GOVERNMENT AND DART REJECT CRITICISM OF REGEN COST

Assertions that the Regen/dump rehabilitation project could be financially crippling for the Cayman Islands have been firmly rejected.

Both the PACT government and the DART group which is leading the project have issued statements challenging those conclusions being circulated.

Although neither has named ex-Finance Minister and Deputy Premier Chris Saunders, in his acrimonious split from the PACT coalition of Premier Wayne Panton, Mr Saunders has said the main reason for his controversial departure was the cost of the project and its financial implications for the jurisdiction.

The former finance minister had claimed that the Regen project could effectively “bankrupt” the Cayman Islands and could lead to a demand by the British government for the imposition of income taxes to cover its budget.

“The last set of numbers that I saw makes this project unaffordable for the public purse and there is absolutely no way I would have signed off on that project when I was Minister of Finance…The last number that I saw for the project was around $2.0 billion dollars,” the ex-finance minister had also claimed.

PACT PUSHES BACK

But both the PACT government and the DART firm have rejected reservations about the cost of the project - although they have not directly named Mr Saunders in their reactions.

According to a government statement issued via the Ministry of Sustainability and Climate Resiliency of the Premier’s Office: “While negotiations are still ongoing, the contract cost is less than the figure shared on social media.”

It explains: “Financial modelling for the project was updated at the beginning of 2023. At this stage, final costs are still being negotiated.”

In a detailed statement, the PACT administration says: “The estimated cost to construct ReGen has increased since the Dart-led consortium was selected as the preferred bidder in 2017. In 2021, the construction costs for the new facilities was projected to be CI$205 million.”

It adds that “this is an increase over the initial contract amount and is largely the result of a policy decision by the previous administration to increase the capacity of the facilities in response to improved data on the amount of waste that would need to be treated.”

According to the PACT administration, “It is also important to note that, in the six years since the Dart-led consortium was chosen as the preferred bidder, global supply chain issues and procurement challenges have increased costs for products and services worldwide.”

It further states that the construction costs will be financed by the Dart-led consortium with no cost to Government until ReGen is fully operational.

Once complete, Government will pay a unitary charge per ton of waste processed through the new facilities over the 25-year life of the contract, with Government taking ownership of the facilities at the end of the contract.

AUDITOR GENERAL'S REPORT

Ex-Deputy Premier and Finance Minister Saunders had also challenged the government to release documents which he claims point to huge differences between a report by the Office of the Auditor General and the winning bid for the Regen project.

But addressing that issue directly, the government says in 2021, the PACT Government and the Governor’s Office asked the Office of the Auditor General to review the project and provide initial insights and advice.

"This report contains commercially sensitive information that the Government is using to inform its ongoing negotiations and improve the overall value for money of the project. Auditor General Sue Winspear has confirmed that the Office of the Auditor General will release an updated report once the Government signs the final contract.”

It also reassures that the investment in ReGen will benefit the people of the Cayman Islands on grounds of safeguarding human and environmental health and ensuring sustainable development.

“Put simply, the Cayman Islands cannot afford to keep landfilling our waste.”

The PACT administration says, while it is confident in its ability to manage the existing landfill footprint to its fullest until the ReGen facilities are commissioned and operational in 2026, “there is no doubt that the country urgently needs an integrated solution for solid waste management that will significantly lower the amount of waste being landfilled.”

The Government also says that at this important stage in project negotiations, there is almost continuous dialogue with the DART-led consortium and that the Environmental Impact Assessment also proceeding at pace.

DART BACKS PACT’S POSITION

Meanwhile, for its part, DART states that it is generally understood that PPPs(Public/Private Projects) are, by nature, complex contract structures that can require significant time and resources to bring to a financial close and execution of the project agreement.

“The DC(DART-led consortium) continues to work collaboratively and diligently with CIG(Cayman Islands Government) to bring ReGen to fruition and deliver a world-class, sustainable and necessary integrated waste management system that will promote the waste hierarchy and serve the Cayman Islands for decades to come.”

DART also says it has provided an accurate background to the project cost escalation over the six years of contract negotiations.

“As the contractual partner, DC is working closely with CIG and our construction sub-contractors to mitigate price increases and deliver waste infrastructure assets that will be operational and effective for at least 40 years, some 15 years beyond the ReGen contract term.”

It also aligns its views with the Government that the ReGen project will “deliver sustainable infrastructure, minimising impact to the environment and human health for everyone in Grand Cayman.

“It will provide an essential ‘utility’ service to all residents and communities through first-world resource management and renewable energy provision.”