Govt. collects US$20M on GT&T’s share sale…

Nov 13, 2012 News

…will use proceeds on Marriott Hotel – says AFC

The sale of Government’s 20 per cent stakes in the Guyana Telephone and Telegraph Company (GT&T) is nearer to finalization with a significant sum paid over last week by the Chinese buyer, Datang Telecom Technology and Industry Group.
The sum is said to be US$20M ($4B) and this was deposited to the accounts of the National Industrial and Commercial Investments Limited (NICIL), the state-owned company which controls public assets. Around US$10M ($2B) more is outstanding.
But it will not be all smooth sailing for the transaction which has been heavily criticized in

NICIL’s head, Winston Brassington

some quarters.
There have been questions whether government was doing the wise thing by selling the shares. It has been earning them on average around $500M annually.
Up until the sale, the government was receiving from GT&T, an annual dividend of US$2.5M, making it the most successful investment ever undertaken by any administration in this country. Initially, when the shares were placed on the market almost three years ago, employees had offered to buy them but this was rejected by Government who wanted them to be purchased en bloc.
Then there was the issue of the price. Government agreed to sell Datang the 20 per cent share for US$30M.
Accountant, Christopher Ram, earlier this year said that Guyana could have got at least US$40M.
According to Leader of the Alliance For Change (AFC), Khemraj Ramjattan, yesterday, Government is planning to use the US$20M for the Marriott Hotel in Kingston.
Government has said that it had problems finding investors for that project.
But the construction has already started with the contractor, Shanghai Construction Group, being advanced US$10M. The 197-room hotel, casino, nightclub and restaurant will cost around US$60M. The foundation is currently being laid and camp has been built at the Kingston site without much clarity about the mysterious investors.
Guyana is plugging at least US$20M into the venture which has been criticized by other hoteliers who are saying that the market is already saturated with too many rooms.

Datang pressured!
NICIL’s head, Winston Brassington, yesterday admitted that monies were paid but declined to give details. He would only say that he has to consult. He asked that Kaieteur news submit a list of the questions.
“I understand that Government officials bore down heavily on the Chinese to make the payment, although the company wanted to smoothly settle in with ATN, the owner of 80 per cent shares of GT&T,” Ramjattan said.
The Parliamentarian said that the government’s heavy push for the monies was to avoid any public perception that it cannot go through with the Marriott project and to avert any impression that the works were in any way being held back by the non-participation of investors.
“Indeed, there is a severe hesitation by private investors into this project because of low levels of occupancy rates in hotels across Guyana. This can shatter confidence in the project and scuttle it. But to shore up such confidence, the government has persuaded Datang to pay in US$20M to NICIL.”

AFC’s Leader, Khemraj Ramjattan

According to the AFC Leader, during the recent graduation ceremony at the University of Guyana, President Donald Ramotar indicated the country’s coffers is not with unlimited funds and so there is a limit on what can be spent on education.
He urged the private sector to help.
“This $4B (US$20M for Marriott) would have gone a far way to enhance the education sector, especially UG, rather than being spent on a project the feasibility of which is held top-secret. It is Marriott for which the President should seek private sector help, and transfer this $4B for education.”

Wild government
Government’s chief spokesman, Cabinet Secretary, Dr. Roger Luncheon, had told media workers earlier this year that Datang Telecoms conducted its due diligence before it arrived at the US$30M price which would include US$25M cash up front and the remainder with a stipulated period.
Government had made it clear that its decision to sell the 20 per cent share was driven mainly by the profits that were coming into the coffers of government and the fact that the telecoms sector was on the verge of being liberalized and opened to new companies.
The majority shares in GT&T are owned by the US company, Atlantic Tele-Network (ATN) under a 1991 agreement.