The previous article on the Sandals Tobago proposal ended by pointing to the need for attention to the underlying, commercial arrangements which drive projects of this type.
The procurement model is key to understanding how these large-scale, internationally-branded hotels are created and sustained. The two ends of the procurement show different approaches –
the T&T model is one in which the State paid to design, build, fit and furnish the hotel to the specifications of the hotelier. The hotel then operates via a management contract which splits the revenue between the State and the hotelier. Trinidad Hilton, Tobago Hilton/Magdalena Grand and Hyatt Regency were built by the State using this method.
The other approach is one in which the hotelier constructs the hotel and receives tax concessions from the ‘host State’ in return.
Both these are Public Private Partnerships (PPPs) in which risk and reward are shared.
I previously estimated State debt to the construction industry in the $3.2-3.5 Billion range. I have since been reliably informed that construction industry claims against WASA are estimated to be in the $600M range, which of course would be subject to verification as discussed previously. My revised estimate (see table below) is now in excess of $3.8 Billion, compared to the JCC’s 27 July 2016 estimate of $2.3 Billion.
The size of my more recent estimate gives a severe picture of the State’s indebtedness to the construction industry, which is the sector that Central Bank research shows to be the largest employer in the national economy. Apart from that, the construction industry also has deep links to other important parts of the national economy such as quarrying; banking/finance/insurance; hardware stores; a range of manufacturers; transportation and so on. Continue reading “Property Matters – Pay Day? Part Two”→
The JCC has become dormant by today’s standards, with only two items posted to its website for 2016. I was therefore very interested in their 27th July 2016 Press Conference to protest the high levels of State debt to its members.
At a time of apparent crisis for the construction industry, one would think that the JCC would have been publicly lobbying on behalf of its membership since this had been so effective earlier. When Dr Armstrong became JCC President it was surprising that instead of applying continuous pressure to have the debts owed to members paid, the association’s first public action was an attack on me. Perhaps they thought this was a higher priority, but it’s hard to see how the industry benefited.
JCC Immediate Past-President, Afra Raymond, interviewed by CTV’s Dike Rostant on Good Morning Trinidad & Tobago on Thursday 11th August 2016 on the State debt to the Construction industry. Video courtesy CNMG
Tobago Benchmark hosted a symposium on the “Impact of Sandals Resort on Tobago and No Man’s Land” on Thursday 18th August 2016 at the Buccoo Community Center. Afra Raymond was one of the guest speakers, focusing his talk on the “underlying commercial arrangements” which no one likes to talk about. Examples throughout the Caribbean are seemingly secret, but there are examples from Trinidad and Tobago that can set a context for what is important as opposed to what is merely interesting. Video courtesy Tobago Benchmark.
The recent official statements about a proposal for a Sandals Resort in Tobago are significant, given both the convulsions in the Tourism portfolio and the urgent need to diversify our economy away from its long-term dependence on energy earnings. This is a preliminary view of some of the relevant considerations, since the sparse details now available do not permit a critique.
The various official statements outline that Sandals are in discussions with the State towards a new 750-room resort to be located in Tobago, which would both increase the overall room stock and bring collateral benefits if it proceeds.
Once again, controversial development proposals for Invaders’ Bay are back in the news. Those proposals of the Peoples Partnership government appeared to have stalled after the successful legal action taken by the JCC in 2012, but we are now hearing of substantial proposals from the PNM government. Some serious questions have to be answered so that the public can understand the situation.
Invaders’ Bay is a 70-acre parcel of State-owned reclaimed land south of the Movietowne/Pricesmart/Marriott complex near to the National Stadium in west POS. In August 2011, the Ministry of Planning and the Economy published a Request for Proposals (RFP) inviting offers to develop those lands by design, finance and construct proposals.
The entire RFP process was deeply flawed and strongly criticized by the JCC, the T&T Chamber of Commerce, the T&T Manufacturers’ Association and the T&T Transparency Institute, as well as the PNM, then in opposition. To make just one example, the RFP entries were judged in accordance with Assessment Criteria which were published a full month after the closing date. At the time, I labelled the entire scheme as possessing all the ingredients for corruption – see http://www.jcc.org.tt/invadersbay.htm – but most importantly, the RFP was issued in breach of the Central Tenders Board Act. Continue reading “Property Matters – Invaders’ Bay Reboot”→