FOUR THINGS THAT WILL GAIN THE GOVT. GREATER PUBLIC CONFIDENCE

Sep 26, 2012 Features / Columnists, Peeping Tom

From all accounts, the government is moving ahead with the construction of the Marriott Hotel. As presently conceived, this hotel will continue to attract controversy and result in Guyana being isolated, internationally, if the worst fears of those who have reservations about this project materialize.
So far a convincing case has not been made out that this is a viable project. The same marketing pitch that was made about Cricket World Cup 2007 has been made about this hotel: that it will bring in tourists and revolutionize the tourism sector. We all know what happened after the Cricket World Cup.
The controversial aspects of this hotel project, however, go beyond its viability. One central concern has been the investment model, in which it is said some investors will enjoy preferred shares over that of the government which is putting in over eighteen (18) million US dollars.
Even if the government does not wish to backpedal on this project, it should see the wisdom of removing the controversial aspect of the preferred shares. It should also immediately offer its shares at par value to the private sector.
If the private sector sincerely believes that this hotel is going to make money, then it should have no problem in placing its money where its mouth is.
The opposition may have given up the fight over this project, but this may have to do with the fact that it was interested in preventing this investment from going ahead rather than in ensuring that the best deal was struck for the country.
The same principle of ensuring the best possible deal rather than no deal should apply when it comes to the Amaila Falls Hydroelectric facility. There are two principal concerns here, but at least one opposition party is so mired in a conflict of interest relationship that it cannot forcibly oppose this project.
In the meantime, the concerns remain. The first concern is the overall price of this project. The second concern is the failure to make public the details of the power sales agreement, which would indicate the price at which power will be sold to the GPL and consequently, the price at which electricity will be available to consumers. This project is not going to make any sense, unless the price at which electricity is delivered to consumers is reduced between 40- 60%. Any lesser range of reductions will simply not make sense.
The government seems to be moving forward with this project, and it is for them to now tell the Guyanese people what will be the final cost of electricity. At the same time, the government should invite an independent review of the cost of this project. In short, they should ask an international firm to evaluate whether Guyana will be obtaining value for money for this project.
The PPP once did this for OMAI, and there is no reason why they should not do it to settle, once and for all, the controversy over this hydroelectric project.
Following closely on the heels of the problems with the Skeldon Sugar Factory, Guyana’s progress can be checked if this hydroelectric project flops. If it does not bring returns, then Guyana will find itself in serious problems. It is time that the President of Guyana assures the Guyanese people that he will guard against this happening. It is time that he undertakes a review of the cost of the project as well as announce the cost of the delivery of electricity after this project would have been completed.
It is no use Guyana boasting about the savings from not having to import petroleum when this project is finished, without factoring that the return on the investment will represent a significant outflow of foreign exchange itself and this will be happening not for one or two years, but for twenty years, by which time the investors would have been repaid many times over.
If the government seriously believes that both the Marriott Hotel project and the Amaila Falls Hydroelectric project are good for Guyana, it should not have any objection to the proposals made above, which are:
1) Removing the preference shares for selected investors in the hotel;
2) Offering government shares immediately to the private sector;
3) Announcing the details of the power sale agreement between the GPL and the company that will be responsible for the Amaila Falls Hydroelectric Plant and;
4) Conducting a value for money audit of this project.

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FOUR THINGS THAT WILL GAIN THE GOVT. GREATER PUBLIC CONFIDENCE

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