Sale of GT&T’s 20% shares…Luncheon confirms money gone to fund Marriott – AFC

Nov 18, 2012 News

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Government has confirmed that it received a significant portion of the money from the sale of its 20 per cent stakes in the Guyana Telephone and Telegraph Company (GT&T). The amount was touted to be US$25M.
The hefty sum has reportedly gone into the accounts of the National Industrial and Commercial Investment Limited (NICIL), a state-owned company that handles Government’s assets.
Earlier this week, Leader of the Alliance For Change (AFC), Khemraj Ramjattan, said that his party which has seven seats in the National Assembly, learnt that the money…between US$20M-US$25M… was released by Hong-Kong-based buyer, Datang Telecom Technology and Industry Group.
Ramjattan accused the government of being secretive despite the hefty sum involved and the importance of the transaction. He said that the proceeds are reportedly being used to illegally fund the Marriott Hotel in Kingston- something that Government is not confirming.
The money should be placed in the Consolidated Fund, the account for all of Government, the AFC leader said.
According to Head of the Presidential Secretariat, Dr. Roger Luncheon, the sum collected may be around US$25M. Datang, earlier this year, agreed that it will buy the 20 per cent shares for US$30M, paying US$25M in cash and the rest over a year.
GT&T’s main shareholder, US-based, Atlantic Tele-Network (ATN) had refused to buy the shares and government determined to release the shares, had placed them on the market.
Although GT&T’s shares were earning Government on an average around $500 million annually, the decision to sell was more swayed by the fact that moves are underway to liberalise the telecommunications sector.
Dr. Luncheon did not deny reports that the money will be used for the Marriott project.
The Marriott Hotel project, which will be located in Kingston, west of the Pegasus Hotel, has been generating controversy since it was announced under the administration of former President Bharrat Jagdeo.
The controversy had to do more with the fact that Government wants to use almost US$20M of taxpayers’ dollars for the 197-room hotel which will carry the well-known Marriott brand. It also has to do with objections over the feasibility of the project which would come at a time when there are too many empty rooms in the hotel industry.
Hotel operators, in their objection to the Marriott Hotel, also said it will force them out of business.
However, in recent days, Government-affiliated newspapers and websites have been defending the Marriott Hotel which will also have as added amenities a nightclub, casino and restaurant.
According to the AFC recently, NICIL’s head, Winston Brassington, who has been under fire to account for the millions of dollars that was supposed to be in the accounts of the entity, admitted earlier this year that it had set aside US$20M ($4B) for the Marriott construction.
The difference would have come from private investors.
The accounts of the Atlantic Hotel Inc. (AHI), a local company established by NICIL to manage the project, last year indicated that US$10M ($2B) was handed over to the contractor, Shanghai Construction Group (SCG) for the project which could cost around US$60M.
Now, an additional US$20-US$25M from the sale of the GT&T shares has reportedly been placed for Marriott, making it over US$30M-US$35M that is reportedly being spent by government on the project…without any disclosures yet on the identities of the mysterious investors.
Government has also not yet released the feasibility studies on the hotel which would show data that compelled it to invest hundreds of millions of dollars in the project.
Already, the contractor, SCG, has set up camp and construction is in full swing with some foundation already laid.
The disposal of state assets and private conversation of such sale proceeds may be illegal.  While NICIL may be the custodian of the state assets, the disposal must follow protocol that is auditable by the Auditor General. More important than the disposal of state assets is the abuse of proceeds from these sales. Millions of dollars are garnered from such sales which in turn are converted to private use by NICIL.
The Government of Guyana obviously knows and endorses such abuse since the Minister of Finance heads NICIL’s board. NICIL is yet to produce a set of audited financials for the last 6 years.
Ramjattan bemoaned the obvious disregard for transparency. “While we support liberalization of the telecoms sector and we are also supportive of privatization of certain sectors, the small band of individuals must stop the abuse of state funds.” There is no indication that the moneys diverted from the state coffers will be accounted for. “This is white-collar nonsense!” Said one accountant who pointed out that NICIL’s board included Minister of Finance Ashni Singh, HPS Roger Luncheon and Winston Brassington among others. “The President is obviously fully aware of the misdemeanors and is therefore equally culpable of any deceptive conversion of state funds.”

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