Over $5 million for Grand Lucayan VSEP offer

Exercise to be completed before the end of the year

 

NASSAU, BAHAMAS – Deputy Prime Minister and Minister of Finance Peter Turnquest yesterday revealed that the government’s special purpose vehicle (SPV) will disburse more than $5 million as part of it voluntary separation packages (VSEPs) to Grand Lucayan employees before the end of the year.

The multi-million dollar VSEP offer, includes back pay owed to those employees.

More than 150 employees have opted to accept packages. The resort employs over 400 people.

Responding to questions from the media in the foyer of the House of Assembly, Turnquest assured that the SPV, Lucayan Renewal Holdings Limited, will complete the exercise before the end of the year.

Lucayan Renewal Holdings Chairman Michael Scott originally estimated the VSEP offers would cost taxpayers around $3 million to finance the exercise.

He later advised that the line staff and managerial unions which represent employees at the government-owned resort requested payouts that exceeded the resort’s offer by $4.6 million.

This week, Scott said despite concerted attempts to negotiate and come to an agreement, the resort’s board was unable to meet the unions’ demands.

He suggested that the board will make a generous offer in the context of its budget and the country’s fiscal constraints and those who do not accept will be considered as having opted to remain at the resort.

The VSEP offer was part of an overall strategy to streamline the operational costs of the resort and put it on a path to profitability before its resale, which the governments hopes to achieve in the second quarter of next year.

Turnquest revealed to Eyewitness News Online this week that there were several “exciting business opportunities” on the horizon, and if realized, the resort’s losses of around $1.5 million per month would be significantly mitigated.

He said the resort may “even turn a profit in the interim”.

The minister was unable to divulge specifics on the SPV’s work, but expressed that the government was cautiously optimistic.

The SPV was established to hold the assets and manage resale.

Earlier this month, Commonwealth Union of Hotel Services and Allied Workers (CUHSAW) President Michelle Dorsett said the resort’s board made an offer that she believes employees will be pleased with.

She did not give details of that offer.

“At the end of the day it will be the best for our workers and our workers will be quite satisfied, and quite happy with what they will be getting,” Dorsett said.

“The offer which we received and the offer that we put forward, it will be accepted.”

Scott revealed in November that the Bahamas Hotel Managerial Association, which represents middle management, demanded $5.4 million in payouts for its members – double the resort’s board’s offer.

At the time, the chairman said the CUHSAW, which represents line staff, requested over $3 million — nearly triple the resort’s $1.1 million offer.

The government purchased the resort for $65 million, with $30 million paid up front.

It borrowed the balance from the former owners, which will be a government-guaranteed mortgage paid over three and a half years.

While Scott originally projected it would take three to six months to resell the resort following the September purchase. However, Minister of Tourism Dionisio D’Aguilar noted last month that the government expects the resort to be sold by the second quarter of next year.

A reported two-dozen entities have expressed interest in purchasing the resort.