Property Matters – Notes on Hotel sales

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This series on T&T’s State-owned hotels has shown the lack of transparency and accountability which is all too common in the other State-owned enterprises. These hotels are some of the largest Public Private Partnerships in which our Public Money is invested, so these are important in this era of declining energy revenues.

This article will examine the prospects for privatisation of those PPPs and make the link to the Tobago Sandals MoU.

Privatisations fit readily within the ambit of the Public Procurement and Disposal of Public Property Act.

In this period of ongoing budget deficits, it is likely that apart from ‘downsizing’, the government will have to consider disposing of various assets to raise cash and reduce its expenditure. That was the underlying rationale for the significant staff cuts at TSTT and the closure/restructuring of PETROTRIN.

The recent confirmation of taxes paid by the State-owned hotels was useful, but those taxes do not in any way represent a return on our heavy investments of Public Money. Continue reading “Property Matters – Notes on Hotel sales”

Property Matters – Anything for a Buck, part three

When I started this examination of the reported taxes paid by the e TecK hotels, it was with faint hopes of making any findings, given the erratic quality of the information provided by Minister Gopee-Scoon. Even the title ‘Anything for a Buck‘ was an attempt to make light of what seemed near impossible, picking sense from nonsense. But the humour soon vanished, just like the Buck, as I estimated the income and salaries for those hotels – Magdalena Grand and Hilton Trinidad.

hiltonposIn last week’s article, I estimated the sales and room revenues of those hotels, which showed that Hilton Trinidad’s Sales Revenue (estimated from its reported payments of Business Levy & Green Fund) was exceeded by its Room Revenue (estimated from its reported payments of Hotel Accommodation Tax). Sales Revenue is usually the sum of room revenue, food & beverage sales and other rentals for meetings/functions. That can only be described as an anomaly and one that requires a proper explanation, since it has a direct and adverse effect on the Rental payable to e TecK by Hilton Trinidad under the terms of its Management Agreement. That Management Agreement was registered as a Lease on 7th July 2006.

Last week I also made the point that there was not enough information to reliably estimate costs, other than salaries, from the taxes paid. This week, I will delve into the implications of the salaries by using the reported payments of NIS contributions and PAYE. Given that Magdalena Grand has no reported PAYE, according to the Minister’s statement on 19th March 2019, it is not possible to compare that hotel with Hilton Trinidad on all bases. Continue reading “Property Matters – Anything for a Buck, part three”

Property Matters – Anything for a Buck part two

The previous article started by dealing with the Buck and his alleged stealing. This week I will be examining, at last, just where does the Buck pass. For those readers who may be smiling, this is no jokey thing. In this article I will be looking at that thing and its meaning.

Minister Gopee-Scoon’s delivery on Tuesday, 19 March 2019 in the Senate was nothing less than a ‘Phantom Presentation‘. (See video below, begins at 29:35) All part of the ‘hop skip and jump’ between wanting to appear to disclose but not really telling the public the real story. Like the olden Primary School days when as children we used to play ‘Hide and Seek‘, with the one who could hide the best as the winner, along with ‘Catch‘, with the one who could run the fastest and twist suddenly being impossible to catch. You see? I am going to explain all that now.

As noted last week, Senator Obika’s queried ‘taxes and dividends collected‘ for the two Eteck hotels in the period 2015 to 2018. Continue reading “Property Matters – Anything for a Buck part two”

Property Matters – Anything for a Buck

This title reflects the negotiating stance of our governments in these massive State-owned hotels as I wonder at the convenient distraction of the ‘Buck’ emerging from folklore into the modern media. A shadowy figure who is eating-out the family’s food, coming and going as they please, people have to tie-down their things but those could still go missing. No broken windows or forced locks, so somebody is letting the Buck in, like some kind of secret love affair. Well I tell you.

In this article, I will set out the recent disclosures by Minister of Trade and Industry, Senator Paula Gopee-Scoon, on Hilton Trinidad & Conference Centre and Magdalena Grand.

scoon-obikaOn Tuesday 19th March 2019, the Minister of Trade and Industry replied in Senate to two questions by UNC Senator Taharqa Obika –

“…Can the Minister advise as to the amount of taxes and dividends collected from the Magdalena Grand Hotel for each year during the period 2015 to 2018?…”

The second question sought the same details for Hilton Trinidad & Conference Centre. Continue reading “Property Matters – Anything for a Buck”

Property Matters – Hotel Reservations

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 – Continue reading “Property Matters – Hotel Reservations”

Property Matters – Trinidad Hilton Improvements

Property Matters – Trinidad Hilton Improvements

At the end of January 2018, the Ministry of Trade & Industry and its implementing agency, Evolving Technologies & Enterprise Development Company (ETECK), announced the completion of a $7.6M project for the renewal of the Trinidad Hilton Pool. According to the official statements, that project was completed on time and within budget, as part of the State’s long-term obligations at that 418-room hotel. Despite those assurances, there was a series of condemnations which need to examined.

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Trinidad Hilton Management Agreement

Three of its interesting details –

  1. Hilton pays ETECK a rental of 76% of the ‘Annual Gross Operating Profit’ which is defined in the lease;
  2. ETECK is responsible for doing replacements, renewals, extensions or improvements to the Trinidad Hilton at its expense. That means that ETECK was acting within the lease terms in paying for those pool improvements;
  3. Hilton is required to prepare detailed accounts of the hotel’s operations and submit those to ETECK.

Please note that Trinidad Hilton is undergoing a hugely expensive improvement program since 2008 (see Sidebar).

I am not making an issue of the decision to do these improvements or making allegations of cost or time over-runs. There may be issues in those aspects of the project but I am not engaging those.

My issue has been and remains, that despite all the smooth press releases and so on, we are unaware of the underlying commercial arrangements by which these hotels exist. The three largest hotels in our country are State-owned – Trinidad Hilton; Magdalena Grand (formerly known as Tobago Hilton) and Hyatt Regency. Those hotels are operated by foreign entities under management agreements with the State agencies which hold the ownership interest. They can therefore be classed as Public Private Partnerships (PPPs). Since PPPs are currently being promoted as a development approach, those arrangements certainly ought to be closely examined, looking beyond the Hilton pool. Continue reading “Property Matters – Trinidad Hilton Improvements”

Property Matters – Tobago Sandals part three

Last week’s article outlined the research I have been conducting, with the support of my colleagues from Disclosure Today, into the ‘Underlying Commercial Arrangements‘ of the State-owned hotels in this country. Those are the decisive details which drive projects of this nature and from which the substantial public benefits ought to flow.

Details of the unhelpful responses from the various agencies with whom we engaged via the Freedom of Information Act only went to show that the actual conduct of these large-scale public private partnerships were virtually opposite to the repeated statements about openness and having nothing to hide. The Ministry of Finance was the only public authority to give a prompt and clear response.

SIDEBAR: Public Money

As I stated in ‘Everything but the Truth, published in this space on 10 June 2014, in relation to Public Money –

“The leading learning from which we have drawn serious lessons is Lord Sharman’s 2001 Report to the British Parliament ‘Holding to Account‘, which was a thorough examination of the definition, role and need for control of ‘Public Money‘. We expanded on Sharman’s definition of ‘Public Money‘ so as to capture the full range of possibilities, but we have accepted his key finding as to the requirement that ‘Public Money‘ is to be managed to a higher standard of Accountability and Transparency than Private Money – see 2.23 on pg 15. The contemporary, best-practice position in respect of the management of and accountability of Public Money being that the private sector rules are the bare minimum.”

This proposed large-scale investment would require significant sums of Public Money to be committed to the project. That commitment would be via direct investment or lease rentals; tax/duty concessions and expensive externalities such as improvements in the water/sewerage and electricity services or the expansion of the Crown Point Airport facilities. Continue reading “Property Matters – Tobago Sandals part three”