The government has not been repaid any of the $30 million advance it provided to the proprietors of the incomplete Casique Palace and Banqueting Halls and one of the local banks has advertised the property for sale.
Stabroek News has learnt that the advertisement was placed by a local bank in the June 15 edition of the Sunday Chronicle. The bank is seeking to recover funds loaned to the investors. No further details were available owing to client confidentiality.
Initially it was intended that the investment would be in the sum of US$3.5 million. A reliable source told Stabroek News that the investment in the facility and the land would now cost US$4 million. The project, however, is only 40% complete.
On Monday this newspaper sought a comment from the Minister of Culture, Youth and Sport Dr Frank Anthony on the status of the loan repayment on the investment intended to aid in the completion of the building over a year ago in time for Cricket World Cup 2007 but once again the minister referred this newspaper to the Minister of Finance and the Attorney General’s Office.
When contacted, Attorney General Doodnauth Singh told this newspaper that he knew nothing about the proposed sale of the hotel.
Stabroek News was unsuccessful in reaching Finance Minister Dr Ashni Singh. However, a source at the Ministry of Finance told Stabroek News that because of the lack of finance to complete the project the ministry was encouraging the New York-based investors, Beverley Arthur et al, to sell the property to recoup their investment and to meet their loan obligations.
Though the source did not see the advertisement which appeared only in the June 15, 2008 Sunday Chronicle, the source was not surprised that it was on sale. “That was expected,” the source said.
A source close to the project yesterday told Stabroek News that the project was only 40% complete and there was substantial work left to be done which would be very costly. The source said that the design of the facility would be very challenging.
Sanata Textiles deal
“It is a maze, almost impossible to work on the designs within a limited period,” the source said adding that, “the government might end up doing a Sanata Textiles deal.”
The source noted that in order to make the deal attractive, there was a recommendation to extend the land to provide for a golf course.
The source, whose expertise is in the construction industry, said that the downfall would have been in the construction of all the facilities simultaneously instead of concentrating on probably the rooms first and then the other facilities given the design. “They did not think it through. It was poor planning. I can’t say whether or not they were victims of the Cricket World Cup fever. Maybe,” the source said.
When the advance on the rooms was made available, Dr Anthony had said that there were guarantees that in the event that the investors could not repay the money the funds could be recovered by other means.
The options included the investors selling the property to a buyer who could undertake to repay the government, the investors themselves selling the property and repaying the government from the sale of the property, or the government taking over the property and compensating the investors for their contribution to the project.
Stabroek News was on Monday unable to contact Arthur but one of her partners in the project George Smith had told this newspaper that their intention was to repay the government for the loan.
When Stabroek News had asked the President earlier this year how the advance on the Casique was being handled, he only said that “We would have to find a way to complete the Casique.”
The Casique and Buddy’s International Hotel both received advances on rooms from the government in the sum of about $200 million with Buddy’s getting $165.7 million.
Earlier this year, the Ministry of Culture, Youth and Sport reportedly paid over to the Ministry of Finance the sum of US$598,000 (approximately $119.6 million) on the $165.7 million advance the government had taken from the Consolidated Fund to advance Buddy’s.
This left an outstanding balance of $46.1 million, but Jagdeo had told the media since that the government would be recovering the funds advanced through room nights.
According to Dr Anthony, Buddy’s International Hotel has agreed to give the government 1,182 room nights to cover the balance that the government was unable to recover from the sale of the rooms during the six Super Eight matches Guyana hosted for the Cricket World Cup (CWC) 2007.
At this stage it is not known whether the room nights had been taken up and/or whether the new investors, the Princess International Group would be absorbing the costs.
The advances to both facilities were made from the Consolidated Fund with the sums advanced having to be laid in parliament. At the time of the disbursement of the funds, the President had given the assurance that they would be repaid from the rooms being sold during the Cricket World Cup 2007. Guyana hosted six of the Super Eight matches at the nearby Guyana National Stadium at Providence.
