Aug. 15, 2006 – The West Indian Co. Ltd's annual $1 million contribution to the General Fund should be decreased so that the agency could invest in other ventures, according to Edward Thomas Sr., WICO's president and chief executive officer.
During the second round of budget hearing's Tuesday, Thomas said the contribution, which was passed by the Legislature in 2003 and subsequently signed into law by Gov. Charles W. Turnbull, was designed to help the local government at a time when it was "strapped for cash."
"However, with the price and demand of fuel going up, it seems as if HOVENSA is going to be making good money and contributing a significant amount of revenues to the local government," he said. "Therefore, our Treasury is going to be doing well. So, the government should let the instrumentalities keep their money and put it into other capital projects."
Many senators disagreed.
"WICO does run a tight ship," said Sen. Louis P. Hill, chairman of the Finance Committee. "The government on the other hand, owes the V.I. Water and Power Authority almost $10 million because they haven't paid their light bills…so, I don't support the idea of taking money away from the central government right now."
WICO, which is owned by the V.I. Public Finance Authority, does not receive an annual budget appropriation from the government. Instead, it funds operating expenses and other costs by collecting passenger, wharfage and dockage fees from ships berthing at the Havensight dock.
Thomas said WICO anticipates collecting about $11.5 million in gross profits during Fiscal Year 2006. "So, while we do bring in a significant amount of revenue, the extra $1 million could allow us to invest in something down the line, or put a down payment on a piece of property – something, like that," he said after the meeting.
During the meeting, Thomas and senators also squared off on the issue of reviving St. Croix's cruise ship industry. While senators encouraged WICO to step in and assist the V.I. Port Authority in bringing vessels back to the "big island," Thomas said offers made to VIPA in the past have been rejected.
"We always want to help, but I have heard a number of people say point blank that if WICO comes to St. Croix, they don't know what they're going to do. Additionally, we have been told by officials from the Port Authority and the Tourism Department that our assistance is not needed over there. And if you're not invited someplace, then why go?"
Instead, Thomas said WICO has focused its efforts on maintaining St. Thomas' cruise industry, and is currently working on expanding the Havensight dock to accommodate the new Freedom-class megaships, which are scheduled to begin calls to the territory in May 2007.
While Thomas said that cruise ship calls will be down next year, he also explained that the new Freedom class vessels will have a higher passenger capacity, which will actually maintain the number of visitors arriving from the mainland and abroad (See "Cruise Ship Numbers Down; Passenger Numbers Up").
"So, in spite of a 2.4 percent reduction in arrivals, the good news is that passenger spending climbed in 2005 to an all time high of $305 per passenger in the St. Thomas-St. John district, by far the highest for any destination in the Caribbean," he said.
Thomas said this trend is expected to continue, since many ships sailing through the Caribbean make the Virgin Islands their first port-of-call. Additionally, Thomas said a new class of passengers coming to the territory have "higher disposable incomes," and are able to spend more when shopping in Charlotte Amalie or at Havensight Mall.
Present during Tuesday's meeting were Sens. Roosevelt C. David, Pedro "Pete" Encarnacion, Juan Figueroa-Serville, Hill, Norman Jn Baptiste, Neville James and Terrence Nelson.
Sen. Usie R. Richards was absent.
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