Posted on August 23, 2023
The West Indian Co. wants the V.I. Port Authority to explain what happened to $130 million collected from cruise ships that docked at the WICO-managed port of Havensight, which was intended to be used to dredge the St. Thomas Harbor, according to Jason Charles, chairman of the WICO board.
Charles addressed the issue during WICO’s board meeting Friday, following statements by VIPA Director Carlton Dowe about the dredging project, which came in response to questions from The Daily News.
Dowe said Wednesday that the Public Finance Authority, WICO’s parent company, has $17 million available for dredging the harbor to a depth of 36 feet, and WICO will need to come up with additional money if they want to dredge the harbor to a depth of 40 feet.
Dowe said the Army Corps of Engineers has recommended that 36 feet is sufficient to accommodate the largest Oasis-class cruise ships, but WICO says the cruise companies want the deeper channel.
VIPA manages Crown Bay, which is currently the only port on St. Thomas capable of accommodating the largest Oasis-class ships.
WICO President and CEO Anthony Ottley has not answered questions from The Daily News sent via email on Aug. 15.
Ottley did respond on Aug. 17 and wrote, “Sorry I missed your email,” and directed all questions to the PFA.
Ottley also did not respond to questions about the issue posed by WICO board member Enrique Rodriguez during Friday’s meeting, and deferred questions to the board chairman, Charles.
Rodriguez referenced Dowe’s statements, and said he hasn’t seen WICO’s concerns addressed publicly.
Charles said WICO always strives “to maintain a great working relationship” with VIPA, but there is disagreement over the dredging issue.
“The harbor has not been dredged in almost 20, close to 30 years. So, the question is no longer about the dredging, for us it’s really an issue of the depths. So, we were able to speak with the governor, work with the govenor,” and “we were concerned from WICO’s perspective that if the depths change, it will lock us out from future abilities to have what you call Icon or Oasis-class ships, to be able to dock at our current docks,” Charles said. “The second issue now, is about the money. It comes down to the money.”
He said VIPA has a tariff agreement with WICO, under which WICO would keep one-third of all funds collected from ships that dock at WICO’s port, and forego two-thirds of the funds, which VIPA would use to pay for dredging and harbor pilots and pilot boats.
“That is legislated. At this juncture, when we did our calculations, we were able to determine it was roughly $130 million. Let me say that number again: $130 million that have been foregoed from WICO to the Port Authority to ensure that the harbor would have been maintained and dredged,” Charles said.
Charles said VIPA has not addressed the missing funds, and “I’m not sure what happened to the $130 million, but clearly we have seen that in the last 25 years, that we have not had the harbor dredged. That is evident, that’s clear. It needs to happen, it’s going to happen,” Charles said.
“Just to be clear, you’re telling the board that $130 million should be in the coffers of Port Authority to do dredging, is that what I’m understanding?” Rodriguez said.
Charles reiterated that WICO has given VIPA two-thirds of port revenues since 2004, which amounted to roughly $130 million.
“And that’s the funds as far back as 2004. We could have gone back to 1993, but we decided to just stop at 2004 because we felt that was enough, it was sufficient information to be able to move forward. It’s a strong case,” Charles said.
For years, officials have discussed the possibility of combining the two entities that manage the cruise docks, often referred to as a “merger” between VIPA and WICO, but Rodriguez disputed that term Friday.
“I think we keep using the wrong word. It’s not really a merger, we are currently owned by PFA, and from what I understand, it would be an asset transfer to Port Authority, and Port Authority would just own WICO as another asset, and that asset would manage the ports,” Rodriguez said. “Is that what I’m understanding? Because whenever the word ‘merger’ is used, I get a little confused. Isn’t it more an asset transfer?”
“Great question, however, you’re going to have to give me a little time to run that through legal counsel, to determine the answer to that question. I cannot answer that question off the top of my head,” Charles said. “I know that this was something proposed by the governor, I know the governor, this is something of his interest. I’m awaiting to see what the result is. No matter what happens, we will follow PFA’s lead on this matter.”