Finance expert and Chief Executive Officer of Fidelity Bank Gowon Bowe said yesterday the government must consider the cost benefit analysis of the Grand Lucayan resort, as the board of Lucayan Renewal Holdings Limited (LRHL) enters into negotiations with a new purchaser for the property.
LRHL revealed earlier this week that it ended negotiations with Electra America Hospitality Group, which agreed to purchase the resort for $100 million, and began talks with a new, “well-capitalized” entity to acquire the resort.
Bowe said political maturity is needed as the government determines how best to divest the country of this asset.
“My personal view is the government needs to decide the cost benefit. Is it better to try and recover what was spent on it, or is it better to offload it into the private sector even if the money spent has to be taken as a loss? Because owning an asset that is going to deteriorate and dilapidate is not the ideal circumstance,” he said in an interview with Guardian Business.
“Doing remedial work just to keep it open when it’s probably operating at a loss is probably equally not as financial viable or sustainable. So, this is one of those circumstances where political maturity needs to set out where the two political parties can sit down and say we’re not going to beat up each other over this, we need a resolution to this that is for the benefit of Grand Bahamians and the wider Bahamas. My thing is, I don’t know if I want them to continue making losses just for the purposes of hubris and saying that I recovered something that you put us in the hole for. And vice versa, I don’t want to see the opposition saying well we told you so.”
The Minnis administration bought Grand Lucayan from Hong Kong conglomerate Hutchison Whampoa in August 2018 for $65 million.
This is the second failed attempt to sell the property after the Davis administration canceled a deal with Royal Caribbean Cruise Lines (RCCL) and the ITM Group, which promised to invest more than $300 million in the redevelopment of the project and the construction of a cruise port.
“I was critical at the time of its acquisition, I think government would have been better to serve as a broker and if you will an underwriter. But it took the choice and route of government ownership for the purposes of employment and that obviously has not panned out in the way that was intended, and it probably would have been cheaper to pay the staff as opposed to the acquisition. But all of that is now water under the bridge,” Bowe said.
