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Dear Editor,
The Sandals Barbados fiasco: Throwing out the baby with the bathwater, otherwise known in the Caribbean as snatching defeat from the jaws of victory.
My name is James Bristol. I am a lawyer from Grenada and I negotiated the incentive agreements with the government of Barbados on behalf of Sandals.
I have read the recent statements both from the Prime Minister and Sandals and would like to clarify certain matters.
May I state from the outset that I have no political axe to grind and no political affiliations in Barbados.
I met the former Minister of Finance for the first time during the negotiations of the incentives and have not met him since.
I know the Prime Minister both as a colleague and as a friend.
The Sandals Barbados incentives are based on those which I negotiated for Sandals in respect of the Sandals Grenada hotel. The Barbados incentives are more generous than those in respect of Grenada.
The present Prime Minister of Grenada publicly expressed his initial concern over the generous incentives granted to Sandals in Grenada by the previous administration.
However, on attaining office and seeing the financial benefits of the Sandals investment in Grenada, the Prime Minister, not only endorsed the incentives granted, but added to them by including a tax stabilization clause to ensure that the incentives, and therefore the financial viability of the investment by Sandals, was not threatened or whittled away by future legislation.
The Sandals Grenada incentives took effect during a period of financial austerity under the IMF. The IMF program was successfully completed notwithstanding the Sandals incentives which incentives were fully implemented and respected by the Government at all times.
A large part of Grenada’s economic recovery has been attributed to Sandals and I am aware that the Grenada Government is doing all that is within its power to facilitate a Beaches Resort here.
Grenada’s enhancement extends to one of the most sophisticated call centres in the region with over 100 employees and increasing. All from Sandals!
As it is well known, Grenada‘s performance has been applauded by the IMF and Grenada is recording one of the highest rates of growth in the Caribbean.
Indeed, the Sandals incentive model has been adopted by the Government of Grenada for other hotel investments.
If Grenada can survive an IMF program while these incentives are in place and come out with flying colours despite the incentives, why is Barbados finding it difficult to honour an agreement reached in good faith between itself and Sandals?
The Barbados agreement was given effect by Statutory Instruments laid before Parliament under the applicable legislation. I drafted those statutory instruments in conjunction with the government’s legal department.
Far from insisting on additional incentives, Sandals is simply seeking to have certain incentives, not within the Statutory Instruments but within the Incentives Agreement, embodied in some form which would give a level of comfort to its bankers and itself to the extent that the financial basis for the investment remains stable so as to guarantee the ability to repay the loans in respect of the proposed Beaches project.
The Barbados incentives agreement contains a clause which mandates the Government to pass all laws and take all steps which are necessary to give effect to the agreement.
So, the Government is mandated to find avenues to give effect to its obligations under the agreement.
Much has been said over the years about Barbados giving Sandals too much by way of these incentives. Indeed, the same has been said in Grenada and Antigua.
The truth is that none of these countries has given away anything because without the incentives Sandals would not have invested. If Sandals did not come the Government would not have a development nor the benefit of the taxes. Therefore, if Sandals does come and pays reduced taxes, the Government has lost nothing. On the other hand, by Sandals coming, the Government has gained everything by way of the investment and its associated benefits. Sandals is the entity taking the risk by investing its money and being unable to dig up its hotels and take them away if things turn sour.
The way I see the incentives agreement is akin to an invitation to a friend to come to one’s home. The invitation allows them through the door and once inside the benefits of that friendship accrue.
The initial investment which Sandals proposed was the construction of two hotels: Beaches and Sandals.
But an added benefit arose as the Sandals Casuarina hotel has morphed into two hotels, Sandals Barbados and Royal Barbados, at about the same level of investment which was envisaged for the two original hotels, the total invested thus far being over US$300 million.
With the Beaches project the total investment is about US$750 million. Barbados now stands to benefit from 3 hotels as opposed to 2.
The corresponding employment and other benefits have been well documented by others with greater knowledge than me in this regard.
No one can argue that Sandals has delivered over and above what it agreed to do. Has the Government fully delivered on what it contracted to do?
The simple question I would pose to the Government and people of Barbados is this: would it benefit your country if there were no Sandals hotels? Think of the benefits of Sandals building the five star Beaches as opposed to the negative impact on your country and economy if the project is cancelled?
The answers are obvious: any investment of the type made by Sandals is a benefit.
Do not throw out the baby with the bathwater. Mia please call Keith. Keith, please explain to Mia.
James Bristol
Henry, Henry & Bristol
P. O. Box 386
4 & 6 Lucas Street
St. George’s
Grenada
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