Mon | Jan 25, 2021

UDC gets $1b refund for doomed hotel deal

Published:Wednesday | June 10, 2020 | 1:07 PMEdmond Campbell/Senior Staff Reporter

THE URBAN Development Corporation (UDC) has received nearly $1 billion in the revised budget to refund Puerto Caribe Properties Limited, a subsidiary of Palace Resorts, after the company pulled out of a sale agreement for Rooms on the Beach property in Ocho Rios earlier this year.

The company had written to the UDC indicating that it would rescind the deal owing to a controversial report from former contractor general Dirk Harrison, which claimed that the public body gave away a US$13.5 million property for US$7.2 million.

In his report, Harrison had also accused Daryl Vaz, minister without portfolio in the Ministry of Economic Growth and Job Creation, of influencing the sale of the St Ann hotel and beach lands below market value by the state-owned UDC.

Vaz had labelled the allegations as false, disingenuous, and without evidence.

Harrison’s report had stated that the UDC was unable to negotiate freely and from a position of strength in the sale of Rooms on the Beach to Puerto Caribe Properties Limited because of Vaz’s direct involvement and that of other state agencies.

However, Vaz had rubbished the comment, saying that the report was unable to provide any substantive basis for the claim that the UDC was not able to negotiate freely.

At yesterday’s Public Administration and Appropriations Committee (PAAC) meeting to examine the First Supplementary Estimates, Financial Secretary Darlene Morrison was pressed for answers as to why the UDC was receiving such a significant allocation from the finance ministry.

She noted that the UDC earns substantial portions of revenues from tourism-related activities that have dried up since the onset of COVID-19.

“There is apparently a refund that is required by them in relation to the property sale,” Morrison said.

The Office of the Contractor General has since been subsumed into the Integrity Commission.

Meanwhile, the PAAC was told that revenue flows into the coffers of the state-owned oil refinery, Petrojam, have been significantly reduced as a result of an overall reduction in the sale of petroleum products.

In the original budget, Petrojam had projected to pull in $207 million in revenues, but this has been adjusted to $92 million in the revised estimates.

The committee was also advised that the national census that was expected to be done by the Statistical Institute of Jamaica this year has been pushed back to 2021 for completion. Nearly $1 billion for the census has been deferred to next year.

Budget allocation to the Students’ Loan Bureau (SLB) amounting to $2.7 billion has been deferred this fiscal year.

Committee Chairman Dr Wykeham McNeill wanted to know if the SLB had sufficient funds to provide loans to students in a year when many have been negatively impacted by COVID-19.

Morrison reported that the SLB currently has $6.2 billion in resources to meet whatever demands that are made this year.