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Law change will give Government more protection over hotel guarantee – Burt

Artist's impression of Fairmont Southampton Beach Club (Photograph supplied)

Legislative changes approved by MPs last night will offer extra protections for the Government’s controversial guarantee for revamp of the $376 million Fairmont Southampton Hotel, according to David Burt.

The Premier said that the Government had learnt lessons from the collapse of the Morgan’s Point development and wanted to ensure that if insolvency did occur in such projects, the Government would have better leverage to renegotiate agreements.

Parliament has already approved tax concessions valued at between $121 million and $133 million over 15 years to the Fairmont Southampton site owner, Gencom.

The Government will also give a guarantee of $75 million, representing 21 per cent of the revised costs of the project.

Mr Burt told MPs: “The Government has, in very limited circumstances, provided guarantees to non-government entities when such guarantees were deemed to be in the public interest.

“For example … agreement has been reached to provide a maximum $75 million guarantee to the Fairmont Southampton Hotel.

“The amendments provide the Government with the legislative mechanism to permit the payment of tax, fee or duty rebates to a person or a company in accordance with an entitlement to a rebate under another Act of Parliament.”

The Premier said that the fiscal system needed to ensure that more checks and balances are in place.

He said: “We recognise the Fairmont Southampton Hotel Act granted a guarantee and freedom from certain taxes for a period in time.”

Mr Burt added: “If in the case of difficulty in the future, we want to ensure that any agreement can survive insolvency and that we can make sure we have the ability to restructure said agreement.

“The Government is learning, observing, listening, making sure that it is building in protections that did not exist previously to make sure that the Government is in as strong a position as possible inside of this particular matter. ”

Cole Simons, the One Bermuda Alliance leader, backed the Public Treasury (Administration and Payments) Amendment Act 2023 as it was passed by the House of Assembly.

He said: “We support this legislation because it is a permissive piece of legislation and it involves tidying up and providing structure in regards to rebates paid from the consolidated fund to a third party.

“We are comfortable that with parliamentary scrutiny the controls will be in place.

“We have to be nimble to arrive at agreements that are beneficial to the country.”

MPs also approved the Appropriation Act 2023.

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Published March 14, 2023 at 4:19 pm (Updated March 14, 2023 at 6:10 pm)

Law change will give Government more protection over hotel guarantee – Burt

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