In April of 2004, the government, Luke Espat and the Carnival Corporation were all smiles when they broke ground and a bottle of bubbly to launch the Belize Cruise Terminal Project, a $100 million plan for cruise ships to dock at a new facility adjoining the Port of Belize. But tonight, the news is that Luke Espat says government has failed to live up to its part of the deal and is ready to leave him holding the a very expensive bag. And it's clear that that the PUP hardline loyalist isn't going to take it; in fact information to us is that he's suing the government for millions of dollars for breach of contract and making false representations and warranties. 7NEWS is reliably informed that a lawsuit was filed today by Belize Ports Limited against the government of Belize.
The statement of claim alleges that government breached the share sale agreement, the cruise terminal agreement the privatization cooperation agreement, a license agreement, the lease agreement for the Commerce Bight Port, and the prospectus agreement. For all these, Espat's Belize Ports limited is claming damages and costs. According to the claim. It's a lot of promises broken and undertaking unfulfilled and government's liability could be in the millions of dollars. But the lawsuit and all the breaches claimed are only the background.
What's really happening is that government appears ready to abandon Espat's project and proceed with mike Feinstein's project at Stake Bank Caye. Feinstein has proposed to build a cruise terminal on that island; works are already well underway, and we are reliably informed that he has commitments from two major cruise lines to participate. But what Feinstein does not have, at least not yet, is a license to operate as a port. But what we are reliably informed he does have is a commitment in writing from government to grant him that license. The weighty matter is expected to go before Cabinet when it meets on Tuesday. Government, of course, has to consider the additional liability and damages that it will incur from Espat if it grants a license to Feinstein's Stake Bank Project - thus violating the exclusive license it gave Espat.
But more than just additional liability, government also has to make another consideration: it has to make a decision for the future of cruise tourism in Belize. Cruise numbers have fallen off sharply in the past two years, and by 2009 the major cruise lines have indicated they will no longer be ready to deal with the cruise tender situation where boats are anchored out at sea and passengers tendered in. Those lines have told government they want a proper docking facility where passengers can get off the ship and walk unto to dry land. Of course, that's what was the plan with Espat's project, which is already well underway. And though it will apparently not meet the target for completion at the end of the year, government, it seems, has lost interest.
Our read of the situation from those government insiders that we've spoken to is that, right now, key players in the Musa administration are very much in thrall with the Feinstein Stake Bank Project and very encouraged by the commitments he has received from Norwegian and Royal Caribbean. With that, we are told, those key decision makers, are leaning in that direction.
Espat's lawsuit is, we figure, trying to make them lean back in his direction or get the sense of how much it will cost, if they don't. Of course, any penalty is ultimately a cost to taxpayers, an outcome which, recent history has shown, this government is never too shy to invoke. But overall, commercial pressures are pushing hard on this one and it should take shape by the end of next week. We'll keep you posted.
