Public Statements on the Cost of New Correctional Facility Misleading, Says the Ceo of the CBI Programme
BASSETERRE, St. Kitts, June 28, 2022 (Press Unit in the Office of the Prime Minister) – Statements being peddled to the general public regarding the cost to the Government of St. Kitts and Nevis for the construction of a new correctional facility have been labelled as misleading by the Chief Executive Officer (CEO) of the Citizenship by Investment Unit (CIU), Mr. Les Khan.
Mr. Khan, who was at the time speaking on a radio programme on Monday (June 27) evening, said the new correctional facility is one of two projects approved under the new Alternative Investment Option of the Citizenship by Investment (CBI) programme which allows for government-approved public infrastructure projects to be constructed by private sector developers at their own expense in exchange for a portion of CBI investment.
Mr. Khan said the Alternative Investment Option allows the country to acquire an infrastructural asset that it would not have been able to finance over a period of time. CEO Khan further stressed that neither the government nor the people of St. Kitts and Nevis pay for new state infrastructure but benefit from its construction.
“There’s an assumption here that $2.2 billion EC dollars is being taken away from the people of St. Kitts and Nevis. There is no $2.2 billion. There is 5,000, 5,500 or whatever the number is in terms of the number of shares that have been allocated to assist the developer in recovering their investment,” Mr. Khan explained.
There are two categories of investment under the Alternative Investment Option. One is the privately-funded, privately owned category where the developer builds a project that meets a government mandate and that developer ultimately owns the project. The second category is the privately-funded, state-owned initiative where the developer does not own the project.
Mr. Khan added, “To quote a number like $2.2 billion is basically misleading in the sense that it’s assuming that the developer is selling at $175,000. Now, the difference between the privately-funded and the state-owned [categories under the Alternative Investment Option] is that the privately-funded is at $200,000 and the state-owned is at $175,000 for a family of four. In both initiatives…one thing happens [and that is] that the developer, regardless of which side of the fence it is, pays government fees. So if we were to truly look at the new correctional facility and we look at how much money the country would actually get from that it would be hundreds of millions of US dollars…and that would be over a period of one, two, three years or whatever it takes for the developer to be able to sell those units of investment. So $2.2 billion doesn’t exist. It’s never coming out of the government’s coffers—actually, there is the money going into the government coffers.”
The second development approved under the Alternative Investment Option is the Liamuiga Housing Development, which falls into the privately-funded, privately owned category.
Both projects were approved unanimously by the Cabinet in 2021.