Dickinson outlines Caroline Bay payout

  • Sitting idle: Unfinished residential units at the Caroline Bay complex in Morgan's Point (Photograph by Blaire Simmons)

    Sitting idle: Unfinished residential units at the Caroline Bay complex in Morgan's Point (Photograph by Blaire Simmons)

The Government’s multimillion payout on the stalled Caroline Bay development at Morgan’s Point was highlighted in last Friday’s Budget speech.

Curtis Dickinson said that $182.4 million had been borrowed to date.

However, Mr Dickinson insisted that the Government maintained a “legitimate expectation” that it would recover the cash.

A $165 million government guarantee in 2016 with the developers of the villa and hotel development on Morgan’s Point was set up by the previous One Bermuda Alliance Administration.

Mr Dickinson said work on the project stopped in February 2018 and was still “fully suspended”, which meant the Government was forced to pay back the project’s lenders after it received notices of default in June and August of last year.

He added that Bermudian construction firms left unpaid for their work were also compensated after the Government “purchased the claims from project contractors”.

Mr Dickinson said that further payouts over the project would mean that debt service costs for 2019-20 were expected be $2.7 million above the estimated figure of $116.5 million.

Mr Dickinson explained that this would push the revised estimate of Bermuda’s overall deficit to $14.6 million — $22.0 million more than the $7.4 million surplus projected.

The Government may cover the $14.6 million through borrowing or through the Consolidated Fund.

The island’s debt service costs for the coming fiscal year are projected to be $121.4 million — about $7.9 million of which is related to the troubled resort.

Mr Dickinson said that interest rates were “relatively low” and that it was planned to refinance the Government’s loan agreement on Caroline Bay.

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Published Feb 24, 2020 at 10:23 am (Updated Feb 24, 2020 at 10:23 am)

Dickinson outlines Caroline Bay payout

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