ST GEORGE’S, Grenada — Prime minister of Grenada, Dr Keith Mitchell, recently announced that his government has launched an investigation into the failure of an aquaculture project financed by the country’s citizenship by investment (CBI) program. The prompt and vigorous action by the Grenada government contrasts sharply with the laissez-faire and lackadaisical approach by other regional governments, notably St Kitts and Nevis.
In February 2017, a CBI registered company called Grenada Sustainable Aquaculture (GSA) launched the Zero-Water Exchange Sustainable Organic Shrimp Farm. The project was to specialize in the production of shrimp in a socially and environmentally-friendly manner, that is, free of antibiotics, chemical additives and enzymes.
GSA said at the time that the project will be a model for the Caribbean and the rest of the world and, due to the technology used, as well as the quality of water supply, it would produce a sweeter shrimp that will be in high demand in countries such as the United States and Canada.
“We have been disappointed in this one, noting that the action of the company has caused the government to make some mandatory changes to the way funds are accessed under the programme,” Mitchell said.
“We are now investigating, and we are seeking the support from our friends regionally and internationally to deal with the proprietors of that particular project because we know that through the programme they have collected significant sums of money.
“They have not done the investment and because of that we have made some changes to the conditions of people receiving money from the CBI programme, we are making sure it goes into escrow accounts and they have to account for it on a regular basis with the government having oversight. Some of them don’t like it but we have to protect the name of the country,” he continued.
A notice on the Grenada CBI website since October 2018 informed visitors to the site that it had suspended applications for the Grenada Sustainable Aquaculture project.
“Notice is hereby given that the Grenada Citizenship by Investment Committee has suspended the acceptance of applications in respect of the approved project, Grenada Sustainable Aquaculture (GSA), until further notice,” said Thomas Anthony, chief executive officer of the Grenada Citizenship by Investment Unit.
“This is the first time a Caribbean government has taken active steps against a project that has failed,” said Mohammed Asaria, founder and vice chairman of Range Developments. “If other Caribbean governments did the same thing and demanded performance in this manner, the CBI industry would be in a much better place and investors protected. The market would be cleaned up from some of the nonsense we are seeing elsewhere.”
In St Kitts and Nevis, the government has notably failed effectively to address rampant abuse of its CBI program, even in the face of documentary evidence of fraud and deception on the part of overseas citizenship agents and local developers, let alone the multitude of partly built, now abandoned and derelict CBI projects.
This abuse of the St Kitts and Nevis CBI program has been, at least in part, facilitated by inadequate or non-existent legally mandated protections for investors and a failure on the part of the government to monitor and police such abuses, which have deprived the government of tens if not hundreds of millions of dollars in economic input, none of which would have been possible without public officials being at worst complicit or at best turning a blind eye to the situation.
While the government has now tried to shut the stable door after the CBI horse had bolted by means of two attempts to introduce CBI escrow accounts legislation and oversight, this is widely perceived as being too little, too late.
Meanwhile, the long-standing failings are likely to achieve greater prominence in September if Caribbean Galaxy Real Estate, developer of the Ramada resort project in St Kitts, fails to meet yet another promised completion date.
Construction of the resort, which commenced as long ago as 2014, has missed several such completion dates and, according to industry experts, is still only one-third complete, contrary to glowing press releases issued by the government.
In fact, an international businessman, who describes himself as a “proud Kittitian”, is so fed up with the lack of construction progress and broken promises by Caribbean Galaxy that he is prepared to wager EC$5 million (US$1.85 million) with the firm’s principals that they won’t complete the project on time.
Caribbean Galaxy has declined to accept the challenge.
As the situation continues to unfold, the international community, investors and citizens are inquiring what recourse is available, what are the consequences, and will Prime Minister Dr Timothy Harris take steps against Caribbean Galaxy if the resort does not open by September 2019.
Meanwhile, the same developer, Caribbean Galaxy, has announced it will break ground in Saint Lucia later this year for construction of the Canelles Resort, which includes Dreams and Zoetry, offering 330 beachfront rooms overlooking the Atlantic Ocean to the South, together with an oceanfront residence with 380 apartments.
The announcement prompted similar concerns in Saint Lucia regarding the developer’s ability to complete such a project on time or at all in the light of of its long history of non-performance in St Kitts.