Government terminate contract with Leisure Centre bowling company

Update
Government terminate contract with Leisure Centre bowling company


Date : 
24/10/12

Ref   : 
695/2012


Government terminate contract with Leisure Centre bowling company


The Government has terminated the contract with the operator of the bowling facility in the Leisure Centre by mutual agreement. This will take effect in about three months time as from the 31st January 2013.

It will be recalled that the terms of the contract effectively meant that the operator takes no financial risk. The taxpayer has been footing the bill to cover any losses and paying an extra 30% profit on top. The loss-making facility has therefore been artificially kept afloat by the taxpayer.

The way the system works, as the Government has previously explained, is that if income exceeds expenditure, which has never happened, then a profit sharing system applies.

However, if there is a net loss, then the Government, through King’s Bastion Leisure Centre Ltd, is contractually required to pay the net loss to the operator with an additional 30% of profit on top.

The operating losses +30% have been paid as follows:

01/01/08 – 31/01/09 – £ 16,639
01/-2/09 – 31/01/10 – £109,003
01/02/10 – 31/01/11 – £169,517.60 (+£22,162.60 re-imbursement of legal fees)

The payment for 2011/12 was expected to be about £213,000.
The Government is convinced that the deal struck by the previous GSD administration was not in the interests of the taxpayer nor in the wider interests of Gibraltar and that is why it has been brought to an end.

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Government terminate contract with Leisure Centre bowling company

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