Antigua’s Opposition United Progressive Party (UPP) leader Harold Lovelle has bemoaned the lack of a statesman-like approach and the offensive comments made that has “soured the important relationship” between Sandals and the Government.

Lovelle, who was passing through Jamaica on his way back to Antigua-Barbuda from week-long meetings in Cuba, said the manner in which Prime Minister Gaston Browne had handled the cancellation of tax concession agreements with the island’s top resort could hurt the economy, the workers, and the farmers who could be negatively impacted.

“What was required was a statesman-like approach and a respectful discussion, rather than a unilateral termination of the agreement,” Lovelle said. “There also appears to be a lack of clarity with regards to what happened, and this is where a fulsome discussion would have been helpful to establish the factual reality and thereafter a discussion on how to proceed.

“Instead, a number of very offensive comments were made which, in my view, soured an important relationship which could have unintended but far-reaching consequences, including for current and future investors in Antigua and Barbuda,” Lovelle cautioned.

Last month, Browne announced he had unilaterally cancelled a 2009 tax concession pact which was signed with Jamaican-owned Sandals Resorts International (SRI) under the previous UPP Government, describing it as illegal.

Giving a history of the agreement, Lovelle said the original concession was signed by Sandals and the then ruling Antigua Labour Party (ALP) of Lester Bird in 2000. Browne is now leader of the ALP.

Senator Lovelle, the political leader of the UPP, said his party came to power in 2004 and opened negotiations with Sandals to continue the concession agreement in exchange for construction of an additional Sandals hotel, the 180-room Mediterranean Village or Sandals Grand Antigua for which SRI would invest US$100 million.

Lovelle, an attorney at law and minister of tourism at the time, said that in 2006, his Government introduced the Antigua and Barbuda sales tax (ABST) and began discussions on a way to transfer the benefits of the concession agreement that Sandals enjoyed to the new tax structure.

The agreement was signed in 2009, to be effective until 2022 and essentially covering all the benefits under the ALP agreement. Keeping its part of the bargain, Sandals opened the new hotel at a glitzy affair in 2007.

“Those discussions took a full two years because we wanted to ensure that Sandals was not put in a more or less favourable position. There was no fundamental change from the 2000 agreement. It worked well until last month when it was unilaterally ended,” said Lovelle.

“I think the concessions are justified for several reasons: Sandals’ impact on airlift into Antigua and Barbuda — all the major US airlines depend to a large extent on Sandals guests who constitute a minimum of 30 per cent of the guests who travel on Delta, American Airlines and Jetblue. In the case of US Air, an average of 60 per cent of the guests are Sandals guests who play a major role in that airline coming to Antigua.

“In addition, the contribution to employment of over 700 people, making it the number one private employer; as the number one private earner of foreign exchange, and there are the ancillary benefits like the spin-offs with the agriculture sector with the purchase of produce; as well as the impact on the economy as a whole,” the UPP leader argued.

“In our view it was worthwhile. The benefits outweighed the concessions or the taxes foregone.”

Asked why the concessions were not offered to other hoteliers, Lovell said that at the time it was a one-off deal meant to attract the US$100 million into the economy. But he added that he was fully in favour of extending them to all hoteliers making investments of a similar size.

“I think the decision to end it and the way in which it was done is harmful to the economy of Antigua and Barbuda, and to the workers and farmers who could be negatively impacted by the manner in which the situation was handled,” he suggested.