Press Release:–The Government through Invest Saint Lucia (ISL) sought to provide responses to some of the burning issues relating to the DSH Agreements and Project. Whilst the Government has deliberately avoided answering some of issues of concern, those that were addressed still provide unclear, and in some cases, inaccurate information.
The Saint Lucia Labour Party wishes to repeat that it welcomes investment for Saint Lucia and indeed Vieux Fort and its environs, but the Agreement in its present form is a bad agreement for Saint Lucia and that there should be no DSH unless the Agreement is renegotiated.
The Saint Lucia Labour Party recognises the need for and always supports foreign investment but maintains that we must not sell Saint Lucia cheaply and certainly not as the cheapest. The UWP Administration has failed to ensure that an Agreement was reached which provides sufficient and satisfactory benefit to Saint Lucia. Saint Lucia is not for Sale.
Let us examine some of the responses provided in the Fact Sheet and from the ISL Press Conference held yesterday.
- What is a Framework Agreement?
The Government continues to skirt around the fundamental issue. The Government has simply plagiarised the definition from Wikipedia and used it on its Factsheet.
Yes, Framework Agreements are supposed to provide agreement as to the way forward for the parties to enter a final agreement. It is supposed to provide a shell or framework to enter into a final agreement. It is similar to an MOU. It supposed to set out what a developer would LIKE to do and what it would LIKE from the Government in order to move to the final binding agreement. However, what we have is DSH setting out what it would be doing and the Government in turn stating what it would be granting DSH. The Agreement as signed, while called a Framework Agreement, is definitive and has finality in its language and is very clear that it is meant to be the definitive agreement. Label and titles don’t matter it, is the language which matters. So much so, it has provisions for arbitration if there is disagreement or default of either party for the commitments made.
Notwithstanding the details of any Final Agreement cannot be in contradiction to the terms and conditions of the Framework Agreement. For example, is the Government saying to us that although it has agreed that some lands can be sold between US$60,000 and US$90,000, that DSH can now decide in the Final Agreement that it will only buy at US$5,000 per acre because that figure is only in the Framework Agreement.
Of course, there will be details in documents such as Deeds of Transfer and DCA Approvals but it is a final agreement and changes to the terms and conditions can only be done by mutual agreement, i.e. both sides must agree.
So we are pleased to hear the Chairman of Invest Saint Lucia accept that they are re-negotiating aspects of the Agreement although he refused to say what has been changed. We will continue to agitate for the offensive clauses to be removed and Saint Lucia gets a better deal if the DSH Project is to go ahead. We are very clear that there should be NO DSH unless the Agreements are re-negotiated.
- What is the proposed project plan between the Government and DSH?
The Government says that it has entered into a partnership with DSH yet Clause 28 of the signed Agreement makes it absolutely clear that there is no partnership between GOSL and DSH. Furthermore, the Government of Saint Lucia has yet to detail or make available for public scrutiny the proposed plans and details for the DSH Project.
- Will there be Public Access to all Beaches within the Pearl of the Caribbean location?
The UWP Government has a history of allowing investors to deny Saint Lucians access to beaches. It is now conveniently saying that is not the case. If so, why was the sentence making reference to guaranteeing access to the beach crossed out in the Supplementary Agreement? Seeing is believing. Read the agreement.
Further, it is worth noting that there have been recorded instances in which the UWP Government has attempted to sell Queen’s Chain to developers in the very recent past for touristic projects. Allen Chastanet was at the time Minister for Tourism. And this was only thwarted at the threat of legal review of the Government’s decisions by the National Trust.
- Will Government Sell Land at US $1 an acre?
The Government says as part of its contribution to the joint project it is only leasing lands that do not form part of the developer’s private commercial parameters. The Chairman of ISL further explained that it is only land which will not be resold that will be leased at $1 per acre for 99 years. He explained that land which will be resold will be purchased by the Developer. Again, that’s not what the Agreement says. The Agreements provide for lands for the racetrack to be leased and lands for other phases to be leased or purchased (Clauses 2.6 and 2.8).
The Agreements do not provide nor is there any evidence that this is a JOINT project! If so, what is the shareholding between GOSL and DSH? And what is the totality of GOSL contribution?
Surely the people of Saint Lucia, should know what their stake in a project is.
- Will 840 acres of land be given away to one developer?
First, the Fact Sheet does not challenge in the first instance the scale of the land to be involved is in fact 840 acres, and not 700 acres as originally suggested by ISL. Even if some of the land will be sold, the fundamental point is that all the development and investment lands in the South have been committed to one developer. The developer need not repay the state until the end of the development period after it has sold the properties in question.
Furthermore, can the Government cite one example in Saint Lucia’s history where so much land has been given to a developer without the developer making an outright purchase of the lands in question? In fact, the only other instance, to our recollection, when this was the case was when the Government placed Crown and Crown acquired lands at Black Bay and Canelles as equity into the failed Ritz Carlton Hotel Resort & Golf Course Project.
We know the involvement of Allen Chastanet and the UWP Government in this and the last SLP Administration had to reacquire these lands and compensate the former owners where applicable. It appears that Allen Chastanet has not only, not learnt from this past folly, but his decision making and judgment unfortunately shows negative regression in the matter of DSH.
The signed binding Agreement provides the parameter for the developer to commence his investment. As said earlier, it is understood that further details will be added but they cannot be disadvantageous, to what has already been agreed with DSH. Of course, all the lands will not be transferred immediately. The Government has committed over 840 acres to the developer. The Government cannot now say it will not provide the lands when required by the developer.
Are you aware that Clause 2.4 requires Government to get the written consent of the Developer before it can transfer or dispose of title to any of the Land identified for the Project?
- Are livestock and pig farmers going to be dislocated and what is being put in place to protect their businesses?
The Government agrees that there will be dislocation. We await what arrangements will be made. The Government has also not addressed the burning concerns as to the requirements and extent of the proposed Equine Disease Free Zone and how many farmers will be affected by its requirements.
- What will become of the VF landfill?
The Government says that the Landfill is not part of the Pearl of the Caribbean project.
Whilst at present the Landfill area will not be used for Phase 1, can the Government honestly say that it is not the Developer who wants the Landfill closed and decommissioned or that the land has not been reserved for another Phase? Furthermore, the landfill is right across the road from the proposed race track and proposed high-end villa properties. Will the Government also indicate to the public what are the potential sites for the new landfill? And how much it will cost the state to establish a new landfill and decommission the existing one? And further, does this mean that these costs will be borne by the state?
- Will the George Odlum stadium be demolished as part of the DSH Project?
We are pleased that the Chairman of ISL has guaranteed that the Stadium will not be demolished. However, he needs to explain what he meant. Firstly, the Agreement agrees to include the land where the Stadium to use to attract academic campuses to the Project and secondly, the Chairman said the area will be used to develop the area for educational purposes. So the Stadium won’t be broken down but the area where the Stadium is will be used for educational purposes as part of the Project. I think the people of Saint Lucia need further clarification. We need the Government to state clearly to the young people that the Stadium will be available for sporting purposes. Who will own the stadium? Why was it necessary to include the National Stadium into lands that can be leased or purchased by the developer?
- Is the Saint Lucia Government taking all the risk on the DSH Project?
The Government says this is a joint project and that the Saint Lucian Government is contributing to the Project. What will the Government and People of Saint Luica be receiving in return? Is there any revenue sharing arrangements for gaming and betting, for hosting races or television broadcasting? How can there be a joint project if there is no partnership?
- Are there environmental safeguards?
The Government should make the Environmental Impact Assessment (EIA), if one exists, a public document. It is our information that an EIA has not yet been commissioned or completed, which is contrary to the Prime Minister’s pronouncement at his press conference two weeks ago.
- Will the developer get all the profits?
The developer will get all the profits. If this is a joint project and the Government and People of Saint Lucia are making such substantial contributions then there should be consideration of Government sharing in profit.
- Is DSH getting an exclusive deal that would restrict future investments?
The Government says the exclusivity is only in relation to other integrated developments. The Legal Counsel for ISL also explained that the exclusivity was only against other projects that are integrated.
That is untrue. The Agreements (Clause 9.3) clearly states that Government warrants that it will not approve other licenses for a casino, for wage and betting for horse racing and for other free zones.
- What are the fail safes for Saint Lucia if the project has challenges?
The Fact Sheet is not correct.
The buy-back clause does not ensure that Saint Lucia always has ownership of the lands. That is false. Nor does the buyback require that Saint Lucia only pay for the land.
The buyback provisions gives the Developer the OPTION within the twenty four months from December 2016 to ask Government to buy back the lands AND infrastructure which is on the land. Saint Lucia does not have any option to buy back. It is ONLY the developer that can ask Saint Lucia to buy back.
- Is Citizenship by Investment Programme being changed solely for DSH?
The Government says that it will always act in compliance with the CIP Act and Regulations and it will not favour DSH.
The Framework Agreements provides that the Government will try to reduce processing time for applications associated with DSH and that a certificate of citizenship will be issued within five (5) weeks. It is not possible under the present requirements for due diligence to issue a certificate within 35 days.
- What is an Escrow account?
The problem with the Escrow Account is what the monies which are held are going to be used for. Monies should not be used for the operations of the race track and funding horse races. Therefore, citizenships of Saint Lucia should not be granted to DSH to be used for that purpose.
In any event, the Escrow Account should be held in Saint Lucia in one of our regulated financial institutions.
There has to be greater oversight and management of the Escrow Account by the Government of Saint Lucia and not be left to the sole discretion of the Developer.
QUESTIONS FOR THE GOVERNMENT
Now that the Government has started to provide clarification, the People of Saint Lucia would surely like to know more about the DSH Project, not just the questions which the Government has asked itself. The Government itself admitted that it has finalised the deal for Phase 1.
- Can the Government confirm if there is a Tripartite Agreement or MOU between DSH, GOSL and the China State Construction Engineering Corporation Limited?
- If so, does the Agreement provide for the number of Chinese workers who would be brought to work for the construction of Project?
- What incentives have been provided by the Government of Saint Lucia to China State Construction?
- What is the construction cost of the Phase 1 of the Project?
- How much capital is being provided by DSH for Phase 1, not just for the race track?
- Has DSH being granted CIP Status for Phase 1 and how much is to be financed out of CIP?
- How many citizenships are to be provided to DSH for Phase 1?
- Has the Government or its agencies ever undertaken a financial due diligence audit or report on the proposed development?
- Who are the partners of the developer and who will be providing the necessary capital for the project?
(Statement today by Doctor Ernest Hilaire, Saint Lucia Labour Party Spokesman on Investment)