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Chamber: dredging of harbor is win-win for tourism economy

Posted on June 29, 2022

Dear Editor,

According to the West Indian Company Limited, 21 Oasis-class ships were turned away in the current fiscal year causing harm to the economic health of the territory, which is sustained, in part, by cruise passenger spending, gross receipts taxes collected on tourism spending and passenger head tax collected by the Virgin Islands Port Authority.

The St. Thomas-St. John Chamber of Commerce (Chamber) estimates the economic losses incurred from the Oasis Class ships by-passing the WICO dock as follows:

• $23,000,000 in lost gross passenger and crew spending

• $1,200,000 in lost gross receipts tax collected to the general fund

• $1,700,000 in lost head tax collection to VIPA and WICO. Please see attached addendum for a detailed breakdown.

Moreover, for every tourism dollar spent in the Virgin Islands, there is a multiplier effect as it circulates in our local economy. Our losses are, therefore significantly higher than the lost gross passenger and crew spending as a result of the 21 Oasis-class vessels that could not enter the main harbor safely and dock at WICO.

The port of Charlotte Amalie faces another imminent danger as a direct result of not performing even basic maintenance dredging which has not occurred in many years; which is a requirement of every WICO berthing contract for the ships docking at port.

The channel is constricting threatening the present ships currently traversing the harbor and docking at WICO. According to a representative of WICO, a ship could run aground in the channel based on deteriorating conditions and the build-up of sand silt from wave action and yearly storm surges.

The Coast Guard would close the channel and the insurance companies would red flag our harbor and bar ships covered from coming into it. Our cruise industry would be at a complete standstill while permits to dredge are secured, a lengthy multi-year process.

The harbor pilots have expressed concern, as well as cruise ship captains, about the risks of navigating entry into our harbor because of the failure to regularly undertake maintenance dredging. The heightened danger to cruise ships of running aground or scraping bottom has never been higher.

If a ship runs aground now it will have a catastrophic effect on all the businesses dependent on cruise ships and all the governmental agencies who depend on the revenues including WICO, GERS and VIPA from ship calls. This is an unacceptable risk that must be rectified immediately. The Virgin Island’s position as a reliable partner to the Florida Caribbean Cruise Association would forever be damaged to the benefit of our regional competitors like St. Marten and St. Kitts.

The administration needs to secure the necessary permits and funding to immediately commence both maintenance dredging for the basic safety of the current fleet of cruise ships arriving weekly; and as importantly to initiate the permitting and funding to dredge the harbor channel and turning basin to allow Oasis-class ships safe entry to our harbor and dock at WICO. The dredging of the Crown Bay channel could be done at the same time.

The success of the Port of Charlotte Amalie requires government investment. Commencing and completing dredging would have an electrifying effect on the tourism economy; leading to more ship calls, massive passenger spending circulating in our economy, head tax increases, increases in gross receipts tax, and new employment and investment.

It will give WICO the commercial flexibility to sign long term berthing contracts with our cruise partners and once again recapture its premiere position as the best dock in the region; berthing the biggest and best ships debuting in the region which currently bypass WICO for regional docks that can accommodate the larger sized ships. The stakes could not be higher and failure to act is not an option.

— Shaine Gaspard, Chamber president; John Woods, Chamber president-elect; Sebastiano Paiewonsky Cassinelli, Chamber past president; Richard Berry, Chamber past president; Abe Tarapani, member, Chamber cruise ship committee; Filippo Cassinelli, board member, Chamber cruise ship committee.

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