Minister of Finance Camillo Gonsalves was, on Wednesday, accused in Parliament of taking a “wholly insulting and inadequate” approach when he asked lawmakers to permit the government to borrow US$50 million (EC$135 million) for the construction of hotels in Mt Wynne-Peters Home and Diamond.
Member of Parliament for Central Kingstown, St. Clair Leacock levelled the accusation as lawmakers debated the Mount Wynne Peter’s Hope Hotel Project (Loan Authorisation) Bill, 2018.
In presenting the bill to lawmakers, Gonsalves said that the issue of the government’s intention to build a hotel in the area of Mt Wynne-Peters Hope is well known, having been announced in the 2018 budget.
He said that issue has been canvassed repeatedly in public and in parliament through questions and answers.
He told legislators that the object of the bill is to authorise the government to borrow US$50 million from the Export-Import Bank of Taiwan.
“As we have discussed in the past, we are fairly advanced in the design processes of a 250-room hotel at that locale and we are in advanced discussions with a major operator.
“The bill itself is short and fairly simple. Clause 4 says that the loan shall be applied for the purposes for which it was raised, which means we have to use the money to build the hotel. It said it would be charged on the Consolidated Fund. It says that the Minister of Finance is authorised to sign the loan and it says that no stamp duty or other taxes shall be charged on the loan.
“And that, Mr. Speaker, in sum, is what this bill is and what we are bringing here.”
House Speaker Jomo Thomas then said that the bill was open for debate.
Opposition Leader, Godwin Friday noted that the bill requires the authorisation of parliament for the government to borrow money for the construction of the hotel.
He said he hoped there would have been more information provided by the minister.
“I understand it is a very short bill,” he said, but added that the proposed project is a large one that includes a considerable amount of money that is to be added to the public debt.
Friday said that the opposition, as lawmakers and a political party, has publicly said they are sceptical about the government’s involvement in financing such a project that proposes to add EC$130 million “to the already ballooning debt of over 1.6 billion”.
The opposition leader said parliamentarians were not aware of the terms of the loan, including the interest rate, duration, and disbursement,
“The nature of the project, we have every little information. My colleague said none. Maybe I am being too generous and we are not a rubber stamp on this side of the house,” Friday said.
He said whereas the opposition wishes to see that the public sector investment programme contribute to capital projects that are intended to generate growth in the country, in order to access that, they need sufficient information to be able to say, responsibly, whether they support or oppose the bill.
The opposition leader said none of that information is provided to them.
“We are not part of discussions that are taking place between the lender and the government, understandably, but the Minister of Finance can choose to share the relevant parts of that discussion with us as a member of parliament in order to obtain our support for this important piece of legislation.”
Similarly, Friday said, there has been talk publicly and references in Parliament about “this is a proven strategy for developing projects and other countries have done it, the government builds it and some private entity runs it.
“There is a suggestion somehow that such discussions have already taken place in this project. We don’t know with whom, we don’t know what terms, we don’t know anything, Mr. Speaker.”
Friday, who is also the opposition’s spokesperson on tourism, said that his side is quite aware of the importance of building hotel capacity on St. Vincent.
“… we understand its relationship to the development of tourism, to the viability of the Argyle International Airport project, but we want to make sure that when we engage in such matters and such projects of such magnitude that they don’t compound the problem by creating debt without any proper assessment as to how that debt will be serviced, how the project will function and its prospects of viability in the long run.
“I think we are entitled to that, Mr. Speaker, to be in a position to make an informed judgment about the pros and cons of the project, about the pros and cons of such a loan and we have not been provided with that.”
The opposition leader said that he expects that the finance minister, in his response to the debate, may say more about the loan.
“But it is not for me to try to divine what his intentions are. I think that in the house we expect that they will be presented and we will be able to make a judgement, determination on our own.”
In response to the opposition leader, Gonsalves said he was a little surprised about the comment because Friday had asked a question in parliament sometime ago about the financing of the hotel.
He said that Leacock had asked a substantially similar question and parliament had coalesced the questions into one.
The finance minister said he had given a nine-page answer in which he said the government intended to borrow US$50 million.
Gonsalves further told parliament that his government had executed a letter of intent to the bank to secure the financing to be repaid over 20 years with a grace period of 20 years at an annual interest rate of US 6 month LIBOR plus a fixed spread of 1.2 per cent.
“That had been released and I would be more than happy, in my wrapping up, to give all the information I had previously given to the Honourable Leader of the Opposition in response to the question he had asked only maybe two parliaments ago.”
But the opposition leader told Parliament that he was aware that he had asked the question and that the minister had provided a response.
“The point of the matter is that we are here now debating the bill. It is sometime on and there are persons who listen to this debate that may not have heard what was said at the time when the questions were asked,” Friday said.
He said it is important that that information be presented again as lawmakers have to justify how they vote on legislation.
“So when the minister presents the comprehensive information not just for our benefit but for the people who send us here, I think that’s required when the bill itself is debated.
And, in supporting Friday, Leacock told lawmaker that they had “a rather unusual approach on this bill…
“The approach of the Minister of Finance is wholly insulting and inadequate,” said the Central Kingstown MP, adding that he was inclined to support the bill.
“That is my natural inclination but the bill has serious issues. In fact, that is what informed why I anticipated questions a few [meetings of] parliament ago that it would have assisted me when we get to this stage of the bill presentation in my direction.”
He said the answers to the questions were not satisfactory.
“They were precise finance and economic questions that were not answered,” Leacock said.
But the Speaker told Leacock that he could raise those when he debates the bill.
“I can’t Mr. Speaker, because what the minister is, in fact, doing, is allowing me to speak and others to speak, presumably in ignorance of information that he has,” Leacock said.
To illustrate, he said the minister had said the government was at advance stages of discussion regarding design of the hotel.
“You are telling me that piece of legislation for $135 million coming before the house and it is not sufficient to even say ‘We are going to be with ‘Butch’ Stewart, Sandals. We are going to be with Hilton. We are going to be with John Jones, Tom Dick, local partner.”
Leacock said that information is fundamentally important to a bill for an EC$135 million loan.
“… because it matters to me who is going to manage 135 million and if that is not offered up front, you are asking me to accept something in the dark. It is critical and that is quite apart from other major important matters that were not addressed when the questions were presented.
“And I am prepared to speak. Maybe the prime minister may want to come and fill in the blanks. Maybe the minister may want to stand and make a more substantive presentation. But it certainly informs the way I handle this support. But it is totally inadequate to speak for three minutes to ask for $135 million.”
Member of Parliament for West Kingstown, Daniel Cummings raised similar concerns, saying he had “no critical information whatsoever that would allow me to make an informed decision”.
In his response, before putting the bill to a vote, Gonsalves restated the facts that he had given in response to the opposition lawmakers questions sometime ago.