NASSAU, BAHAMAS – The $16 million allocated to the Grand Lucayan resort on Grand Bahama will be used to cover existing operation costs, according to Minister of Finance Peter Turnquest.
Turnquest stressed the funding is necessary as the government continues to iron out the sale of the property.
“The Grand Lucayan was purchased with the intent to sell it as soon as we could,” Turnquest told Eyewitness News in a recent interview.
“Of course, we had Hurricane Dorian that intervened and some other matters that intervened that caused a delay in the negotiations.
“I believe that the Bahamian public is going to be very pleased at the end of the day, what results from this transaction, which we anticipate will be concluded very shortly.
“So in that borrowing you will have some support for the existing operation.
“It still has staff. It’s still operating. It still has electricity, water and all the rest of expenses. So it is intended for the support of that ongoing operation.”
By the end of 2018, Grand Lucayan’s operation costs were at nearly $1.5 million.
However, the government anticipated that cost to decrease following the completion of a voluntary separation exercise.
It remains unclear how much the government spends each month to operate the resort.
Last week, during his contribution to Parliament Turnquest delivered a break-down of Dorian related expenditure as he tabled a supplementary budget and resolutions to borrow $507.9 million, and $50 million from the Caribbean Development Bank.
Turnquest revealed that non-hurricane related expenditure is expected to cap nearly $120 million for the 2019/2020 fiscal year.
Of those costs, the government allocated $16.1 million to Lucayan Renewal Holdings, the special purpose vehicle that manages the Grand Lucayan property.
In 2016, Hurricane Matthew that caused parts of the Grand Lucayan to be shut down and the property to be subsequently taken over by the government in order to protect jobs and ensure the sale of the property.
The government purchased the resort for $65 million in 2018.
For several months, the government has been in negotiations with Holistica – a joint venture company formed by Royal Caribbean International and ITM Group – on the renovation and development of Freeport’s cruise port and the Grand Lucayan resort complex.
Turnquest said along with the government’s plans to rejuvenate that resort, is the critical need to reopen the Grand Bahama airport, which was debilitated as a result of Hurricane Dorian.
Residents have continually called on the Minnis administration to move quickly on the matter, to ensure that airlift is restored to bolster the island’s crippling economy.
However, officials confirmed just last week that 11 employees were terminated.
“The airport we recognize is a very critical piece of infrastructure that we have to get back open fully and fully serviced as it was in the past but if not better, but certainly in a more resilient way,” Turnquest said.
“The government is involved in discussions with the existing partners, Hutchison and the Grand Bahama Port Authority about the future of the airport, what that may look like from a ownership perspective, an operations perspective, and then how we might build back in a more resilient way so that we don’t continually face this.
“This is not the first time the airport has been underwater
“Those are progressing very well and I think that we will have some announcements about that in short order.
“That leads to the sustainability of the Our Lucaya project, because obviously airlift is needed to feed it.”
GBPA confirmed last week that it is in ongoing talks with the government regarding “a transition of ownership to the government”.
Turnquest noted that while consideration has been given to move the airport, given its vulnerability to natural disasters, the relocation would be too expensive among other issues.
“I think the present location is sustainable, but there obviously needs to be modifications in terms of how and where we build a new terminal building itself,” he added.
“…I think for Grand Bahama we are not asking for LPIA, but we are asking for that kind of infrastructure that would survive another similar kind of storm.
“The funding for it is a challenge. The model of operation is a challenge.”