Crown Bay Decision

The $31 million joint venture between Royal Caribbean International (RCC) and Carnival Corporation to develop a Panamax-max pier in Crown Bay, St. Thomas has been vetoed by Virgin Islands Governor Charles Turnbull who had originally backed the deal.

Citing the strong opposition from community groups, Turnbull commented, “Although the letter of intent between the Virgin Islands Port Authority (VIPA) and the cruise lines has many merits, I believe it is important that the U.S. Virgin Islands maintains full control of its harbor and harbor developments.” As a result, Turnbull instructed the West Indian CO. (WICO, the operator of the main St. Thomas pier) and VIPA to ”work together on the rapid expansion and development of the Crown Bay port facilities in order to accommodate the growing needs of the cruise lines for additional berths in the Port of Charlotte Amalie.”

The cruise lines’ response: “It is mind-boggling to us – we are quite astonished at this tum of events,” said Carnival Corporation Vice President of Strategic Planning Giora Israel, who spearheaded joint-venture plans together with RCC Vice President of Commercial Development John Tercek. Israel said the cruise lines have stopped any additional activity on the project “and we’ve sent the Virgin Islands a bill to be reimbursed for what we’ve spent so far.”

Carnival Corp. and RCC had stepped in to facilitate the speedy development of the pier, which the cruise lines wanted to be complete by this November. According to Israel, when it became evident political problems might delay the completion date, Carnival decided not to risk brochuring Panamax-max vessels for that port during winter 2002-03. Now that the project has been further delayed as WICO and VIPA develop an alternate proposal, Israel said that St. Thomas’ cruise business would be further impacted. ”By the end of this year Antigua will have four (mega­ ship) berths and St. Maarten already has four,” he said, intimating that those ports may be afforded ships that cannot be accommodated in St. Thomas. “Between Royal Caribbean and Carnival, we’ve got 85 percent of the ships coming into St. Thomas – and our companies do not build ships anymore that are smaller than Panarnax-max,” he said, underlining the potential impact of any further delays by asserting: “They will see a standstill.”

Both Israel and Tercek have publicly stated their belief that political opposition to the RCC-Carnival development was fermented by WICO. Of the future relationship between his cruise line and WICO, Israel stated, “We’re not going to pull ships that we can bring into the Virgin Islands because of this, but I think some irreparable damage has been done.”  

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