Property Matters – the Benefit of the Doubt for Tobago Sandals?

In which a Flying Pig births a White Elephant…

If that phrasing sounds over-imaginative and gross, just consider these proposals for Tobago Sandals…

The previous article stated the bare facts about this large-scale development and placed those for consideration.  The response, online and elsewhere, was such that I am now going to set out the main arguments being used by the promoters of this project and place those for consideration.

What is ultimately at stake here is the right of our Public Officials to negotiate these large-scale projects, in secret and on our behalf.  The promoters of this project are claiming that intangible but substantial element, the Benefit of the Doubt.  This article will examine the merit of those claims for the Benefit of the Doubt. 

This is a summary of the case being made by the promoters of this large-scale project – The Government has invited Sandals to set up in Tobago and those negotiations are at an early stage.  An MoU has been signed, but no contracts have been agreed as yet.  There is no secret, given the early stage of these discussions.  It would be counter-productive to disclose any details at this stage.  The proposed project will follow the established arrangements for the existing State-owned hotels – Trinidad Hilton, Magdalena Grand (formerly Tobago Hilton) and Hyatt Regency. 

Under those arrangements, the State contributes the land and pays for the design, construction, fitting and furnishing of the hotels to the specifications of the hoteliers, who operate the facilities under Management Agreements. The existing arrangements are satisfactory, so the public can have a measure of comfort since this is an established pattern.  Once the agreements are signed, then the public can be informed of the details.

• There is no secret – If there is a secret/confidentiality clause/commercial confidentiality, then just say so and we could all understand what is happening– Business as Usual.  If the deal has the strong attributes being claimed, then there should be no difficulty releasing the main terms of the MoU, which is a pre-contract, non-binding document.  The MoU will outline the roles to be played by the parties as well as the proposed timetable.  Given that the State is investing valuable public land and funding the design and building of the resort, I can see no case for the hotelier to receive any incentives or concessions, beyond those established in the Tourism Development Act (2001).  Is the Government considering the grant of additional tax/duty/work-permit concessions to Sandals for this project?
• The details will be provided once the deal is agreed – No details have ever been provided on our three existing State-owned hotels, so why should anyone believe that this case will be different?
• The existing arrangements for our State-owned hotels work well – Is that really so?  Is the normal arrangement beneficial?  On 25th October 2016, with the assistance of my colleagues at Disclosure Today, I submitted a Freedom of Information request to the Ministry of Finance for copies of any audits or management reviews which had been conducted for the three State-owned hotels.  On 10th November 2016 the then Finance PS, Maurice Suite, confirmed that no such audit or management review had ever been conducted and I have no reason to doubt him (a scanned copy of that letter is below).  Given that the State-owned hotels have never been audited or subjected to management review, how can we place any reliance on the repeated claims that the existing arrangements are effective?  Think about it this way – The Finance Ministry has not measured the performance of those State-owned hotels within its portfolio, so how can we possibly manage those assets or judge their performance?  We can be sure that if the existing State-owned hotels were profitable we would have been told.  Just think about the recent announcements on Caribbean Airlines’ ‘return to profitability’.  You see? 

• Premature publication of the details being requested will jeopardise the entire deal – there is abundant and solid research to show that the conventional views on contract confidentiality do not safeguard the public interest.  Indeed, given our country’s full membership in the Open Government Partnership, this is a position which will be difficult to evidence in the minds of reasonable people. 

We must be vigilant to ensure that the underlying commercial arrangements for this large-scale Tobago Sandals project really serve the Public Interest.