The Grand Lucayan resort.
By AVA TURNQUEST
Tribune Chief Reporter
aturnquest@tribunemedia.net
PROGRESSIVE Liberal Party Leader Philip Davis yesterday blasted the government for placing the burden of Grand Lucayan severance packages on taxpayers, pointing to “myopic” and “incompetent” negotiations.
Noting the voluntary departures of 150 workers, Mr Davis questioned whether the government had a plan to provide relief to Grand Bahamians as the country continues to pay for the government’s “knee-jerk” actions.
“They invested the money to save jobs but it (doesn’t) look like that’s what happening,” Mr Davis told The Tribune.
“People are running away from them, and I doubt this will be the last of it. There is still no relief in sight as to when will they start having an impact on the community of Grand Bahama.
“The 150 persons leaving seems to be having a negative impact, what does this mean going forward? What are they doing in the interim to relieve the suffering and despair of Bahamians? Those people will not be employed, where are they going to?”
Mr Davis rejected the explanation given to Tribune Business by Michael Scott, chairman of Lucayan Renewal Holdings Ltd, who admitted it was normally the seller’s obligation to pay severance, but the government opted to shoulder the burden due to its “very difficult relationship” with Hutchison Whampoa, former owner of the property.
Mr Scott said: “Severance is usually the obligation of the seller, not the purchaser, but in this instance, given the historically difficult relationship with Hutchison, the government opted to exercise the principle of ‘parens patriae’ - parent of the nation - as protector of its citizens’ rights of those who would be unable to protect themselves.”
Mr Scott estimated the voluntary separation packages will cost the government between $2m to $3m, but noted officials were still “crunching the numbers”.
“This is a complete display of incompetence,” Mr Davis said yesterday. “How can you agree to buy a hotel and not include the inventory, not taking into account the impact of the acquisition on employees? It shows a lack of appreciation for what they are doing.
“All they had to do is withhold part of the purchase price to pay off staff. If they knew it was going to be a factor, then factor it into negotiations. It’s not a question of the relationship with the seller. Whether it’s bad or good, there is an answer for that, just hold the sum.”
Besides the $65m purchase price, Tribune Business reported the government also committed to a $2m subsidy to cover Hutchison Whampoa’s operating losses between August 1 and September 11, and waived the payment of $3.25m in stamp duty on the conveyancing by the Hong Kong conglomerate. The latter also reportedly walked away with $80m-$85m in Hurricane Matthew insurance proceeds, rather than put them into repairs.
Deputy Prime Minister K Peter Turnquest previously said the full financing costs could run as high as $124m.
Yesterday, Mr Davis said: “Again, it shows the myopic-ness of their approach. They didn’t think it through, this was a knee-jerk action. They had egg on their face after the sale fell through and needed to clean it up. So, to clean it up and cover their own failures, they threw money at it, $65m to acquire the property.’
Comments
BahamaPundit 6 years ago
Why is Minnis making Davis seem like the logical one. Davis, one of the least logical people seems like a whiz kid next to Minnis' stupidity. Unfair.
Well_mudda_take_sic 6 years ago
Minnis is just much more mentally challenged than most. God only knows all of the influential people who no doubt had to pull many strings in order for him to get through medical school and become a licensed MD. I suspect he's definitely one of those doctors who has seriously tarnished the reputation (and value) of any type of degree or certificate issued by the UWI medical school.
licks2 6 years ago
You can always tell when dese dumb Bahamian politicians jealous and don't have nothing to say. . .they start getting personal!! I would rather go kick rocks and watch paint dry than to dialogue with you two "has been politicians from the DNA". . . see yinna dumb politicians. . .gatta be that moss bouy and BM. . .
Economist 6 years ago
Whoever negotiated on behalf of the Government should be named and shamed.
licks2 6 years ago
This post has been taken over by political pygmies. . .THE DNA. . .I een gat time to waste with these duck brains. . ."big body and lil brains". . .yall have at it!! I out!!
DDK 6 years ago
Buncha crooks and idiots, all of them. Can someone please tell me what these 150 staff were doing at this hotel that was so severely hurricane damaged. Was the hotel partially opened? The whole affair is a disgrace, from the Hong Kong owners, to whichever government allowed them to take big insurance money without affecting repairs, to this government actually purchasing the white elephant with such a lousy deal for The People whose time it certainly is not.
DDK 6 years ago
"The Grand Lucayan's post-Matthew closure has resulted in much of the property being shuttered for 21 months, causing the loss of over 1,000 jobs and 59 per cent of Grand Bahama's hotel room inventory - effectively taking the island off the stopover tourism map." This from 31st July, 2018 Tribune report.
We never seem to get a full report so details are often murky and confusing, which is as the government likes it. The onus falls on the publication to glean as many facts as it possibly can!
birdiestrachan 6 years ago
the FNM fellows bend over and that was that. but pay attention. they could not get what was due to them under the law. but their tune towards the Union is very clear.
Hutchison saw them for who they were and used them accordingly . a bunch of DUMB POMPOUS FOOLs. trying their best to act important. Hutchison is having a good laugh all the way to the bank
sheeprunner12 6 years ago
HW has Minnis dem by the balls ................ this is a LOSE-LOSE proposal, but we too far gone now ............... $100+ million for a few hundred hotel jobs with no airlift solution????????
bogart 6 years ago
The peoples Opposition Leader ought to know particularly in his line of work it is called negotiations....bargaining...the seller knows what they wants...dey has a price....whether it is 65 million cash and severemcing of 3 million paid by buyer or 68 million cash and seller pays severencing.....if the peoples Opposition Leader has to ask dis ....at dis point....we in even bigger trouble....
BMW 6 years ago
Someone gotta go to hong kong and tell them get the hell out of freeport. They have not done a damned thing for this island or country, except make politicians look dumb.
sealice 6 years ago
isn't this the same socialized communal BS that the PLP did with Clico? or the PLP tried to give all the damn money away but they couldn't get it right... somehow they couldn't cus that's usually their MO..Why do we have to pay for all these things that wind up being another massive failure by our Gubmint??? Why are we paying for either of these screw ups? there's tons more please don't forget we still paying for Bamsi, Eleuthera be paying for disney with their souls in a year or so..... WHY DO WE LET THE GUBMINT REPEATEDLY DO THESE THINGS?? We musse stupid....BAD BAD BAD
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