'Sleeping assets are no value to this economy'
Mark Titus, Gleaner Writer
Despite a call for fiscal prudence by the International Monetary Fund (IMF), millions of dollars are being used to subsidise the maintenance cost of several Government-owned assets, initially branded as major outlets to garner foreign exchange.
The Montego Bay Convention Centre in the tourist capital was constructed in 2011, at a cost of US$51.7 million, to capitalise on the lucrative US$280-billion worldwide conventions and conferences market, but has, instead, left the Urban Develop-ment Corporation (UDC) footing a whopping $1 million-per-day bill.
This project was expected to generate approximately US$10 million in its first year, with the prospect of a 10 per cent increase in earnings each succeeding year.
SMG Worldwide Entertainment and Convention Venue Manage-ment Company was awarded a seven-year contract valued at US$2.4 million "to ensure a continuous flow of conventions to the centre".
"If you are talking about what was racking up the cost last year, it was mainly the utilities," said general manager of the convention centre, Dittie Guise, last Thursday, "I cannot provide you with the numbers from where I am, but we have taken corrective measures that have resulted in a significant reduction in the maintenance cost."
TIME FOR NEW STRATEGY
However, former government minister Dr Horace Chang believes a new strategy must be developed in order to maximise the profitability of the centre.
"The fact is, everyone entering or leaving our city must go past the facility. We don't have a bypass," Chang said last Monday. "The convention centre was a demand by the Montego Bay community, so this now requires some networking among stakeholders to market and attract business."
"The plans for the centre would have been affected by the fact that several hotel rooms that were under construction in the vicinity have stalled, plus the long-standing issue of casino licensing," he added.
The convention centre is one in many Government-owned entities bleeding the country.
Government also purchased more than 4,000 square feet of office space at the Bay West Shopping Centre in Montego Bay in the early 1990s to house extended services of the Tax Administration Jamaica, but today it remains unoccupied.
"Successive governments have had to pay more than $150,000 every single month for maintenance for thousands of square feet of office space at the Bay West Shopping Centre, which have been locked up and sitting there for years," said a former UDC board member who spoke on condition of anonymity.
"The Government owns a number of properties around Montego Bay - nice properties - closed up, not being used," said the source.
The former Breezes Montego Bay building is one such entity. Constructed in 1995 by National Commercial Bank (NCB), the bank sold 49 per cent of the project to the National Investment Fund (NIF) for J$271 million. NIF is the State-run agency responsible for investing pension receipts and operating the now J$70-billion fund from which government retirees are paid their pensions.
The hotel, located on Gloucester Avenue in the heart of Montego Bay's Hip Strip, and last valued at US$14.32 million, has been closed for more than five years.
"This is a waste being located on prime property in our tourist town," said former Tourism Minister Edmund Bartlett, "Sleeping assets are no value to this economy, and it does not create jobs nor provide revenue."
Bartlett believes the reopening of Breezes and the other closed hotels along the Hip Strip would make a significant difference for the local hotel sector, and it being an investment made on behalf of the people, must be done with a sense of urgency.
Naturally, the future of the once-popular facility is expected to be dictated by NCB as majority owner, but according to Bartlett, this must be done as sleeping assets are not what the economy needs.