The Cayman Islands has reached an agreement with MSC Cruises to provide funding toward the cost of a new cruise ship berthing facility in Grand Cayman harbor, said Alden McLaughlin, the country’s premier, in a statement this week.
MSC Cruises becomes the fourth cruise company with which the Cayman government has contracted to provide financing for the cruise port project, joining Royal Caribbean Cruises Ltd., Carnival Corporation and Disney Cruise Line.
MSC officials signed a letter of intent with the Cayman government to provide $15 million for the cruise port project according to a Cayman Compass report. In all, the four cruises lines have agreed to contribute $180 million towards the facility. The operators will have preferential access to the port’s berths when the project is complete, Mclaughlin said.
Government officials have previously placed the port’s cost at between $150 million and $180 million. Three proposals are currently under consideration for construction of the port; McLaughlin said he hopes to have information on a timeline for final bids by the end of May.
“These agreements, coupled with the finance to be provided by whichever entity is eventually selected as the preferred bidder on the project, ensure that no public funding will be required to build the cruise berths,” said McLaughlin.
“As well as strengthening the project’s financing structure, having cruise companies financially vested in the project provides assurance that [Cayman] finances will not be exposed to risk and is a positive indication of their commitment to our islands for decades to come,” he added.
“This agreement represents the accomplishment of another key milestone in the lifecycle of this project,” which was launched in 2013, said Moses Kirkconnell, the Cayman Islands’ tourism minister. “MSC operates more than 1,000 routes globally and is one of the fastest growing cruise companies in the world. Their commitment to the Cayman Islands will help to sustain and grow our cruise tourism industry into the future,” he said.
In a March address to the Cayman Society of Architects, Surveyors and Engineers, Kirkconnell said the cruise-line financing arrangements follow a model recommended in a PwC analysis. “Government is not in a position to finance the project and the business case recommended a public/private partnership to fund the construction of the piers,” he said.
“This means that [cruise lines] have a vested interest in returning to Grand Cayman and we have the assurance that when the piers are built, the world’s largest cruise lines will include Grand Cayman on their itineraries for decades to come, Kirkconnell said.
“Cruise lines will be repaid from a portion of the per-passenger fee that they remit to the port authority each time they are in port,” he said. “This underscores that the only way they can benefit from their investment is to continue using the facility.”
The Port Authority of the Cayman Islands will continue to own, operate and manage the cruise port, said Kirkconnell.
Meanwhile, Cruise Port Referendum Cayman, a local group opposed to the project, is attempting to trigger a referendum on the issue by collecting 5,288 signatures to a petition.
The Cayman Islands is the only major Caribbean cruise port without a modern terminal facility. The island still hosted 1.92 million cruise passengers in 2018, the third-highest total among Caribbean destinations tracked by the Caribbean Tourism Organization.
Kirkconnell and other government officials have warned the destination risks losing its future cruise-ship business as the industry continues to deploy larger ships that require fixed piers for efficient passenger embarking and disembarking.