(CNS): The updated Outline Business Case does not support proceeding with the development of a cruise port in George Town but the findings are being ignored by the Cayman Islands Government, which has confirmed it is still pressing ahead. Far from finding compelling reasons to develop the piers, the consultants, PricewaterhouseCoopers, found that the data is insufficient to justify the project and in some scenarios it could lead to serious economic losses along with the environmental ones.

In a report that indicates throughout the massive disparity in predictions because of a lack of information regarding visitors’ behavior, as well as assumptions being made based on unsubstantiated figures and estimates, the consultants stated on page 23: “The current data which underpin the economic and environmental impacts, including the marine resource valuation, are inconclusive and do not provide the basis for drawing a definitive conclusion about whether or not to proceed with the CBF.”

Pointing to three possible scenarios, the report reveals that questions that are fundamental to the economic rationale of the project have not been answered.

PwC indicates that under the lowest impact scenario for ecosystem services, the economic impact of the damage to the reefs would have a minimal impact on the economic benefit, but under the highest impact scenario for ecosystem services, the damage to the reefs “more than outweighs the economic benefits” of the case for building the piers.

“If ‘divers’ are on the scale envisaged and respond in the ways outlined to the loss of parts of the reef, then the costs of the CBF would exceed its economic benefits,” the report warns.

Indicating that an increase in cruise passengers, as predicted or hoped for, could see cruise tourism outweigh watersports tourism but, the report says, “The poor quality of the data currently available means that this upside scenario should not be relied upon for the overall assessment of the costs and benefits of the CBF.”

Warning that government should not base the decision on the information and statistics which underpinned the OBC, the consultants recommend that government, before pressing on, should develop a more detailed understanding of the scale of the impacts put at risk by the CBF and the anticipated behaviour of “divers” in response to loss of parts of the GTH reefs.

“This could be conducted through a detailed survey of tourists, combined with questionnaires /interviews with dive, water sports and other leisure industry operators. It will also be important to consider the ways in which the potential adverse impacts can be mitigated,” PwC added.

The OBC and additional Business Research and Economic Advisors (BREA) report on shopping behavior of cruise passengers was released by government to just one media house Tuesday. The remaining press corp received a copy of the report on Wednesday afternoon. The documents are published below.

The tourism ministry also sent a statement in which it stated that the report “concludes that the estimated economic benefits to be derived from the piers exceed the environmental costs associated with the damage to the reef”, but it is not clear where the consultants make that claim given their statement that the data is “inconclusive” and in one scenario could in fact be the opposite.

Although the BREA report, which is based on data commissioned and collected for the cruise lines, may imply that the piers increase how much cruise passengers spend, the consultants also raise questions about the limitations on that data for that report. PwC said that the findings do not alter the OBC base assumptions as there is not enough data to conclude that the port should progress.

Long term data from BREA also shows it is impossible to establish any trends regarding the shopping behavior of people on a cruise vacation due to numerous variables impacting their decisions.

A local economic expert who requested to remain anonymous told CNS that the OBC has not been conducted based on any primary data, which presents a significant gap in the starting point for this project. Regardless of the environmental impact, the economic risk to the public purse is extremely significant, he warned.

A weakness in the OBC could have a long term impact on the project if government presses ahead. At a recent Public Accounts Committee meeting, Mary Rodrigues, who is heading up Project Future, indicated the most fundamental starting point for any new government capital project had to be a solid business case. (See Cultural change is biggest challenge in CS reform)

However, in its statement, the ministry spoke to the policy position that is supporting the decision rather than the economic one.

“Feedback from the cruise lines affirms the inconvenient truth that the Cayman Islands will continue to lose market share unless a berthing facility is constructed to facilitate the fast, easy and safe movement of passengers to and from their ships,” the ministry stated. “Without berthing facilities the Cayman Islands will not be in the consideration set when itineraries for these ships are being crafted and we will continue to be bypassed, as is currently the case with the Oasis ships … The question for the Cayman Islands therefore becomes distilled to, do we want to remain in the cruise tourism business? If we do, we must understand that doing so means we must provide berthing.”