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Economic Impact Study of Cayman Turtle Centre
The results of an Economic Impact Study conducted by PricewaterhouseCoopers (PwC) on the Cayman Turtle Centre (CTF) have been published on the Cayman Turtle Centre website. See below to view report.
In March 2013 PwC was contracted to produce a study of the economic impact of CTF. PwC gathered information from CTF, the Cayman Islands Government (CIG), the Department of Tourism, the Economics & Statistics Office, private sector tour operators and tourism attractions owners, and BREA (Business Research & Economic Advisors). The approach used was consistent with that used in the UK by HM Treasury. They completed the study in May 2013 and produced a report on the study.
The scale of the expected impacts on Cayman’s economy used two indicators: economic output as measured by Gross Value Added, and employment. CTF has direct, indirect and induced economic impacts, but a key determinant of CTF’s net economic impact is its wider effect on enabling and encouraging greater visitor spending in Cayman which of course also translates into employment.
The study estimated the current impact of CTF on Cayman’s economy for a one-year period (2012), and went on to estimate the net present value of the economic impact of CTF over an estimated 15-year economic life period in “counter-factual” scenarios, in other words what is the impact of CTF in two different scenarios of the future, compared against a hypothetical scenario in which CTF receives no subsidy and as a result its operation is wound down over twelve months to cease operation.
The results of the study are given for the two different scenarios: If there is going to be no cruise berthing in Cayman, the Net Present Value of the Gross Value Added is $73 million with an employment impact of 203 full-time employees. If there is going to be cruise berthing, the Net Present Value of the Gross Value Added is $220 million with an employment impact of 603 full-time employees.
PwC stated that these economic impacts “should be considered in the context of the Cayman Islands Government’s ongoing subsidy of operating losses, which, at approximately $4 million per annum, equate to a Net Present Value of $40 million over the fifteen-year period.”
Given the Government’s firm commitment to and commencement of a deliberate systematic process aiming to redevelop the cruise terminal and berthing facilities, of the two different future scenarios studied the second scenario now appears to be the most likely of the two, which assumes Government will be proceeding with the redevelopment of the cruise terminal and berthing facilities in George Town.
The primary purpose of this economic analysis is to inform decision making for the future. The Government guarantees almost all of CTF’s debt, so the portion of subsidy that is applied toward debt servicing and reducing overdraft does not factor into this analysis because Government’s debt obligations would remain whether or not CTF continues operating. Therefore, for comparison purposes the study estimated the value of the portion of Government’s subsidy that goes toward subsidizing CTF’s operational losses; that is the US$40 million figure that PwC mentioned for the 15-year period.
As PwC put it, “In determining the value-for-money of the subsidy, the CI Government should consider whether its $40 million ‘investment’ is generating sufficient ‘returns’ in terms of economic benefits. This assessment should not be made in isolation, but bearing in mind alternative subsidy options for cruise tourism such as, for example, subsidization of cruise berthing fees. CTF’s conservation role … and the cultural/social value of CTF will also be relevant in these considerations.”
Tim Adam, Managing Director of Cayman Turtle Centre commented, “In summary the key numbers show that especially in the scenario of having cruise berthing facilities, there are large economic benefits from the Government subsidy to enable CTF to continue operating and having the positive net impact on the wider economy and employment in Cayman. In addition CTF also provides other benefits in its role in conservation and maintaining our Islands’ cultural and social traditions.”
The report gives further detail as to PwC’s methodology and findings.