The longstanding dispute between the V.I. Port Authority and the West Indian Company (WICO) has reached a resolution with the legislative approval of $17 million in funds for the Charlotte Amalie harbor dredging initiative.

Senate President Novelle Francis Jr. championed Bill 35-0191, which garnered support during the Committee on Budget, Appropriations and Finance’s session this Tuesday. “Sustained investment is vital for maintaining the Virgin Islands’ appeal as a top-tier tourist destination,” asserted Mr. Francis. He stressed the need for the territory to accommodate the new generation of larger cruise ships to preserve its revenue stream and competitive standing. The territory, he warned, risks falling behind other Caribbean locales that have already commenced similar enhancements.

This legislative action earmarks up to $17 million from the current fiscal year’s budget surplus, identified within the gross receipts tax debt service reserve fund. Nathan Simmons, the Public Finance Authority’s Director of Finance and Administration, recounted the PFA’s notification from the Bank of New York Mellon of an approximate $17.5 million overage in the reserve fund. Following this discovery, the PFA Board of Directors authorized the allocation of $17 million from these excess funds in July 2022 for the harbor dredging project.

In testimony to the committee, WICO President and CEO Anthony Ottley threw his support behind the bill, citing unanimous agreement from cruise industry partners on the project’s urgency, primarily due to safety concerns. Ottley described how silt and debris accumulation in the harbor was not just visibly problematic but posed a significant hazard to the larger vessels currently docking, such as the Carnival XL Class ships, pointing out that without intervention, these ships could be redirected away from the Virgin Islands.

Mr. Ottley emphasized that the cost of the project is a small price to pay compared to the potential economic fallout of not proceeding with the dredging. “By ensuring our harbor can welcome all sizes of cruise ships, we aim to solidify our status as a premier Caribbean cruise destination,” he stated.

V.I. Port Authority Executive Director Carlton Dowe addressed the issue of funding, noting that the existing tariff system has fallen short in accumulating the funds needed for such extensive maintenance work. Dowe proposed a long-term solution of federalizing the harbors, similar to practices in neighboring Puerto Rico, which would facilitate annual maintenance through the Army Corps of Engineers, thereby reducing the local government’s financial burden.

Despite the recent legislative victory, it’s recognized that the dredging project’s costs will exceed the $17 million mark. Discussions are actively underway among VIPA, WICO, cruise line representatives, the Governor’s Office, and the PFA to address the financial shortfall. Ottley reassured the committee that despite previous public disagreements, WICO is fully committed to collaborative efforts to ensure the dredging proceeds smoothly.

With unanimous committee support, Bill 35-0191, initially requested by the Office of the Governor, moves to the Committee on Rules and Judiciary for further deliberation.