straight to the point – from different points of view

Development the THA way

Development the THA way

There are few things that the various political parties in Tobago agree about. I cannot blame them, as such is the nature of politics. Yet, there is one lament on the island abut which every political party and concerned observer will agree. It is that Tobago needs to develop its economy and that the most critical part of that is the need to create income streams for the local government.

To achieve this we need to facilitate the creation of productive businesses and a conducive business environment. We all know that such an effort costs money. Generating income in the future means investing significantly and wisely now. All the parties in Tobago agree with the principle that more needs to be allocated for development expenditure if we are to have any chance of being net contributors to the national treasury in the future.

We regularly therefore hear the calls from all and sundry for a greater allocation in the national budget for development expenditure in Tobago. There is no disagreement on that score. In fact, the PNM in Tobago has long boasted about the benefits of their relationship with the PNM administration in Trinidad and promised that it would bear fruit partly in the form of better appreciation of our needs, and delivery against those needs. We can safety say that with regard to development expenditure, that has not happened. The share of the budget allocated for development in Tobago has remained stagnant in the face of this supposed excellent relationship.

Tobago needs therefore to ask itself how best to go about the task of winning from central government, a share of development expenditure more in line with its needs. Part of that argument must be a recognition that any income generated by Tobago goes directly to the consolidated fund managed in Trinidad and of which only abut 4% is returned to Tobago. In other, very simple words, profitable investments in Tobago benefit Trinidad more than Tobago. This is a concept seemingly not understood by our leaders either in Tobago or Trinidad. It is a subject I will return to in greater detail in the future.

But the quantity of the development budget is not the only consideration. The quality of the investments will play a critical role. If the development budget is used to finance ill considered investments that fail to produce positive returns, then we end up in a worse position than before especially as we now evidently plan to borrow funds to support our Tobago development thrust. I decided to assess how well we have been spending the development funds that we have received so as to be able to gauge whether increased funding would in fact achieve the desired objective of net positive returns. Failure would result in long term finance costs that curtail even our recurrent expenditure. We cannot afford that.

To gauge how our current development projects are performing, I decided to look at two investments that were announced with great fanfare and the implied promise of satisfactory returns. It was reported that in 2014/15 two properties were acquired by the Tobago House of Assembly (THA) at a total cost of 32 million dollars. They were Sanctuary Villas at 28 million and Manta Lodge Hotel at 8 million dollars. How have they performed and what does that performance tell us about how our very scarce development dollars are being spent?

In 2018, some four years after the purchases, THA Tourism Secretary Nadine Stewart-Phillips was reported as follows:

Stewart Phillips said an international investor was currently looking at developing one of the properties.

We actually have an international investor that is looking at developing Manta Lodge for us, so based on feedback from the investor, we would determine the way forward.

Sanctuary Villas, that would depend on what our allocation in the budget is, if we are going to focus on Sanctuary. However, once investors come forward and they are willing to develop, we are always open to conversation, but we would definitely be placing some emphasis on Manta Lodge, which is a dive hotel and of course the dive niche is very important to Tobago’s tourism,”

What is now clear is that these properties were bought without a plan of action. It defies belief that four years after acquisition, there is no firm plan of what to do with them. Those of us who have been advocating for passage and implementation of the procurement legislation will point to these outrageous sums being wasted on spurious decisions taken by our political leaders as clear evidence of the need for more transparency and accountability and the publication of Needs Analyses, Project Plans and Financial Projections as a minimum. I doubt these purchases could have passed such scrutiny and we would have saved tens of millions of dollars.

In an earlier column I told you that I had submitted some requests for information under the Freedom of Information Act about these two properties. I have now obtained the responses which I can share with you. I will reserve comment for a later date. I have no doubt that you will understand the significance of the figures without comment from me.

Sanctuary Villas:

Purchase price

24,000,000.00

Security Costs

2,003,074.75

Maintenance Costs

1,000,871.91

Other Costs

296,926.36

Manta Lodge Hotel:

Purchase price

8,000,000.00

Security Costs

1,623,327.19

Maintenance Costs

541,379.34

Other Costs

1,616,708.91

Here is an official statement on the current state of affairs as at June 2019 directly from the government:

The Tobago House of Assembly is in the process of selecting operators for two hotels acquired by Government in 2015. 

The Manta Lodge was acquired November 19, 2015, at a cost of $8 million, while the Sanctuary Resort was acquired in two parts: the first part of the property was acquired November 17, 2015; the second part on August 8, 2016, at a cost of $24 million.

Speaking in the Senate on Tuesday, Minister in the Finance Ministry Allyson West said no funds have been spent to outfit either property.

Questioned by Opposition Senator Taharqa Obika on whether additional funds were required to bring the properties into operation, Minister West indicated that this has not yet been determined. 

“The THA is seeking operators for these properties. As and when those operators are identified and arrangements finalised, a determination will be made as to whether it needs to incur any money and how much will have to be incurred.”

Questioned further on a timeline for the completion of these processes, West said, “The THA is working assiduously on these matters and is trying to conclude this as soon as possible.”

I leave you to digest the information I have presented and to assess their implications for how our money is spent and whether we should be allowing the administration to carry on in this vein. I have more to say so stay tuned.

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