Govt. finalizing sale of Marriott Hotel – Jagdeo

Dec 23, 2023 News

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Kaieteur News – Vice President (VP), Bharrat Jagdeo during his weekly press conference on Thursday disclosed that the National Industrial and Commercial Investments Limited (NICIL) and their lawyers are still finalizing the sale of the Marriott Hotel.

American businessman, Ramy El-Batrawi, was the highest bidder, proposing the sum of US$90 Million for the acquisition of the Kingston, Georgetown property.

On Thursday, Jagdeo reiterated that the Government of Guyana (GoG) is not involved in the negotiations at the technical level with El-Batrawi and his lawyers; as NICIL is facilitating the sale of the hotel.

Jagdeo said, “The investor complained about the sloth. Once the bid was out, we, as I said before, we left it to NICIL and their lawyers to deal with the negotiations at the technical level. Let me just say we want the matter concluded but the executive will not intervene unduly into a technical process unless we believe that something is not being addressed to satisfaction and the satisfaction of the original bid, now let me make it clear that this company put in a bid and they have to remain faithful to the bid.”

The Vice President explained that NICIL has to ensure that the country’s interest is protected in those negotiations and that the original concept of the bid is reflective in the signed agreements of the sale.

“At this point in time NICIL will issue a press release in the negotiations we are bound by a confidentiality clause but we are not rushing anything to satisfy because there is there is no desperation for money from this deal, the asset remains 100% government,” Jagdeo said.

He continued, “We went out to tender, we wanted the agreement concluded but it must be concluded in a manner that would reflect public scrutiny and scrutiny by the audit office.”

In December 2022, the Government announced that it will be selling the hotel. Negotiations with El-Batrawi and NICIL began in June 2023.

Following the announcement, six companies had submitted their proposals for the hotel. However, in May, the government had informed the bidders that their initial bids were rejected, because the bids were too low and did not reflect the true value of the hotel. Thereafter, four bidders dropped out leaving X, LLC owned by El-Batrawi, and local consortium Integrated Group Guyana Limited, headed by Ravindra Prashad, whose second bid was US$86.1 million, falling short of El-Batrawi’s proposal.

Construction of the Marriott Hotel started under the Bharrat Jagdeo-led administration. Taxpayers’ money along with a syndicated loan through the Republic Bank Limited of Trinidad was used to finance the project. The hotel opened its doors on April 17, 2015.

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 privilege to the proceeds of a sale.

Meanwhile, Kaieteur News had highlighted that El-Batrawi was barred by the United States Securities and Exchange Commission (SEC) back in 2010 from acting as an officer or director of a public company for a period of five years. Notably, while El-Batrawi never accepted wrongdoings, in April 2010 the final judgment resulted in him being barred from running a public company for five years.

Moreover, El-Batrawi visited Guyana twice last year, October 2022, and November 2022. The American businessman had praised the time he spent with President Irfaan Ali during his visits to Guyana. One month later, NICIL announced the Government’s decision to sell the hotel.

In March 2023, Jagdeo revealed that despite the criticism the hotel faced when the construction was announced – the hotel had emerged as a profitable venture, but justified the sale of the hotel by stating that it was a business decision.

In fact, the VP said during a press conference that while the hotel is making a profit, it is of no supreme benefit to the Government owning it anymore. Jagdeo continued by saying that within a few years, several hotels are expected to come on stream and in order to avoid competition, this is the best time to maximise the profit and sell the hotel.

According to Jagdeo, the proceeds of the sale is to 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.”

Notably, a decision by the former administration resulted in US$1.1 million ($226 million) of taxpayers’ money coming out every six months (since 2017) to service the US$27 million loan from the bank – for a 13-year period.

This was after the hotel was unable to service the loan. In order to prevent the hotel from being acquired by the bank, the APNU+AFC Government in April 2017 transferred the hotel’s financial obligations to the Central Government. However, VP Jagdeo stated that while in Opposition, the People’s Progressive Party (PPP) was opposed to the hotel’s financial obligation being transferred.

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• Construction, Government, Marriott hotel, National Industrial and Commercial Investments Limited (NICIL), Ramy El-Batrawi

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