DSH Suing Government for Millions?

Government under no circumstances will pay to stay out of arbitration Deputy Prime Minister and Minister for Investment, Dr. Ernest Hilaire

DEPUTY Prime Minister and Minister for Investment Dr. Ernest Hilaire this week provided insight into the status of the Desert Star Holdings (DSH) Agreement with government which to date continues to generate interest.

DSH, which entered into a partnership with government (under then Prime Minister Allen Chastanet) in 2016 for the development of the ‘Pearl of the Caribbean’ project, has given government notice of its intent to take it to arbitration, since “in their view the last government did not deliver.”

That’s according to Hilaire.

The DSH project was touted as one that would raise economic activity in the south of the island and provide significant job opportunities. (The management and investment company is based in Hong-Kong).

The project, the previous administration claimed, would comprise a marina, racecourse, resort, shopping mall complex, casino, Free Trade Zone, entertainment and leisure facilities, eco-tourism as well as architecturally designed villas and apartments.

But apart from a short-lived racecourse (meant for horse racing), none of its plans materialized.

In fact, the entire DSH project was said to be ill-conceived from the very beginning by some critics.

In a video posted on the government’s Facebook page this week, Hilaire said Chastanet failed to stick to the agreement. Now DSH is seeking payment.

Government “under no circumstances”, will pay millions of dollars to that company to not to go to arbitration.

“Originally the investor was in negotiations with the previous Labour Party administration and we had been negotiating with them for quite a while. We never reached an agreement with them (because) there were too many clauses in what they proposed which we thought were not in the best interest of Saint Lucia,” he said, noting that “we then proceeded to negotiate with them for almost a year to try to get an acceptable agreement.”

“We are not opposed to development, we actually invite foreign investors to come into this country but… we strive always and every political party should, always strive to ensure that it’s in the best interest of government and people of Saint Lucia. By the time of the elections in June 2016 there was no agreement with DSH.

Within a month of the change of government under the UWP administration, the Leader of the Opposition, as Prime Minister, signed an agreement with DSH. In fact, some of the clauses we thought were offensive were actually included and signed into force by the… then prime minister,” Hilaire added.

He noted that “since the Labour Party came back into government, we repeated our position to DSH-we want development but (it) must be done in a way which is acceptable to the people of Saint Lucia and consistent with our laws.”

Government he said, told DSH the agreement had to be renegotiated.

As to why DSH was not able to implement the agreement in the first place, Hilaire said it was “because the last government had not stuck to their commitments and did not in a rightful manner implement what was agreed.”

“We indicated clearly again to DSH that we needed to renegotiate the agreement, (there) were just not clauses that we found acceptable and some them required legislative changes (and) specific arrangements for DSH.

“They asked us to basically resubmit a new agreement as a basis for discussion. They did not want us to attempt to cancel the previous agreements and they submitted a new agreement to us for negotiations,” Hilaire said.

The agreement, he stated, “virtually starts off saying  that the last government did not do business in the right way… we had (a) back and forth as is done in negotiations then they indicated to us  that Saint Lucia has not delivered, especially under the last government and therefore they are minded (inclined) to go to arbitration.”

Hilaire made it clear that the present government never cancelled any agreement and that it simply wishes to renegotiate with the company.

According to him, “so contrary to what the Leader of the Opposition said we did not cancel any agreements but he (Chastanet) is right: DSH has served notice of an intent to go to arbitration because in their view the last government did not deliver.

How did he (Chastanet) get to know that (government is being sued by DSH)? Is he colluding with DSH? Secondly, knowing that there is an intention by DSH to sue the government why would (he) go and have an activity in that same facility?”

Hilaire said these (abovementioned) are critical issues “because when the government and people of Saint Lucia are sued for tens of millions of dollars do you know the destruction and suffering that can cause… for an agreement that you signed?”

Government, he said, has never gone public with those details “because we thought that in the conduct of business we should respect the negotiations.”

If the company takes government to arbitration government will go through with the process Hilaire said.

“We told them under no circumstances would government pay millions of dollars to them not to go to arbitration,” he said.