By Caribbean News Now contributor
BASSETERRE, St Kitts — A January 17, 2019, press release issued by the office of the St Kitts and Nevis Prime Minister, Dr Timothy Harris, entitled “Construction on the St Kitts Ramada resort continues apace; developers eye September 2019 opening date” has raised more questions than answers in the absence of any real evidence of the claimed progress.
The press statement followed a visit to the construction site by a bevy of senior government officials including Harris and attorney general Vincent Byron, along with Ying Jin, the CEO of the developers, Caribbean Galaxy Real Estate Corporation, and other company executives.
The site visit and related publicity appear to be part of a local public relations push by the government and the developers to reassure stakeholders that the project, which is financed by the country’s citizenship by investment programme (CIP), is not in trouble.
According to Harris, “We have seen progress here. This is my second site visit…and I am satisfied that the project is advancing apace and the project deserves the continuing support of the government of St Kitts and Nevis.”
In support of his claim that the “project is advancing apace”, Harris’s office provided a photograph of two workers and an apparently idle excavator surrounded by buildings that have no windows or doors or exterior rendering, and no evidence of any mechanical, electrical and plumbing (MEP) installation.
In other words, there appears to have been minimal progress, if any, since doubts were raised early last year that the developers would be able to complete and open the resort by their last announced deadline of December 2018.
Neither the St Kitts and Nevis government nor Caribbean Galaxy has responded to requests for additional visual evidence of the claimed progress.
Of greater concern is whether Caribbean Galaxy now has the financial resources to complete the project.
Using accepted industry rates, the estimated total cost of the 273-unit ‘high-end’ resort is approximately US$95 million and, according to construction experts, it is likely to cost between $50 and 60 million to complete and open from the current state of construction, and take two years to finish, far removed from the latest completion date given of September 2019, which seems to be the sole basis of the government’s “proceeding apace” claim.
All 273 investment units have reportedly been sold through the CIP, which at US$400,000 each under the old investment option rules equals some $109 million, less commissions… enough to complete the project.
This money is supposed to be held in an escrow account with the St Kitts-Nevis-Anguilla National Bank and released to the developers on the basis of certified construction progress. However, the government has offered no evidence or other assurance that the funds in question are actually held in escrow.
Instead of addressing questions in this regard, the government has gone ahead and approved a second phase of the Ramada development, even though phase 1 is nowhere near completion, a reasonable inference being that this is necessary in order to raise additional funds to complete phase 1, something that has not been denied by either the government or Galaxy.
In other words, in the apparent absence of effective financial control by means of an escrow arrangement, it seems possible that it is Galaxy’s intention to use money from new phase 2 investors to meet its commitment to existing investors to complete phase 1, which is the classic hallmark of a Ponzi scheme.
The St Kitts and Nevis government and Galaxy have been given multiple opportunities to explain and clarify the situation but have consistently failed to do so over a period of several weeks.
Coupled with the well publicised, ongoing abuse of the St Kitts and Nevis CIP in general and the government’s corresponding failure to take any meaningful corrective action, this has raised serious concerns among the major players in the citizenship industry.
Sam Bayat of Bayat Legal Services, asked what could possibly explain the lame and passive attitude of the St Kitts and Nevis authorities, which is in “contario” to their claimed CIP “platinum brand”.
“To remain or to be a ‘platinum brand’ one is required to show also exemplary standards, not just in selecting applicants but also in running the CIP,” he said.
He noted that the St Kitts and Nevis authorities showed a lack of courage to address and effectively solve real and important issues, and suggested that the events there may negatively impact other Eastern Caribbean countries’ CIPs.
Bayat pointed out that St Kitts and Nevis officials will be in Dubai on Monday, January 28, at the Hilton hotel, Al Habtoor City, from 7 pm, and encouraged citizenship applicants, international marketing agents and sub-agents to attend and raise any concerns and questions.