Settlement of casino case saved country $1.4 billion - officials - Monday 2nd of June 2008
The government has reached the best deal possible with minimal losses in its settlement on the casino agreement with the British company Oasis Holding Investment Ltd., senior officials said on Tuesday.
Through the settlement, the government managed to avoid losses which could have reached as much as $1.4 billion without ceding any property as rumours have suggested, Minister of Justice Ayman Odeh and Tourism Minister Maha Khatib told the Jordan News Agency, Petra, yesterday.
Taking into account the annual profits that a Jericho casino was making, the company could have claimed over $1 billion if it had resorted to British courts, the justice minister said.
Odeh said all rumours that recently have been spreading on the government allegedly ceding around JD1.5 billion worth of land for the company are "baseless".
The government has not transferred the ownership of any property to the Oasis as stipulated by the original agreement, the justice minister said.
He explained the sale transaction of the 100-dunum plot and the other 50 dunums earlier agreed on under the original deal would have become effective only after the firm had carried out required real estate developmental activities, which did not happen.
Under the initial agreement, reached during the term of the former government and signed by former tourism minister Osama Dabbas on behalf of the government, the company was licensed to start two casinos (one at the Dead Sea and the other at the north border crossing with Israel).
The government also averted the loss of millions of dollars it would have had to pay in return for legal expenses should the case had been filed in London, the justice minister indicated.
Instead, the total amount of legal fees the government incurred to have the issue resolved was only £79,588, Odeh said.
The main dilemma the government had to deal with was the possibility of the company obtaining an arbitration decision through one of Londons courts which could have meant the companys seizure of any assets or deposits the government has abroad, Odeh said.
After resorting to local and British lawyers, the government decided not to terminate the agreement right away.
Instead, as a first step, the government decided to send a detailed warning notice to the company declaring its intention to terminate the agreement as a result of perceived breaches committed by Oasis.
At a later stage, the government sent another notice to the company to terminate the agreement, Odeh said.
The settlement was reached after a meeting between Prime Minister Nader Dahabi and the companys owner on March 24 and several consecutive meetings and correspondence between the government and the companys representatives to resolve the dispute.
Under the new deal, the company is no longer entitled to open the casinos and practise its activities. However, if the government ever decides at any time in the future to open a casino at the Dead Sea or at the northern crossing, the company will have the priority to open the facility. Moreover, the concessionary period allotted to the company under the provisions appearing in the original agreement will be cut to five years in lieu of 10.
Meanwhile, Odeh reiterated the second agreement emphasised that the government is not committed to allowing any casino activity now or at any time in the future.
On the other hand, the latest agreement maintained the companys right to set the original project agreed on the designated area with all its facilities, except the casino and the attached hotel.
The other facilities are worth $25 million.
Only after the completion of 35 per cent of the construction work, the project land be sold to the company, as provided for in the original agreement, Odeh explained, adding that the plot designated for the project is only around 100 dunums.
The plot will house a major tourism project in line with the development plan for the Jordan Valley, Khatib said, adding that the project will be dealt like any investment project in the country.
According to Odeh, the only compensation the company got in pursuance of the latter agreement is leasing another 50-dunum plot in the Jordan Valley.
Oasis is committed to building $10 million worth real estate structures on the leased area, to be officially owned by the company only after it completes 35 per cent of its development.
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