‘No financial record available for Marriott since 2015’ – NICIL

Apr 03, 2023 News

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…says audits will be made available when 2021 is completed

Kaieteur News – As the Government of Guyana (GoG) moves ahead with its decision to sell the Guyana Marriott Hotel, Chief Executive Officer (CEO) of the National Industrial and Commercial Investments Limited (NICIL), Radha Krishna Sharma has disclosed that the last public financial records for the hotel was filed for the year ended December 2015.

Back in September 2009, NICIL incorporated Atlantic Hotel Inc. (AHI), as a special purpose company to construct and manage the Marriott Hotel and through NICIL; the Government of Guyana owns the hotel. However, that will soon change as the Government is awaiting bids from prequalified firms for the purchase of the almost US$60M hotel.

The hotel was opened back in 2015 and since then, according to NICIL’s CEO, no financial returns has been filed for the company. In a statement, NICIL said, “In March 2015, before the PPP Administration left office, the financial statements of AHI up to the year ended 31st December, 2014, were audited.”

It was further disclosed that when the People’s Progressive Party/Civic (PPP/C) administration re-assumed office in August 2020, the status of the audits for the hotel were only audited up to 2015.

As a result, NICIL stated that a new Board of Directors for AHI was appointed and in December 2020, the Board engaged the Office of the Auditor General, who appointed Chartered Accountants Nizal Ali and Company to complete the outstanding audits of AHI in March 2021.

According to NICIL’s CEO, “To date, the audits for the years ended 31st December, 2016, 2017, 2018, and 2019, have been completed, together with the field audits for the years ended 31st December 2020, and 2021. AHI was advised by Nizam Ali and Company that the audit for the year ended December 2022, is ongoing.”

He added that AHI has successfully managed to commission and complete the audits of its accounts for five years in a span of less than two years.  According to Sharma, the audited accounts will be published upon completion of the audit of the year ended 2021.

Last Wednesday, the CEO had confirmed that eight firms have submitted their Expressions of Interest (EOIs). He explained that five of the eight applicants have paid for and uplifted information packages and noted that the deadline for submissions of bids is on April 17, 2023.

For his part, last Thursday during a press conference, Vice President (VP) Bharrat Jagdeo stated that while the Marriott Hotel is “a profitable venture” and is “making a profit” it is of no supreme benefit to the Government owning it anymore.

Notably, the hotel started under the Jagdeo administration when he was President using taxpayers’ dollars and with a syndicated loan through Republic Bank Limited of Trinidad.

During the press conference, the VP explained that despite the hotel was started at a time when others touted it as “a white elephant” the hotel is now a money-making machine. Jagdeo stated that as a result of the Government being generous to help trigger a new wave of hotel building, “…there is no particular supreme benefit to Government owning (the hotel), it’s better to maximise the money and invest it in something else backing healthcare or maybe in another facility…”

The VP justified the Government’s reason for selling the hotel now by saying, “The Government didn’t need to own a hotel at that time, but the era was that we were not getting new hotels built and we had to trigger the investment. So now it would be best to sell the Marriott off, you would probably maximise the price that you will get when it’s profitable and before the seven new hotels that are privately built, that are internationals brands come on the market. It is the period you maximize, the period in which you sell.”

The Government has been reported in the media encouraging investors to build hotels as part of their plan to advance the hospitality sector in Guyana. There are seven new hotels being constructed that are expected to meet a demand of around 2,000 rooms by 2025.

Kaieteur News had highlighted that under the syndicated loan agreement, the preferred rights go to those investors – meaning that in the event of the hotel being unable to service the loan – the unknown investors would have the first lien on the proceeds of any sale.

Back in 2017, AHI was unable to meet its due financial obligations to repay the syndicated loan. As such, AHI had requested the assistance of NICIL, the guarantor but the State agency was also unable to assist. In order to prevent the hotel from being acquired by the bank, the former Government in April 2017 made the decision to transfer AHI’s financial obligations to the Central Government. This decision has resulted in US$1.1 million ($226 million) of taxpayers’ dollars coming out every six months (since 2017) to service the US$27 million loan – for a 13-year period.

However, during the press conference the Vice President stated that while in opposition the PPP/C were opposed to the loan obligation being transferred to central government. Jagdeo claimed that the loan being burdened on taxpayers had nothing to do with the hotel being unable to service its loan.

According to the Vice President, the proceeds from the sale of the hotel will be used, “to clear off the remaining loan and some of it will come back to the treasury to be used back for whatever purpose is determined.” Jagdeo continued by stating that, “this is probably the best time when you can maximise the value before you get competition from the seven other hotels coming into the market within a year or two…”

 

 

 

 

 

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• Guyana Marriott, Marriott, NICIL

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