More shocking revelations…Contracts to build Marriott signed before feasibility study done

Mar 24, 2015 News

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Government is facing pressure to withhold final payments to the Chinese contractor of Marriott Hotel,

Shanghai Construction Group (SCG), until a forensic audit is done to determine whether the firm complied with local tax and other obligations.
Writing on his blog site, chrisram.net, prominent accountant and lawyer, Christopher Ram, yesterday blazed Government and Winston Brassington over a number of irregularities that have become public knowledge, raising the ire of the Opposition.
The accountant was highly critical that Brassington and Government signed contracts for the hotel since in October 2011, but only had the critical feasibility study done by a Miami-based consulting firm in September 2012. The feasibility study is the assessment that tells whether a project makes economic sense.
“Yet the contract for the project, comprising several documents, was signed by Brassington and Michael Zhang, Managing Director of S.C.G. International (Trinidad and Tobago) Ltd. in October 2011.
“Shortly thereafter the contractor was paid billions of dollars on a project whose feasibility was under study.”
Ram believes that the Marriott feasibility study was typical of Brassington’s usual response to concerns about the feasibility of any project: “get a study done by someone to whom you dictate all the favourable parameters.
Ram also criticised the partial feasibility study which was released by AHI.
“So pathological is the deception that the feasibility study released evidences further deception. It is either

that the report was poorly done or the report was doctored.
“No half decent consultant would submit a report without a contents page and with unnumbered pages. The pages of the document are not only un-numbered, but several chapters including the key Chapter 3 Market Analysis are excluded.”
He said that the exclusion of Chapters 1 to 4 is gross dishonesty on Brassington’s part.
Brassington is the Head of the National Industrial and Commercial Investments Limited (NICIL) and Atlantic Hotels Inc. (AHI).
NICIL is the controversial Government-owned company in charge of managing state assets and investments, while AHI is a holding firm which is overseeing the hotel’s construction and its subsequent operations.
Government has plugged more than US$36M of taxpayers’ money held by NICIL into the construction of the Marriott without the authority of the National Assembly.
This sparked protests by an incensed Opposition which said that the money belongs to taxpayers and should not be spent without their permission.
The hotel is set to open next month, but its critical entertainment component that will house its casino and restaurant, will not be completed before yearend.
Ram, who has joined a list of those highly critical of the financial arrangements of the Kingston hotel, said that Brassington has been part of one of the gravest violations of the country’s laws, involving billions of

dollars.
“The directors and officers either initiated or were negligent in the violations. Brassington himself has lied big time. He stands accused of perjury, among other things.”
Ram argued that it is public knowledge that the hotel construction has been financed mainly from the proceeds of the sale of Government shares in the Guyana Telephone and Telegraph Company Ltd. (GT&T) and from other public resources diverted to, or vested in the company through means that many consider completely illegal.
He said that it is also public knowledge that the National Assembly passed a motion on December 17, 2012 that, among other things, neither NICIL nor AHI may incur further expenditure on the project without its authorisation and approval.
“Needless to say, the directors and officers of NICIL and AHI have ignored that motion.”
CRUDE SUBSIDIES
He said that it is known that the hotel has been granted concessions rare to any entity in Guyana – even to Queens Atlantic, a company that is closely linked to former President Bharrat Jagdeo. “Those concessions, in addition to land at below-market price, are no more than crude Government subsidies.
It is also known that the contractor has been allowed, illegally, exemptions from the laws of Guyana which even the diplomatic community does not enjoy.”

He said that in the middle of violations is Brassington.
“Other facts are less well-known. Other than payments to the contractor, details of most other transactions with other parties have been carefully hidden away by Brassington.
Sometimes it requires the detective skills of Sherlock Holmes, the criminal expertise of Crime Chief (Leslie) James, or the forensic resources of Ernst & Young to piece together Brassington’s acts.”
The 197-room hotel and entertainment complex ran into a roadblock last year after an Opposition Parliamentarian, Desmond Trotman filed court actions which blocked AHI from mortgaging the hotel.
The court action effectively blocked monies from the equity investor from Hong Kong –US$8M and US$27M from a syndicated local being handled by Republic Bank. Only part of the syndicated loan was released by the bank, with Government stepping in with the rest.

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