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THE BIG GAMBLE

Jul 14, 2010 Features / Columnists, Peeping Tom

Sheila Holder, one of the leaders of the Alliance For Change (AFC), says she is not a betting person. If she only knew the irresistible wager that Glenn Lall is offering, she may become the gambling type.
Glenn Lall, the publisher of the Kaieteur News, is making a high-stakes gamble. He says that he is willing to give away Kaieteur News if anyone can prove to him that the proposed five-star hotel for the Kingston area will be a good deal.
Glenn Lall is not convinced that this is a sound deal. And he has the credentials to know a good deal when he sees one. He is someone that is extremely business savvy. When he first took the risk of entering the newspaper business, not many felt that he would succeed. The skeptics said that there was no room for a third daily newspaper in Guyana. He proved them all wrong. The newspaper not only survived but developed into the country’s leading newspaper in under ten years, quite a phenomenal feat considering the existing competition. When it comes to business in Guyana, I assure you, Glenn Lall is someone whose opinions cannot be ignored.
When he therefore says that he is not convinced that the proposed Marriott-branded hotel for Guyana is a viable investment, people should take note. He is so confident about this that he is prepared to risk losing his flagship company, the Kaieteur News, just to prove that he is right.
For him, the only way that the Marriott Hotel can be profitable in Guyana’s small economy is if the competition is wiped out. Thus for the Marriott to survive and make a viable return on the investments of the owners, both the Pegasus and the Princess Hotel will have to go out of business. The local market, he is convinced, is too small to secure an adequate occupancy in a 260-room hotel. He further feels that even if the Pegasus and Princess Hotel go under, there is no guarantee that the new hotel will be a viable investment.
The second condition for a viable hotel of that size and class in a small economy like Guyana would have to be a significant subsidy from the government. The proposed hotel is not likely to make it unless it is floated by government. This is why the taxpayers of Guyana must be concerned about the reason why the government is an investment partner in this deal. If this project is as attractive as is being touted, why is there the need for the taxpayers’ monies to be put into it as a catalyst? Unlike the Princess Hotel which was built three years ago, there is no deadline in the form of a cricket tournament. Guyana’s reputation is not at stake in completing this hotel.
So just what is at stake that the government is so keen to become a co-investor? Why should the government be acting as a catalyst for big business? Why do the private investors need such government assistance? There should be no subsidy, in whatever form.
The private sector supports this investment in the hotel. But the private sector needs to be careful in endorsing a project before they know who the investors are. The previous attempt at a hotel in the Kingston area failed, and despite this, the government still onto this day has not revealed the names of the persons who were supposed to invest in that venture. Why the secrecy still?
The private sector should focus on two things. The first is the publication of the names of the investors. The second thing is that they should insist that adequate safeguards be in place so that the wrong type of money does not find its way into that project.
The government does not have a good record of recent when it comes to due diligence on investors. For example when asked about the due diligence done on the person selected for the Amaila Falls Road Project, one government official spoke about the insurance company which put up the bid bond having most likely done such a due diligence test.
All may be above board with this hotel and casino project, but there is an extra need to be careful because these types of investments can become conduits for the wrong type of activities and this is something that both the government and the people of Guyana should avoid at all cost.

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