Former Prime Minister and Opposition Leader. Dr. Keith Mitchell has voiced his disapproval of the Congress administration’s handling of the issues surrounding the failed Citizenship by Investment-approved Kimpton Kawana Bay resort, which was being developed by True Blue Development Ltd Co., on the property previously occupied by the Flamboyant Hotel on Grand Anse Beach.
Dr. Mitchell sought to raise awareness on the issue during a press conference of the main Opposition New National Party (NNP) in St. George’s on Tuesday, days after Attorney General Senator Claudette Joseph announced that the Government is close to finalising an agreement with the developer, who sought redress before the International Centre for Settlement of Investment Disputes after the former NNP regime refused to increase financing for the project in 2021.
Dr. Mitchell provided the rationale behind his government’s decision, noting that “150 CBI applications” would have produced the resources needed to complete the “US$52.5 million project,” which commenced in 2016.
However, according to the former Grenadian leader “in 2017, the developer requested an expansion of the project to US$99 million, which means 272 CBI applications,” and three (3) years after “the escrow requirement was put in place in 2017,” the developer indicated its intent “to downgrade the project.”
The Opposition Leader disclosed that “by August 2020 the Kawana Bay developer did not put the escrow account in place but requested for another expansion to the project again, and in September 2020…requested an increased budget of US$105.1 million (and) November 2020 they requested for the budget (to) increase (to) US$110 million…citing increase in cost.”
Dr. Mitchell said that in an attempt to justify the rationale for the increase the government contracted an independent engineer to evaluate the work and the cost of the project, an assessment, which revealed that the estimated construction cost of the project was “US$ 47.4 million.”
He noted that the CBI committee had raised concerns with the Kawana Bay developer regarding two (2) companies that were receiving funds under the project.
He recalled that “in 2021, the CBI committee advised the organisation that they were concerned about the project including two (2) companies GRENCO Holdings Ltd., from BVI (British Virgin Islands) and True Blue Services Ltd., to which money collected from the applications of government CBI programme was being sent…”
“So the question, therefore, is, who are these organisations, and is the investments in Grenada?” The Opposition Leader charged.
Noting that the developer’s response to the then government’s concern was by filing the arbitration claim and expressed the view that instead of the new Congress regime settling with the developer “the arbitration should have been utilised.
“…The Government, I don’t know for whatever reason… decided to not continue with the arbitration. I don’t know if the Prime Minister understands the implications of what he’s doing…is it in the interest of Grenada?”
According to Dr. Mitchell, “the country could be left holding the bag in so many areas,” as a result of the government’s acceptance of liability on this particular project”
“What the government is doing with that particular project is beyond anyone’s imagination.
“There was an arbitration process going forward, you intervened, and literally accepted liability on behalf of the country, acquiring the facility with all the implications of the shareholders who have invested through the CBI programme, and the fact that you may be liable to the tune of millions of dollars to those persons.”
“…We have facts to show that this thing makes absolutely no sense…and, I put this down to arrogance, ignorance, and the lack of understanding of the implication, or care for the problems that …. you can face.”
In 2020, the Keith Mitchell-led NNP regime suffered a massive defeat before the International Centre for the Settlement of Investment Disputes (ICSID) when it had to find over EC$200 million to pay US company WRB Enterprises which triggered the buy-back clause in an agreement signed with Grenada to purchase the majority of shares in Grenlec.
WRB turned to the court following constant hostility to the company by the NNP over the sale of the majority shares in the utility company by the 1990-95 Congress administration of then Prime Minister Sir Nicholas Brathwaite.