Monies associated with the Sam Lord’s Castle Hotel Redevelopment Project are not missing, Minister in the Ministry of Finance Ryan Straughn insisted as he sought to clear the air on concerns raised in the 2022 Auditor General’s Report about how millions of dollars associated with the project are recorded.
He explained that the Government took a decision not to go ahead with the amount that was committed to the project by the previous administration and, therefore, the amount recorded would be different from what was “voted for”.
“There is no money missing from the account or anything. The Chinese took the money and spent it there,” Straughn said in his clear-the-air statement during debate in the House of Assembly on Friday.
He explained that when the Mia Mottley administration came to office in mid-2018, it had indicated to the Export-Import Bank of China, which provided financing for the project, that Barbados could not afford to build a luxury hotel at the time, given the need to address a range of issues including purchasing buses for the Transport Board, purchasing garbage trucks, and fixing the sewage problem on the south coast.
“So we [said] to the Chinese Export-Import Bank, ‘we are not pursuing this in the way that it was previously contemplated’. They agreed to put in the counterpart funds for the Government. And, therefore, taking the project off budget meant that we were able to do the things that were outlined in our mission critical agenda for the citizens of this country,” explained Straughn.
“Someone clearly not understanding what took place may seem to think ‘well, money missing or something’, and I want to say to Barbadians, let us be clear here. Any Barbadian could get on the Sam Lord’s Castle bus and when they go up there they are going to see a completed hotel, which is not Four Seasons or any of the other machinations that the previous government got involved with.
“Therefore, what is highlighted in the Auditor General’s Report is just a matter of how he interprets the thing should be accounted for versus what we determined what was important for us to spend taxpayers’ money on. While he is entitled to his professional accounting view in relation to the treatment of the transaction, this Government could not allow those expenditures to come on the budget, which would have prevented us to do the things on the mission critical agenda and allow us to pick up space in the budget when we had to respond to COVID-19,” added Straughn.
In his report, Auditor General Leigh Trotman indicated that as of March 31, 2022, the records of the Treasury showed that $241,511,623 was received from the Export-Import Bank of China for the project.
However, he noted that only $65,721,609.21 had been recorded in the Assets Under Construction account and therefore, “the total asset has not been recorded accurately in the accounts”.
“The Treasury has indicated that the funds expended in excess of the $65,721,609 were not voted in the Estimates in relation to this project as required. This is contravention of Rule 60 (1) of the Financial Rules which requires that all expenditure must be provided for in the Estimates,” said Trotman in his report.
However, Straughn explained that what was recorded in the Treasury under what is called Assets Under Construction was “the money that had been expended already in relation to the project”.
Adding that it was important to understand “the context in which decisions are taken so that when you see things pop up in reports or in the newspaper, that it is clearly understood”, Straughn stressed that it would be out of place for the Government to bring onto its budget, the construction of a luxury hotel when more pressing issues had to be addressed.
“The difference between what we have on the books now in terms of assets, vis-a-vis what was spent subsequently, is that the Chinese Exim Bank took on the expenditure and the completion of that asset because the Government, this Barbados Labour Party government, determined it was not going to pursue the financing in the way that contemplated by the last administration,” he explained.
“So we weren’t putting money in the budget as the last government had committed to doing, because if we had spent the money to construct Sam Lord’s in the way that was originally contemplated, then we would not have had any money to buy the buses, the trucks, and to fix the south coast and all the other things that every Bajan knew was wrong with the country at the time,” he said.
“It must be made clear that the government of Barbados intends to sell the Sam Lord’s Castle at the earliest opportunity to be able to rid ourselves of that liability that was there.”