The Tribune

By NICO SCAVELLA

Tribune Staff Reporter

nscavella@tribunemedia.net

THE Minnis administration’s “lazy” purchase of the Grand Lucayan Resort has exposed a lack of “business and negotiating skills” on the government’s part, according to Democratic National Alliance Deputy Leader Arinthia Komolafe.

Mrs Komolafe, in a statement, accused the government of taking the “easy way out” in purchasing the resort, and consequently expending “taxpayer funds” on a resort that “has been described as not making economic sense”.

Mrs Komolafe further criticised Prime Minister Dr Hubert Minnis’ communication on the controversial purchase, saying it was “disappointing” and “fell short” on substance on the strategic, business and operational plans, interim measures and a detailed exit plan for the resort.

Instead, she said Dr Minnis’ communications “raised more doubts about the government’s actions”.

Last week, Dr Minnis revealed that the reason his administration stepped away from the Wynn Group’s proposal for the Grand Lucayan in Grand Bahama was because its CEO wanted extraordinary concessions.

According to Dr Minnis, Wynn Group CEO Paul Wynn asked to be given a 20 percent electricity discount rate, permission to employ 420 non-Bahamians for work on the project and an ability to have 15 percent pre-approval on non-Bahamian employment without the need to apply for work permits.

He also explained Mr Wynn wanted to be exempt from paying any increase in taxes along with an annual marketing subsidy of $750,000, no casino taxes and a commitment from the government to either buying or building a new airport within two years.

Further, Dr Minnis said the government would have also had to agree to pay Mr Wynn for any losses he may have incurred with a guaranteed profit of seven percent.

And that deal, Dr Minnis said, would have ultimately cost the government $159.65, substantially more than the $65m his administration will now pay to temporarily own the hotel.

However, Mrs Komolafe said Dr Minnis’ communication revealed that the “fundamental issues” confronting Grand Bahama’s economy—the cost and ease of doing business, serve as a “disincentive” to investment and investors.

“Wynn’s requests reveal that investors are concerned about the cost of energy, anxiety over increasing taxes, inefficiencies within the public sector and The Bahamas’ overall competitiveness when compared with our regional counterparts,” Mrs Komolafe said.

The DNA Deputy Leader further noted that comparisons between the total cost of the concessions requested by the Wynn Group and the price the government will pay seem “disingenuous and misleading”.

“The $159.65m in concessions sought by Wynn appears to have at its core a fully functional Grand Lucayan with all three hotels operating as going concerns as opposed to the purchase of an asset with only one hotel in operation and without considering costs related to repairs and operations on an ongoing basis,” she said. “A fair analogy can only occur when these additional costs and accompanying concessions are determined and communicated.

Mrs Komolafe added: “By all accounts, massive subsidies, concessions and incentives will be required to address the issues with airlift, room inventory and the high cost of doing business in Grand Bahama (which is reflected in the concessions demanded by Wynn). A frank discussion on these and the corresponding plans remain outstanding.

“…The government acting as a buyer of last resort cannot become our modus operandi as a nation. Not only is this approach unsustainable, it deprives essential services such as education, healthcare, national security and disaster recovery of much needed funding and investment. We implore the Minnis administration to abandon its lazy approach to governance and chart an economic course that can inspire Bahamians and incentivize investors.”