St Lucia government must stop ‘silence’ on DSH – Hilaire

The government in St Lucia continues to be silent on a number of issues around the Desert Star Holdings (DSH) development, according to the St Lucia Labour Party (SLP).

And since public protests in May, the opposition has heard “nothing” from Prime Minister Allen Chastanet’s administration on questions raised.

“The silence of the Government cannot be allowed to continue. Answers must be provided to the people of Saint Lucia,” said Earnest Hilaire, SLP MP for Castries South.

“You will recall the prime minister stated that phase one of DSH had been signed, sealed and delivered with the developer. Yet, we cannot get responses to some of the basic questions which were asked.

“Accordingly, the St Lucia Labour Party wishes to repeat some of the questions which were asked and we think which merits a response from the government.”

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What questions are the SLP asking?

1. What is the value of phase 1?

2. Has phase 1 received DCA approval?

3. How much money is DSH bringing for the commencement of phase 1?

4. Has phase 1 been given CIP approval status?

5. How many passports have been allocated to phase 1?

6. Is DSH leasing the land at US$1 per acre?

7. Will DSH be allowed to use money from CIP held in escrow to operate the racetrack?

8. Have the farmers affected by the scope of the project been served eviction notice?

9. Has there any changes to the framework agreements signed with DSH, particularly in regard to the buy-back clause, the escrow account, the exclusivity arrangements, the sale of Sandy Beach and the stadium, and the leasing of land at US$1 per acre?

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Desert Star Holdings Limited, a Hong Kong-based management and investment company, has partnered with the St Lucia government to create the Pearl of the Caribbean, a development plan for the south of the island.

The proposed project will comprise a marina, a racecourse, a resort, shopping mall complex, casino, free trade zone, entertainment and leisure facilities, eco-tourism as well as villas and apartments.

WIC News has had no response to emails asking for a response from the government on this story. Hilaire, speaking at a press conference with his party colleagues, also tackled the issue of Invest St Lucia and the Citizenship by Investment Unit rejecting the DSH application.

“You will also recall at our last Press Conference in May, I stated that the CIP Unit and Invest Saint Lucia has done assessments and had rejected the DSH application,” he said.

“In response, it was stated by the government’s spokespersons that I was misleading the public and a joint press release was issued.”

Documents provided by Hilaire show that under current proposals the latest submission by DSH for approval would not quality under current legislation – and that probability of success, due to financial viability, is low.

"It is noted in the document that the CIP [Citizenship by Investment Programme] regulations provides for some measure of CIP financing and equity financing and that in submissions, almost 90% is CIP, the balance is equity put in by the developer of which most is in the form of his professional fees,” Hilaire added.

“In the submission for phase one, the gross development cost is US$340 million. The developer claims that during construction between 500-800 employees will be at the site. During the operational phase, for the race course operations, there will be 150 persons, for equine husbandry, 3,000 persons for retail, and [food and beverage], 2,000 persons, hospitality and gaming, 2,000 persons. That’s the submission by the developer.

“The assessment of the team says that it is important to note that despite the employment figures given, the developer has not provided any details of the operational aspect of the project in which the employment figures are based. The assessment goes on.

“Based on the CIP Units required, is a need for 990 CIP units. However the developer is asking for 1,843 CIP Units which value is US$550 million. There’s a difference of US$256 Million between the development cost and the value of the CIP units being requested. In response to the financial viability, the assessment goes on that the project is highly leverage and the probability of success is low.

“In conclusion, the team makes the point that based on the analysis of the proposal, it is recommended that the Pearl of the Caribbean not be given approval as real estate or enterprise project at this time.”

Citizenship by investment boss

WIC News reported in June that the head of St Lucia’s Citizenship by Investment Unit, Cindy McLean, had been sent on administrative leave.

This followed a conflicting account on policy following the release of a joint statement from Invest St Lucia and and the CIU regarding the Desert Star Holdings project.

Since June, no further news on McLean’s future has been announced.

Hilaire said: “We’ve heard nothing about the status of this individual, whether the individual is still being investigated, for what? Has the individual been terminated?

“We have no idea and I think it is that minister with responsibility the CIP clearly indicates to St Lucia, what was the issue the CIP CEO and why was she sent on administrative leave.”