Prime Minister Allen Chastanet has responded to concerns regarding the granting of concessions and Citizenship by Investment Programme (CIP) approval to the US$2.6 billion Desert Star Holdings (DSH) Caribbean Star Ltd. development project, amidst talks of a leaked Cabinet document which has been making rounds on the local talk shows.
The document – conclusion number 530 of 2017 and dated July 3 – states that a memorandum submitted by the Department of Tourism, dated May 25, requested concessions to facilitate the construction and development of the Pearl of the Caribbean on behalf of DSH Caribbean Star Limited subsidiary companies.
This was considered and approved by Cabinet pending proof that the Development Control Authority (DCA) had approved the project, the document said.
According to the conclusion paper, pursuant to the Tourism Stimulus and Investment Act Number 12 of 2014, the construction of the Pearl of the Caribbean is to be declared an approved development. It also stated that a 100 percent waiver of import duty and Value Added Tax (VAT) was granted on behalf of Royal St. Lucian Crescentia Limited.
At a press briefing this week, Chastanet addressed the issue of incentives granted to the development company.
“…They are tourism incentives. So there are aspects of the project, which is an apartment building, a hotel and also a villa complex that incentives were given for, and again, under the Special Development Areas Act, as well as the tourism incentives. Because you would appreciate that the horse racing track is also an attraction in itself. Those are the incentives that have been provided and are within the regulations that we currently have. So nothing extraordinary was given to them that has not been given to anybody else,” he said.
Chastanet said the company will not pay VAT during construction but will do so when the business is up and running.
“They pay VAT once they’re operational but they don’t pay VAT on the construction. That’s standard across the board. I’ve always wanted to make that distinction. So once they’re operational everybody pays VAT,” Chastanet stated.
As to the CIP approval of Pearl of the Caribbean, Chastanet said this has not yet been granted.
“We have been in constant dialogue and you would appreciate that the owners came here with a CIP programme in place and we have changed many of those things in the CIP programme, and are trying to negotiate a format that would be beneficial to them as well as protecting St. Lucia. I would like to think that we’re very close to a conclusion and once we are, I will be happy to make those details known to you and to the public of St. Lucia,” he stated.
Meanwhile, Opposition Leader Phillip J Pierre said that he is skeptical about the effects the project will have on the island.
“We [The former St. Lucia Labour Party government] never had any investment for 900 acres of land. That’s the fundamental difference… We were the government that heralded the incentives for the Royalton Hotel. The Royalton Hotel is on how many acres? 15 acres of land. They have employed 500 people. The government wants to give 900 acres to employ how much? 3,000…. So when Fedee and the prime minister wants to talk about ‘we are the ones who did it’ that’s not the point. The point is not the Tourism Stimulus Investment Act…The point is you are putting in the hands of other people 900 acres of prime land with a question on access to the beaches. That’s the fundamental point,” he stated.
Initial construction of the first phase of the DSH development is already in progress.