Minister of Tourism and International Transport Kerrie Symmonds today stopped short of saying that Government would no longer be proceeding with the planned sale of either the Hilton Barbados Resort or the Barbados National Terminal Company Limited (BNTCL) by telling Barbados TODAY that privatization of the two state assets would be a “last resort” for the Mia Mottley-led Government.
The position is at direct variance with that taken by the former Freundel Stuart-led Democratic Labour Party (DLP) administration, which was eager to sign on the dotted line and to have available for use the proceeds of the divestment of both the BNTCL and Hilton, which were each valued at US$100 million.
However, the BNTCL sale hit a major snag when it went before the Fair Trading Commission (FTC) for approval, while the proposed Hilton privatization agreement was not completed in time for it to go through ahead of the May 24 elections.
Speaking to Barbados TODAY on the sidelines of this morning’s Caribbean Aviation Day Conference at the Needham’s Point based resort, Symmonds explained that “the fate of the Hilton and the future of the Hilton have not yet attracted Cabinet’s attention.
“What I can tell you is that the very last possible option before this new Government would be the sale of the Hilton,” he stressed, adding that “everything else that can be conceived of conceptually, every other possible avenue will be explored before we settle on the sale of the Hilton.
“That is the position of the Ministry of Tourism and I believe that is the position of the Ministry of Finance,” added Symmonds, who had earlier in his address to the conference said that the Barbados Labour Party (BLP) administration would take a different approach when it came to Hilton, which a passionate Symmonds told aviation and other tourism industry stakeholders “was going to be sold for spit” by the last Government.
“That is no longer the approach that will be taken. Therefore, I want to say to you please be patient with us. Please try to understand the transformation that we are trying to bring about. We are working very hard to get Barbados where it used to be and it will not be without a measure of pain and measure of difficulty, but I ask you to forbear harsh judgment.
“We have come to this point of great difficulty but we want to be sure that three years from now we will be able to say that we do not regret ourselves of the difficulty that we took,” he said.
Following the announcement of the planned sale of the 350-room property a year ago, the then Opposition BLP, which was vehemently opposed to the move, said it should be “stopped at all cost”.
In fact, leading up to last month’s poll, the Mottley-led party threatened to call out its supporters after the then Minister of Finance Chris Sinckler announced that he had found a buyer for the luxury property.
And while Sinckler assured at the time that the hotel would not be sold below its most current value, Mottley had presented documents during a political meeting to show that Hilton was valued at some $252,824,956 two years earlier, before major renovations of over $11 million.
She had argued that should the sale proceed there would have been a loss of nearly $93 million.
When pressed by Barbados TODAY to explain his comments regarding the “approach” to be taken, Symmonds emphasized: “Cabinet has not had an opportunity yet [to discuss the matter] because we are on the voyage of financial discovery about all the other things that are confronting the country right now. All of the other financial atrocities that we are trying to cope with”.
However, he was equally adamant that the planned sale of the BNTCL, which also became embroiled in controversy under the Stuart Government, which was booted out of office last month, would have to be reviewed.
“Again, the BNTCL has not yet been put before Cabinet. We are on the voyage of discovery with respect to some other financial atrocities. But the fact of the matter is that the same principle applies. The sale of the BNTCL is not at this stage perceived as being a sensible solution to the country’s economic fortunes,” Symmonds said.
With the constant slide in the country’s foreign reserves over the past few years, Sinckler had confirmed in January 2017 that the DLP Government had signed an agreement with the regional petroleum giant Sol Group for the sale of BNTCL.
However, this was met with strong opposition from Sol’s main competitor RUBIS, which filed an application in the High Court for judicial review of a decision to approve the inclusion of a 15-year moratorium clause in the sale and purchase agreement between a Sol subsidiary and the Barbados National Oil Company Limited (BNOCL), BNTCL’s parent company.
In November last year the FTC ruled against the sale of the state entity, stating that sections of the sale bid would hurt competition and were, in fact, unlawful.
When asked to comment on the decision by the BLP administration to review the planned sale of the Hilton resort, President of the Caribbean Development Bank (CDB) Dr Warren Smith, an advocate for partial or full privatization of some state entities, said he would rather not speak specifically to that deal.
However, using the airport and seaport as an example, Smith, who had earlier told Barbados TODAY that Government should consider privatizing a number of state entities, including the Grantley Adams International Airport and the Bridgetown Port, contended that the sale of state entities were a means to an end.
Therefore, if Government decides to keep them it should be prepared to put the required investment in those assets in order “to make them world-class” and internationally competitive, the CDB president said.
“That is a big ask for small countries like we have here in the Caribbean,” he said, adding that there were several examples in the region where Government assets suffered because of the lack of investment and they were forced to either sell or lease those assets to the private sector on a long-term basis.
“If you make a sale, you can use the proceeds from a sale to pay down debt that you might have incurred. So we think that [the sale of state assets] is just a practical thing. It is not ideological. It is the right thing to do when you are in those kinds of circumstances and when there are opportunities through things like a public/private partnership.
“Those are some of the mechanisms you can use in order to achieve the objective of having world-class facilities whilst at the same time not incurring debt and having the cost of running the entity over a period of time,” Smith added.