Irma pummels Cuban economy

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CUBA STANDARD — Scraping along most of Cuba’s northern coastline during 72 hours, Hurricane Irma claimed at least 10 lives and caused major damage to much of the island, knocking out the entire national power grid and devastating the tourism infrastructure in the northern keys.

Loss of life is an unusual occurrence in Cuba, which prides itself of world-class hurricane preparation and response. However, this Category-5 storm — the highest on the Saffir Simpson scale and the first to hit Cuba since 1932 — affected major population centers with a crumbling housing stock. Officials at the small city of Santa Clara, in central Cuba, reported 29 building collapses. In Havana, there were a total of 4,288 cases of structural damage to buildings, including 157 total collapses, 986 partial collapses, 818 total roof losses, and 555 partial roof losses.

Collapsed building in Matanzas. Photo: Granma

Collapsed building in Matanzas. Photo: Granma

Two lives were claimed when a balcony fell on a bus, and two people died in a roof collapse. Both incidents occurred in Centro Habana.

More than 1.7 million people — 15% of the island’s population — had to be evacuated. Eighty-six percent of those sought shelter in homes of family and friends.

Authorities shifted into recovery mode very quickly, mobilizing tens of thousands of soldiers, linesmen, construction workers.

However, the costly hit comes just as the Cuban economy is struggling to emerge from recession.

In a message to Cubans on Sept. 11, President Raúl Castro talked about the “immense task ahead”. He said it was too early to estimate the damage, but that the biggest hits were to the housing stock, the electric system, agriculture and tourism.

“These were hard days for our people, who in a few hours have seen what they have built with so much effort hit by a devastating hurricane,” Castro said. “The images of the last hours are eloquent, as is the spirit of resistance and victory of our people that are reborn with each adversity. The coming days will be of much work, when Cubans will demonstrate again their strength and indestructible confidence in the Revolution. This is not a time to complain, but to rebuild what the winds of Hurricane Irma intended to eradicate.”

Underlining the sense of financial urgency, the Cuban foreign ministry announced that the government — in an apparently unprecedented move — opened a hard-currency account at state-owned Banco Financiero Internacional for hurricane relief.

“It’s not possible to venture a figure at this point,” said Pavel Vidal, a former Central Bank economist who now teaches in Colombia, asked about the economic impact. “More data is needed to be able to assess the impact of the hurricane on the GDP and growth.”

Cuba has much experience to get organized after similar natural disasters, Vidal added, but this hurricane seems to have been more intense than previous ones, and it struck right when the Cuban economy is in “intensive care”, due to the effects of the Venezuelan crisis.

“Tourism and agriculture were the sectors that most contributed to boosting GDP growth in the first half of the year. Due to the impact on tourism infrastructure in the keys and the general infrastructure of the country, tourism will lose energy and won’t be able to take full advantage of the winter high season that is approaching.”

“Already, damages in agriculture are being reported, in sugarcane plantings as well as other crops in the center of the island. And the problems in electricity generation affect production capacity in all sectors.”

“Therefore, the probability for the economy to remain stuck in recession is much bigger now,” he concluded. “The complexities in advancing towards a solution of the financial crisis are multiplying.”

“This type of natural disaster tends to have an immediate negative impact on the GDP, due to the effects on productive capacity, but this is often followed by a positive impact thanks to a rise in investments to repair infrastructure damage. However, the question for Cuba is where the revenues and financing to cover the costs will come from. The hotels can count on financing from insurances, but what about the other damages? The fiscal accounts and the balance of payments don’t allow for bigger deficits, and the capacity to take on further debt is close to zero, due to the non-payment crisis that has been dragging down the country for two years.”

First assessments

Vice President Miguel Díaz-Canel tours the Guiteras power plant

Vice President Miguel Díaz-Canel tours the Guiteras power plant. Photo: Granma

Water: More than 3.1 million people were without water service as of Sept. 14, according to a UN Reliefweb report. “Service has been restored in about half of the supply systems damaged by Hurricane Irma,” the report says. “Restoration of services depends mainly on the electric power system rehabilitation.”

Power: The entire electric grid was down as of Sept. 12, Energy and Mining Minister Alfredo López Valdés said that day, although some parts were being reactivated. Fifteen major transmission lines more than 2,000 kilometers long went down, as more than 3,600 transmission line towers were toppled. As of Sept. 16, 87% of clients had their power back. The biggest problem is damage to the country’s aging thermoelectric plants, some of which are lined up along the northern coastline. The 280-mw Antonio Guiteras power plant in Matanzas province, Cuba’s largest, which supplies much of the Havana metro area with electricity, was down for repairs after the cooling circuit was destroyed by the storm surge; 25 truckloads of rubble of what used to be the cooling complex had to be removed before damage to the pumps could be assessed. The work ahead at the seaside power plant is “complex and voluminous”, Granma reported Sept. 12. Officials said they hoped to be able to fix part of the damage within two weeks, but could not give a date when the plant will go online again.

The Boca de Jaruco combined-cycle gas power plant — operated by Canada’s Sherritt International Corp. in a joint venture — fed electricity into the grid again after just 72 hours, apparently receiving enough gas despite damage to nearby wells (see Oil and Gas, below).

Meanwhile, technicians re-installed panels in solar parks throughout the island. The solar panels were dismounted and stored in safe places before the hurricane.

In the hardest-hit areas, such as the town of Bolivia in Ciego de Ávila province, power was restarted with generator clusters using the municipality’s local electric grid.

Vice President Miguel Díaz-Canel, who is expected to replace Raúl Castro as president, toured the Guiteras  power plant Sept. 14, saying that restoring power is the most urgent task at hand.

Repairs have begun at the Caibarién-Cayo Santa María causeway. Photo: Granma

Repairs have begun at the Caibarién-Cayo Santa María causeway. Photo: Granma

Tourism: Tourism officials almost immediately sent an “open for business” message to the world, but serious damage to tourism infrastructure from Guardalavaca in Holguín province all the way to Havana needs to be repaired. The Caibarién to Cayo Santa María causeway is closed due to severe damage in several spots (repairs are underway). Meanwhile, the causeway connecting the beach resort of Cayo Coco to the mainland reopened Sept. 16. Cayo Coco and the Cayo Guillermo resort were closest to the path of the storm, as was Varadero, with wind speeds of up to 160 mph, storm surges of up to 10 feet and waves as high as 20 feet. Just on the Santa María, Coco and Guillermo keys, 10,625 tourists had to be evacuated, half of them to Varadero and Havana; the other half were Canadians who were flown home. In Havana, the landmark Meliá Cohiba and Riviera hotels were flooded (the Cohiba was reported to be “fully operational” again, with all services restored by Sept. 14; a Prensa Latina report said the coastal Arenal, Memories Jibacoa, Aquarius and Commodore hotels in Havana will all reopen by the end of this week).

Terminal of the Cayo Coco airport. Photo: Granma

Terminal of the Cayo Coco airport. Photo: Granma

Photos by official daily Granma showed major damage at the main terminal at the Cayo Coco international airport. Both José Martí Airport in Havana and Juan Gualberto Gómez Airport in Varadero were closed for five days, reopening Sept. 12.

In Varadero, 17,000 tourists — including 3,000 evacuees from more exposed keys further east — hunkered down in hotels.

The day after the storm, the roads between the Varadero airport and the hotel area were “almost completely blocked by debris, fallen trees and fallen electricity poles, making the area practically inaccessible at the moment,” a local travel agent said. “The road closest to the ocean is also blocked by rocks, sand, debris and trees. It is almost impossible to visualize the road and we can estimate that it will require several days of work to remove all the debris blocking these routes.”

Castro highlighted the issue of damaged tourism infrastructure in his message.

“The damages will be repaired before the high season begins,” Castro promised in his message. “We can count on needed human resources and material, because (tourism) is one of the main sources of income of the national economy.”

High season begins in the first half of November.

All of the damaged hotels are owned by Cuban state companies. Even though a local official told reporters that the damage was only minor, inspectors by a tour operator found nine hotels in Varadero with major damage (see list below).

“From what could be noticed today in the inspections it is estimated that the recovery time for hotels can vary from a few weeks to a few months for hotels that have been most affected,” wrote an inspector by tour operator Destino. “The current priority will be the restoration of electricity, water and telecommunications services.”

“The recovery in hotels will depend largely on the resources invested by the Cuban government, which will have much on the table due to the extensive damage suffered from Irma in the areas of Cayo Coco, Santa Clara, Camagüey and the provinces of Holguin and Matanzas,” the inspector’s report concluded. “The structural damage and destruction of residential areas in the provinces of Matanzas, Villa Clara, Ciego de Avila and Camagüey is substantial.”

Low-lying areas further inland were hit by flooding caused by 10 inches of rain. Thirty-six foot waves penetrated the seaside Malecón boulevard in Havana, flooding nearby neighborhoods and damaging the U.S. embassy building.

The Tourism Ministry confirmed the tourism infrastructure will be in good shape again for the beginning of high season.

Meanwhile, Canadian airlines WestJet, AirTransat and Sunwing removed regularly scheduled flights to and from Cayo Coco, Cayo Santa María and Santa Clara through Oct. 31, according to TravelWeek.

Agriculture: The next sugar harvest is expected to reflect the big hit Irma inflicted on sugarcane crops. According to an official of sugar industry holding Azcuba, the impact on sugarcane has been “severe”, with at least 338,000 hectares of this year’s sugarcane crop flattened and another 92,000 hectares inundated, 20 sugarmills damaged, and 4,000 tons of raw and refined sugar soaked. The poultry industry and egg production suffered major damage, as roofs were blown off many chicken barns. Cattle feed, banana and corn crops, as well as fruit, were severely affected.

 

Oil and gas: Some 90 oil wells on the northern coast were damaged by the storm surge. An Empresa Cubana de Extracción y Perforación de Petróleo official said that more than 90% of production facilities in the main oil region east of Havana was “affected” by the storm. Infrastructure at the oil and gas fields of Boca de Jaruco, Puerto Escondido and Seboruco suffered damage. Revenues from the latter are expected to be reduced by 30%. Recovery work on each well is underway.

Manufacturing: Storm damage — mostly to roofs — shut down state-owned Empresa de Fertilizantes de Nuevitas (fertilizer), Fábrica de Calentadores Solares in Morón (solar water heaters), Tenería de Caibarién (tannery), Fábrica de Cloro, Hipoclorito y Alúmina in Sagua La Grande (chlorine), and Fábrica de Ácido Sulfúrico in Rayonitro (sulphuric acid). Repairs are underway, the Industry Ministry said Sept. 20.

Law and order

At least 14 alleged looters have been detained in Havana, for robbing shops and homes in the flooded Malecón area, official media reported. Near-shore neighborhoods in Havana are desolate after the storm surge reached second floors in the Malecón area.

“We are investigating 10 legal cases against 14 people accused of robbery in these establishments. All were detained on charges of theft, violent robbery and embezzlement,” Havana Prosecutor Dixan Fuentes told Juventud Rebelde.

Relief aid

Former South Carolina Gov. Beasley during his tour of Jaimanitas, in the Havana district of Playa. Photo: Cubadebate

Former South Carolina Gov. Beasley during his tour of Jaimanitas, in the Havana district of Playa. Photo: Cubadebate

The United Nations’ World Food Program will start a $5.7 million program to “complement the food needs of 664,000 persons” in all storm-affected areas, WFP Executive Director David Beasley announced after touring a flooded neighborhood in Havana. The WFP will deliver 1,600 tons of food it already has to the island, and use $1.5 million to buy more, the ex-governor of South Carolina said.

“We will work with Cuban leaders on distribution of the food because they’re best at it,” Beasley said, after meeting with Vice President Miguel Díaz-Canel. “They’re doing a great job.”

Also, the United Nations’ FAO opened its emergency fund to help with rehabilitation measures in Cuban agriculture. Belgium started with a donation of $300,000; the FAO hopes to provide a total of $7 million.

Meanwhile, Venezuela agreed to send 600 tons of relief supplies, including construction material, electric equipment and other supplies. Russia agreed to send 1,200 tons of relief supplies. The Dominican Republic sent a ship loaded with 86 tons of building material; Japan delivered two planeloads of relief supplies. China donated $1 million in cash and said it will send six airplanes with relief items and a ship with rice. Spain donated €200,000 to the Cuban Red Cross for building materials. Russia, Bolivia, Ecuador, Vietnam and Panama also announced they will send aid to the island. Chinese state company Beijing Enterprises Group Ltd. donated $1 million in cash.

Recovery

Miami-based Norwegian Cruise Line announced Sept. 15 it was told by Havana port authorities that cruise facilities were not damaged and that the Sierra Maestra terminal is ready to welcome cruise ships.  Norwegian said the Port of Miami-based Norwegian Sky will depart for a four-day Cuba cruise on Sept. 18, as scheduled.

Italy’s MSC Cruises said that its Havana-based MSC Opera will resume operating regular cruise service starting September 16, with unchanged itineraries.

Meanwhile, the government announced it would fund 50% of all expenses for construction supplies for hurricane victims. Also, Havana city officials held an unusual press conference emphasizing a five-year old program that assists in home repairs with a budget of 185 million Cuban pesos (US$7.7 million); it has delivered 10,000 homes to people living in shelters. Havana housing Director Euclides Santos said that 50,000 families just in the capital are in need of new housing.

 

Irma’s impact on Varadero

(report by a travel agent, based on inspections by tour operator Destino, as of 9-11-2017, published via the Havana Times):

General:

  • Access to some hotels is blocked by trees and debris.
  • Recovery and cleanup work has begun in hotels but not yet on the roads and resort areas.
  • Hotels do not have regular electricity. Most are running on backup generators.
  • Telephone or Internet services are not available.
  • Cell phones work in some areas, however the signal works erratically.
  • Recovery work has begun but the current priority of the authorities is to carry out a complete evaluation of the damage.
  • Most customers are in their rooms and all people have been asked to stay away from beach areas and areas damaged by the hurricane.
  • In most hotels, food is being taken to guests in their rooms. In other hotels it has been possible to open a restaurant where food service is being offered.

List of damaged hotels (mostly unaffected properties are left out of this list):

  • Blau Marina Varadero – “Serious damage, due to its location right on the tip of the peninsula. The main building suffered serious damage (roof, glass doors, etc.). Structural damage could be noted in the room buildings. The beach eroded due to the waves”
  • Meliá Marina Varadero – “Some rooms have broken windows and damage to the balconies, but the biggest damage can be seen in the common areas of the hotel, especially in the lobby. The hotel is located on a hill so the protection against gusts of wind is minimal”
  • Grand Memories Varadero – “Suffered some damage due to gusts of wind. The lobby will require restoration work and it is one of the hotels that suffered major damage to the roof and common areas such as gardens and pool areas. According to reports from the general manager, approximately 40 rooms were damaged and have broken windows. In general, there is no great structural damage and the damage is considered moderate. Access to the beach is virtually blocked.”
  • Paradisus Varadero – “The hotel suffered extensive damage. Ceilings were blown off in some structures in the Family Concierge areas and will require considerable investment to recover. The main building was equally devastated; the new restaurant that was under construction near the beach collapsed”
  • Royalton Hicacos – “Suffered major damage. The beach area eroded due to the waves. The restaurant on the beach also suffered extensive damage. The main buffet area is very exposed so it suffered serious damage especially to the roof. You could see a lot of rubble in the area. The Caribeño restaurant has broken windows”
  • Iberostar Varadero – “Severely affected. Part of the palapa-like straw roofs disappeared. The theater is partially destroyed. The palapa roof in some rooms was equally destroyed. The palapas around the pool were destroyed and there is debris in the area”
  • Playa de Oro – “Broken windows in several rooms. The pool area was quite affected and the lobby area also has noticeable damage. The disco area has some parts of the roof collapsed. Landscaped areas have fallen trees”
  • Blau Varadero – “The hotel has a very solid structure, however being a tall building it always receives some damage when a hurricane hits the area. The lobby was in good condition however the rooms on higher floors may have suffered some damage”
  • Brisas del Caribe – “Rooms were badly damaged. The lobby also suffered some damage”

 

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