Premier defends $100m borrow

Premier Dr. Natalio “Sowande” Wheatley has hit back at opposition criticism of a $100 million loan designed to boost the government’s long-delayed recovery from the hurricanes of 2017.

His comments came after some House of Assembly members asked why the government had chosen an 18-year loan at commercial rates of 6.5 percent interest when cheaper options were previously available under a £300 million loan guarantee the United Kingdom offered in 2018.

Dr. Wheatley, who is also the finance minister, insisted that the London-backed loan was no longer “on the table” when he became premier shortly after the arrest of then-premier Andrew Fahie in April 2022.

Dr. Wheatley added that the previous National Democratic Party-led administration — which included four of the six current opposition legislators — had ample opportunity to access the UK offer before it lost power in the 2019 general election.

“Opposition had the opportunity to borrow more and get [a] guarantee,” Dr. Wheatley told the Beacon. “They chose not to, and the issue even splintered their party.”

$700m cost

Public-sector recovery costs following hurricanes Irma and Maria in 2017 were initially projected at some $700 million, and the HOA voted in March 2018 to access the UK guarantee and to set up the independent Recovery and Development Agency to administer the funding as part of the deal.

The RDA was subsequently established, but loan negotiations with the UK stalled, and then-premier Dr. Orlando Smith’s NDP-led administration didn’t access the guarantee before it was voted out of office in February 2019.

Talks with London then continued under the Virgin Islands Party-led administration of Mr. Fahie, who implied in February 2022 that the offer was still an option.

“We never told the UK we don’t want the loan guarantee: We just wanted to renegotiate some of the areas,” Mr. Fahie said at the time.

He was arrested in Florida about two months later, and Dr. Wheatley, who had been serving as deputy premier in Mr. Fahie’s administration, became premier.

‘Off the table’

This week, Dr. Wheatley insisted that the UK’s offer had been available for a limited period only.

“By the time I became the minister of finance in 2022, the loan guarantee was off the table,” he told the Beacon.

He added that the $100 million loan from CIBC Caribbean bank — which the House of Assembly unanimously approved on Sept. 27 — is unprecedented.

“It is the biggest loan in our history,” he said.

‘Wasting five years’

The premier’s clap-back came after opposition member Myron Walwyn accused the VIP of “wasting five years” by not taking up the UK offer shortly after Mr. Fahie’s administration took office in 2019. He added that the previous NDP-led government — in which he served as education and culture minister — had been negotiating with London on the issue until it lost power.

Opposition Leader Ronnie Skelton, who served in the NDP government Cabinet as the health and social development minister, also raised questions about why Mr. Fahie’s administration did not take up the UK guarantee offer.

“This [$100 million] loan is definitely not enough to fix our infrastructure problems,” he said. “The £300 million that was offered before was more realistic. And with the UK on board, it would have been a much better interest rate.”

Mr. Skelton also questioned the finances of the new deal.

“At a 6.5 percent interest rate, without a UK guarantee, this loan is going to cost a lot of money as it’s now on commercial rates,” he said. “It will be dear.”

Over the years, Dr. Smith and Mr. Fahie both complained about various conditions attached to the UK offer.

But without the guarantee, the main source of recovery funding to date has come from a $65 million loan obtained in 2018 from the Caribbean Development Bank.

With money short, much of the public-sector recovery has been delayed, and the RDA, which initially was expected to oversee nearly $600 million worth of major projects over a seven-to-ten-year period, has spent only around $55 million on mostly minor projects.

Planned spending

Last week, Dr. Wheatley said $54 million from the $100 million loan will be earmarked for infrastructure, with almost $36 million, including some support from the Transportation Improvement Network Funds, going to roads.

His plan also includes $31 million for building projects and facilities improvements, including work on the shuttered Ralph T. O’Neal Administration Complex, the premier said.

Dr. Wheatley also told a press conference on Sept. 30 that it would be possible to try to renegotiate the 6.5 percent interest rate ten years into the 18-yearloan, but he was unable to say how much the territory would have to pay back in total.