17th April 2019

Barbados government to investigate Sandals resorts “exceedingly egregious” concessions

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By Caribbean News Now

By Youri Kemp
Caribbean News Now associate managing editor
[email protected]

WASHINGTON, USA — While addressing the second annual Washington DC Panel Discussion Series hosted by the Boston University’s Global Development Policy Centre and United Nations Conference on Trade and Development (UNCTAD), Barbadian prime minister, Mia Mottley stated that her government is in the process of founding a select committee to review concessions given to businesses in the hotel and tourism sector.

Mottley also stated that the hotel and tourism sector, on the whole, can contribute a lot more to the economy of Barbados.

By directly referencing Sandals Resorts International (SRI), owned by Jamaican business magnate, Gordon “Butch” Stewart, Mottley said she recalled that in her budget presentation in March that she had to remind “a large investor in the Caribbean that we don’t run a company, we run a country and we don’t have the ability to play fast and loose with the kind of egregious requests and that I consider the rule of law paramount because Barbados has one asset, its reputation.

Mottley also added: “The last government awarded tax incentives that were exceedingly egregious over a 25-year period, fully, and then another 15 years after that. They wanted even more on top of that. Also, I made the point that I will honour the agreements of the last government because not to honour them would cause immeasurable consequences to our reputation and to honour them will cause a large measurable hit.”

SRI and the Mottley administration have been engaged in intense negotiations over Mottley’s claims that the concessions granted to SRI by the previous administration were way too excessive on top of Stewart’s SRI claiming wanting more concessions on top of those already granted by the previous government, in which the Mottley administration said flatly no!

Stewart claimed that he was not asking the Mottley led Barbados Labour Party for more concessions, but merely just a continuation of the arrangements already made by the previous administration to which Mottley had already agreed, but not before she delivered a series of new requests made by Stewart and SRI to her new government for greater concessions than before that Stewart claimed they never made or intended to make.

During Mottley’s maiden budget speech to parliament in 2018, she revealed that Sandals was seeking to be “indemnified if any future parliament at any stage in the next 40 years were ever to tax them for anything in the industry for any goods or services that others in the industry were paying taxes for.”

The prime minister also said in parliament: “We welcome Sandals here and the jobs it has provided and everything it is doing in Barbados. We are certainly open for business, but it cannot be at any price. And in our current predicament in the middle of an IMF program Mr Speaker, there is a limit even to what we can accept.”

All of this has apparently affected SRI’s plans to start development on their US$400 million “Beaches” project which had already started at the old Almond property in St Peter and one that Mottley and her team had already toured along with Stewart and SRI officials.

While SRI claims that the current disagreement on taxation and concessions with the Mottley government in no way affected its “excellent relationship” with Barbados and that it would continue to “work toward doing more and more for the island because we remain confident that Barbados is in good hands,” rumours over whether or not the project would move forward have started to swirl and the project is in doubt.

There is no word on when the select committee comprised of private sector, and public sector officials will be formalized and begin their investigatory work on concessions in the tourism/hotel sector; and there is no further delineation as to what would be expected from the review committee, what powers they would have and what the government would do in the face of information found and presented by the select committee.

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