By Cliff Williams, Contributor"WITHIN twelve months immediately following the grant of this licence, the licencee shall offer its shares for purchase to the public in accordance with the divestment plan already approved by the Government of Jamaica."
Believe it or not, and for those who may not be aware, the foregoing is an extract from the terms and conditions of the licensing arrangement between Caymanas Track Ltd. (CTL) and the Betting Gaming & Lotteries Commission (BGLC). In fact this is condition 1(c) of the license issued in December 1992, fractionally over a decade ago.
Amazingly, there has not even been a serious debate on the issue and even now with Horsemen's Association submitting a five-point plan for the rescue and development of the racing industry, ownership of the business does not seem to be priority. It may very well be that the horsemen have resigned themselves to the fact the government was never serious about divestment in the first place, so it's a waste of time to even put the subject on the current agenda.
There can be no question that if modernisation is to be achieved there needs to be a massive injection of capital. CTL from its 11.25% take of sales combined with largely insignificant rights fees and receipts, also miniscule, from entry and parking fees have managed to expend in excess of $300 million on various capital projects in the last decade.
Specifically, these projects include, the 1998 reconstruction of the racing surface and acquisition of track maintenance equipment costing about a total of $45 million for both.
Then there was the matter of the construction of administrative and racing offices in 1992 as well as the establishment of the first computerised terminals and audio-visual communication network for the OTBs accounting for $52 million in that year alone.
In 1999 significant expenditure on the perimeter security wall, Y2K compatibility for computer network and the construction of an equine swimming facility accounted for $35 million. In 2001 $14million was expended on a new satellite up-link system to aid the simulcast of racing across Jamaica and to selected locations overseas.
In there 2000 was also substantial capital investment when the reconstructed internal roadway from the Meadow Vale entrance to grandstand required $11 million and the new tote computerised system needed all of $8.5 million. Taken together the capital outlay in the years not mentioned here also make up a huge portion of what exceeds $250 million, with new stalls, facilities for the professionals and CTL staff, re-engineered stands on the second floor, and the establishment of a much needed well coming on stream.
More recently and throughout 2002 the construction of the internal roadway from Meadow Vale entrance to the Gregory Park five straight start estimated to cost $10 million was undertaken. Then there was the purchase and installation of Versa Terminals (betting machines) running to $25 million as well as the acquisition of additional track maintenance equipment for $7.0 million, the completion of another well at a $12 million cost and state- of- the- art photo finish equipment came in at $2.5 million.
Truth be told, this must be possibly the only commercial enterprise of this magnitude in the world that has had to fund its capital budget out of inadequate cash flows and expensive loans. As I understand it a document has been submitted to the government by the CTL board and it will be interesting see the official response. This column will continue to look at current status of CTL and the prospect for future development.
