The Tribune

By KHRISNA RUSSELL

Tribune Chief Reporter

krussell@tribunemedia.net

TOURISM Minister Dionisio D’Aguilar said the future economic benefits of the Grand Lucayan resort sale outweigh what the government spent to manage the hotel before it was sold and any concessions given to the buyers.

Mr D’Aguilar also doesn’t think the concessions given to the buyers of the resort are extraordinary.

However, the minister seemed unsure of when the heads of agreement would be made available for public scrutiny, telling The Tribune yesterday it would “probably” be during the 2020/2021 budget presentation, but ultimately is up to Prime Minister Dr Hubert Minnis.

Mr D’Aguilar was asked about the recently inked deal following the morning sitting of Parliament.

The government signed a sales agreement and heads of agreement on Monday with Bahamas Port Investments Limited – a joint company of Royal Caribbean International and ITM Group – for the sale of the resort and the development of a cruise port on Grand Bahama.

“I don’t think they are at all (extraordinary) when you balance over the revenue,” he said in response to a question from this newspaper. “Just the head tax alone you are going to get off 2.5m new passengers to Grand Bahama from this deal and another million from the Carnival deal. When you look at the investment that it’s going to create in the hotel, when you look at the airlift that’s going to be brought into the destination and bringing people in in terms of airport taxes and the like.

“When you look at the VAT receipts that you are going to be making with all these people buying food and going on excursions - the employment opportunities that it is going to create for Bahamians running their business or seeking employment opportunities, it outweighs the couple million dollars or so that you’re going to be spending every year in operating losses and you would have incurred while we held it for 18 months and the concessions that you will be given. It just far outweighs.”

He also moved to clarify confusion over the purchase price of the hotel.

The government purchased the Grand Lucayan from former owners Hutchinson Whampoa for $65m. But when the deal was signed Monday for the resort to be sold to Royal Caribbean International and ITM Group, Lucayan Renewal Holdings Chairman Michael Scott said the final buying price was $50m.

His comments triggered criticism from the Progressive Liberal Party that the government suffered a loss considering operational costs for the last 18 months.

“There are two issues in acquiring the hotel,” Mr D’Aguilar told the House of Assembly. “The first is ‘did you make a loss on the acquisition of the hotel?’ and we contend that we purchased the hotel for $65m and we are selling the hotel for roughly $65m probably a little more than $65m.

“The agreement will say that we are selling it for $50m but then we also have the insurance proceeds that we are going to receive from the insurance company based on the damages incurred from Hurricane Dorian.

“So we reflected that somewhat in the price but we expect to get that money directly from the insurance company and it will balance out at $65m. Now obviously while we operated the hotel, there were some operating losses for the 18 months that we held it or the period that we operated the hotel. But we thought it was much more important to keep that hotel open and we were prepared to incur those operating loses to keep that hotel open.

“Once you let a hotel close it becomes very difficult to sell it the value of it diminishing significantly and it is harder to get it sold and reopened. The Royal Oasis is a classic example of what happens when you close a hotel. So we were determined not to let that happen and we were right and it worked.”

His comments followed a heated exchange in Parliament when Exuma and Ragged Island MP Chester demanded the heads of agreement be made public.

Mr Cooper said: “We can clear this up today. The devil is in the details. We want the Bahamian people to have the details laid on the table of the House. We want to know how much in dollar terms will go back to the developer in terms of rebates and concessions and we want to know the exact number of that insurance amount.”

At the time Mr D’Aguilar maintained the revenue streams to come would financially out perform any taxpayer dollars that had been spent to date.