THE caption is the title of a tune from a 1940 Rodgers and Hart musical, recorded as recently as 2014 by Lady Gaga. As we take a look at the currently proposed Desert Star Holdings Ltd.’s development for Vieux Fort, we might want to add “Bedazzled” to that title.
The goalposts have shifted. Just as we were becoming used to the CIP “developer” proposals of 140-160 room luxury hotels and costs in the region of US$150m to US$200m, all of a sudden we have a bewildering proposal for expenditure of US$2.6 billion. The brain can’t process it, struggling as it is to determine just what US$200m in luxury hotel development represents. We’re bedazzled, eyes glazed, mouths wide open. US$2.6 billion? That’s nearly eight times our national budget.
First thoughts were that a development of this magnitude plunked down in one location on the island would surely cause us to capsize about that point, as this severely unbalances our development. But then, we still don’t know what’s really proposed except that it envisions a marina, a luxury resort and shopping mall complex, villas, a casino, and an equestrian, (horse riding), centre. Nothing unusual here, as just next door, three miles or so away at Black Bay in Vieux Fort, the CIP “developer” there proposes a master development which includes, (you guessed right), a marina, luxury hotel, villas, and an equestrian centre.
Then we were told that, in order to cement the deal with Desert Star Holdings, government would have to amend the current laws governing the citizenship by investment scheme, removing the limit of 500 on the number of passports which could be sold in any one year. That number had been inserted in the legislation by the previous administration, presumably to bewitch the nation into thinking that St. Lucia’s CIP was an exclusive one. Now we know how easily that “spell” can be changed.
But we are bothered when we are also told that while the previous administration had been negotiating this deal with Desert Star Holdings for three or so years and had not been able to conclude it, this new administration has been able to do so in the three months that they have been in office. This, with the only changes which have been reported to us being the relatively insignificant ones related to the number of passports to be made available for sale, reducing the period of time required for processing them, and including sport as an approved CIP development activity so as to accommodate horse racing.
Now, the former administration is claiming that the current administration has not subjected this proposal to proper due diligence, while the current administration claims that the previous administration did not take advantage of the technical capability of Invest St. Lucia in the conduct of its due diligence exercise, and dragged its feet. The truth will probably be much more interesting than what we’ve been told so far.
We’re bewildered by all of this talk of due diligence, but US$2.6 billion is a bewitching figure and it can lead to the strangest of things, not least of which is the fact that we’re also told that some of the conditions in the Memorandum of Understanding between Desert Star Holdings and the Government of St. Lucia are top secret. We can understand a need for confidentiality during the negotiation stage of an agreement, but why is this still necessary?
Bothered, but not bewitched, and not prepared to dedicate the 24 hours which one travel website indicates is the required travel time one-way from Bridgetown to Beijing, we also avoided the bedazzlement of the sights of China and the horse-racing scene there and did a quick search on Google. From all accounts, the Chairman of Desert Star Holdings, Mr. Teo Ah Khing is a genuine tycoon, head of his own architectural design firm established first in Malaysia before also establishing in Dubai.
According to one account, Mr. Ah Khing describes his period in Dubai as being in the right place at the right time, and his firm’s website lists several projects which were completed there in addition to those in Malaysia. The last of these Dubai projects was a racecourse designed for the ruler of Dubai.
Born in Malaysia of Chinese parents, Mr. Ah Khing is quoted as stating that his goal has been to develop thoroughbred horse racing in China, and his firm has designed two racetracks in that country. He is the founder and Chairman of the China Horse Club, an exclusive group, membership of which costs a minimum of US$1m.
The China Horse Club also hosts the China Equine Cultural Festival, established in China in 2013, with a race event then held in Singapore in 2015 before the event returned to China in 2016. Mr. Ah Khing seems intent on achieving his objective of establishing thoroughbred horse racing and breeding in China, and has established links with the international horse racing and horse breeding communities in his efforts to promote this aim. To all intents and purposes, Mr. Ah Khing seems to be a successful businessman who has developed a love for horses and horse racing, and aims to reintroduce the sport to China.
The Desert Star Holdings Ltd. website indicates that that company is a management and investment company in the horse racing business, and presents the Tianjin Equine Culture City in China, an 827-acre thoroughbred horse community designed to appeal to China’s high net worth individuals, on its “Projects” tab. There is no indication of ownership of this project or on its state of construction.
What then would lead Desert Star Holdings Ltd. to decide that St. Lucia, situated over 24 hours by air from China, would be the ideal location for a facility similar in size to that proposed for Tianjin? We can’t answer that, but we do know that the first thing that our government had to do as part of the agreement with DSH was to remove the limit on the sale of our passports. To raise US$2.6 billion will “only” require the sale of 8,667 passports. As we’ve discussed before, once the passports are sold, the developer benefits from interest free, risk free money, and his profit, at whatever level that he determines, is guaranteed. Whatever has been constructed will be owned by the external “investors” who have acquired our passports; we, get the cleaning jobs.
At some point we are going to have to step back and ask ourselves what “development” means for us, and whether that really means simply providing enclaves for the newly ultra-rich of the far east who see our passport as one more trinket in their possession. Because that is what that development in Vieux Fort represents: 700 acres devoted to ultra-rich Chinese where we’re told that even our new abbatoir at that location cannot process pigs as its too close to the proposed location for the horses. Somebody needs to explain that.
Tourism is our dominant industry and currently accounts for about 20% of our employed population. It is a service industry, and we must be careful to instil the highest standards of service provision, and pride in the provision of that service, in those of us employed within this industry. It will be difficult to maintain that pride in the enclaves which we are about to establish.
We also continue to raise the issue of the impact which these CIP schemes will have, particularly on agriculture, on construction, and on other labour dependent activities, including on our existing tourism plant. Not to mention the impact on our national psyche.
In closing, there is one more word that should be added to the title in describing the effect of this US$2.6 billion proposal on us. We are Bewitched, Bothered, Bewildered, Bedazzled, and Bamboozled by it.