BRIDGETOWN, Barbados, Friday June 1, 2018 – A country with the third highest debt in the world, “egregious” contracts signed just days before the May 24 elections, and foreign reserves that are at a “tenuous” stage – generally, an economy that is in far worse condition than the recently ousted Democratic Labour Party (DLP) administration had let on.
Those were the findings of the new Barbados Labour Party (BLP) administration, within a week of taking over the reins of government following a clean sweep at the polls last Thursday.
Prime Minister Mia Mottley disclosed the state of affairs yesterday afternoon at the first post-Cabinet press conference. She said the country is BDS$1.7 billion (US$850 million) in debt and the country is “in need of serious, urgent action”.
“As of the 30th of September last year, outstanding wire transfers as per the Accountant General’s records were BDS$621.4 million (US$310.7 million). University of the West Indies, as per the last audit confirmation, was owed BDS$229.7 million (US$114.85 million) and state owned enterprises BDS$467.7 million (US$233.85 million), bringing to a total of BDS$1.315 billion (US$657.5 million),” she told reporters at Government headquarters.
“And when we add to that approximately BDS$345 million (US$172.5 million) owed by the Barbados Revenue Authority [to taxpayers] you see that we are on or about approximately BDS$1.7 billion (US$850 million).”
Mottley added that foreign debt payment will become due between June 5 and 18, which, she said, “represents a high point of foreign debt payment for us over the course of the month of June to the tune of BDS$100 million (US$50 million”.
“Our foreign reserves are at a tenuous stage…We have a state of affairs where our deficit is unacceptably high. Indeed our debt represents the third highest in the world after Japan and Greece,” Mottley said.
To make matters worse, she said there was still the sewage mess on the south coast to attend to and “I am now being advised that there are issues with the Bridgetown sewage project…with respect to failing equipment as well as the same woeful state of affairs with respect to garbage and the absence of garbage trucks, [and] the Transport Board”.
The Prime Minister also revealed that her team had discovered that even after Parliament had dissolved, and in some cases just days before the elections, the DLP government signed off on a plethora on contracts and concessions.
Mottley said there were unreasonable contract extensions, numerous renewals at statutory corporations, and even the approval of more than 150 permits to taxi and tour operators in the two and a half months after Parliament’s life ran out.
And a day before Barbadians went to the polls, tax concessions were granted to the Hyatt Hotel Division Developments Inc., including import duty, excise tax, Value Added Tax (VAT), tax on all supplies, motor vehicles, food, alcohol, beverages, and even construction supplies. This is although the Hyatt, which is embroiled in a legal battle, cannot yet start construction.
The Prime Minister also cited a contract signed on May 8, which saw the Government agreeing to a deal with a company called Global Ports Holding PLC that would grant them a 30-year concession to operate the Cruise Pier for what she called a paltry BDS$34 million (US$17 million), in exchange for the Barbados Port Inc. to collect charges from cruise lines. Under the agreement, the Government would receive one-sixth of the current passenger charge, and one-fifth of any increase in certain other charges.
“I will ask the Attorney General as well as the lawyers for the Port to advise on this as a matter of urgency, particularly since this contract seems to be tied to a Berth 6 contract which started with concrete piles being built in the Port in advance of any contract being entered into.”
The Prime Minister also revealed that on May 7, another contract was signed and incentives given by the Ministry of Finance to a company called Berth 5 Projects Limited, as well as to Vision Developments Inc., the company behind the proposed US$100 million Hyatt Centric Resort project.
The Prime Minister said Berth 5 Projects’ concessions include exemption of payments of import duty and VAT for all supplies imported or purchased locally, or used exclusively in connection with the project for a period of 22 months from when the contract was signed.
Regarding the activity after Parliament was dissolved on March 5, the Prime Minister drew reference to what she said was “the most egregious part” – the procurement of a high-end Mercedes Benz AMG GLC on April 12, to be used by a director of sales for the yet-to-be built Hyatt Resort, which would cost taxpayers more than BDS$330,000 (US$165,000).
“I have no bias against any person, and if investments are made for the good of this country, we will do it. But I’ve asked for all these things to be reviewed urgently,” Prime Minister Mottley said, adding that “there was an attempt to tie any Government’s hands with the appointment of personnel or the renewal of contracts and leases”.