Has DSH reaped the fruits of its Labour?
Post-election 2016, the Desert Star Holding Project (DSH) was hastily ushered to Saint Lucians as the current administration’s signature development. The government touted the significant benefits to the Saint Lucian public particularly the people of the south in numerous press releases in 2016. “The ‘Pearl of the Caribbean’ is valued at over USD2.6 billion and occupies a 700 acre site to the south of the island. The project will comprise a marina, a racecourse, a resort and shopping mall complex, casino, Free Trade Zone, extensive entertainment and leisure facilities, eco-tourism as well as architecturally designed villas and apartments. Overall, the Pearl of the Caribbean Development is designed to be a well-balanced project with open space making up over 50% of the overall development. It is designed to be a sustainable and self-contained development and is expected to generate between 500 to 800 jobs in construction during its initial phase of implementation.”
The subsequent material will give an overview of the DSH project; question the current status and analyze how close we are to achieving the grandiose dreams that was sold to the Saint Lucian public.
Pearl of the Caribbean
The Prime Minister promoted this project personally in the Millionaire Asia magazine which aimed to appeal to Asia’s richest.
The PM stated: “Under the government of Prime Minister (PM) Allen Chastanet, the island is taking strategic steps towards positioning itself as a leading global incentive destination, spearheaded by the Pearl of the Caribbean project.”
· Has the Pearl of the Caribbean resulted in any additional investment to Saint Lucia?
The development had some very lofty goals: “The US$2.6 billion development is the biggest resort project undertaken in the Caribbean and will include a marina, racecourse, resort, shopping mall complex, casino, free trade zone, entertainment and leisure facilities and a residential component including villas and apartments, positioned across three sites. It aims to raise St Lucia’s profile with the elite, while also transforming the economic and social landscape of the nation. The latter will be achieved by raising economic activity in the south of the island and providing a significant amount of jobs for the locals.”
· What portion of this US$2.6 billion development was generated in the first 5 years of the project?
Since it was claimed to be a 15-year project, one would expect that DSH to be 33% completed. Furthermore, it would be expected that over US$800 million (EC$2 billion) would have been delivered to date after 5 years.
· Have the people of Saint Lucia seen any investment of this magnitude into Saint Lucia?
The project promised “a marina, racecourse, resort, shopping mall complex, casino, free trade zone, entertainment and leisure facilities and a residential component including villas and apartments.” To date, has any of this come to fruition? In addition, Desert Star Holdings had previously announced the following timeline. “The civil & construction contracts valued at almost USD 10 million for the project ‘Alpina Square’ will be awarded accordingly to selected contractors in the tender progress outcome by DSH Caribbean Star. The closing date of the tender is on 18 January 2021. The new project is the first of several slated to commence construction works in the first quarter of 2021.”
· Can we now expect a new timeline?
· Has any construction work begun on “Alpina Square” given that we are mid-way through 2021?
Horse Racing Track
A key part of the Pearl of the Caribbean was the horsing track named the Royal Saint Lucian Turf Club. In December 2019, albeit to much fanfare, it was announced that wealthy persons would purchase these racehorses. “The CECF Saint Lucia will not just be a racing event; it will also be the launching of thoroughbred industry. Under a unique initiative from the Royal Saint Lucia Turf Club, the opportunity exists to become a racehorse owner in Saint Lucia and complete at the nation’s very first race day as well as across racing throughout 2020 and beyond. Racehorses will be offered for sale at USD $20,000 each.”
· How many of these horses were purchased?
· Where is the current status of these horses?
· How much was spent on the horse-racing track and for all associated costs such as the diverted road?
· How much of the money spent on the horse-racing track was paid or will need to be paid by the people of Saint Lucia?
· How much revenue has the horse racing track generated for Saint Lucia? How much revenue is the horse-racing track projected to generate in the next 5 years?
Land Acquisition
The current administration stated the following in their fact sheet from 2016. “As part of its investment in the Pearl of the Caribbean the government is proposing to lease lands to DSH at US $1 an acre which do not form part of the project’s private commercial parameters. This is part of our contribution to this joint project. The aim of the Government is to get this project going to facilitate benefits to Saint Lucia that would far exceed what it would make from leasing this land at a larger amount. Moreover, it is commercially customary for discounts to be given to an investor based on the scale of the proposed
project. It would have proven prohibitive to demand from the investor the full commercial value for an unproductive portion of land, which could have been detrimental to the viability of the project.”
The buy-back clause is also of concern particularly given the uncertainty of this project “The sales agreement will govern the precise terms of the purchase including any ‘buy-back’ provision.”
· What benefits did Saint Lucians receive from their contribution to this “joint project”?
· Has the investor justified being given prime Saint Lucian lands at this absurdly low lease price?
· Was the return on investment considered by the government?
· What would be the cost to Saint Lucia if the “buy-back” provision has to be invoked?
Education CIP Changes
In DSH chairman’s (Teo Ah-Khing) 2021 New Year’s message, he announced the “World’s first Citizenship by Education which is exclusively associated with the Pearl of the Caribbean.”
Interestingly, there was no mention of this Citizenship by Education on Saint Lucia’s Citizenship by Investment options at CIP Saint Lucia. In the Millionaire Asia magazine article, the Citizenship by Education was also referenced. “DSH has also proposed an education-linked CIP that is pending cabinet approval. We will drop the CIP age criteria from 18 years old to 15 years old. Why? Because there are plenty of Asian parents that are reluctant to change passports due to their business commitments. But they will change passports for their children’s education,” Teo explained. “A portion of proceeds from the education CIP will go into supporting St Lucia’s own education initiatives.” Teo’s announcement also indicated a price point of $18K for the Citizenship by Education which is significantly less than any other CIP options and aligns with the bargain basement sale of Saint Lucian passports.
Conclusion
The Saint Lucian public remains in the dark about the DSH project; the status of this project remains a mystery. When this grandiose project was announced back in 2016, the current administration indicated the immense benefits to the island particularly to the people in the south. However, in a recent Flambeau Forum the current administration made no mention of DSH. There were also numerous other troubling questions such as the buyback clause. Key questions remain such as:
· How many Saint Lucian passports have been sold?
· What are the total costs associated with aspects of this project such as the road diversion or landfill relocation?
· When will the people of Saint Lucia harvest the benefits of DSH?
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