The concerted attempts to sell the Tobago Sandals project were driven by high-level Public Officials who repeatedly assured the public that the existing arrangements for the three State-owned hotels were working satisfactorily. So much so that we should be pleased that the existing arrangements were to be adopted for the new project. The two main promoters were PM, Dr Keith Rowley and the Minister in the Office of the PM, Stuart Young.
Of course, we now know, due to the unplanned publication of that Tobago Sandals MoU, what were the terms and conditions on which the State intended to engage that project. No other hotelier had ever had a deal like that.
But there is a deeper series of official conversations on these existing State-owned hotels which need to be spotlighted so that a better view can be had as to ‘Who is Who and What is What’.
I am relying on the official records in this one, with my sparing commentary shown below –
Hyatt Regency Hotel and Conference Centre
The Minister of Trade & Industry, Senator Paula Gopee-Scoon, told the Senate on 1st May 2018 that the Hyatt Regency Trinidad had made these net profits after tax in the previous five years:
The profits realized by Hyatt based on audited account are as follows:
For the year 2013, TT $75.7 million;
For the year 2014, TT $76 million;
For the year 2015, TT $66.3 million;
For the year 2016, TT $51 million;
For the year 2017, TT $60 million;
All told, TT $329 million.
Further questions were put to the Minister
…Sen. Hosein: …Having regard for the decline in the profits from the period 2013—2017, can the Minister indicate what is the reason for this?
Sen. The Hon. P. Gopee-Scoon: I am not able at this time to give any concrete reasons as to why, but you should note as well that between 2016 to 2017 there has been at least a 20 per cent increase in the profits.
…Sen. Obika: …Could the hon. Minister inform the Senate what dividends—because we have the profit figure, we understand the Government being a shareholder—applied to the Government for the respective years?
Madam President: No, I would not allow that question. Next supplemental question.
Sen. Mark: Could I ask the hon. Minister of Trade and Industry whether these net profit figures represent from your perspective, as the Minister, adequate returns on our investments at that particular enterprise?
Sen. The Hon. P. Gopee-Scoon: That evokes a subjective answer from me and I am not prepared to do that….”
Of course, in the absence of audited accounts, there is no clarity on Hyatt Regency Trinidad’s overall turnover or performance. You see?
Note that the Minister of Trade & Industry has ETeck within her portfolio which is responsible for Trinidad Hilton and Magdalena Grand. Hyatt Regency is under UDECOTT which is under the Ministry of Housing & Urban Development. So, this all begs the question as to how come the Minister of Trade & Industry came to be giving the Parliament a report on an entity outside her portfolio. A report on which the Minister was either unable or unwilling to answer basic questions.
Trinidad Hilton and Conference Centre
[Then Senator David] Small: …I want to ask a question directly about the Trinidad Hilton upgrade…why are we doing these projects? What is the rationale? When I look at it on a pure financial basis…it comes back as a massive negative return.
So…when you decide to do projects, what is it based on? Is it that the Hilton is an infrastructural project of the Government and we are effectively subsidizing Hilton?Because there is no cash on a financial pure discounted cash-flow analysis, there is no return to the Government of Trinidad and Tobago on the $500 million investment for the next 15 years. Is it that the Cabinet tells you to do so and that is all you work with? And if that is the case then someone should say, well, this is purely an investment project, the Hilton is an investment project and we are subsidizing Hilton.
I would like to understand what is driving these decisions…if my money is going to support Hilton international, and the only benefit that is coming to the Government of Trinidad and Tobago is jobs and taxes, but the money we spend we will never get it back. So, one, what is the basis for your decisions?…
Mr. Salandy [then ETeck President]: I can just simply say that the decision to refurbish Hilton was not eTecK’s decision; that is a Cabinet decision; and we are guided by the Cabinet decision. That is all I can add at this point in time…”
Well I tell you.
Magdalena Grand Hotel and Conference Centre (formerly Tobago Hilton)
Ms Shamfa Cudjoe [then serving as Minister of Tourism]: …In 2014 Magdalena would have boasted about being totally self-sufficient, and now two years, or should I say a year and a half after that claim, I want to know how did we move from being totally self-sufficient to now being totally dependent on e TecK? What would have happened from 2014 to now 2016?…”
The Minister of Tourism requests a report.
…Dr. Gopeesingh: …when Hilton sold over to Vanguard what was that cost and
then Vanguard sold over to Magdalena, what was that cost? And then how much
money was spent to refurbish…
Mr. Karim (Director of Policy & Strategy at the Ministry of Trade & Industry): Well, Hilton had shares in Vanguard Holdings as well as Tobago Plantation. When the Government took the decision in 2008 to purchase the hotel it paid the equivalent of TT $138 million for the shares which Trinidad Hilton had in Vanguard Holdings…then approximately $160 million was the full cost of renovation to get the hotel opened in 2012…”
$138 million to rescue the private shareholders and a further $160 million to fix the building.
Mr. Chairman [Senator David Small]: …It is abysmal, 10 years of consecutive losses; over $400 million in losses over the 10-year period…What you find with Magdalena is that for every dollar revenue it earns, its operating cost in 2017 was $1.70. It was $1.68 in 2016, $1.60– so that there is something wrong in the way in which the core business is operating…you spend more to run the business than you make in revenue…even the years when you had relatively good occupancy…”
All the while, our Public Officials trying to tell the public that those arrangements were satisfactory and so on. But some of us still read and reflect.