BELIZE CITY, Fri. May 22, 2015–For the past two months, Prime Minister and Minister of Finance Dean Barrow has been traveling back and forth to Miami to try to broker a truce between stakeholders in the cruise sector, to permit the US$100 million Stake Bank port to proceed without litigation.
However, no compromise has been reached, and Barrow proposes to press ahead with legislation which he hopes would at least put to bed the dispute over how $14 million in head taxes, paid by tourists, will be shared by those who control the market here.
Currently, the Fort Street Tourism Village (FSTV), part-owned by Royal Caribbean, is the only port receiving cruise tourists under an exclusive concession granted by the Government of Belize. All the other cruise lines, including Carnival Cruise Lines, the dominant one on the Belize market, use the FSTV port. However, there is a move afoot to establish a new docking facility at Stake Bank, off the coast of Belize City. Stake Bank is the brainchild of Michael Feinstein, who years ago sold his stake in FSTV, and who wants to now build a port which he would control.
“We are at a point now where I need to step back and take a break to reflect on the situation… and then come again!” Barrow told us.
He said that while he does not want to encourage any further delay with Stake Bank, trying to reach a settlement may not be as urgent as he had first feared.
Barrow said that when he made his first visit to Miami in April, he met with executives of Royal Caribbean and was able to hear from them at the highest level. The indication is that they would keep coming to Belize for at least the next 5 to 10 years, he explained.
Barrow met again this month with Royal Caribbean, and he returned from Miami on May 14. Barrow told us that the Friday after he returned from Miami, he and executives of the Belize Tourism Board – BTB chairman Carla Barnett and Director of Tourism Karen Bevans – met with Michael Feinstein and Feinstein got back to him the following Tuesday to say that he had spoken with Royal Caribbean and it was a “no go.”
For their part, though, Royal Caribbean and the FSTV group are still very much insisting on their rights under the agreements with the Government of Belize, helped by Michael Feinstein, Barrow pointed out.
He said that if Stake Bank were to be built and Royal Caribbean is not a major player, and if the head tax is given to Stake Bank, Royal Caribbean would argue that it would constitute a breach of their contract with the Government and they would sue.
Cruise tourists pay US$7 head tax, and US$4 goes to the FSTV, US$1.60 to the Belize Tourism Board and US$1.40 to the Protected Areas Conservation Trust (PACT), while US$0.33 is extracted from each of these amounts as a contribution to the Belize City Council for use of the city as the port of entry.
According to Barrow, FSTV is banking on a series of agreements that had been signed by the former Said Musa administration, and possibly a ffourth. The Prime Minister told us, though, that based on the legal advice he has received, he believes that the Government can argue against the view that the Government must pay the head tax to FSTV regardless of whether cruise passengers use their facility or not, while on the face of it, he admits that FSTV does have a point.
Barrow said that Carnival, which has the lion’s share of the passengers who come to Belize, has no major issues with the Stake Bank proposition. However, they have expressed concerns about things such as the quality of tendering cruise passengers for onshore tours, as well as the concentration of crime in the Belize City area.
For his part, Barrow expressed reservations over the financing of the Stake Bank project. He told us that three local banks, First Caribbean, Heritage Bank and the Belize Bank, have indicated an interest but have not made a firm commitment, and the prospective financing does not include the cost of building the causeway to Belize City.
He added that his conversation with one of the three banks has convinced him that the banks will not finance the project unless they have iron-clad guarantees as to the viability of the project, such as a guarantee on the amount of passengers and a dedicated revenue stream, such as the head tax, to service the debt.
Carnival has made it clear that they will make no such commitment that they will be locked into Belize for any period of time, and Royal Caribbean could remain committed for the next 5 to 10 years, but Royal Caribbean can only guarantee a flow of cruise passengers for the Stake Bank port if they are a significant partner in the new project—a proposition that Feinstein continues to resist.
“We see their effort to acquire the island as doomsday for us. We would never be allowed on the island,” Tom Greenwood, president of the Federation of Cruise Tourism Associations of Belize (FECTAB), told Amandala.
According to Greenwood, FECTAB represents 23 associations, unions, groups and businesses, including the General Tour Guide Association, which has a membership of over 400 drawn from the Belize, Cayo, Orange Walk and Corozal Districts.
Greenwood said that they have a contract with Stake Bank, assuring them a space on the island, and he fears that if Royal Caribbean assumes control of the project, local tour operators would be boxed out, because the contract would not be transferred along with the island.
Greenwood said that they had asked the Prime Minister to tell them once and for all if he can help to get things going. He said that he will try to get an audience with the Prime Minister next week or after the case comes up in court.
Barrow had indicated that his attempt to broker a deal with the parties was intended to avert litigation on the matter. Michael Feinstein has asked the court for a declaration that the granting of the head tax to the FSTV is unconstitutional.
For his part, Barrow told us that he can’t allow for the head tax arrangement to be scuttled, because FSTV will be shut down if there is no head tax. So, the solution, he says, is to imminently pass a law to confirm and validate the head tax retrospectively.
What if the court case comes up before he can get to Parliament? Barrow told us that as long as the judge does not render a decision in the matter, the status quo will remain, and that decision would remain binding until the legislature can introduce the new law.
Parliament has already passed the Stake Banks Cruise Docking Facility Development Bill, but has not yet brought it into effect.
Barrow told us that he will ask Crown Counsel, Nigel Hawke, to seek an adjournment from the Supreme Court, to indicate to the court that the Government has a bill that it plans to take to Parliament at the end of June or the first Friday in July.
Barrow said that he has already shared a draft of the bill with Royal Caribbean and the FSTV group, but he has made it clear that the law will not state that the head tax will be theirs forever, whether or not passengers disembark at their port.