UDC loses $487 million in five months
THE failure of the Urban Development Corporation (UDC) to sell its shares in the Bloody Bay project has led to the corporation suffering a net operating loss of approximately $487 million for the first five months of the 2012/2013 fiscal year.
The corporation's newly appointed general manager, Desmond Malcolm, told the Public Administration and Appropriations Committee (PAAC) of Parliament yesterday that the UDC's total revenues between April 1 and August 31 was approximately $612 million, compared to a budget of $1 billion.
He attributed the difference primarily to the failure to complete the sale of the corporation's shares in the Bloody Bay Hotel Development Limited, which had been projected at $542 million.
The Development Bank of Jamaica (DBJ) is negotiating a deal on behalf of the corporation. DBJ Managing Director Milverton Reynolds said recently that the sale is expected to close in December.
Negotiations have been ongoing since early April between SuperClubs and the UDC, whose 50 per cent stake is held through Bloody Bay Hotel Development Limited.
In the meantime, Malcolm said that the UDC has been seeking to offset its losses through a policy of cost containment, which has chopped close to $200 million from administrative expenses including advertising, repairs and maintenance, seminars and training expenses and motor vehicle repairs and maintenance.