Sandals’ ‘demands’ rejected

There is a possibility that the Jamaica-based Sandals Resorts International (SRI) could pull the plug on its highly publicized US$400 million Beaches project which has started at the old Almond property in St Peter.

Prime Minister Mia Mottley made the revelation on Wednesday night as she outlined several measures in her first major Budget speech in Parliament.

She said her administration has been in discussion with officials of SRI, operators of the Beaches brand, over the past two weeks as they sought changes to the sweeping concessions the hotel chain was granted by the former administration when it first entered Barbados in 2013.

However, a concerned Mottley admitted “We have reached a difficult moment in the negotiations that may result in the project being stalled or pulled.”

She said her administration had worked hard to make the sprawling Beaches project a reality, despite it not being in agreement with the “excessively generous concessions” the last government issued to Sandals.

It was in October last year that Prime Minister Mottley promised that her administration would ensure that all approvals were in place so the project could get off the ground by its planned January 2019 date.

Work was ongoing at the St Peter location, with the majority of the beach development near completion.

“For us not to have honoured a contractual arrangement made by a previous executive would have destroyed our reputation as a country that follows the rule of law. And that we accepted that we were bound by the terms of the agreement signed by the last administration with respect to the Sandals and with respect to the Order under the Duties Taxes and other Payments Act Chapter 67B,” she explained.

“In other words Sir, the damage to our government and our country to fulfill this obligation would be large but measureable, but if we failed to honour the obligation, the damage would be immeasurable and affect the integrity of our reputation as a place where the rule of law obtains or where business is conducted. So we agreed that we would honour it,” she said.

However, Mottley explained that Sandals “wants and continues to want even greater levels of assurances and guarantees” than they have already received through these agreements.

She explained that the company was seeking assurances and guarantees that the Government of Barbados would “indemnify them 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”.

However, the Prime Minister made it clear that it would be unfair to the people of Barbados for her administration to honour such requests.

Insisting that she was running a country and not a company, Mottley, who said she was not prepared to negotiate in public, made it clear that there was no way her administration could play “fast and loose” with the future of Barbados.

“When we were elected last year, we promised that we would not make decisions that would compromise the stability of this country nor would we act in a manner that was capricious with respect to the stability of future generations. And in our judgment, a sovereign country cannot abandon its right to tax simply because none of us knows what lies in our future,” said Mottley.

Stating that Government had worked hard to make the Beaches project a reality in Barbados, Mottley said this was one request
she simply could not give in to, and she said she hoped the officials of Beaches would “come to view Barbados as an excellent partner”.

Mottley said Attorney General Dale Marshall would continue to meet with the lawyers of the hotel chain “but I have a duty to tell you that the project may be on stall or maybe on hold”.

“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 programme Mr Speaker, there is a limit even to what we can accept,” said Mottley.

In light of this, she said Government would establish a commission to review “once and for all”, the investment code and policies with respect to taxation and incentives, adding that a new framework was needed in order to remove the element of discretion “that is often the engine of corruption”.