Not a priority…Marriot, CJIA project should be halted – AFC, APNU

Apr 22, 2012 News

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– US$130M loan one that country can ill – afford at this time

 

Government’s intentions to spend more than US$170M on two major projects is not going down well with the Parliamentary Opposition parties. They say that the investments are not priorities to Guyana at this time.
The two projects under fire are the proposed Marriott Hotel and the planned expansion of the Cheddi Jagan International Airport.
With no immediate clear evidence that both projects even makes economic sense at this time, both the Alliance For Change (AFC) and A Partnership For National Unity (APNU) are now calling on government to rethink the investments.
In the case of CJIA, Government has announced that it will be putting US$20M ($4B) of government funds while the remaining US$130 will be coming from a “soft loan”, via the Ex-Im Bank of China.

Regarding the Marriott Hotel, Government says that it could be placing up to US$27M of taxpayers’ funds in the 197-room facility to be built in Kingston, west of where the Pegasus Hotel is currently located.
That project, inclusive of a casino, could cost up to US$60M. Government is now seeking private investors through an arrangement with Republic Bank (Trinidad) Limited.
According to APNU’s Parliamentarian, Rupert Roopnaraine, Government’s arguments in justifying the Marriott Hotel’s construction centre on a need for an international branded hotel to boost tourism.
“I am in favour of anything to boost tourism. The question is whether in the condition of scare resources, if it is the best allocation of the taxpayers’ money. Our last adventure is the Buddy’s Hotel (now Princess Hotel and Casino) and that did not go all that well. As far as I am aware, they had to make some creative arrangements to get the money repaid.”
The Parliamentarian was referring to the fact that Government, in a bid to recover monies that it had invested to make Buddy’s ready for the 2007 Cricket World Cup, was forced to buy rooms in advance for future events.
Empty rooms
A number of other hotels that had been constructed for that event have since been sold as rooms remained empty.
“I don’t know whether we should be putting money here. The argument is that it gives Marriott a competitive edge over the hotels. It makes the playing field not level. A lot of hotels are not receiving taxpayers’ dollars. They would now have to compete against a new hotel coming in… this seems to be unfairness to the hotel industry,” Roopnaraine said.
In the case of the CJIA expansion, Roopnaraine noted it is no secret that Guyana does not have the volume of air traffic that would justify the investments to be made.
Last week, Transport Minister, Robeson Benn, told Parliament that Government was banking on the Asian and African markets to boost air traffic to Guyana.
“It seems to me again as if they putting a whole lot of funds into the operations with a view (to benefit from future traffic. I don’t believe it (the investment) is justifiable at this stage.”
AFC Parliamentarian, Moses Nagamootoo, stressed that both the CJIA and Marriott are not projects that will immediately create “tremendous employment” for Guyana. This comes when there are constant criticisms over Government’s spending from the National Industrial and Commercial Investments Limited (NICIL), state-owned company that manages state assets.
Managing the proceeds of the sales of some of Guyana’s assets by NICIL has raised questions with pressure mounting on government to transfer billions of dollars, said to be around $60B, to the central account– the Consolidated Fund.
“Whether it is US$19M or US$21M…the hoteliers are saying that there is no question in Guyana with regards to hotel accommodation,” Nagamootoo said of the Marriott.
With Government plugging the private sector as the engine of growth, it would not be unthinkable that local hotel owners may also want to ask for additional incentives and concessions to boost their capacity, he said.
“And therefore, I think that it is discriminatory and unreasonable to use people’s money, the taxpayers’ money.”
Another expansion?
Speaking on the US$150M expansion for CJIA, Nagamootoo was puzzled about Government’s intentions. “We have been talking of expansion. Now we are being told about a new airport.  We had expansion. We have had new facilities installed. We have had new radar installed with an improved airport tarmac.
“We put in landing lights, we installed new conveyor belts. There has been an expansion of the airport.”
The AFC official questioned the state of negotiations with new airlines.
“There are no direct flights coming from England; there no direct flights from Europe, and they will have to tell us what has been the status of negotiations with the airlines outside of the Caribbean and North America. And if they tell us that we have British Airways coming here; and KLM will be coming here and Katara Airways will be coming here, then they will probably justify why they need a new airport.”
As far as the AFC official is concerned, the airport financing will be an addition to Guyana’s loan stock and a loan that the country can ill-afford at this time.
“They may say this is concessionary loan but concessionary loans are not, they are loans that add to your loan stock which is creeping up on us. And we have a situation here that we have to be careful, that we rely on agriculture and rice and sugar, and if this implodes on us, our ability to repay proportionate to our GDP will be hampered.
“These (projects) are not necessities and therefore they could be avoided.”
The CJIA airport was awarded to China Harbour Engineering Company (CHEC) Limited of Beijing, China late last year. The deal only came to light after a Jamaican newspaper reported that an agreement was signed there between officials of that Chinese-owned company and Guyanese officials who had travelled there. There were immediate criticisms.
The CJIA expansion is supposed to include longer runways, a two-storey terminal building, passenger loading bridges, more check-in counters and concession spaces. The project, the construction of which is set to last for 32 months, will also allow for a larger apron to park planes and be fully equipped with close circuit television (CCTV), building automation system and several large screen TVs displaying flight information.

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