‘The Truth eats Lies’
—from Marlon James’ latest epic ‘Black Leopard, Red Wolf’
The previous article stated that over $5.0 Billion of Public Money was spent in the first 6 months of 2009 during the CL Financial bailout, under that MoU. Yes, that is the same type of document which we were so loudly being told is not binding and can be completely renegotiated, in relation to Tobago Sandals.
The publication of the Tobago Sandals MoU at the end of November 2018, forced by my litigation, set those misleaders to try diverting concerns by claiming it was all open for discussion. Of course it is possible to renegotiate any contract, or MoU for that matter, but that is trite and explains nothing. Probably intentionally so, really.
The limits of renegotiation are rooted in the bargaining strength of the parties. Which means that the party with stronger leverage can in fact call for renegotiation and likely obtain improved terms. The weaker party will almost inevitably agree to renegotiation, in the course of which serious concessions will be obtained by the stronger party.
The recent episodes of Sandals shutdown/withdrawals in both Antigua and Barbuda and the Turks and Caicos Islands are crucial in understanding this ‘Carefully Crafted Confusion’. In both those cases, Sandals spent the capital to build the resort, but yet were still able to shutdown to seek further concessions. In the Tobago case, Sandals was investing no capital. Even in what I am now calling the Lok Jack Gambit (which I will get to in the next part) no Sandals capital was at risk. The point being that if Sandals was intended to have no capital at risk in Tobago, T&T would have been in a far weaker negotiating position than any of the other Caribbean countries. That is the precipice we were facing, the deep peril which our misleaders are trying to normalise.
Of course, we have had a sobering silence from the usual suspects, already under pressure from the dire truth about the MoUs agreed intentions, now from the CLF MoU – according to our political lore – ‘Facts are stubborn things’ – hence this week’s first epigraph.
The UWI hosted a seminar on Wednesday 30th January 2019, under the rubric, ‘Economic Implications of the Termination of the Sandals Project’
The panel was publicised as including Minister Stewart Young, Dr Roger Hosein, Dr Bhoendradatt Tewarie, Louis Lewis and Professor Vanus James. The session was chaired by Mr Julian Rogers of Guardian Media Limited. The surprise speaker was Arthur Lok Jack of Associated Brands and Guardian Life, and former National Chairman of the Vision 2020 Exercise, who made a number of widely-reported and frankly unsurprising statements. Lok Jack’s main points, from my reading, were –
- Sandals engaged in negotiations with our Government after a 2015 dinner at Lok Jack’s home at which both Dr Keith Rowley and Butch Stewart were guests;
- Bad publicity was not the reason for Sandals exit, it was the fault of the Opposition;
- Another reason for Sandals stance was the participation of the State…in fact, Lok Jack was reported to have said “Government has to get the hell out of private sector business.”
The first point about the private dinner is unsurprising and would explain the overall reluctance, even now, to invite other hoteliers to participate. The second point is a bemusing attempt to shutdown the pointed questions as to the impact of the intended terms in the MoU. The third point, however, is extremely interesting as it is clear that the prospect of private sector investment in the Tobago Sandals resort has been part of the public discussion for quite some time. What is bizarre and verging on offensive from Lok Jack is his brazen dismissal of the history of these matters.
Here are some relevant extracts from my previous article ‘The Tobago Hilton Story’ published on 24th April 2008 in the Business Guardian –
- “Hilton Tobago [Golf and Spa Resort] is a 198-room complex on a 20-acre site alongside the 18-hole golf course. It is owned by Vanguard Hotel Ltd—whose shareholders are reported to be the State (which owns 47 per cent, held via eTeck), Guardian Holdings Ltd, Angostura Ltd (these two companies being the developers of Tobago Plantations)—and Hilton International Ltd.
- The hotel was opened in November 2000 and it is therefore the most recent major hotel constructed in Tobago. In that respect, it could be considered a test case for the viability of the high-end tourism model which has so far eluded us in T&T.
- The Minister of Trade and Industry, Dr Keith Rowley, announced at the post-Cabinet press briefing on March 27 2008, that the State was taking several initiatives to increase its investment in the hotel. The two main expenditures being the allocation of $45 million for urgently required renovations and the purchase of the 53 per cent private-sector shareholding, so that the hotel would be wholly State-owned.
- There have been two Newsday reports referring to a price for the hotel of approximately $200 million.
- Competence and moral hazard: quite apart from repairs and maintenance aspects, one is bound to wonder what, if any, is the value added by private sector participation in this project. Dr Rowley’s statement made it clear that Hilton International was virtually “handing back” its shares for a nominal sum and further, reducing its annual management charges significantly. No such assurances were heard from our home-grown private shareholders. Instead, we were told that eTeck is engaged in negotiations to settle terms for the acquisition of the remaining private shares. It is common wisdom these days that the private sector is better than the public sector at assessing risks and allocating resources. The Tobago Hilton episode should give us all cause to pause and reconsider those beliefs.
- Repairs and renovations – Dr Rowley made it clear that the private sector partners had not fulfilled their responsibilities insofar as contributing to the ongoing maintenance of the hotel itself. Those lapses had made it necessary for the State to undertake urgent repairs in the reported sum of $45 million. The appropriate adjustments should be made to ensure that the shareholders do not benefit from their inaction in terms of repairs and maintenance.
- What was the quality of the feasibility studies done for this project? How reasonable were the underlying assumptions? Do we now understand the reason/s for the project’s failure? If yes, what were these? If not, why are we investing further? This episode leaves a cloud of doubt over the superior competence of the private sector to conceive, implement and manage complex investments…”
Hence my second epigraph, as this is surely not the last we have seen of this scheme.
3 thoughts on “Property Matters – Tobago Sandals MoU-MoU”
I really thought that this Sandal’s issue was over but it seems like there was indeed a jack-in-the-box supporting this MOU,a MOU that was of no benefit to the State of Trinidad and Tobago.
I am sure that no successful businessman would run his own personal business with agreements remotely similar to the Sandal’s MOU or he would have been out of business by now…
So,the pull-out at no cost to the country and possibly no cost to Sandals,must have been at some cost to someone right? Why else would anyone want to raise 1/4 million USD to encourage the company to return here,given the conditions set out in the MOU?
Why else would Jack pop out of the box?
Then again,maybe he just believes in good luck, just like the Jack in this nursery rhyme:
Jack be nimble,
Jack be quick,
Jack jump over
In the 1800s, “Jumping candlesticks was a form of fortune telling and a sport. Good luck was said to be signaled by clearing a candle without extinguishing the flame.”
Our Jack,did not clear the candle stick,so the deal is off.
Better luck next time Jack…
The information given here puts to rest the statements by certain high flying people in the country that the Scandals deal was good for TT. The most important question is – ‘why is the government of TT involved in investments of these types since it is a fact that the Government of TT cannot manage any company successfully.’ The purchase of the private sector interest in the Hilton Hotel in Tobago was a god sent to those private companies. Analysis has shown they did not suffer any loss from their mismanagement of the project. The politicians of TT do not have the interest of the people of the Country. This has been shown bu their actions in the CLICO, Scandals, Tobago Hilton and other projects. When will we get honest politicians who will make decisions in the best interest of the people of Trinidad and Tobago?
We are a passive and passé people for whom life is what it is, or que sera sera. With a plethora of alcohol ads, soca with wining dong an freeness for daze, we jammin still. This atmosphere is perfect for investors. Afra is the last of the “moral nay-sayers who is bringing down this country an doe let poor people get ah break in Tobago.” Unemployed people cud always get ah 10 days bligh or do ah lil jail till tings kool off. Many students have no clue about where they are heading and prepare themselves to be swallowed by the dogs of war.
Parents have less time and money to waste on books that are not used in schools and by those who cannot or will not read. Most of us are blind to litter, obscenity and no-value products, such that huge projects will ‘hurt our heads’ an day have mouths to feed. Absolutely no attention is seriously paid to those who vote, particularly in safe-seat constituencies like Belmont, where I still live with my MP, Stuart Young who refuses to communicate with me for over a year.
Because this terrible system has been allowed to grow, it has adopted a ‘too big to fail’ attitude that was only slightly shaken by Afra constant investigative journalism. Plans are certainly underway for his type of interference to be halted or sidelined. The devil doh sleep either. I cringe at the applause Cro Cro receives for his boasting, errant behavior, but that too speaks to our penchant to champion low-standards. If that is how he raised his children…. I disagree that the truth eats lies. I favour that lies fructify on the fertile soils of truth and we consume what is sold without question. We are worthy of the leadership we have.