unable to obtain funding for the project. Both leaders say that the BVI Ports Authority will vigorously pursue pier development.

Oct. 17, 2013: Speaking before an audience of taxi drivers angry about news that Carnival Cruise Lines will stop visiting the VI beginning in the 2014-2015 season, Mr. Vanterpool pledges that his government is developing the industry for the long term. In explaining its decision, Carnival cites concerns about having to reserve berths through NCL and Disney due to their proposed agreement with the VI government. But government plans to continue negotiating the 425,000-passenger guarantee with NCL and Disney, Mr. Vanterpool says, adding that in the next 15 to 20 years he would like to see as many as one million cruise passengers visit annually.

Special Report

The BVI Beacon | Thursday, October 24, 2013

Cruise from page 18

CRUISE SHIP VISITORS BY THE NUMBERS O

f the 340,000-plus cruise ship passengers who visited the Virgin Islands during the October 2012 to April 2013 tourism season, more than 305,000 disembarked in Road Harbour. Of those, more than 81 percent arrived aboard ships affiliated with the two largest cruise corporations: Carnival and Royal Caribbean. This month, Communications and Works Minister Mark Vanterpool announced that government

plans to offer a preferential berthing agreement to two other companies, Disney and Norwegian. While both are large corporations, they handle a much smaller share of passenger traffic worldwide and to the VI. Carnival has recently announced that it will pull its Carnival-brand ships from the territory due to concerns over the agreement, though it is unclear if that decision will apply to its sister lines.

CRUISE COMPANIES’ GLOBAL SHARE OF PASSENGERS 23% 2% 48% 8%

Government’s proposed partners

OTHERS

19%

PASSENGERS WHO VISITED ROAD HARBOUR DURING 2012/13 SEASON

185,465

Passengers

200,000

| Page 19

Road Harbour

have preferential berthing agreements, Mr. Darley explained.

Carnival Carnival, on the other hand, has alleged that the VI government’s proposed berthing arrangement with Disney and Norwegian is unprecedented.

“In no other port throughout the world are we being asked to go through another company to book a berth,” said a Carnival Corporation official, who declined to be identified publicly because of the sensitivity of ongoing negotiations. “It’s an unacceptable situation.”

While three Carnival Corporation-affiliated lines already have announced 2014-2015 cancellations, more could soon follow.

“I think we’re close,” the official said. “In some cases some of the decisions may already have been made.”

The decision to pull the Carnival-branded ships was announced on Oct. 15.

“Based on issues arising in Tortola, we do not have confidence that a positive guest experience — and in some instances, even the ability to call at the island — can be provided,” the company said in a statement. “Therefore, we have made arrangements to offer our guests alternative ports.”

The statement added that the company had difficulty in its communications with government.

“Additionally, despite repeated requests to the Tortola government, they have been unwilling to reconfirm our scheduled berthing slots for 2015, and therefore we have no assurances that we will be able to call at the port on those dates,” according to the statement.

Official meetings

66,435 45,772

50,000

7,539

0

OTHERS

CRUISELINES* and affilliates

CARNIVAL * Costa Cunard Line Holland America P and O Scaborn

Sources: VI cruise ship agents, Cruisemarketwatch.com

ROYAL CARIBBEAN* Aida Celebrity

Crystal Kristina MSC Crociere Oceanic Fred Olsen

Regent Sevenseas SAGA Silversea Thomson Cruises TUI Cruises

NORWEGIAN *

DISNEY *

Government’s proposed partners Graphic: TODD VANSICKLE

The Carnival Corporation official said that all of the company’s lines are interested in continuing VI visits, but decisions need to be made soon.

“I think the door is still open to conversations, but even meetings have been canceled and haven’t been rescheduled as of yet,” the official said.

When informing taxi drivers about the Carnival-brand pullout Thursday, Mr. Vanterpool said that he has been in talks with company officials, but he acknowledged that he previously told them about the proposed passenger guarantee deal.

“I said to them: ‘Gentlemen, we appreciate your business. We want to continue to do business with you; we want to continue dialogue, but I can-

Cruise see page 20

Page 20 | Thursday, October 24, 2013 | The BVI Beacon

Cruise from page 19 not in good faith confirm to you that we can give you bookings in 2015 until we finish our negotiations,” Mr. Vanterpool said.

Asked by a reporter at a press conference Friday if there was a possibility the Norwegian and Disney agreement wouldn’t be signed, Premier Dr. Orlando Smith avoided providing a direct answer.

“The possibility exists that all the cruise lines will continue to visit the BVI,” he said in reply, after a reporter’s repeated prompting.

During last Thursday’s meeting, Mr. Vanterpool asked audience members for their questions and comments. And he got plenty.

“My understanding is a ship like Carnival, they’ve been coming here since the 70s,” said Ishmael Scatliffe. “You’re going to give up an opportunity for them to keep coming to our islands?

Especially in the off-season also.

They’re one of the only ships that come in the offseason.”

Pullout criticisms Sam Henry, a taxi driver and talk show host, was outspoken in his criticism of the guarantee plan. He also said BVIPA Managing Director Claude SkeltonCline should be fired for his actions as government negotiator during the 2012 bidding process that ultimately selected TPP. ( John Tercek, a Royal Caribbean vice-president, wrote to Governor Boyd McCleary last year alleging that the bidding process favoured TPP and characterising Mr. Cline as having an “antagonistic attitude.”)

But when Dr. Smith was asked at the press conference the next day if Mr. SkeltonCline would be fired, he replied, “I have no reason to believe that this is required.”

In a press statement, opposition member Julian Fraser (RD3) strongly criticised Mr. Vanterpool’s handling of the pier development, calling the planned agreement that led to Carnival’s decision “the latest in a series of missteps by the minister.”

“And this didn’t have to happen, had the minister followed the established procedure for project planning and execution,” Mr. Fraser alleged, adding that Carnival and Royal Caribbean

had been “summarily dissed” by government’s actions.

For his part, Mr. SkeltonCline distanced himself from government’s agreement with Disney and Norwegian, explaining that the BVIPA is progressing on port development and holds no responsibility for Carnival’s decision.

“As it relates to what is being said about Carnival Cruise Line, let me state for clarity’s sake that I, Claude Skelton-Cline, did not turn back Carnival. No such powers are granted for any individual acting in the post of managing director,” he said in a statement.

Mr. Skelton-Cline, a pastor and former National Democratic Party candidate who has been working with the BVIPA since 2011, said he has worked alongside Mr. Vanterpool, but added that the minister “has been leading the charge in negotiations with Norwegian and Disney.”

Industry players Though several meeting attendees expressed concern that government’s prospective guarantee partners are relatively small industry players, Mr. Vanterpool dismissed those fears in an interview after the meeting.

“Look, you’re talking about Disney Cruise Lines. You’re talking about Norwegian Cruise Lines. Norwegian has about 12 to 14 ships. I don’t think that’s a little baby we’re talking about,” he said.

During the last cruise season, Norwegian brought nearly 7,100 passengers to the VI during three port calls, down from 20 calls during the 2011-2012 season. But while smaller ships like the 2,300-passenger capacity Norwegian Jewel used to frequent the pier, the company replaced this ship on its popular Eastern Caribbean route this season with the 4,100-passenger Norwegian Epic, which is too big for the current pier.

And the company plans to launch two more 4,028-passenger-capacity ships in the coming years, joining two recently launched Norwegian ships of the same class, according to the website CruiseCritic.

Disney Disney, by contrast, hasn’t announced fleet expansion plans. Though there were rumours earlier this year that the company planned to commission new larger ships, those ru-

Special Report mours turned out to be false, according to the Disney Cruise Line Blog, which is unaffiliated with the company.

“Our current focus at Disney Cruise Line is on our existing fleet,” DCL Public Relations Manager Rebecca Peddie told the blog in June.

The line operates four ships: the Magic and Wonder, which each carry a maximum of 2,400 passengers, and the 4,000-passenger-capacity Dream and Fantasy. Magic and Wonder previously stopped in Tortola, but have since been diverted to other routes. During the upcoming season, Wonder will be used for seven-day cruises in the Western Caribbean, while Magic will make shorter sails from Port Canaveral, Florida to the Bahamas. The Fantasy will transit the Eastern Caribbean, including stops in St. Maarten and St. Thomas, but it is too big for the VI pier.

While four ships may not seem like a lot, Mr. Vanterpool said that the fleet is ample enough to handle Disney’s portion of the guarantee, which is 75,000 passengers per year. Norwegian would be responsible for the other 350,000, the minister added.

Mr. Vanterpool said he isn’t concerned about the possibility that instead of providing passengers, the cruise lines may opt simply to pay for the lost passenger duty revenue, which is projected to rise to $15 per head under the proposed development.

“You negotiate in good faith,” he said. “These are companies that have the ships and say they want to come. They have a desire to come. But it’s a risk.”

IDEA firm Mr. Darley, whose firm International Design and Entertainment Associates creates concepts of a destination’s “guest experience,” believes that the passenger guarantees are a risk worth taking.

Despite the present state of the dock, he said, the VI has a key advantage as a port, especially for companies that want to enlarge their market share in the region. Because the territory is closer to ships’ homeports in Miami than St. Maarten, a destination where Royal Caribbean and Carnival have invested heav-

Cruise see page 21

BVIPA’s profits turn into losses Revenues fluctuating, expenses rising

BVI PORTS AUTHORITY

By JASON SMITH jsmith@bvibeacon.com

BY THE NUMBERS

luctuating cargo volumes and flat cruise ship passenger tax revenues have turned the once profitable BVI Ports Authority into a loss-making agency.

The statutory board generated a $3.4 million surplus in 2008, but as the global recession wore on its finances worsened.

By 2011 the BVIPA posted a loss of more than $900,000, according to its recently released annual reports from 2009 to 2011.

Half of the agency’s revenues come from cargo handling fees, which were over $5.1 million in 2008 but fell to about $4.6 million in 2011.

At the same time passenger tax receipts have stayed mostly flat: They were $4.8 million in 2008 and 2011.

But during the four-year period, expenses have taken off. In 2008 it cost about $7 million to run the BVIPA, but by 2011 that figure increased to $10.6 million due to sizable increases in personnel expenses, administrative expenses and depreciation costs, according to the annual reports.

Total cargo handled: 2008: 128,136.57 tons 2009: 135,151.91 tons 2010: 120,760.01 tons 2011: 122,230.35 tons

F

Scrutiny The BVIPA’s fiscal performance recently drew scrutiny from Julian Fraser, the Third District representative.

During a House of Assembly meeting this month, Mr. Fraser asked Communications and Works Minister Mark Vanterpool how much cash the organisation had on hand.

Mr. Vanterpool said the BVIPA had about $9.3 million cash. When prompted about what has depleted the authority’s reserves in recent years, Mr. Vanterpool cited spending on capital projects such as the cruise pier tender dock built in 2010 and a transfer of funds to the cashstrapped BVI Tourist Board.

Asked about the board’s finances at a press conference Friday, Premier Dr. Orlando Smith gave a

Total cruise ship visits to territory 2008: 409 2009: 421 2010: 372 2011: 387 Total cruise ship passengers to territory 2008: 571,868 2009: 532,975 2010: 501,451 2011: 484,265 Total Surplus/Deficit 2008: $3,496,554 2009: $938,656 2010: -$361,455 2011: -$908,003 Source: BVIPA Annual Reports 2009 through 2011

similarly worded explanation. He added that the reserves will also be used in the future to fund upcoming ports projects.

“These developments are absolutely necessary,” Dr. Smith said.

“For example, we have to consider the development of the dock in West End and in Road Town and in Virgin Gorda. So there’s a lot of work to be done.”

Special Report Cruise

from page 20

tination where Royal Caribbean and Carnival have invested heavily over the years, newcomers can potentially save in the long run by developing the VI as a destination, he claimed.

“So on a seven-day voyage from Miami you can get to Tortola easy,” he said. “It saves about $90,000 in fuel costs. So over a year for a ship, it’s a $4 or $5 million fuel savings.”

But when told of some taxi drivers’ preferences for Carnival and Royal Caribbean ships due to perceptions that those passengers spend more money, Mr. Darley said government’s preferred partners sail ships whose guests will spend more than current lines’.

“Would you rather have a guy buying a taxi ride and merchandise who paid $299 for a trip or $2,000?” he asked, referencing companies’ ticket prices.

And then there’s the “chess”-like dynamic of how the largest two companies operate in the region, maintaining preferential berthing rights in “premium” ports, which can have the effect of blocking would-be competitors from expanding their itineraries, he alleged.

With assured berthing rights in the VI, Norwegian and Disney will be able to trade berths here with the larger corporations for berths in other Eastern Caribbean ports, he said.

“Royal and Carnival know that. They’re throwing everything and the kitchen sink at us because we are making a huge statement,” he said. “If the BVI and everybody would just understand. You all are gonna change the industry. Forever.”

Questions remain But Mr. Scatliffe, one of the taxi drivers present at last Thursday’s meeting, questioned why government would make a deal with the smaller cruise lines instead of the companies with which local businesses are familiar.

“If you are going to jump off a mountain, you better at least jump off a springboard that is there. And you better know that springboard is safe because several persons have used it,” he said.

“We’re going to jump off one ain’t nobody use yet.”

The BVI Beacon | Thursday, October 24, 2013

| Page 21

Dispute: TPP partners disagree on reason for deal’s failure Continued from page 1 public during a March 27, 2012 ceremony in the Central Administration Building. The media was invited to witness the signing of a “heads of understanding” agreement, which formally opened talks between TPP and government.

Two consortium members were identified at the time: Jay Cashman Inc., a major dredging and construction firm based in Quincy, Massachusetts; and the United Infrastructure Group, a construction firm headquartered in Great Falls, South Carolina.

Also present in the room were Premier Dr. Orlando Smith; Mr. Vanterpool; Todd Malphrus, identified as a TPP representative; and Hugh Darley, the founder of the firm International Design and Entertainment Associates, or IDEA. In a Tuesday interview, Mr. Darley portrayed himself as the architect of TPP, with an expertise in creating the “concept of the guest experience” — in other words, designing ports and theme parks that people want to visit.

“I was the dealmaker. I brought to the country the opportunity to build a port with Disney and [Norwegian Cruise Lines],” Mr. Darley said. “I brought them in because of my relationship. I’ve had a 30-year relationship with the Disney company, where I was at one time an executive and employee.”

A one-time Disney “Imagineer” working for the company’s design and development arm, Mr. Darley later served as the art director of Disneyland, he said. After founding IDEA in 1995, he began consulting for several clients, including cruise lines, he explained.

Eventually he developed an interest in the Virgin Islands.

“I identified, for myself first, all of the deepwater opportunities in the Caribbean, and I worked with Royal Caribbean as they developed them,” he said. “Royal passed over this one, and I thought, ‘Why?’ And I kept coming calling here, thinking, ‘You know, I think this is the best cruise destination in the Eastern Caribbean.’ So I put the deal together. Totally selfishly, I wanted to be an owner and operate the best cruise ship port in the Eastern Caribbean.”

His firm, he said, had the needed connections with Disney and Norwegian.

“We brought those relationships and we came to the BVI, because I knew strategically from the planning I’d done … that the BVI was one of the last undeveloped premium ports,” he said.

Development proposal Mr. Darley said that when speaking with members of the National Democratic Party government, including Dr. Smith, he was told that officials would need a pier expansion proposal that didn’t require borrowing.

After interviewing several prospective partners, he said, he “approached two contractors, who told me that they could deliver the cash. They could write a $30 million cheque and government didn’t have to borrow a nickel

and would get 50 percent of the revenue.”

After checking out “eight or ten firms,” he said, he chose Jay Cashman Inc. and UIG. “And you know what? I made a mistake. I picked two contractors that appeared on the surface when we did our due diligence [that] they had the cash and the wherewithal to do it,” Mr. Darley said.

He placed the blame for the deal’s failure squarely on UIG. “Because UIG would not invest and close.

UIG didn’t close,” Mr. Darley asserted, referring to the process of the bank mobilising the funds to allow the project to move ahead.

But Jim Triplett, UIG’s CEO, yesterday disputed this claim.

“That’s not even remotely accurate,” he said, adding that TPP has invested close to $5 million in the project.

That money was spent on legal costs, financing fees, pre-planning expenses, and expenses for Mr. Darley’s firm IDEA, which was a subcontractor of TPP, Mr. Triplett said.

He added that Mr. Darley also had an ownership stake in TPP held through another company.

Final financing But financing for the project — about $45 million — had just been finalised and could have been mobilised to fund the project, Mr. Triplett said.

“TPP actually achieved satisfactory financial arrangements the same week the BVI terminated the contract,” he said, adding, “We could have closed; TPP was capable of closing.”

The process to get the financing finalised, Mr. Triplett said, began in the spring. But several factors complicated the process, including the shortening of the lease of Crown land that TPP was to receive, he claimed.

Because that change altered the economics of the project, it also altered the financing terms from the bank, and negotiations took more time.

With the changed lease, he explained, the banks wanted “recourse” to go after the assets of the individual partners in case the project failed.

Thus, the TPP members then needed more time to come to an agreement with the lenders.

“In a private-public partnership, there’s so many moving parts to it, it can get a little complicated. If one part moves, everything can move,” he said.

Given the reason for the delays, Mr. Triplett said he hoped government would understand and acquiesce to TPP’s September request for a three-week extension. Instead, he said, the government terminated the agreement.

“We were very surprised at their actions and somewhat dismayed,” he said. “They knew we were getting very, very close.”

Jay Cashman Inc. A former TPP partner, Jay Cashman Inc., was initially interested in the project but dropped out in February, after the initial 48year lease for Crown land was shortened to 30

years, Mr. Darley said. He added that the change resulted in a projected difference of $150 million less in cash flow.

“It was no longer a great business deal; it was a good business deal, but not a great business deal,” Mr. Darley said of the Jay Cashman Group’s feelings about the proposal.

Jay Cashman, the founder of the eponymous dredging and heavy equipment contractor, declined to discuss the TPP deal at length.

“My sense is there’s several more acts to play in this theatre, and as it plays out I’ll comment on them,” he said.

Mr. Cashman added that Mr. Darley and his firm IDEA were never investors in the project.

“He was kind of a salesman for the group. … He was a consultant with a bunch of crayons,” Mr. Cashman said, adding that he thought Mr. Darley was “a great consultant” but not an experienced developer.

Mr. Triplett said that Mr. Darley acquired a stake in the project through a holding company, but he maintained that IDEA was a subcontractor to the group that was paid for its services.

Government response Asked last Thursday to comment further on why government cut negotiations with TPP, Mr. Vanterpool claimed that the project’s financing was at issue.

“They didn’t finalise their financial arrangements they were making — we know they were making,” he said, adding, “And they were quite solid financial arrangements, but they didn’t complete them in time for us.”

Asked how much of a funding shortfall the group faced, Mr. Vanterpool declined to comment.

“I don’t think it’s fair for me to disclose that,” he said. “That’s their personal — that’s on their side. You will have to ask them, but they were negotiating with banks to fund it.”

TPP members as consultants?

Despite the failure of the TPP deal, officials may hire some members of the group to advise on the BVI Ports Authority’s plans to continue with cruise pier development, Mr. Vanterpool has said.

In an appearance this month on the television programme “Spotlight,” Mr. Vanterpool said the entire group won’t play a role in government’s plans.

“However, we believe that it would be useful for us to consult or to have particular areas that we think they were expert in to consult to us. So there are discussions about that. We haven’t made any agreements up to this point,” he said, though he didn’t specify which TPP firms may be consulted.

Asked about the possible consulting arrangement at a press conference Friday, Premier Dr. Orlando Smith said that in the future all aspects of the cruise pier project would undergo competitive bidding.

“As we go forward now, all contracts, whether they be for consultants or for persons involved in the work, will be tendered in accordance with the [Protocols for Effective Financial Management],” he said.