"Previous government had relaxed option conditions Ritz Carlton"

May 24, 2010 7:26 AM

ORANJESTAD — ‘For inexplicable reasons’ the Aruban government had relaxed the option conditions for Hotelco regarding the terrain at Fisherman’s Hut when it appeared the project developer could not comply with a number of points in the option-agreement.

Lawyer David Kock indicated this in the second legal advice, which he submitted to the government yesterday with regard to halting the Ritz Carlton project at Fisherman’s Hut or not. According to Kock, one could only consider a court case if no adequate explanation can be given for the changes. A favorable outcome could not be guaranteed, as the case would already be in the hands of the judge, says Kock.

Kock indicates that in 2009, Hotelco had only been able to produce guarantees for a part of the estimated 125 million dollars on investments. The Ministerial Order, in which the option is officially granted to Desarollos Hotelco, mentions the condition of providing a description as to how the project would be financed. In addition, one must present authentic evidence proving the financing is guaranteed. During the option period, Desarollos Hotelco was also to deposit a donation of five percent of the total investment, which is 625,000 dollars, into a social institution on the island. However, from the documents read by Kock it does not appear that upon the expiry of the option, Desarollos Hotelco had presented evidence proving the financing of 125 million dollars was indeed guaranteed. Neither does the lawyer know whether the determined donation had been deposited. On that ground, the government could have withdrawn the option. However, this had not occurred. Shortly afterwards, Hotelco had submitted a document from Aruba Investment Bank that states only 78.5 million was available, of which only a part had been promised orally. Nevertheless, a long lease was still granted on September 1st 2009. In addition, the so-called ‘performance bond’ had been lowered from 25 percent of the total investment to 10 percent, amounting to 12.5 million dollars instead of the 25 million agreed upon in the Letter of Intent. Kock finds it inexplicable that DIP-director Errol Sjak Shie had agreed to this, while with a previous similar request in 2008, he himself had advised against a reduction with –would you believe– a lower amount. At the time, Hotelco had requested a reduction of five million dollars. The lawyer advises the government to give Hotelco the opportunity to guarantee the remaining investment amount, to donate the five percent of that total investment to a good cause on the island, and to comply with the performance bond. Only then, or also when they cannot find any clear motivation for the liberalizations by the previous government, could they consider a court case.

For that matter, these two points had not been included in the first advice submitted by the attorney’s office HBN Law in March.

(Source: National newspaper Amigoe)

19 May 2010