Statement to the Press on the NIC – Cabot Loan Fiasco

Ladies and gentlemen of the Press, good morning,

When Saint Lucians elect their leaders, they expect that, beyond all else, these women and
men will put the people’s interest and that of the state first, and not the personal, private
interests of friends, family, and foreigners.

The National Insurance Corporation (NIC)-Cabot Loan Fiasco has become one of the most
glaring examples of a government not acting in the interest of the state and putting ulterior
motives first. We have all heard the Prime Minister stating that he is “a product of Canada”
This statement explains perfectly why we are now saddled with this Cabot scandal

Allow me to state succinctly the facts regarding this matter.

1. Sometime in 2008, a golf course development, called the Raffles Project earmarked for a
   375-acre site at the north-eastern tip of Saint Lucia, collapsed and the land fell into
   receivership of the Bank of Nova Scotia and remained a distressed asset (at risk of being
   foreclosed) for many years.
2. In early June 2019 a sod-turning ceremony for a Cabot Point 18-hole golf course, 50-room
   hotel and real estate development was held on the site. Cabot is a relatively small Canadian
   golf course company which is owned by a Canadian entrepreneur. The Prime Minister,
   representatives of the NIC and Cabot participated in that sod-turning ceremony. No
   indication was made that NIC was providing a loan to Cabot.
3. At the time of the sod-turning ceremony in 2019, Cabot did not yet fully own the property,
   nor was there any planning approval granted for the development. It was only after
   information was leaked through the media suggesting that NIC funds were going towards
   the development that the NIC felt compelled to issue a statement and then hold a press
   BREAD * JUSTICE * FREEDOM
   conference. The NIC claimed it was bound by confidentiality and details of the loan
   remained sketchy.
4. However, at the press conference, the Chair of the NIC Board, disclosed that it was the
   Prime Minister who initiated the Cabot loan arrangement. We are told, also, that the NIC
   undertook a valuation of the property and its value was placed at EC$92 million. So, why
   then did the NIC simply not purchase the property outright, if the property was for sale at
   about 40% of its actual value?
5. In fact, the NIC’s Director, in his statement at the same press conference, revealed that the
   NIC’s first intention was to actually purchase the property. Now, the reason given by the
   NIC as to why they did not purchase the land is that the Receiver had a commitment to sell
   to Cabot. It is our understanding that the commitment period provided to Cabot was close
   to coming to an end. The NIC simply had to wait a short while, and then make an offer
   once that commitment had expired. But it did not. It was clearly convinced by the Prime
   Minister into giving Cabot, a loan instead.
6. Let us examine the facts surrounding that transaction. The area under consideration
   comprises of 360 acres of land valued at approximately $90M or $250,000 per acre or
   $5.74 per sq. ft.
   The land was purchased by Cabot for $37.5M or $104,000 per acre of $2.39 per sq. ft.
   In effect if NIC had bought the land it would increase its asset portfolio by $52.4
   million automatically.
7. On March 17th 2021 the NIC received $29.4 million from Cabot which represented the
   repayment of the loan of $27 million and interest of $2.4M. It is fair to say that the NIC
   made $2.4 million when they could have increased the assets of the pensioners of Saint
   Lucia by $50m if they had simply just purchased the land.
   The notion that we should be celebrating this early repayment of the NIC loan is plain
   foolishness and a cheap political trick.
   The government instead should have given opportunities to Saint Lucians living here
   and abroad to benefit from the land of their birth by owning a piece of pristine
   property in Saint Lucia.
8. The NIC could easily have created an opportunity for the development of the land and could
   have potentially made close to $200 million in land sales alone. On the other hand, Cabot
   by collecting just deposits alone, for the first phase of its development, has raised US$50
   million (EC$135.8 million) in sales.
   BREAD * JUSTICE * FREEDOM
9. Now, some may say this sounds astounding. However, if you visit Cabot’s website, you
   would see a listing of the properties available and their prices. This first phase has about 43
   lots, covering about 15 acres of land. The prices of the lots range from EC$2.2 million to
   EC$6.5 million for a half acre lot. Phase One sales can raise EC$135 million for Cabot, or
   US$50 million (5 times the loan amount). In effect, land which the NIC loan helped buy is
   now being sold for over $250 per square foot.
10. The Saint Lucia Labour Party supports true foreign direct investment that is inclusive,
    sustainable and beneficial to Saint Lucians. We will correct the wrongs of this and many
    other developments. We will secure free, public access to our beaches and coastline. And
    we will protect our institutions like the NIC from Prime ministers and Ministers who may
    have their own personal agendas at heart, and not that of the country.
11. Finally, we again call on this uncaring, self-serving Administration to call the Elections
    now, so that the people of Saint Lucia can go to the polls and let themselves breathe again

I thank you.