Hon. Tillman Thomas
c/o Prime Minister’s Office
26th November, 2012
Greetings Hon. Prime Minister!
Permit me to clarify that I write in my individual and personal capacity.
Permit me to address you, Hon. Prime Minister, on the following:
* the relationship between the Government of Grenada, the National Democratic Congress and H.E. Ambassador Peter DeSavary
* The tax incentive package awarded to Grenada’s first brand name hotel, Sandals Resorts
* Government’s GRENLEC shares
1. Ambassador Peter DeSavary:
2. I am appalled by the fact that your administration, Sir, with or without the help of the “rebels”, has seen it fit to make Mr. Peter de Savary, Amb. de Savary, an investment ambassador, in spite of the unambiguous recommendations by the Cheltenham Report 2007 on the matter of non-nationals as ambassadors.
The questions and concerns regarding the transfer of the people’s property for $1.00, involving Peter de Savary and his Port Louis investment, WILL NOT GO AWAY. This was an election platform issue on which your party campaigned. It promised a Task Force Review of a number of “controversial agreements” which involved the “people’s property” and its first action was to set up the Task Force.
The people of Grenada are still waiting, after FOUR years, to be told what were the findings and recommendations of that Task Force. In the meantime, according to his website, Peter de Savary has been made an “international ambassador with full diplomatic status and responsibilities for inward investment”.
Prime Minister’s Dinner:
I understand Hon. Prime Minister, that Ambassador Peter de Savary, was one of the corporate sponsors of the Prime Minister’s dinner, hosted by yourself and held at the Spice Basket last Friday evening, November 24th.
This begs the questions, Sir:
* Was this dinner an official function of the Government of Grenada or was it a fundraising event for the National Democratic Congress?
* Is it proper, Hon. Prime Minister, for an investment ambassador to be sponsoring a function hosted by the Prime Minister? Is there a difference, Hon. Prime Minister between the sponsorship of the Prime Minister’s dinner by an investment ambassador and the sponsoring of an investment mission of (former) Prime Minister Keith Mitchell by a trade counselor?
* If it was a fundraising event for the National Democratic Congress, is it now reasonable to conclude, Hon. Prime Minister, that Amb. De Savary is a “sponsor”/financial backer of the National Democratic Congress?
Sandals Resorts and Tax Incentive Package:
The Minister of Finance announced the tax incentive package, spanning a period of twenty five years, that has been given to Sandals Resorts. He advised the nation that such a package was not new.
The Minister should have been EXPLICIT and should have advised the nation that this was a package no different to that one that had been received by Peter de Savary under the NNP regime. Is it also reasonable to conclude, Hon. Prime Minister, that Ambassador de Savary has become the precedent re the policy/practice of your government on the matter of tax incentive packages that are awarded to foreign direct investors?
I seem to recall Hon. Prime Minister, that this tax incentive package was bitterly criticized/condemned by your party in opposition and justly so. What this incentive package amounts to Hon. Prime Minister is the Grenadian taxpayer SUBSIDIZING a foreign investor.
Sandals and Air Jamaica:
It is useful to note that the amazing expansion of Sandals Resorts took place between the period 1994-2004 when Air Jamaica was privatised and the airline’s majority shares were held by the Air Jamaica Acquisition Group led by Gordon “Butch” Stewart.
In 2004, when the group handed the airline back to the Government of Jamaica, it was in $US 560 million debt, a debt now held by the Jamaican taxpayer while Sandals had expanded to numerous hotels in Jamaica, and a number of other hotels throughout the Caribbean.
The airline also owed the Government of Jamaica millions of dollars in unpaid taxes. Is it therefore reasonable to conclude that the Jamaican taxpayer subsidised the expansion of Sandals Resorts?
Investment Policy and Performance Criteria:
I do recall that, as part of the doing business reform agenda, one of the first matters that was addressed by the Office of Private Sector Development was the matter of the award of tax incentives in order to make for a predictable environment.
It was intended to do away with the matter of carte blanche concessions and link tax incentives to performance indicators/benchmarks. There would be tax credits. Why therefore has these carte blanche tax concessions been given to Sandals over a 25 year period? What are the performances clauses/conditions attached to this package?
Given the economic situation facing the country and the crisis in the face of the closure of the La Source Hotel one can describe both La Source and the Government of Grenada as being almost “on their knees”.
With 200 jobs on the line from the closure of La Source, one appreciates the government’s sense of obligation to be supportive and to act quickly. However, at the end of the day, the deal is a private one between the owners of La Source and Sandals Resort.
It is the obligation of the Government to protect the interest of the taxpayer and the pubic.
While revenue continues to hemorrhage due to the ill-advised tax incentives – for example given to St. George’s University, now some 35 years in operation, to speculators like Peter de Savary and passed on to his subsequent buyers such as Camper and Nicholson – the government is cash stricken. Therefore it is obliged to borrow, sinking the Grenadian taxpayer further into debt which they cannot afford.
Then the government seeks to attract foreign direct investment which it feels obliged to give a free tax ride and to divest of the people’s assets to these same foreign investors who continue to ride free!!! And so the vicious cycle continues!!
Happenings in other Islands:
Sandals Emerald Bay Resort, Bahamas:
Perhaps the euphoria over the coming of Sandals ought to be tempered by what is happening in other islands. It is ironic that Sandals Emerald Bay Resort on Grand Exuma is facing the very same predicament of which La Source has just been relieved. Six hundred (600) jobs are at stake.
It is instructive to note that Mr. Stewart has approached the Government of the Bahamas for support to keep the Sandals Emerald Bay Resort on Grand Exuma open. According to a news report, Mr. Butch Stewart acknowledged that “high operating costs – including high utility costs and the cost of overcoming a shortage of trained workers on Exuma – and limited airlift are proving to be unsustainable.”
It may be also useful to note that this hotel was acquired from Four Seasons. In the face of high utility costs and the costs of airlift, both of which are linked to the rising price of fossil fuels which will not go away any time soon, the question that needs to be addressed by the Caribbean people is whether their islands can AFFORD the Sandals model of luxury resort tourism.
Sandals/Beaches and Antigua:
It is also worthy of note that just last month, Mr. Stewart decided not to proceed with a proposed US$100 million dollar resort at Long Bay in Antigua. According to the Observer, Mr. Stewart stated that he had “decided to shelve plans for the new development because of political wrangling” in Antigua.
The report went on to state that Mr. Stewart was referring to “vehement opposition to the project by the Antigua Labour Party, especially from the MP for the area Robin Yearwood”.
According to the report, Mr. Yearwood, a former minister, has maintained that he “is opposed to any development which would reduce the access that locals have to one of the last remaining and most popular recreational spots on the island”.
Sandals and Barbados:
Throughout this year, there have been various reports of Mr. Stewart being unable to conclude a deal in Barbados re the take over of the failed Almond Resort, alleging that the sticking point has been over the issue of private beaches.
In Barbados, the windows to the sea may have all but disappeared. However, the Bajan people and government remain resolute that all beaches in Barbados are public and must remain public – a sentiment embodied in the calypso by Mighty Gabby, “Jack, the beach belong to me”!!
Exclusive Pink Gin Beach:
Hon. Prime Minister, it has been noted that the press release on the acquisition of La Source by Sandals which appears on the website of the Grenada Board of Tourism makes reference to Sandal – La Source ‘s location on the “exclusive Pink Gin Beach”. What does exclusive beach mean?
We the people need assurances from the Government of Grenada that it has not made any concessions to Sandals Resorts on the matter of privatisation of beaches, even if certain establishments in the extreme south are making access by locals almost prohibitive, already behaving as if these beaches were private.
Sometime ago, much to the alarm of we the people, rumours emanated from certain quarters that the government had sold its shares in GRENLEC. The Minister of Finance deftly side-stepped the questions posed on this matter, advising that the Government was reviewing its portfolio of shares in various companies with a view to divesting itself of some of those shares.
What is the status in respect of government’s shares in GRENLEC? Can you advise/assure Hon. Prime Minister that the Government of Grenada has not sold its shares in GRENLEC – even as the government facilitates GRENLEC’s stranglehold on the energy sector by its prioritisation of the geothermal renewable energy project which will also result in the privatisation of the people’s property in Mt. St. Catherine.
Metamorphosis and Political Speak:
It has undoubtedly been a very trying year for the country, for your administration and for you personally. Much has unfolded and those who have been noting the unfolding of events ever since the administration came into office may even conclude that events as they unfolded were inevitable.
One may even conclude that the NDC which promised CHANGE was all a political CHARADE that has, inevitably, become undone.
It seems to me, Hon. Prime Minister, that we the people are witnessing the metamorphosis of the administration of the National Democratic Congress. It appears that it is “changing its colours” right before our very eyes. Practices and policies that were stridently criticised/condemned while in Opposition are adopted and implemented without we the people being afforded the benefit of an explanation or information.
Did your administration mean what it said and did it say what it meant on the political campaign platform? Is it that I did not/do not understand “political speak”? As a citizen, I am confused. I can no longer recognise the administration which was voted into office. Perhaps, all will be revealed in the fullness of time.
Thank you, Hon. Prime Minister, for the opportunity to offer these queries and observations. Permit me to also extend my best wishes for the Christmas season.
Sandra C.A. Ferguson