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THE ISSUE: Too far to turn back

Eric Smith

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It promises to provide hundreds of sustainable jobs, earn this country substantial foreign exchange and enhance the island’s profile as an upmarket destination.
Given all these reasons, the Four Seasons project at the former site of the Paradise Hotel at Walmer Lodge, St Michael, is critical to the island’s economic welfare.
However, this project – which was previously undertaken by Cinnamon 88, a private company headed by Mike Pemberton, a well-known figure in hotel-property development in Barbados – had been expected to deliver quickly and on a grand scale. But it lost its Midas touch in early 2009 when it ran into financial difficulties.
Construction of the US$600 million hotel and villa project came to a sudden halt in February 2009 when over 800 workers were sent home.
Like a knight to the rescue, Avinash Persaud, a much touted academic and international financial adviser of high reputation, was brought in to salvage the project and ensure its completion; after all, it meant much for the national good.
Persaud, a Barbadian little known to most people on the island who had lived and made his name away from these shores, was invited by the late Prime Minister David Thompson to work with Government and use his expertise to get the project going again.
After all, the Paradise location is one of the last major underdeveloped areas on the pristine West Coast and had been lying idle for many years. Jamaican businessman and hotelier Gordon “Butch” Stewart had bought it but left it unutilised, rundown and overgrown with bush.
The derelict buildings which had once formed part of the Paradise Beach Hotel were briefly occupied by some South Asians here on contract to work on the expansion of the Barbados Light & Power plant at Spring Garden.
Famous for its idyllic beach and cyrstalline waters, the site could not be allowed to continue being an unearning asset.
So Persaud took up Thompson’s challenge and said that with at least $240 million, it could be completed.
In July 2010 Persaud said, “As a member of the National Council of Economic Advisors, I was well aware of Government’s tight fiscal position and indeed I have made my job harder by limiting the size of the Government guarantee to the minimum possible to get the project up on its feet.
“The size of the Government guarantee is not sufficient to ensure that the project does not need any further financing.
“It would have been ideal, from a private point of view, if the guarantee was twice its size. However, it would not be appropriate for Barbados.
“My job is now three times harder by keeping the guarantee to this size.”
While Government has guaranteed a $120 million ANSA Merchant Bank loan for the Four Seasons project, it will not be involved in the day-to-day operation of the facility. Persaud said Government’s involvement will be through the board of directors, four of which it has appointed.
So, there were high hopes that having paid off those whom it had owed for an extended period, the project would have been operational in a matter of months.
Indeed, in July last year Persaud was quoted in the SUNDAY SUN newspaper as saying that the project would resume in September 2010.
“Part of the multiple agreements between Paradise, villa owners, Four Seasons, Government and the new lenders is that the work will be carried out on a different basis than before.
“There will be an internationally recognized construction-management firm who will then tender and sub-contract construction work to leading Barbadian-based contractors.
“The expectation is that when the work resumes, there will be up to 1 000 Barbadian workers on site and the contracts will bring in some BDS$500 million of foreign exchange revenues over the course of the project,” he said.
But things simply have not gone as expected. Earlier this month, news came that the stalled Four Seasons Resort and private residence project needed $270 million more to be completed, with developers looking to the Inter-American Development Bank and ANSA Merchant Bank of Trinidad and “only a tiny fraction” of money also being sought from the National Insurance Board.
While the delays and need for more financing have met with some outcry, Minister of Finance Chris Sinckler has made it clear that Government will not turn its back on the mutimillion-dollar project but will ensure it is completed.  
Noting that Government could not be blamed for the project coming to a screeching halt, he said, “Let me state categorically, we will not turn our backs on this project and we are determined to see that it is not only restarted but carried to completion.”
In the meantime, many observers did not expect the project to resume until late 2012 at the earliest.
Additionally, there are other issues. A number of huge old oil tanks are still overlooking the project while a popular service station also occupies a prime spot above the planned multimillion-dollar venture.
The question is, will additional financing be required to purchase and remove both the old fuel tanks and the service station?