||Last Updated: Mar 29, 2019 - 10:00:49 AM
- LOI should be viewed in context
- Key details not available for proper assessment
- Total cost to Bahamians unknown
- DNA hopes for the best for Grand Bahama
The Democratic National Alliance (DNA) welcomes any news or initiative with the potential to boost the Bahamian economy. We are hopeful that the long-suffering people of Grand Bahama will finally get some relief and a much-needed economic stimulus imminently.
It is on this premise that the DNA is cautiously optimistic on the prospective sale of the Grand Lucayan resort and proposed developments in our nation’s second capital.
The signing of a Letter of Intent (LOI) between Lucayan Renewal Holdings Ltd. (LRHL) and Royal Caribbean Cruises Ltd. and the ITM Group for the purchase of the resort should be taken as what it actually is. The LOI is simply a document which contains declarations of the intentions of both the seller and purchaser. The approval process and formal discussions on a Heads of Agreement for an actual purchase have yet to be completed.
Successive administrations have been known to sign LOIs in the past with some of these being engulfed in controversy or not materializing. Many will recall the infamous Stellar Energy Waste LOI and the Wynn LOI for the purchase of the Grand Lucayan signed in December 2017.
In the case of the Wynn Grand Lucayan LOI, the government was not involved in the signing as this was only a preliminary step in the process. Rather, the announcement was made by the government following the signing between Hutchison Whampoa and the Wynn Group. The Minister of Tourism was perhaps mindful of this when he stated that the Chairman of LRHL spoke prematurely about an imminent deal for the Grand Lucayan. The Prime Minister’s absence from the signing also speaks volumes about the significance of this ceremony.
There are currently no details beyond the announcement and photo opportunity for the government. The announced purchased price of $65 million is meaningless in the absence of specific details on the incentives, massive subsidies and concessions that will be provided by the government and funded by taxpayers to make this deal happen as well as how the issue of airlift will be addressed. Further, it is evident that the purchase price will not cover the costs expended by the government to date inclusive of operation costs to manage the hotel, severance packages, any repairs carried out since the government’s purchase and the interest costs on the loan from Hutchinson Whampoa among other things.
The government will need to disclose the total cost to Bahamians seeing that the Wynn Group had sought $159.65 million in concessions to make the resort functional. Concerns had also been expressed about the cost of energy, taxes and inefficiencies at that time. The Prime Minister had cited these as the reason why the deal with Wynn fell through and as justification for the purchase of the property for $65 million (even though it was appraised at $57 million prior to being damaged by Hurricane Matthew).
We are hopeful that this is not another political stunt and that this deal will bring an end to the emotional roller coaster that successive administrations have placed on Grand Bahamians.
Arinthia S. Komolafe, Leader
Democratic National Alliance
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