Barbados’ third Sandals Resort hotel beached
By George Alleyne
A $400 million Sandals
Resorts International construction
project in Barbados may
come to an abrupt halt because
the Mia Mottley-led administration
contends that the hotel
chain is asking for more than
an already generous agreement
sealed with the last government.
Since 2013 the Caribbean
tourism giant, world renowned
for its holiday all-inclusive
accommodation, had wrapped
up a deal with the government
of former prime minister Freundel
Stuart granting it 40 years of
concessions from various forms
of taxation.
There is a straight 25-year tax
holiday with waivers on imports
of hotel equipment along with
consumables such as food and
beverages.
Included are duty importation
of vehicles and household items
for hotel executives.
At the end of that quarter
century of concessions, the hotel
chain would for the next 15 years
be paying only half of all taxes
that apply.
Based on this agreement Sandals
had injected millions of dollars
in acquiring and refurbishing
one hotel property and building
another on the island’s south
coast, naming them ‘Sandals
Barbados’ and ‘Sandals Royal
Barbados.’
It then proceeded to acquire
another property on the premium
west coast and had begun
preliminary work for the $400
million construction project of
‘Sandals Beaches.’
But things appeared to have
fallen apart when Mottley —
who had severely criticised the
concession when in opposition
— announced during her
2019-2020 budget speech that
the Beaches project is in doubt
because Sandals was asking for
more than what it already got.
Explaining that she is bound
by agreements of the last government,
Mottley said her administration
is unable to grant the
world-famous brand hotel any
sweeter deals.
She said last week that her
government and Sandals had,
“reached a difficult moment in
the negotiations that may result
in the project being pulled or
stalled.”
Making clear that her administration
was prepared to honour
the agreement signed by the past
Caribbean Life, M 32 arch 29–April 4, 2019 BQ
government because governance
is a continuum and failing to
uphold such deals would have
“destroyed our reputation as a
country that follows the rule of
law,” the PM who is also the minister
of finance, said the added
requirements were a no go for
Barbados.
“If you are simply asking for
what was promised then there is
no issue. I have stood here and
I have stood elsewhere and said
that the government of Barbados
remains committed to the two
agreements signed by the previous
minister of finance, we don’t
like what he did, we abhor what
he did, but by the rule of law, by
a country governed by the rule of
law that we stand by it.”
Local media reported Sandals
Chairman, Gordon ‘Butch’
Stewart, responding to Mottley’s
statement by claiming, “we were
not asking for more concessions
… It was not anything more
than what we already have as an
agreement.”
This prompted the PM to cite,
during another parliamentary
presentation this week, documents
from Sandals’ attorneys
in Jamaica pointing to legal
‘gaps’ in the agreement that may
make the hotel subjected to taxes
in laws that the country may
amend.
She said that attorney had
written the Barbados government
indicating that the tax
stabilisation clause in the existing
investment agreement was
“based on the proper theory and
is a good start, but there are two
other critical gaps.”
According to Mottley, those
gaps that Sandals wanted closed
included protection from any
new tax law parliament may
enact. The other is a request
for a guarantee that if any other
company obtains a sweeter deal,
the Sandals agreement must be
upgraded to match.
“I cannot as leader of this
country in all conscience sign
any further agreement to close
two critical gaps,” the prime
minister said.
“I simply have a duty to tell
the country that we are not
mad people, and that if all that
was being asked is all that was
promised, then it the project
should have started,” she said,
indicating that the deal is not
dead once Sandals sticks to its
original agreement chockful of
concessions.
“Barbados welcomes Beaches,
but it can’t be at any price. I hope
that we can find an understanding
. . . but there is a national
interest to be protected here for
the people of this country.”
Barbados Prime Minister, Mia
Mottley. Photoby George Alleyne
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