Marriott’s financial arrangements unheard of in the Caribbean

Marriott’s financial arrangements unheard of in the Caribbean – Ram

Mar 14, 2013 News

…private media not invited as Ramotar tours site

The government’s decision to force taxpayers’ money into a Marriott-branded hotel project and then make special arrangements to accommodate investors without even knowing if any will come onboard is unheard of in the Caribbean, Chartered Accountant Christopher Ram has charged.

Chris Ram

Despite mounting controversy over the project, the government is stubbornly pushing ahead, and is further locking out public scrutiny. Yesterday, President Donald Ramotar toured the Kingston site of the hotel, but did not invite the private media.
Government not only advanced monies for investors who seemed unwilling to plug their own funds, but procured tens of millions of dollars in concessions and permits.
All along the way, it was the assumption that government would have continued to own part of the facilities which would include the casino, hotel, nightclub and restaurant.
However, recently, in surprising statements, Head of the Presidential Secretariat, Dr. Roger Luncheon, announced that government has no intentions to hold onto the hotel, but will sell its shares once it is completed.
With fresh details of the project now emerging, Government is now being asked hard questions as to its true intentions regarding the project.
“The Guyana Government has now taken on the role of venture-capitalist and procurer of concessions, licences and permits for an unknown entity(ies) which is not willing to invest any money upfront. It is hard to think of any similar arrangement across the Caribbean,” says Ram, an accountant/columnist who has a long-standing business section in the privately-owned Stabroek News.
In his column two Sundays ago, Ram said that an agreement dated April 14, 2011 has no conditions regarding ownership. This meant that Government can sell the hotel one day after completion “with all the massive concessions which amount to a windfall to whoever the buyer turns out to be.”
Yesterday, President Donald Ramotar led a team of ministers and other officials to visit the Kingston site where the hotel is under construction.
However, only the state media was present for the tour although the privately-owned news houses have been asking questions. He was accompanied by Chinese Ambassador to Guyana, Zhang Limin; Shanghai Construction Group (SCG) and their local counterparts, Minister of Finance, Dr. Ashni Singh and Minister of Public Works, Robeson Benn.
The 197-room hotel will boast a large ballroom, conference centre, a casino, entertainment complex, restaurant, concrete walkway, swimming pool, sport facilities and all other amenities to outfit a world-class hotel.
The hotel is scheduled to be commissioned August 2014, a government statement said yesterday.
Government, which has heavily been defending the project, insisted that it was critical if Guyana wants to develop its tourism product.
The hotel is being developed by Atlantic Hotel Inc. (AHI), a subsidiary of the government-owned investments/privatization company, National Industrial and Commercial Investments Limited (NICIL).
NICIL is the same company whose privatization transactions have been criticised by the opposition as its monies are currently not now under the authority of the National Assembly.

President Donald Ramotar at the Kingston construction site of the Marriott-branded hotel.

AHI went ahead without the blessings of the National Assembly to approve the US$51M project to build the hotel.
Ram said he has seen a document, an agreement between the Guyana and AHI, dated April 14, 2011 and signed by Winston Brassington on behalf of AHI and Dhanraj Dhanpaul, Chief Executive Officer (ag) of Guyana Office for Investment (Go-Invest) on behalf of the Guyana Government.
It gives the hotel a host of benefit.
Among other things, the agreement said, the new facility is being granted 10 years exemption from corporation, property and withholding tax, including the payment of interest and dividends to debt providers and equity holders.
“Additionally the developer has received an undertaking that it will be granted a licence to operate a casino. Additionally, the developer is guaranteed relief from duty and excise tax on capital repairs or replacements including machinery, equipment and buildings costing more than US$10,000.
“And on top of that, the developer is entitled to a “one-off” retrofitting of the project within ten years if so required for a period of ten years (sic) from the commencement of commercial operations.”
Government is plugging at least US$21M ($4.2B) in the project from NICIL’s coffers.
Under the deal, investors other than the government which owned AHI, will have first preference to get back their money should the hotel fail for some reason or the other.
There have been protests after disclosures that only imported Chinese workers were employed on the worksite.
Recently also, it was disclosed that government doled out a US$1M contract to an engineering consultancy company in the US that has been banned by the authorities from participating in any of its school projects.
Government said that it went ahead and hired that company even knowing of the blacklisting.