The Grand Lucayan Resort. Photo: Shawn Hanna/Tribune Staff
By KHRISNA RUSSELL
Deputy Chief Reporter
THE government has to date spent $9.2m on operations and payouts to line staff since it acquired the Grand Lucayan resort in Grand Bahama, The Tribune can reveal.
A high-ranking government official on the request of anonymity confirmed $6m in taxpayer dollars was spent on operational costs and $3.2m paid to line staff who opted to receive voluntary separation packages.
However there has been no money expended on capital works projects.
The figure sharply falls below Progressive Liberal Party deputy leader Chester Cooper’s estimation on Tuesday that $14m in taxpayer funds has been used since the government temporarily took over the hotel.
He called the exercise a “frolic” as the PLP doubled down on criticising the government’s handling of Grand Lucayan employees and the execution of the plan to sell the resort. He further called for greater accountability in the spending of tax dollars.
His chiding yesterday sparked a defence from Tourism Minister Dionisio D’Aguilar.
He said it was inevitable there would be money spent as the resort transitioned to a new buyer, but everyone would agree that it is better to take action than to do nothing at all. He noted that even under the PLP the resort had to be subsidised.
The minister said: “I am a little dismayed that the word ‘frolic’ would be used to describe a situation where the government of the Bahamas is trying to create a good circumstance out of a bad one.
“Yes, there will be expenditure while we transition from one situation to the next, but I think everyone would agree that doing nothing would have been disastrous for the economy of Grand Bahama.”
Mr D’Aguilar added: “Even under the PLP the property had to be heavily subsidised by the government. It would have been extremely irresponsible for this government to stand aside and let the property meet the same fate as the Royal Oasis. We are very hopeful that a new purchaser will be selected for the Grand Lucayan in the shortest possible time.”
Mr Cooper has called on the government to be transparent and accountable in this regard. Both he and Englerston MP Glenys Hanna Martin insist there has been no public account of the money matters relating to this hotel.
He said on Tuesday: “The government’s handling of the Grand Lucayan sale and the myriad of issues involved would be laughable were the stakes not so high.
“We are now learning that a settlement for managers who wish to depart the resort is being arbitrated by the Industrial Tribunal in Grand Bahama, and the voluntary separation involved in this tranche of layoffs will cost taxpayers $3m-$5m.
“This is in addition to the more than $3m already paid to separated line staff, plus a reported $3.5m for renovations. We can add to that amount the $30 million in cash paid to (former owner) Hutchison upfront for the hotel before the sale was completed.
“Added to that amount is the reported $35 million mortgage the government has executed with Hutchison, and the associated closing costs of the sale.
“On top of that is the running total of government subsidised operating costs for the hotel, at last an estimation by the government to be just shy of $2 million per month.”
His comments came after it was revealed there was an ongoing impasse between officials and Lucayan managers.
The managers have demanded $5m for voluntary separation packages for those who have decided to leave the hotel. However, Michael Scott, chairman of Lucayan Renewal Holdings Ltd, the state-owned vehicle that owns the hotel, said only $3.1m can be offered.
Unable to reach an agreement, the union has sought intervention from the Industrial Tribunal in Grand Bahama.