BaiShanLin owes $600M on Cacique Palace

Aug 16, 2015 News

A Chinese logging company that had purchased the Cacique Palace and Banquet Hall in Providence still owes around $600M for it.
BaiShanLin is facing financial problems and is examining a number of options with the building, located behind the Princess Hotel and Casino.
On Wednesday, Minister of State, Joseph Harmon, responding to questions, disclosed that indeed the transaction was incomplete.
The Cacique Palace and Banquet Hall was started by a group of private developers, for the 2007 Cricket World Cup to cater for several matches scheduled to be played at the nearby Providence National Stadium.
However, the US$3.5M ($700M) project was not completed despite a $30M cash injection by the then Government.
Work on the hotel began in late January 2006, and was to have been completed by the end of the same year.
At the time of the construction, the government facilitated $30M from the Consolidated Fund. That money was turned over on the agreement that it was an advance payment for rooms, but with no business conducted, Government had stepped in.
To recover its monies, the previous administration had established a team comprising the developers and Keith Burrowes, a senior official.
BaiShanLin, which was rapidly expanding its tentacles in the logging and other sectors, expressed an interest and a deal was reportedly reached for US$4.5M, down from the original asking price of US$5M.

BaiShanLin’s local boss, Chu Hongbo

The Cacique Palace

However, BaiShanLin between 2012 and 2013 only paid US$1.5M. There was difficulty to collect the remaining US$3M.
The Cacique Palace and Banquet Hall had been on the market for about four years, with numerous persons and businesses expressing interests, before the deal was sealed with BaiShanLin around 2013.
BaiShanLin’s operations in Guyana and its closeness to the former administration had been under scrutiny because of the hundreds of millions of dollars in tax breaks and concessions it received.
The Chinese company was aggressive in its advance in the logging industry, with exports rising sharply in recent years. While the Guyana Forestry Commission has insisted that logging activities for the country remain way below the allowable cuts, there was still the feeling that the Asian presence was dramatically increasing exports in recent years, as evidenced from official figures.
BaiShanLin is also involved in gold mining and has entered the barge transportation business, much to the anger of local operators who say that they are facing unfair competition.
A gated community at Providence is being constructed but work has slowed.
The company is also building a huge showroom nearby.