December 10, 2019

Cayman Islands Ministry of Tourism addresses Auditor Generals Report

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Project governance has improved and the governance arrangements and roles and responsibilities are in line with the new Major Projects Office () governance framework.

George Town, Cayman Islands (21 January, 2019) The Ministry of District Administration, Tourism and Transport acknowledge the ’s report assessing the progress of the ORIA Terminal Redevelopment Project in relation to time, cost and quality.

Hon. Moses Kirkconnell, Minister for Tourism is pleased that the report notes that ‘Project governance has improved and the governance arrangements and roles and responsibilities are in line with the new MPO governance framework.’ This is in keeping with the Auditor General’s earlier Major Capital Projects follow up dated October 2017, which stated that ‘The new MPO governance framework is in line with recognized good practice. It is based on the UK HM Treasury Green Book and other UK good practices and has been adapted to suit the Cayman Islands.’

While the report notes the project’s significance to the Cayman Islands economy, it also highlights an increase in cost over contract of $10.5 million; $5million of which derives from change orders which have in turn contributed to the projects extended timeline for completion.

Ministry of Tourism Chief Officer, Stran Bodden, explained that over the lifespan of the project the Board requested improvements to the original designs to further enhance safety, efficiency and comfort for users. These included improving the hurricane protection by upgrading from 9LB to 15LB glass and putting the necessary measures in place to bring forward the planned installation of new generators, to ensure that full emergency power was available to the whole terminal building earlier than originally anticipated.

Other improvements included the installation of canopies to shield passengers from inclement weather, upgrading the CIAA offices and duty free mall, landscaping within the airport footprint and providing additional staff parking facilities to ensure the number of spaces available to the public and travellers was not reduced.

Mr. Bodden noted that the Board was aware that these improvements would marginally extend the projects final completion date. “Since the project is being completed in phases and the use of critical areas such as the Customs and Immigration halls would not be delayed by the enhancements, on balance it was agreed that the added convenience for passengers and users of the airport justified extending the timeline.”

Speaking specifically to the costs, Albert Anderson, CEO of the Cayman Islands Airports Authority explained that outside of governments CI$15M cash injection, which was contributed to accelerate the project’s completion in order to minimize discomfort to visitors and the travelling public, the remainder of the funding required to complete the project has come from the CIAA’s Passenger Facility Charge.

“PFC revenue is intended to fund capital improvement projects to enhance safety, security, and capacity at Cayman’s airports, which is precisely the way it is being used at ORIA. It is important to keep in mind the Board’s change order requests were made based on the fact that funds were available to cover the improvements requested. Given that no borrowing was undertaken and there has been no impact to the public purse, the Board considers the enhancements to be reasonable and warranted.”

ORIA redevelopment and expansion project is the first major capital initiative in the Cayman Islands to be completed in compliance with the Framework for Fiscal Responsibility which became enshrined in Cayman Islands Law in 2012 and significantly raises the bar on what were already stringent goals for overseeing government expenditure with respect to accountability and value for money.

“For growth to be sustainable it must go hand-in-hand with the infrastructure to support it,” stated Minister Kirkconnell. “The airport is our international gateway to the rest of the world, and its expansion is vital to our long-term ability to grow tourism, particularly stayover arrivals.”

“The Ministry, CIAA and MPO and many others have worked hard using the funds that are available to deliver an airport that fits our needs, he said. While we may not have all of the amenities we would have liked, the highest standards of quality and service have not been compromised. The Ministry accepts that performance audits are a key aspect
of good governance and on this basis we welcome the Auditor General’s recommendations which aim to further heighten performance and accountability.”

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