Leader of the Opposition Godwin Friday says he is keeping a close eye on the EC$36 million loan that the government has been authorised to borrow to facilitate the Buccament Bay resort deal.
Friday made the assertion after failing to secure from Minister of Finance Camillo Gonsalves, in Parliament, an “ironclad assurance” that Sandals will follow through on the deal, and Vincentian taxpayers would not be left with another loan.
Parliament, in a supplementary estimate this month, approved, with opposition support, the bridging loan, which would allow the government to settle with parties with interest in the failed resort.
This will pave the way for the government to sell the failed resort to Sandals Resort International, which has made a 10% deposit on the US$14.75 million deal — US$3 million less than Prime Minister Ralph Gonsalves had previously indicated.
Friday, speaking on his New Democratic Party (NDP’s) radio programme last week, said that a lot of errors were made during the construction of the resort.
He said that the opposition could simply say that the government made a lot of errors and the resulting “mess” is theirs to clean up.
Friday, however, said that Sandals resort hold much potential and it is on that basis that the opposition supported the loan.
He, however, told the public that opposition lawmakers will hold the government to the terms approved by parliament.
“… we will keep our eyes open to see that the money is repaid in a timely manner in the way that it was set out, through the government, and so that we are not left carrying and paying a debt that is added to the permanent government debt because the transaction doesn’t go through. I want it to go through; I want you to succeed,” the opposition leader said.
Buccament Bay Resort, which was the source of much controversy during its construction around 2006, has been closed since December 2016, amidst mounting financial woes.
In presenting the supplementary estimate to lawmakers earlier this month, Minister of Finance, Camillo Gonsalves, said:
“This supplementary budget is asking for $36 million. That $36 million, as I have explained, is the money that will be paid to the various players that I discussed: the Catholic Church, the local farmers, KPMG, the 51 villa owners and all the interested parties there. What we take, we pay. We come out with no profit but we do come out with a new hotel, 700 employees and a large new market locally for the farmers and fisher folk of St. Vincent and the Grenadines.”
In his response in Parliament, Friday said that Gonsalves had presented a persuasive argument but which sounded much like what was said when the resort was first built.
He asked about payments owed to former workers, service providers and the state who are owed by the resort.
‘repeated failures and the promises’
The opposition said that it has complained many times about the growth of the national debt and the acceleration of payments needed to service the debt over the past four years.
He said that about 40 cents of each dollar of national revenue go to servicing the national debt.
Friday said it is, therefore, incumbent upon the government to be completely transparent with lawmakers as representative of the people of St. Vincent and the Grenadines “who have seen the repeated failures and the promises that have been made with respect to this resort and others”.
He mentioned that Black Sands Resorts in Peters Hope was still a shell.
The Canadian investors who broke ground there in January 2017 had promised completion in 36 months, although they only had half of the $60 million that the construction of the project was expected to cost.
The opposition leader said that he did not want his comments to seem like the opposition somehow doubted the Sandals Resort project.
Friday noted the legal issues surrounding the resort, adding that he was sure that one of Sandals’ conditions was that the government clean up “the mess”.
“The point is, there is a mess to clean up and I will help to clean it. Because I want this project to come to fruition the way it was intended in the same way I want Ottley Hall to come to fruition in the way it was intended. In the same way I want Argyle International Airport to work because taxpayers’ money has been spent on a promise that has still not delivered.
“… We need to know with ironclad assurance, not with likelihood or a possibility but that having completed the transaction for purchasing the property from all of these players and having gone and borrowed $36 million that this deal is assured; that it will be completed; it will be consummated,” Friday told Parliament.
The payment to land owners in St. Vincent and the Grenadines as well as investors in the UK is good on many levels, including repairing the country’s reputation.
Show us the deal
He, however, said that the situation would be compounded if the deal does not work and Sandals does not pay for the resort in full by November, as the finance minister has promised.
“That has to be ironclad. We don’t have the agreement. I would love to see the agreement. The minister doesn’t want to put it out in public; I can look at it privately. But I think, I would have more comfort if I understand the nature of the assurance that is given that once we do all of this, clean up the mess, it is not just on a hope or on anything less than an ironclad commitment to go through with the transaction,” Friday said.
He said that Sandals’ plan for a 350-room resort with water parks and other amenities sounds “magnificent”.
“We’ve heard those before. That’s the thing,” Friday told Parliament.
“But it doesn’t mean anything if it does not come to fruition. We cannot afford to disappoint the people of this country,” he said, noting that the current plan involves public funds.
“We now have a stake because we own the whole thing before we sell it back. That is inherently risky unless you know something that we don’t.
“You must because you have seen the agreement; but I don’t know. And I don’t want to hear that when October comes and November comes and the loan that we have taken out continues to attract interest, it is only a necessary loan if it leads to the consummation of the ultimate transaction to have Sandals come here. Otherwise, it is simply an additional burden on taxpayers that is unjustified…” Friday said.
“And don’t try to impress me and tell me that Sandals have paid 10% so that is proof of the ironclad nature of the transaction because I know people make decisions of this sort and they walk away from the deposit if it suits them to do so, rather go ahead and spend the other 90%.
“I am not saying this will happen and I really don’t want it to happen. I want this transaction to succeed, I want people to find jobs, I want young people to have the hope and faith in their country again that they can find a place here; that they don’t have to go away,” Friday told lawmakers.
And, in his response, the finance minister told Parliament that the contract between Sandals and his government is legally binding.
“The contract then lays out a payment schedule: first payment by date X. They have met date X; second payment by date Y. Why would we think in legally-binding contract where they have already put down the first payment, why would we think that they would not honour the second payment?” Gonsalves said.
He said Sandals is a reputable company.
“I am not saying that things don’t happen but I don’t understand the level of ironclad. Should we have said, ‘No, we need all the money upfront one time? Or should we have said write me a cheque but postdate it and I will hold it in my pocket and when the day comes, I will deposit it?
“That’s not how these things work. So we have what we have, the assurance we have is that we have done our due diligence, it is a reputable company, it is a resourced company and we have signed a legally-binding agreement with them that sets out the timing for payment. The Honourable Leader [of the Opposition] is an attorney but I think that’s a fairly solid commitment,” Gonsalves told lawmakers.