The Hotel Corporation was prevented from collecting over an estimated $50 million in casino fees between the years 1999 – 2002 as a result of an “administrative directive” of the previous administration.
This according to Prime Minister Perry Christie as he addressed the media during a press conference held at the Sir Cecil Wallace Whitfield Building on Monday to announce members of the corporation’s Board.
Mr. Christie also accused the Free National Movement of almost depleting the Hotel Corporation’s cash reserves between 1999-2001 by ordering $16 million to be paid into the Consolidated Fund to meet the Government’s shortfalls in revenue.
Up until 1998, the prime minister said, the corporation collected up to $20 million annually from casino fees under the provisions of casino management agreements.
“With these fees, the corporation was able to fund the acquisition of properties, build and renovate hotels and carry out other touristic activities. However, in 1999, by administrative directive from the then-government, the corporation was directed to cease collecting casino fees. This was done even though the corporation did not terminate the casino agreements,” he disclosed.
Turning his attention to the Radisson Cable Beach Resort, Prime Minister Christie said although this major asset of the corporation is debt-free, last year it incurred an operating loss of $3.5 million. This year, he added, the hotel will suffer a projected operating loss of around $12.5 million, due in part to damage caused by Hurricane Michelle to 150 rooms, which have remained closed since last November.
These closed rooms represent a revenue loss of $1.5 million per month, he said.
“The former government left office with the insurance claim still outstanding, with no plan in place to renovate the 150 damaged rooms, a leaking roof, and with the hotel management contract which expired last February unsettled,” he said.
Adding to that, Mr. Christie said, is the fact that the 700-room resort is grossly overstaffed. The number of employees increased from 700 in 1992 to 950 ten years later. However though, the prime minister said, there are no immediate plans to downsize.
“The new board is now having to correct this situation by arranging funding to arrest these massive losses, stopping the financial haemorrhaging, settling the insurance claim, carrying out the urgent renovations in time for the approaching Winter season and dealing with the outstanding management contract, while hopefully finding a suitable buyer for the resort,” he said.
And, in addition to the Radisson Cable Beach Resort, the Cable Beach Golf Course, the Cable Beach buildings which house the Bahamas Development Bank and Gaming Board, other undeveloped land in Cable Beach, the Lighthouse Club in Fresh Creek, the corporation also owns some 11,000 acres of prime property in Andros and Eleuthera suited for extensive development.
“However, the new board will be impeded in immediately carrying out the development goals by reason of certain decisions of the previous administration which my government have uncovered since taking office as they relate to the cash reserves and revenues of the Hotel Corporation,” Mr. Christie said.
By Keva Lightbourne, The Nassau Guardian
