The Tobago Sandals mega-project has returned to the headlines with recent interviews of Sandals Resorts’ CEO, Adam Stewart, in Barbados and Stuart Young, Minister in the Office of the Prime Minister.
Stewart’s statements were widely reported in the local press (see Addendum 1 below) with an emphasis on the lack of secrecy in the entire arrangement and the fact that discussions were still at a preliminary stage. Minister Young’s CNC3 interview on Wednesday 28 February 2018 (below) was also notable for his insistence that there was no secrecy or any reluctance to engage with the public on this mega-project.
Power 102.1 FM interview with Ms Sandrine Rattan on e-tendering within the new Public Procurement system with Afra Raymond, Moonilal Lalchan, Chairman of the Office of Procurement Regulation and Keino Cox, Chairman of TSTT’s Tenders Committee. Audio courtesy Power 102 FM
Two significant events in the previous week heralded a fresh round of Board Games, as we strive for higher standards of governance and accountability in our State Enterprises.
The first of those events was the Privy Council ruling on Monday 19th February 2018, in the case which eTeck brought in 2011 against its former Board, chaired by Professor Ken Julien, related to alleged negligence for a US$5M investment gone awry.
The second event was the publication of Transparency International’s 2017 Corruption Perception Index on Wednesday 21 February 2018, in which T&T improved its score from 35 to 41 and moved up the scale from 101st out of 176 countries in 2016 to 77th out of 180 countries in 2017. The average country score in the 2017 CPI was 43, so T&T is still below average, but the improvement in that perception has already been welcomed by the current administration.
On 2 February 2018, the Ministry of Tourism announced its upcoming symposium – ‘Digital Transformation within the Tourism Sector‘ – as a major event on Friday 23 February 2018, in conjunction with Massy Technologies and featuring speakers from Microsoft and IBM.
This is an ambitious project intended to examine big-data, the cloud, the digital customer experience and the prospects of the hospitality industry in our country. As such, these proposals should have our principled support, but there is real cause for a pause here, given the distinct reluctance of the State’s agencies to answer our queries on the agreements and performance of the large State-owned hotels.
The three largest hotels in our country are State-owned – Trinidad Hilton; Magdalena Grand (formerly known as Tobago Hilton) and Hyatt Regency – comprising about 45% of the established hotel rooms, at the better end of the market. The amount of Public Money invested via capital outlay in those hotels is estimated, from the public record, in the first sidebar. But what is of deeper interest to me is that far larger sums of money are generated in the operations of those hotels than the capital spent to create the actual facilities. Those sums are spent on rooms, meals, drinks, rentals for functions and so on.
At the end of January 2018, the Ministry of Trade & Industry and its implementing agency, Evolving Technologies & Enterprise Development Company (ETECK), announced the completion of a $7.6M project for the renewal of the Trinidad Hilton Pool. According to the official statements, that project was completed on time and within budget, as part of the State’s long-term obligations at that 418-room hotel. Despite those assurances, there was a series of condemnations which need to examined.
Trinidad Hilton Management Agreement
Three of its interesting details –
Hilton pays ETECK a rental of 76% of the ‘Annual Gross Operating Profit’ which is defined in the lease;
ETECK is responsible for doing replacements, renewals, extensions or improvements to the Trinidad Hilton at its expense. That means that ETECK was acting within the lease terms in paying for those pool improvements;
Hilton is required to prepare detailed accounts of the hotel’s operations and submit those to ETECK.
Please note that Trinidad Hilton is undergoing a hugely expensive improvement program since 2008 (see Sidebar).
I am not making an issue of the decision to do these improvements or making allegations of cost or time over-runs. There may be issues in those aspects of the project but I am not engaging those.
My issue has been and remains, that despite all the smooth press releases and so on, we are unaware of the underlying commercial arrangements by which these hotels exist. The three largest hotels in our country are State-owned – Trinidad Hilton; Magdalena Grand (formerly known as Tobago Hilton) and Hyatt Regency. Those hotels are operated by foreign entities under management agreements with the State agencies which hold the ownership interest. They can therefore be classed as Public Private Partnerships (PPPs). Since PPPs are currently being promoted as a development approach, those arrangements certainly ought to be closely examined, looking beyond the Hilton pool. Continue reading “Property Matters – Trinidad Hilton Improvements”→