Investment in hotels in Guyana at this time not a viable proposition

Dear Editor,
The editorial in the Sunday Stabroek of October 5, 2008 expressed the view that pile driving for the foundation of the proposed Kingston Hotel may well undermine the foundation of the Kingston Lighthouse, the seawall and other buildings in its vicinity.

Firstly, pile driving is not an earthquake. Most of the energy generated by pile driving is transmitted longitudinally and not transversely. Prior to construction of the hotel, detailed subsoil analysis will have to be carried out to enable the structural engineers to determine design loads on the foundation piling, their lengths and the quantity required. Other considerations integral to proper design and construction will among other factors determine whether pre-boring will be required to protect adjacent structures from the energy that is normally generated by pile driving and could impact on adjacent building foundation.

Therefore, scaremongering tactics by some among us should not be allowed to derail a legitimate development project about to proceed since pile driving technology is available for engineers to assure the integrity of the foundation of adjacent structures in the proximity of the proposed hotel. Pile driving similar but less complex to what is likely to take place at the proposed Kingston Hotel site is now underway at a new mosque under construction at Church and New Garden streets. The engineer to whom SN spoke and  other skeptics should visit the site and observe the pile driving operation and see first hand that the foundation of adjacent buildings including Bourda Cricket Pavilion and the Lady of Fatima Church across the road have not been impacted upon.

Of greater concern is the issue raised by SN regarding the obscuring of the lighthouse. The proposed hotel will evidently obstruct the line of sight of ships using the lighthouse as their target for entering the harbour. If on the other hand the Lighthouse has become derelict because of the use of the GPS navigation system by ships this would not be a problem and the lighthouse will most likely become a museum and historic landmark.

To make it a tourist attraction its view should be unobstructed from the river and surrounding area. This would not be possible with the overpowering height of the proposed hotel. The pros and cons regarding these issues should have been spelt out in the Environmental Social Impact Assessment Study. If it hasn’t then something is amiss and the study is incomplete. The pertinent facts should be laid out for Guyanese to make their judgment.

There are reasons to believe however, that construction of the proposed Kingston Hotel will not get started any time soon. The developers are still seeking finance and they have not stated unequivocally who the committed investors are. The occupancy rate for hotels in Guyana has been consistently low for some time now and the situation is unlikely to improve in the foreseeable future. The Guyana tourism industry is further negatively impacted upon by the country’s poor infrastructure (unreliable electricity supply, poor quality and quantity of potable water, deplorable roads, etc) and services generally. It is evident that investment in hotels in Guyana at this time is not a viable proposition and the balance sheets of the top four hotels in Guyana could attest to this. Investors in multi-million dollar hotel ventures want to be assured in these turbulent financial times that their investments are in financially viable projects with high and secure rates of return. It is unfortunate that the Government of Guyana (GoG) spent large sums of taxpayer dollars to re-locate sewage and other pipelines for a Kingston Hotel project whose viability and financing were fuzzy to start with and now is evidently going nowhere.

Amaila

The same could be said for the Amaila Hydroelectric Power Project whose promoters have painted a rosy picture of job creation and other benefits to be derived from its completion. It is inconceivable that bids are out for engineering, procurement and construction although no firm commitment has been made as to where the finance will come from. In these difficult financial times, Guyanese should not be led to believe that US$500 million will be committed by private funding for a hydro project in a potentially unstable developing country and that after twenty years of its operation the project becomes the property of the state irrespective as to whether the borrowed money was paid back. There is urgent need for the GoG to review its analysis of Synergy Holdings and check the credit profiles and track record of its promoters with intense scrutiny. After all, Guyana does not need another Intermediate Savannah Agricultural Development project under which the PNC Government in the 1970’s was duped by slick promoters from Global Agro- Industries Ltd. to spend millions of Guyanese tax dollars to produce corn and beef cattle in the Intermediate Savannahs. The Corporation had no experience in the production of corn and beef cattle on the scale contemplated in a complex ecological zone. Yet GoG Ministry of Agriculture took a 51% interest in the Company, laid out finance up-front to purchase equipment, insecticides, fertilizers etc. The project instead of having the  significant development effect in opening up the Intermediate Savannahs and being of considerable major importance to the economy of CARIFTA went belly-up, the then Minister of Agriculture was fired and the rest is history.
Yours faithfully,
Charles Sohan