Government continues to record heavy losses on loans made to private investors and quasi-Government agencies.
These revelations are contained in the just released 2013 Auditor General Report which was laid in the House of Assembly yesterday.
Under the caption Loans Receivable By Private Entities, the report states that a loan in the amount of $2 million was made to Southern Golf on September 25, 2009, but no loan agreement was entered into by the parties and no repayments or interests have been received from Southern Golf to date.
This was reported in previous Auditor General reports but still no action has been taken to rectify the situation.
The report also noted that two amounts totalling $4 666, 781 were advanced to Needham’s Point Holdings Limited to facilitate the construction of the Hilton Hotel.
However, this entity has failed to make payment toward the loan as required and the Auditor General said there was no evidence to show that the Treasury Department had made any efforts to recover the outstanding amounts. It was also noted that as at March 31, 2013, no formal contract existed between the Government of Barbados and the Barbados Tourism Investment Incorporation (BTII) in respect of sums advanced to the agency. There were also no repayments received from BTII during the year under review.
Accounts receivable in respect of the BTII were reported in the Accountant General’s Financial Statements (Note11) as $141 500 000 with accrued interest as $19 351 206.
No further information was produced to verify the status of these receivables which had been reduced by $97 885 949.83 in July 2011 without adequate explanations.
The Audit Office is therefore not in a position to verify the accuracy of this account.
The report further noted that the government of Barbados had granted a loan in the amount of $145 328 264.23 to Hotel & Resorts Ltd back in July, 2002. This was repayable on a semi-annual basis over a 20-year period at a rate of 7.25 per cent per annum on reducing the balance.
Cabinet had subsequently agreed that effective 2010-2011 an amount (approximately $10 million per year) should be included in the Annual Estimates Of Expenditure representing principal and interest due for the two years prior, until the loan is written off or repaid.
The report noted however, that only $7 million was provided during the financial year.