Govt. may or may not put money into Marriott – Jagdeo

Jul 24, 2010 News

---

– says one experience at Pegasus will turn any investor off this country

In the face of scathing criticism from management of one of the country’s leading hotels over the government’s involvement in the Marriott Hotel project, President Bharrat Jagdeo yesterday said the government may or may not put any money into the venture.
This was as he lashed out at the service offered at the Pegasus, saying “one experience there will turn any investor off this country.”
In mid-June when the formal announcement of the Marriott Project was announced, it was stated that the hotel will operate under a management agreement with Atlantic Hotel Inc. (AHI), a company owned by the Government of Guyana (GoG) as part of a public-private partnership between the Government of Guyana and private sector investors.
Yesterday, Jagdeo said no investor has so far been identified. The owner of the Pegasus hotel, Robert Badal, Thursday said that it was difficult to understand why the President had committed US$20M of poor tax-payers’ money to the Marriott project.
Yesterday, Jagdeo did not say how much money, if any, the government would plug into the project.
“The government may or may not, depending on how many private partners are onboard, put some money into the project,” Jagdeo told reporters at the Presidential Secretariat in Georgetown.
Before, Jagdeo had said that at some point in time after the hotel is built, the government would sell off its equity so it becomes 100% owned by the investor. He maintained that position yesterday.
Jagdeo was adamant that the country needs a modern hotel like the Marriott and not one plagued by a multitude of problems like the Pegasus. But the President said he was not surprised at the Pegasus owners reaction to the Marriott project.
“If I were him (Badal), I’d probably try to kill every other effort for any other hotel in the country to be built, because it means I can continue to have a monopoly, charge high rates and not refurbish, and give the frankly speaking, crappy service that so many foreigners have complained about,” Jagdeo said.
“And I am not blaming the staff at Pegasus, because they have very little to do with it. It is the money that they need to spend on refurbishing the place that when people turn on… in an international hotel – and I have travelled a lot – when they turn on the tap, the sink is not filled with red water and when they turn on their AC in the room, like some Prime Ministers complained to me, it is soaking wet; it drips all the time, because of the level of condensation,” he added.
He referred to criticism against the Marriott project as a reflection of what happened when the government sought to assist in the building of the Buddy’s (now Princess) hotel. Now, he said 300 Guyanese are employed there.
Jagdeo was adamant that the country needs hotels like the Marriott, especially if the country is to be marketed as a destination for conferences.
Jagdeo said if Badal is so concerned about the taxpayers’ money, he shouldn’t have tried to “steal” the government’s shares in Guyana Stockfeeds or build a wharf belonging to National Industrial and Commercial Investments Limited without paying. Further, Jagdeo said he has gathered that Badal also owes the Neighbourhood Democratic Council where his property is located $20 million in taxes.
“It is these narrow minded people who will hold this country back,” Jagdeo charged.
Badal said the Marriott Hotels would usually under normal commercial management contracts have to pay a management fee to compensate a developer and owner of a hotel a minimum of 10% of the project cost, in this case a minimum of US$2M per year.
Jagdeo says Badal’s analysis is nonsensical.
Badal argued that if the Pegasus were not up to standard and Guyana so desperately needed to improve its standards, then the resources going into the Marriott could go to Guyanese operators with strict conditionalities.
“With all due respect, although the improvements have been made at Princess and the Pegasus has been there, they are not of the quality that you would want if you are promoting tourism and other travel,” Jagdeo told Kaieteur News in Montego Bay, Jamaica two weeks ago.
Badal said the management and staff of the Pegasus Hotel are “deeply disturbed by the irresponsible, erratic, and unpatriotic behaviour of President Jagdeo in criticising this icon and hallmark of Guyanese hospitality.”
Badal called the government’s input into the Marriott project “an indecent assault on the local hospitality industry, but more so on the local Private Sector.”

---

---