For the first time since the new ownership arrangement relating to Cap Juluca has been announced, official details have emerged about the benefits the Anguilla Government will derive from its involvement in the hotel on behalf of the people of the island.

Honourable Victor Banks

The information has come from Minister of Tourism, Victor Bank. He was at the time delivering the feature address on Monday at the opening ceremony of the Third Biennial National Development Conference.

He said the Government’s aim was to get more out of tourism which he described as “the engine that drives our economy.” He made the point that the intention was “not to accomplish this by abandoning Anguilla’s orientation of ‘low volume – high value’ tourism. Rather, Government’s objective was to “seek to increase the gains from tourism by gradually expanding the tourism plant and increasing the yield from economic activity in the tourism sector.”

It was in this context that Mr. Banks gave some vital information about the Memorandum of Agreement (MOA) which the Anguilla Government concluded in August with the Gencom Group and the Real Estate affiliate of Goldman Sacks for the acquisition and re-development of Cap Juluca.

Mr. Banks said: “The MOA has provision for the Government to obtain a 20% equity stake in the investment vehicle, ‘Genhall Juluca Ltd’. Essentially for an investment of US$13 million (which, incidentally, does not involve Government putting up any cash), Government is projected to receive US$39 million in profits over 10 years.

“These are funds which could be available to finance critical investments in social and other infrastructure for the benefit of all Anguillians. Investing in Cap Juluca would be just the start – as two of the other MOAs have similar provision for Anguillians, or the Government acting on behalf of Anguillians, to acquire equity stakes in foreign direct investment tourism projects.”

The Minister said that the success of such initiatives depended on ‘good’ governance. He explained that in this case it meant the corporate governance arrangements in the Company Agreement that would govern relations among the members of Genhall Juluca Ltd., the legislation that would give effect to the Government Investment Holding Company and extreme diligence in selecting the individuals chosen to represent the Government and people of Anguilla on the Board of Genhall Juluca and so on.

Mr. Banks went on: “For general information, the Cap Juluca MOA also has other innovations. For example, there is provision for the establishment of a National Park comprising a minimum of 84 acres of beach and pond lands at the Cove. It would be the first Terrestrial National Park of such extensive acreage on Anguilla. The National Park lands would be vested in the National Trust.

In another matter, the Minister spoke about the proposed Social Security Investment and Development Company. He made the following statement:

“With some EC$160 million in consolidated reserves at the end of 2006, the Anguilla Social Security Board (ASSB) is potentially the island’s largest institutional investor. An Investment and Development Subsidiary would allow the Board to invest in social development infrastructure, housing, economically-targeted investments (ETI’s) and other areas of need while providing acceptable rates of return on such investments.

“I am happy to report that Executive Council has approved the formation of such a company and the matter is now in the hands of the legal draughtsmen. This is not to create a ‘milking cow’ for GOA (Government of Anguilla) projects, but a transparent and accountable system of getting the best out of these resources for the contributors and beneficiaries.”

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