Government gives details of the MOU with NCL

vlcsnap-2013-08-19-12h05m08s114The NCL Cruise project at Harvest Caye is moving forward full throttle. We’ve been covering Wednesday’s lengthy press conference where the MOU agreed to by the Government of Belize and the Norwegian Cruise Line was made public. Tonight we take a closer look at the details of that document and what it means for the country moving forward.

The project’s benefits aside, Government, according to Senator Godwin Hulse, stands to make up to BZ$45 million during the first year of the project. But who will get what? The MOU requires that NCL must not employ more than 25% of the total workforce from outside of Belize during the project. It gives out US $.17 per passenger to a tourism development fund which a portion will be used to promote sustainable management, and pay other statutory fees, rates and taxes.

Mike Singh – CEO Foreign Trade and Investment:

vlcsnap-2013-08-19-13h12m00s245To commit an employer and contract Belizeans, in accordance with the Labour Laws of Belize and at no time employ foreign employees in excess of 25% of the total workforce during all phases of the project.  In addition to establish a graduated scale and phase-out of foreign employees within the first five years of the project.  That no foreign employees shall be permitted to provide the following services: entertainment, boat captain and crew, tour guide and tour operator, and to further commit that opportunities will be made available to Belizean-owned businesses, to operate any business or concession to be established on the island and on the hub. 

To ensure and transfer of technical expertise, knowledge and proper training opportunities, whether locally or abroad, to Belizeans employed or to be employed by the project. The announcement  that Mr Murphy made today, which was actually a surprise to many of us, because I didn’t realize he was actually going to announce that today, about hiring Belizean to work on the ships from now, to get them ready and get them trained, so that they may come back and work on the development, or choose to remain on board the ship, that is a good example of what that point is encouraging. 

Mike Singh, CEO in the Ministry of Foreign Trade and Investment, says the usual fiscal incentives were granted and needed for this project.

Mike Singh – CEO Foreign Trade and Investment:

Government undertakes to grant the developer fiscal incentives, under the Fiscal incentives Act, to provide for a complete phased development of the port and harbor according to a submitted development plan and bill of quantities, and duty-free exemptions for all necessary capital machinery, equipment and materials, including specialized machinery and equipment and spare parts, building material, fixtures and fittings, terrestrial and marine vehicles including aqua-sport equipment, for use in the development of the port and the hub.  Just to explain this a little bit, there’s been all kinds of rumours flying around about these runaway concessions that are above what everybody gets.  The Fiscal Incentive Program is available to all tourism developers, overnight, cruise, small and large alike.  This fiscal incentive Package is for the set up and capital investment to get the project up and running, and which is permitted and which is allowed buy any developer within the tourism industry.  This does not exempt from GST, business tax, or any of the other taxes that businesses in Belize will pay. 

The issue of the head tax came up and Senator Godwin Hulse explained the reason for an even split of possible increases every five years for the duration of the 25 year concession.

Senator Godwin Hulse:

vlcsnap-2013-08-19-13h11m41s56We’re looking at it from a country position.  We we’re looking at it only at specifically [this project], because it’s expanding cruise tourism across the country.  There’s built in place a progressive increase as we go along. 

 

 

In addition, there will be a revised EIA, environmental impact assessment, for the project. Mike Singh explained.

Mike Singh – CEO Foreign Trade and Investment:

In general the undertaking of this MOU is subject to a positive outcome of this application for the amendment of the current approved Environmental Impact Assessment for Harvest Caye.  As Colin mentioned earlier, there is an already approved concession for the island, and for the company that was acquired with the island, with the idea being that, based on the changes that are being proposed by NCL, there will be an application for an amendment of that EIA, which will go through all the processes that are needed for amendments of EIAs.   

Lastly, the question of legal enforcement of the MOU was raised and this was Colin Murphy’s reply.

Colin Murphy – VP, Destination And Strategic Development For NCL:

vlcsnap-2013-08-19-12h52m25s253I think in principle it’s not legally binding, but obviously we think it’s a strong demonstration of Government intent.  We think it will be fairly unprecedented for it to deviate significantly from that. 

I know that the international investment community is watching very closely what happens in Belize, to try and understand whether Belize is a place that is really open to do business.  So we’re taking the Government at their word.  We have an MOU.  We think that’s a great basis to move forward.  People in London and New York will be watching this, to see how it progresses.  So we want to send a shining example  to the rest of the investment community.

Norwegian has proposed inviting the press on board one of its ships at a later date.

About the Author