The government’s role in the Marriott project begs for serious answers and explanations

Dear Editor,

In his letter, ‘Step away from Marriott and step-up to Mahdia,’ (SN, July 13), C.K. Hunte implored the government to invest money in rebuilding the Mahdia community, which recently suffered major losses due to fire, rather than in the revived efforts at constructing a Marriott hotel in Georgetown, given its dubious merit and financial viability.

While I understand his concern, I don’t think I can readily share his call for the government to get involved in rebuilding a community that it never was involved in building in the first place. Not that I don’t believe in government helping communities that are independently built, but this government has been over-extending itself, as it is, in using taxpayers’ money in quite a number of projects whose quality and costs have been subjects of public discussion.

It’s about time the private sector takes the initiative and lead Guyana’s recovery and let government focus on other issues. The private sector should meet with business owners in Mahdia and help them obtain low interest rates on loans from local banks that are swimming in oceans of money and with no serious borrowers. Borrowers can either get co-signers or put up collateral, but it is time for the government to take a break from investing taxpayers’ money Wild West in projects that do not guarantee solid returns.

As for the revived Marriot hotel project, Guyanese are still smarting from the previous failed attempt at a Marriott in which millions were spent on preparing the foundation in Kingston, Georgetown, after many weeks passed without Guyanese knowing who the overseas investors or partners were and whether it was really the downturn in the world economy that drove the foreign partners away or the fact that Guyana is not as hot a tourism spot as government is making it out to be.

After all, the owners of Pegasus Hotel in Guyana, Starwood Hotels and Resorts Worldwide sold the Guyana franchise to CEO of Guyana Stockfeeds Incorporated, Mr. Robert Badal several years ago.

Question: Why would a hotel chain sell its Guyana franchise after so many years? Any sound businessman who is making a profit on his investment will not get rid of that investment, but will unhesitatingly do so if any part of his total investments is haemorrhaging his profits. Ergo, the sale of its Guyana franchise was a sound business decision from its owners’ standpoint. This does not mean the new local owner will not do well, but just that the argument for selling is understood.

In 2007, government rushed to the aid of Buddy Shivraj to help him speed up completion of his hotel by pumping $168M in loans into the project. Let’s set aside the convoluted arrangement surrounding the loan and repayment processes and focus on this fact: about one year after the hotel was finished and up and running, Buddy sold the hotel for a tidy profit. Mind you, when the government announced the loan arrangement, the President himself declared that the hotel would be better and more attractive than any of the existing ones.

He also defended his decision to not help the existing ones upgrade to come up to par with Buddy’s in time for CWC 2007 when thousands of overseas guests were expected to arrive and pave the way for a stream of foreigners over the long run.

So why did Buddy sell his hotel only one year after its completion? Well, like Starwood, it had to come down to a sound business decision if the hotel was not making money, which brings me to yet another question: If the highly profitable owners of Pegasus bailed out and Buddy’s bailed out after one year, even though the President bragged about this latter hotel’s potential, why would the President be so insistent on having government be a partner, albeit with taxpayers’ money, in another major hotel venture? This is not the President’s personal money he is using, but taxpayers’ money, so taxpayers (and all Guyanese everywhere) should be up and about seeking answers and not roll over and adopt a ‘que sera, sera’ attitude, or else they may end up being burdened with unnecessary expenses which may well redound to the benefit of a ‘chosen few’.

In October 2007, KN columnist, Ms Stella Ramsaroop, penned a piece, “A Marriott hotel could be very good for Guyana,” but the situation in Guyana deteriorated since then, so she did a new piece on July 11 this year, “A Marriott is not the key to attracting tourists.” In May 2008, Caribbean Net News carried a story by Kevin London, “Marriott hotel in Guyana one step closer to reality.”

Then on May 25, 2009, Stabroek News carried a shocker: “Alleged Marriott hotel project dead,” with this qualifier: “The long-questioned and controversial Kingston hotel project which was allegedly to carry the Marriott brand appears to have been finally consigned to the dustbin as the government yesterday advertised for expressions of interest in a joint venture for the same location.”

After a hiatus, on June 22, this year, the Marriott posted this information on its website: “Marriott International announces first hotel in Guyana,” with a strap line: ‘Georgetown Marriott Hotel to open in 2013; seeking LEED status by USBGC’. The information goes on to state (if everything goes as planned) the hotel will be Marriott’s first LEED® ((Leadership in Energy and Environmental Design) hotel in the Caribbean and Latin America, and that it will operate under a management agreement with Atlantic Hotel Incorporated (AHI) currently owned by the Government of Guyana as part of a public-private partnership between the Government of Guyana and private sector investors’.

First, if Marriott says this will be its first hotel in Guyana, then who were those persons involved in the previously failed Marriott hotel construction bid? Second, on what date did the Jagdeo government establish this new state-owned AHI and who are its principal executives? (Are they the same people on the state-owned company NICIL?).Third, no original estimates have been given for this latest project, so what is this going to cost taxpayers? In fact, the Marriott statement specifically noted the hotel will be part of a public-private partnership between the GoG and private sector investors, so it would be helpful to know what is government’s share and what is the private investors’ share, and also whether Marriott will be making any direct investments? Again, is this going to be an all-Guyanese business investment with the Marriott brand name; if so, why is the government insistent on investing taxpayers’ money in a project that is not guaranteed to deliver positive returns in a bleak tourism market? The government’s role in this project begs for serious answers and explanations, but I will rest here.

Yours faithfully
Emile Mervin,
Queens, New York

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