$120 million guarantee

estimates2013ronaldtoppinGovernment has been forced to pay two “bond holders” $120 million related to its guarantee of a loan of that equivalent in United States currency for the stalled Four Seasons Project.

Barbados Labour Party spokesman Ronald Toppin made that claim this afternoon on the third day of the Estimates Debate in the House of Assembly, and he said both Minister of Finance Chris Sinckler and Minister of Tourism Richard Sealy were keeping Barbadian taxpayers uninformed about it.

The St. Michael North MP said having received Parliament’s approval in 2011 to guarantee the US$60 million in finance provided by Trinidad’s ANSA Merchant Bank via credit facility funded by private financiers, the Freundel Stuart Administration was now poorer by $120 million.

“Mr. Speaker do you know that in the dead of night this US$60 million government guarantee has been called by the bondholders, Sir, in relation to that project. And that $120 million has been paid over by this Government to two bondholders in relation to that project without a single word being said to the people of this country. Not a single word,” Toppin alleged.

“Just after Moody’s downgrade last year, when we went down to junk, one bondholder called in his US$24 million one time (and) said he wasn’t keeping junk and then in January of this year the second bondholder wouldn’t roll it over any more, he called it in too, US$36 million and all this without a single word being said by this Government to the people of this country, not a single word.

“This is absurd. There is no point calling for heads to roll because over there the ‘Eager 11’ run things and if the Prime Minister don’t watch out his head will roll too, so there is no point in calling for heads to roll.

“It is extremely disrespectful to the taxpayers of this country for Government to have just paid out $120 million under a guarantee that we said should not have been entered into in the first place and do not say a single word to the people of this country,” he told the Lower House.

The Opposition representative said Government representatives were obligated to inform taxpayers if the state now had an interest in the Four Seasons Project.

“Is the Government now the owner of the Four Seasons Project or a substantial owner? Is the Government now, having been called in on the guarantee, also exposing itself to liability in relation to villa owners who paid down and now might be interested in pulling out?” he asked.

“Has the Government exposed itself to any further liability as a result of what was the origin of it all, the government getting involved in a project that was private sector? The major absurdity in it all is that having allowed Almond (Beach Village) to go under, you now hear the Government saying, after a very long time, that shortly they will be working with a private partner to revive the enterprise.”

Toppin reminded the House that at the time the guarantee was discussed and approved there the BLP had warned against its adoption because “Government was in effect guaranteeing private villas with taxpayers money”.

He also found it “even more suspicious” and “an uncanny” coincidence that, according to him, the sale of Government’s remaining shares in the former Barbados National Bank to its Trinidad owner Republic Bank took place at the same time Government had to pay the bondholders.

“No doubt that the sale at that time took place to be able to pay the bondholder in relation to the guarantee,” he asserted. (SC)

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