Dickinson: I’ll get back Caroline Bay $11m
An attempt to claw back $11 million of government cash handed out to construction firms unpaid by the developers of the stalled Caroline Bay resort will be made, the finance minister has vowed.
However, contractors said the compensation had not paid off all the companies left in arrears after finance dried up last year for the hotel and villa development at Morgan’s Point in Southampton.
The heads of two firms, who asked not to be named, also predicted the Government would end up “owning” the resort on the former United States Navy base, where work stopped last year.
The director of a third firm said new investment at Caroline Bay would need “very creative” tactics by the Government.
He added there had been “zero” movement on financial backing or “a viable scheme” to revive the project.
The source said they were “hopeful something will happen” because of “how much money is already invested” in the development.
The contractors were speaking after Curtis Dickinson, the Minister of Finance, said last week that the Government planned to “get the money back” from developers Caroline Bay Limited “in due course”.
Mr Dickinson added: “I committed to addressing the issue of unpaid local contractors; we heard stories of people not being able to send their kids to school.
“We have made payments to the majority of those persons who were current, or had arrangements in place, with respect to Caroline Bay.”
The minister said the payouts, made at the end of last year, were “purchasing the claims” of contractors who had guarantees in place for their work.
It is understood that construction firms that owed payroll tax and social insurance had been asked to settle their debt before they got compensation.
The payout was credited with saving the development from going into liquidation if cases had gone to court.
Contractors threatened to band together for a lawsuit last summer and one source said that up to 25 businesses were waiting to be paid.
One contractor said yesterday that the development would have been “tied up in court for years” if the insolvent project had been hit with a lawsuit.
He claimed that the courts would have had “no choice but to force a wind-up”.
But he said that getting Caroline Bay “back up and running is something else entirely”.
The project was backed by a $165 million government guarantee arranged under the previous One Bermuda Alliance administration, which had to be paid to lenders last year after finance for the development collapsed.
The payout required Parliament to approve a $200 million credit line for the Ministry of Finance and the island’s debt ceiling was raised by $250 million as a result.
Caroline Bay Ltd did not respond to a request for comment.
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