Lok Jack: Stewart pulled out because of Opposition

Gordon “Butch” Stewart didn’t leave the Tobago Sandals project because of “negative publicity,” his longtime friend Arthur Lok Jack said Wednesday, but because of the Opposition.

“Butch Stewart didn’t run away because he was agitated by the press. That is not the point.

"The point was when he saw what the Opposition statements were. That is what killed the deal,” businessman Lok Jack told the audience at a panel discussion at UWI, St Augustine, on the economic implications of the termination of the Tobago Sandals deal.

In some ways, the Opposition ended up making things worse for their own supporters, Lok Jack suggested, because the people who would have benefited the most from the resort in Tobago would have been farmers, who are among the UNC’s traditional base.

“I don’t understand. The thing is, the farms, (Sandals is) going to have the tremendous amount of demand…for agriculture as far as I am concerned, and you know that for business people and investment, supply follows demand – not the other way around. But once I create the demand, who is going to benefit with the farming?

"It’s the same people in the UNC, the Indian constituencies in this country who are the farmers (and farmers in Tobago too). But you put everything out. I was at a loss to understand why this project went belly up,” Lok Jack told the audience.

He also encouraged the government to court the private sector better when engaging in these types of mega projects.

“With all due respect…the Government of TT is broke. The private sector has plenty money,” he said. Usually, the private sector, including pension plans, which he said were the savings of the people, would invest in government bonds – effectively a loan to the government – that were low-yield.

“(The private sector) are all interested in making direct investments in many projects providing they know about the project and they feel comfortable with the project,” he said.

They would also insist on private-sector governance, away from politics.

“If the private sector was involved and put in the money, let say if they were invited to (invest) in a thing like (Sandals Tobago), and put together a deal like that, let’s say 60 per cent, the private sector would want to have a proper private-sector board. If it’s a government institution, you are not sure which board you’re getting. And then you get political this and political that. We have to take these things away from the government and into the private sector. The private sector has to get up and get,” he said.

Speaking to the Newsday after the panel, Lok Jack said, if Stewart, the Jamaican billionaire founder of the Sandals group, were to change his mind about coming back to Tobago, Lok Jack was confident he could easily raise at least US$250 million from the local private sector to invest.

“But he has to want to change his mind. We are not going to invest in a hotel in Tobago for somebody else. Because I don’t know who that somebody else is and what their track record is. It might be high risk. When I invest in Mr Stewart. I know it is very low risk,” he said.

He included the government as another investor, explaining it would be a public-private partnership, in which the government would build the hotel but the private sector could provide, among other things, the equity shareholding. At some point later, the government could even sell its stake, and Sandals, as it has before, could offer to buy the hotel itself.

“Hotel chains do not own their hotels. Hotel chains are hotel-management companies. Who owns the hotels are long-term investors,” Lok Jack said.

The Sandals project was first conceptualised at a dinner party at his house, Lok Jack said, when he was able to pitch the idea to Stewart after a long time trying to convince him to set up in Tobago.

“Tobago is not on the tourism map at the moment,” he said. “I’ve known Mr Stewart for years and I’ve been trying to get him to come to Tobago for a long time to put a Sandals here and eventually he said, 'Okay, fine,' and he came down and talked and I got Dr Rowley to come and we had a very small thing – and bam!”

At the Caribbean edition of the World Travel Awards on Monday evening in Montego Bay, Sandals swept away the competition, with the company’s resorts across the Caribbean winning awards, and the brand itself claiming the Caribbean’s Leading Hotel Brand.