Much was made by ministers, as reported in the 10th July edition of The Anguillian, of the Government's Memorandum of Understanding ("MoA") signed on 7th July 2009 with Adam Aron's Cap Juluca Properties Ltd. The truth of the matter is that the Agreement is a monument to government incompetence and bad economic management. The government have sought to conceal that fact by not publishing the terms of the MoA. They should come clean and publish it immediately.

On Monday of this week, in the House of Assembly, ministers berated the British Government for not giving them permission to borrow vast sums of money. The British Government's position is entirely understandable against the background of financial irresponsibility displayed by the United Front Government. The Cap Juluca MoA vividly illustrates that irresponsibility and incompetence.

In its customary manner, the government has approached this project as an under-the-table "fix". The Agreement provides for the existing lease to Cap Juluca to be extended to 125 years with a further option to extend for an additional 125 years (until 2259)! At a time of severe financial difficulty for Anguilla, a give-away of that magnitude to a foreign investor should at least enable government to collect substantial Alien Landholding License ("ALHL") stamp duties. Instead, the government has collected only US$1 million stamp duty on the share transfer, at 1%, with just US$50,000 more to come on the initial extension of the ground lease - and has had the effrontery to insult the intelligence of Anguillians by presenting that as a triumph - but has foregone ALHL stamp duty at 11% of the freehold value of the land (which they should have been entitled to collect either as a matter of law or under conditions which, had they been prudent, they should have imposed on Mr Friedland's ALHL).

Not content with squandering potential immediate revenue, the terms of the Agreement also run the severe risk that future revenue will be at risk. In addition to the many very generous fiscal concessions granted to the Cap Juluca, the provision for rent over the entire potential lease term of 250 years is based on a percentage (5%) "of the gross room revenues generated by units let as part of the hotel room rental programme". However, there are no clear obligations as to the rooms that must be included in that programme or the operators' letting obligations. The rental return - which is the only form of payment for the extended lease - is therefore highly uncertain and may be further rendered uncertain by changes in tourism practices over the potential lease period of 250 years. If the rental provision fails to yield a full commercial rent, the lease extension will be tantamount (as I fear it is anyway) to a gift to the developer of something not far short of a freehold; in other words, virtually a gift to a foreign investor of probably the most valuable piece of tourism real estate in the whole of Anguilla. How can this government dare to surreptitiously give away the people's birthright in this way and without public consultation?

Other flaws in the MoA are too numerous to mention here, but I shall be discussing them on the Mayor's Show on Kool FM on Saturday 19th September.

I would like to believe that the United Front administration has, during its long years in government, had the interests of all Anguillians at heart, but the evidence of the Cap Juluca MoA casts further doubt on such a conclusion and suggests, at the very least, that if they have had Anguilla's interests at heart they have not known how to accomplish that aim. So long as they continue to shroud all their dealings in secrecy, and to abdicate responsibility for those dealings that have been less than successful, we can only speculate on their true motives.

Yours sincerely,

Pam Webster
APP Candidate for District One

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