Royal Caribbean is part owner of the exclusive cruise port ? the Fort Street Tourism Village, and it claimed that when Government gave permission for Carnival to build another port in city, it breached the exclusive 15-year agreement it had given to the Tourism Village in 2000.

At the time that Government signed the contract with Carnival Corporation in April, Royal Caribbean raised strong objections, claiming that Government had breached their prior agreement.

The Prime Minister explained on Wednesday that Government has renegotiated its agreement with Royal Caribbean, ?whereby they are compensated for what they would have gotten had this facility not been built, which is the legal position to avoid any claim for damages.?

He explained, ?Up to [a maximum of] 925,000 passengers, Royal Caribbean can claim the head tax?In other words, if 500,000 cruise passengers come, they will get paid on 500,000, not 9 or 925,000.?

According to the BTB?s 2003 Tourism Travel and Statistics report, Carnival claims 56.8% of the Belize cruise market. If cruise passenger arrivals reach the projected record of 1 million, anticipated this year, and stays there, it would mean that the Government would pay out to Royal Caribbean over US$2.1 million dollars. [56.8% of 925,000 at US$4 each]

On the other hand, if passenger arrivals plateau at last year?s level of 575,000, reported by the BTB, Government could end up paying Royal Caribbean over US$1.3 million. [56.8% of 575,000 at US$4 each]

Meanwhile, a US$2 increase in the head tax to cruise passengers, due to go to the Belize Tourism Board at the beginning of 2005, would be offset by these payments from the Government to Royal Caribbean.

The Prime Minister said that the agreement with Royal Caribbean to compensate it for losses in the US$4 passenger tax?up to a maximum of 925,000 passengers?should become effective in about three years, or one year after the Carnival port is built.

While Government has been able to overcome that one hurdle, that is, settling its dispute with Royal Caribbean, it has other hurdles yet to scale.

Recently, the Government has come under fire from some investors in the tourism sector, including those involved in overnight tourism, who believe that the contents of the Carnival agreement do not secure the national interest.

This morning, the Prime Minister again endorsed the project, saying, ?On the Carnival agreement side, I am satisfied that as a whole, it is a good agreement. It is a good project,? said PM Musa. ?There are a few issues that we believe need to be clarified?modified, if you like?and we are now in discussion with Carnival to resolve those matters.?

He said that contrary to other reports in the media, the project has not been stalled; soil tests and other preliminary works are ongoing.

As those works proceed, though, the Government is working with Carnival to ?clarify? some sections of the contract that have been the cause of much concern locally.

The latest objection to the contract has come from the Cayo Tour Guide Association, which, in a press release on Wednesday, stated, ?After reviewing the contract at our past association meeting, we consider it a direct threat to our overnight stays, which employs approximately 95% of close to 200 guides in our association.?

It adds, ?Furthermore, no tour guide was allowed to sit on a forum, at least, to discuss this opportunity for Carnival and there are instances in the contract that suggest that Carnival has the right to hire or not to hire any Belizean, tour guide or other, in their work force.?

The Prime Minister contends, however, that the agreement does ?contemplate? that hundreds of Belizeans would get jobs, even though the contract also stipulates that the Government should not tell the investors whom they should hire.

?I am fully satisfied that the agreement does not, in any way, give Carnival any carte blanche to bring in any foreign labor to do work that Belizeans can do,? PM Musa told the media.

Clause 9.d of the contract states: ?The GOB will not require the use by BCTL [Belize Cruise Terminal Limited ? co-owned by Belize Ports Limited and Carnival] of any services or any third party, including any Belizean entities, nationalities or government agencies??

The Prime Minister said that this clause is a ?standard clause.?

We note that one major criticism from objectors is that there was not enough consultation between the Government and stakeholders before the contract was signed. The Belize Tourism Industry Association and more recently, the Cayo Tour Guide Association, are among those who have raised the concern.

The 20-year contract was signed on April 29, 2004, just about a month after Cabinet endorsed it. However, three months earlier, Government had already signed a memorandum of understanding with Carnival and Belize Ports Limited. Our sources said that now that Cabinet has seen the full contract, reportedly for the first time, there are clauses with which some members are not happy, including clauses that, to them, suggest that Carnival would be allowed to ignore certain Belizean laws and cruise industry policies, and they want them to be addressed, they stressed.