In writing on the extent to which Public Money is stolen or wasted and the need for proper standards, I offered this equation for the reality check –
EXPENDITURE OF PUBLIC MONEY Minus Transparency Minus Accountability EQUALS CORRUPTION
My previous articles have been focused on the gaps in the available information on the current proposals for the large-scale Tobago Sandals/Beaches resort,. This article will examine those proposals from the other perspective, by listing the facts which we do know.
Selection of Hotelier
A Sole Selective Process was adopted and there was no competition, as was the case with the Tobago Hilton (now Magdalena Grand). Competition is usually seen as an important element in improving the development process by prioritising value-for-money and so on. Even though a competitive process was used in the early stages of the Tobago Hilton project, it continues to be a failure.
The land intended for the resort is vested in a new State Enterprise, Golden Grove Buccoo Ltd. (GGBL). Hyatt Regency is in the portfolio of UDECOTT, which operates under the Ministry of Housing and Urban Development. Trinidad Hilton and Magdalena Grand are both in the portfolio of ETeck, which operates under the Ministry of Trade & Industry. It is not clear what Ministry will be responsible for GGBL, but I would not be surprised if the THA has a strong role to play.
Scale of the Resort
GGBL applied to the Environmental Management Agency (EMA) on 13th September 2018 for the Certificate of Environmental Clearance (CEC). That application specifies a large-scale development comprising 925 rooms in two resorts, 25 restaurants and other works on a site of about 647 acres (262 Ha). The cost is estimated at $2.72 Billion TTD. That site is said to comprise elements of the Golden Grove and Buccoo Estates.
Biggest-ever resort for Sandals
According to Sandals’ Corporate Services Director, Jeremy Jones, on 11th October 2018 –
“…Tobago will end up being one of our largest projects – both – and as a result of having a Sandals and a Beaches side by side. We’ve never really done that before, but we feel that to benefit economies of scale, being able to bring two operations under one umbrella so close to each other and with our estimation, (this is) an ideal location to do this: the Sandals brand with close to 300 rooms and the Beaches brand about 450-500 rooms. So it’s an entire development complex, about 700 rooms, but two different brands…”
Biggest-ever resort for T&T
The largest resort hotel in T&T is the Magdalena Grand at 198 rooms, so this project is at least three times larger. Even our Business and Conference Hotels such as Hyatt Regency and Trinidad Hilton are about half the size, since they are in the 400-room range.
The State is to fund the design, building, fitting and furnishing of this large-scale resort to the specifications of Sandals which will operate the complex under a Management Agreement. Only Public Property and Public Money are being placed at risk in this arrangement.
No private funds or lands are being committed, so there is no case, in my view, for any concessions to the hotelier.
Sandals’ usual Commercial Arrangement
Sandals Press Release of 19 June 2018 was titled ‘Sandals Responds to Misleading Reports‘ and contains two important points.
- Firstly, the penultimate para on the first of its four pages states
“…Indeed our negotiations on concessions have always been completely transparent and open…”.
- Secondly, the penultimate para on the fourth and final page states –
“…Sandals is proud to say that we own each and every one of our hotels except for one in Jamaica…”.
So Sandals built or bought 22 of its 23 existing resorts and obtained tax/duty/work-permit concessions from the host governments in exchange for those substantial investments of capital.
According to Jeremy Jones of Sandals, on 11th October 2018 –
“…When you look at the real estate that is going to be developed and built, and the incentives that we have been granted, we think that the incentives that have been given by the government, not necessarily to operate but to the country, if Sandals or Beaches would not be operating then the real estate would still be there, the assets would still be there and that is always going to benefit the people…” (emphasis mine)
This would therefore seem to be only the second time Sandals is not investing its capital in a new resort, yet they seem to have been able to obtain concessions or incentives from T&T.
Sandals was reported by Bloomberg on 19th July 2017, to have been seeking long-term funding for a series of large-scale developments of new resorts, including the proposed Tobago complex at an estimated $500M USD.
The T&T state is willing to contribute the land, pay the capital costs of the project and grant further incentives to the hotelier, so the Sandals group will no doubt use its capital where it is needed.
It is quite unclear just who is negotiating for the State in this large-scale matter. One sees photos of the PM and Minister Stuart Young with the Sandals principals. There was a high-profile team appointed under the Chairmanship of Former Finance Minister, Wendell Mottley, but he resigned a few months ago from all official positions. Where is the Ministry of Tourism, GGBL, the THA or the Tobago Tourism Agency in all of this?
All the ingredients for corruption are present, sad to say, as specified below.
The ingredients for corruption
I created this list in November 2013, during the ‘bad old days‘ when the previous administration (PP) was trying to do a large-scale development at Invaders’ Bay.
- Extensive public assets coming onto the market, in turbid circumstances. Those assets can include property, concessions, contracts and jobs;
- Questions of access to the gatekeepers – in these scenarios, some people will have unbelievable access to the decision-makers;
- Conflicting and confusing versions of the project or proposal. The confusion is as persistent as it is deliberate, a part of the tangled web.
- Blatant double-standards and lying is the norm in these situations;
- Apart from ceremonial fluff, such as sod-turnings and ribbon-cuttings, there is no intention whatsoever to give any proper public account or statement of intentions. True transparency is evaded like taxes;
- Professional Civil Servants who are unable or unwilling to insist on the maintenance of minimum standards.