During his nine-hour contribution to the budget debate that wrapped up Thursday morning, former Prime Minister and Member of Parliament for North Abaco Hubert Ingraham said he is not opposed to concessions for proposed developments, but providing $1.4 million annually to Club Med, San Salvador for seven years, is a “raid on the public treasury.”
Mr. Ingraham raised questions surrounding the government’s involvement in the marketing of Club Med, which closed in the fall of 2001 due to severe fall-off in tourism travel following the September 11 terrorist attacks on the United States and damage caused by Hurricane Michelle in early November of the same year.
Mr. Ingraham expressed displeasure at the provision of the Heads of Government Agreement signed on May 23. He said the provision regarding marketing is a “cash give-away” by the public treasury to Club Med in an effort to fund its operation.
“We want to develop resorts in the Family Islands,” he said. “We want Club Med to succeed because if it succeeds, it may attract some additional people to build down there. If the argument is that San Salvador hasn’t been adequately marketed as a destination, it is quite appropriate for the government through the Ministry of Tourism, to spend monies with Club Med to promote the island. This agreement though, isn’t talking about that.
“This agreement is about subsidizing Club Med’s operation and it refers to marketing and promotions. So what the agreement does and what the prime minister intended are two different things.”
Prime Minister Perry Christie explained that in negotiating the agreement, it was noted that there is an incredible opportunity to create a new business in the Bahamas through diving and Club Med is one of the principle companies to facilitate that.
But Mr. Ingraham urged the government to structure another agreement. He said the present agreement should not be left as is, especially when other hotels are not doing well.
Mr. Ingraham then referred to the $4 million the government has agreed to pay for marketing activities for Kerzner International for the next five years. He said the initial reason for that provision under the Free National Movement government was to assist Kerzner to establish the resort in The Bahamas.
Prime Minister Christie said, “When the question was posed to my government as to whether or not it would continue these special contributions for special promotions and marketing arrangements, we agreed on the premise that they said they are moving the investment to a totally new development to move to the level to compete with Disney.
“Right now, they are second in awareness in the United States right behind Disney. To move to the level where they can compete with Disney is so breath-taking and awesome in its magnitude, that one would have ordinarily agreed to partner within that regard.”
Mr. Christie said the fact that Kerzner has chosen to invest an additional $600 million in the economy demonstrates the confidence the developers repose in the country’s stability.
Mr. Ingraham, meanwhile, said overall the agreement bodes well for the tourism sector and the Bahamian economy. He said he looks forward to continued partnership with Kerzner – whose Atlantis development was born during his administration.
By Hadassah Hall, The Bahama Journal
