Property Matters – Sandals MoU

Adam Stewart, CEO Sandals Resorts International

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.

Two aspects of those interviews concerned me.

  1. First, the Sandals CEO claimed that an estimated $85M USD would be ‘left in the Tobago economy‘ annually if this project were to proceed. That estimate corresponds to previous statements by our public officials. I find those statements to be literally unbelievable.  As I wrote previously in this space -On 30 September 2016, during the 2017 budget presentation, Minister of Finance, Colm Imbert, confirmed:

    “…Original projections indicate Sandals’ contribution to the Trinidad and Tobago economy to be of the order of $500 million per year…” (pg 24)

    I am not sure that this kind of estimated contribution can be justified. That would amount to a $1.37M daily contribution, or to take it another way: each of the 750 rooms at Sandals would be making a daily contribution of $1,826. That is equivalent to about $250 USD per room per day. So, are those reliable estimates or just optimistic statements in support of this favoured project?

  2. Second, the largest hotel in Tobago, the Magdalena Grand (formerly Hilton) seems to have been banished from view as it is never mentioned, by either Dr Rowley or Minister Young, when they are describing the success of the prevailing model in which the State builds the hotels. I wonder why? At this point it is not clear to me why the Tobago Hilton failed. That is a sobering gap in our knowledge, given that as a large resort it is the closest to the current Sandals proposal now under discussion. How can we properly engage the new and critical negotiations without that kind of detailed understanding?

The underlying, seldom-disclosed, commercial arrangements drive projects of this type, so that is where our attention has to be focused. Which is what drove me to make the request for information detailed in the sidebar.


My RFI under S.13 of the Freedom of Information Act, sent to the PS at the Office of the PM, was for –

“Memorandum of Understanding with Sandals Resorts related to the proposed Tobago Sandals/Beaches resort with appendices, supplements, maps, plans, projections, designs, conceptual drawings, layouts or other material.”

Addendum 2: The Use of Integrity Pacts

This is a large-scale, long-term, Public Private Partnership (PPP) being proposed on terms which are arousing legitimate public concerns on a variety of aspects. PPPs of this nature can benefit greatly from the use of Integrity Pacts.

Integrity Pacts are modern open-book approaches to projects and contracts of this nature which are achieve a greater degree of openness and performance than the traditional approach which places great store on commercial confidentiality.

A full explanation of these approaches is beyond the scope of this article, but readers should can reflect on why major oil & gas companies seldom get into the kind of bizarre litigation which has recently beset Petrotrin in the A&V case. Integrity Pacts are widely used in these long-term large-scale commercial arrangements in the international arena and we need to start implementing these within our State Enterprise sector and especially within the PPPs.

Given the expressions of openness and the absence of secrecy, the Tobago Sandals would be a great project on which to embark on Integrity Pacts here in T&T.


8 thoughts on “Property Matters – Sandals MoU

    1. Indra, I am not reading this as a disparity in projections…there is over-optimistic polishing of this proposal, that is all…and I am being kind in my language…

  1. The amount scheduled to remain here seems high however I would not compare MAG with Sandals, Their raison det, is destination marketing, couple board planes in droves bound for sandals, perhaps not just United and CAL but the new Tobago Airways will be the conduit for this occur. I wonder more so if that nifty sum includes direct income to Tobago from ancillary services…but unless they tell us….

  2. Afra, not sure what constitutes the US$85m, but I want to believe he’s referring to total economic impact, as opposed to direct receipts from the hotel. This, in my opinion, would be determined when we have a better understanding of what GORTT has negotiated.

    1. Roxanne & Warren, let us try an analysis of the background…I am on Sandals ‘Royal Caribbean’ website now…there are three grades of accommodation – Luxury, which starts at $228 pp/pn; Club, which starts at $318 pp/pn and Butler, which also starts at $318 pp/pn…anyhow you slice it, the claims being advanced now are that, every calendar day, each room will contribute $250+ USD to Tobago’s economy…I have to ask, where are we going to be earning that money? Roxanne, you warn against using the Magdalena as a comparison…ETeck officials yesterday told the JSC that Magdalena’s annual wage bill (for 198 rooms) was about $20M TTD…even if we apply generous adjustments, it is difficult to see those expenses exceeding $120M…all of which leaves the central question hanging…

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