From L-R: Hon. Mark Vanterpool, Minister for Communications and Works; Governor Boyd McCleary; and Premier and Finance Minister, Hon. Dr. Orlando Smith
Photo Credit: Melissa Edwards/BVI Platinum News
The Governor's Office has indicated that Governor Boyd McCleary has no comment on the revelations surrounding the award of the cruise pier development project to the Tortola Pier Park (TPP) group.
On Monday, March 18, BVI Platinum News published details about a letter written by Royal Caribbean Cruises Ltd. (RCCL) to the Governor, which alleged that the procurement process lacked fairness and transparency.
The letter was also copied to Premier and Minister of Finance, Dr. D. Orlando Smith and Minister for Overseas Territories, Mr. Mark Simmonds.
Governor's Office spokeswoman, Maria Meys indicated that the Governor does not wish to comment at this stage. Meys indicated that if Governor's position changes, BVI Platinum News will be notified.
Article Published March 19, 2013 - Update: Gov't Urged To Come Clean On Pier Project; Premier Responds To Criticisms
The Government has sought to push back against criticisms following the publication of an article by BVI Platinum News, detailing a letter sent to United Kingdom representatives about the lack of fairness and transparency in the award of the cruise pier project to the Tortola Pier Park Group.
Almost the entire National Democratic Party's (NDP) radio program last evening, March 18, was spent explaining Government's position on the project, including clarifications from Premier and Minister for Finance, Hon. Dr. D. Orlando Smith and Hon. Mark Vanterpool, Minister for Communications and Works.
A subsequent statement by the Premier was delivered via email about midnight. However, the contents of the letter published in the BVI Platinum News article were not directly addressed.
The letter was written by Royal Caribbean Cruises Limited (RCCL), sent to Governor Boyd McCleary and copied to Premier Smith and UK's Minister for Overseas Territories, Mr. Mark Simmonds.
During the radio program, a caller implored that Government come clean about the pier park project as they claimed a senior official was walking around, telling persons who will get work when the project commences.
Minister Vanterpool dispelled those claims as not true. The Minister disclosed that works will commence next year, which is about six months later than the summer timeline announced earlier this year.
Another caller asked the Minister to disclose the names of the persons involved with TPP, but the Minister stated that he could not recall at the time. He later provided the names of Disney Cruise Line and Norwegian Cruise Line as the cruise ship partners involved with TPP.
According to Premier Smith's statement today, on August 1, 2012, Government published an invitation for an expression of interest in various publications, including in the United States, the Caribbean, Europe and Asia over the period of one month. The Premier stated that on August 28, 2012 Government received expressions of interest from TPP, RCCL and GLF.
He noted that the the bids were evaluated by the Public Tenders Board of the Ministry of Finance against the conditions set out in the published expression of interest. From that process, TPP and RCCL were chosen for further consideration.
The Premier further explained that on October 31, 2012, a team consisting of lawyers and financial experts was selected to enter into negotiations with the two selected groups on behalf of the Government.
The recommendations of this team, according to the Premier, were presented to Cabinet and accepted. He stated that Cabinet also then decided that the process could proceed to the stage where the successful bidder would be allowed to make presentations to a committee comprising external financial and legal experts, as well as representatives of the Government and the BVI Port Authority.
"The process was designed to ensure that the entity with which the Government commenced final negotiations would have to be based on the technical opinions of experts in the engineering, legal, and financial fields," Premier Smith stated.
He added that after an intense and vigorous negotiation process, three independent reports were produced by the experts and presented to the Ministry of Finance. These reports, according to the Premier, were unanimous in their conclusion that the proposal presented by the consortium led by TPP was most favorable to the Government of the Virgin Islands.
Premier Smith stated that based on thee expert opinions, the Public Tenders Board made their recommendations to Cabinet and these were accepted in November 2012.
He added that Cabinet then also authorised further negotiations with TPP and for the negotiating team to negotiate final terms to be included in agreements for the cruise pier project.
"At all times, it was emphasised that the final terms would have to be in the best interest of the Virgin Islands and should not cause the Government to assume any financial liability that would cause it to be in breach of the Protocol for Effective Financial Management that had been agreed with the United Kingdom," Premier Smith stated.
The Premier confirmed that negotiations are still ongoing and that no Minister of Government has held discussions with the Tenders Board or with the negotiating team.
"The Government of the Virgin Islands remains committed to fairness and transparency in building the economy of the Territory. The Government of the Virgin Islands will continue to do what is best for the development of the Virgin Islands and its people and will in this vein ensure that the Territory gets value for money," Premier Smith stated.
In the statement, Premier Smith pointed out that when completed, the project will have significant beneficial implications for the economy and noted that they believe it is their duty to keep the people informed.
He stated that Government also believes that they should "continually illuminate the circumstances around this very important project and now underscore that we are committed to fairness, transparency, and accountability in how this project is implemented".
"This Government is anticipating the commencement of this project, recognising, as the previous Government did, that the economic wellbeing of our Territory will be enhanced by the expansion of our cruise pier. The need to lengthen and strengthen the existing cruise pier in Road Town was born out of a necessity to accommodate the bigger cruise ships that are now being deployed to the Caribbean," Premier Smith pointed out.
The area identified for development as pointed out in the document requesting persons to submit expressions of interest.
He noted that the discussion about the extension of the dock and the development of the land side has been ongoing for years and was in fact started by the previous Government.
"After assuming office in November 2011, we soon recognised that there was an urgent need to accommodate these bigger ships, since the cruise lines in planning their itineraries up to two years in advance, were already canceling calls to the BVI and this threatened the livelihood of our cruise tourism industry. In addition, the cruise lines had by then intimated, if not made clear, that their sustainable future calls to our shores required expansion of our cruise pier, without which expansion they would not commit inclusion of the Virgin Islands in their forward planning itineraries," the Premier stated.
Article Published March 18, 2013 - UK Told Cruise Pier Bid Process Lacked Fairness & Transparency; Claims Gov't Reps Were Antagonistic
Governor Boyd McCleary and the Foreign and Commonwealth Office (FCO) have been informed that the process that led to the selection of the Tortola Pier Park (TPP) Group to undertake the expansion of the cruise pier project in Road Town was unfair and lacked transparency.
Royal Caribbean Cruises Ltd. (RCCL), the only other company that was shortlisted with TPP to execute the project, has written to the Governor and copied to Mr. Mark Simmonds, Minister for Overseas Territories and Premier and Minister for Finance, Hon. Dr. D. Orlando Smith.
TPP was initially selected to undertake the development following a restrictive bid process, but Government decided to halt the initial process as the protocols signed with the United Kingdom called for other stipulations. On August 1, 2012, Premier Smith announced that the process with TPP was being discontinued and a decision made to re-tender through an open bid process. The deadline for submissions of the new proposals was August 28, 2012.
In the letter obtained by BVI Platinum News, RCCL's Vice President of Commercial Development, Mr. John Tercek outlined that they entered the process because of the intervention of the UK Government in August and thus their anticipation that the bid process would not be the usual "getting business done in the Caribbean", but instead a fair and transparent process.
"Since the process appears to have been undertaken by the Government merely to satisfy the UK's administrative oversight concerns and the terms of the Protocols for Effective Financial Management, while nevertheless moving forward as planned with the original privately negotiated transaction, we feel that we have completely wasted our time and capital. Thus we request your support to help us gain a recovery of our out of pocket expenses for this pointless undertaking," RCCL wrote to the Governor.
According to RCCL, they were skeptical about the legitimacy and impartiality of the process from the beginning and more so, when "Mr. Claude Cline showed up as the active chairman of the negotiating committee".
"This was quite a surprise to us as Mr. Cline has been the lead negotiator and perhaps even a paid consultant during the earlier negotiations with the Tortola Ports Group that had been chosen through earlier secret negotiations and now again through the so-called "competitive bid" and had appeared publicly with this group to tout them as the group selected by Government to carry out this important project," RCCL pointed out.
According to RCCL, this speaks volumes to the lack of fairness of the process to the RCCL group and the distinct disadvantage faced when competing with the other group for the award of the project.
RCCL pointed out to the Governor that they were astonished by the antagonistic attitude of Mr. Cline and some members of his committee. Attacking, aggressive, patronizing and unfriendly are some of the words used to describe the Government's negotiating team and attorneys from Baker MacKenzie, UK.
According to RCCL, they read that the competing bidder included as its local partner, the BVI Investment Club. RCCL alleged that the BVI Investment Club includes sitting Members of Parliament or their relatives as participating investors.
RCCL pointed out that even before it became a requirement to include 20% local ownership, they did not choose the right local investors. In documents obtained by BVI Platinum News, the Romasco Group has been identified as the local investor in the RCCL proposal.
In light of what the company termed an "unfair process", they are seeking some $190,000 as reimbursement for monies spent on consultants and attorneys to put their bid together.
The company listed about 13 port projects between 1999 and 2006 that it has been involved in while pointing out that TPP has not been involved in any actual port projects during that time period.
Making It Up On The Fly
RCCL claims that on December 4, 2012, Mr. Neil Smith, Financial Secretary (FS) informed the company that their proposal was not selected, but without specifying or giving any reasons as to why, the proposal was not selected.
The company claims to have made repeated requests during the process about the specific criteria on which the selection of the bids were being made, including the level or degree of importance which would be attached to certain criteria, but this was not made available.
According to the missive to the Governor, the chairman of the negotiating committee established by Government, castigated RCCL and their attorney for having the temerity to dare to ask for such criteria.
Furthermore, RCCL claims that the tender instructions were insufficient to produce a winning bid proposal as evidenced by the FS's subsequent correspondence announcing various additional requirements and modifications to the tender.
RCCL cites these additional requirements as an increase in local participation to include a minimum of 20% local ownership which evolved from a recommendation to a requirement during the process; a Government buy-out at various time intervals during the concession; and the denial of placing liens on the land improvements being built, which RCCL pointed out are general requirements from commercial lenders.
"In general, there was a lot of making it up on the fly during the process. In our effort to advance, we acknowledged and accepted each revision from the Government throughout the process," RCCL cited.
Astonished; No Public Discussions
RCCL also claims that during the time-compressed process, they were not allowed to discuss their project ideas with Government or obtain clarification of various questions about the bid.
This, the company stated, was strange as they were placed in competition with a group that had freely interfaced with the same Government officials extensively for the previous nine months or so and had been presented by the Government to the general public as the awardees of the project.
According to RCCL, this placed the company at a distinct disadvantage, especially since the process evolved into a subjective competition.
RCCL said they were astonished as not one question was asked by the Government's negotiating team about their track record, nor about the detailed and innovative design concept produced, marketing concepts and management concepts.