With Government finding it difficult to attract the investors and syndicated loans to complete the controversial US$52 million Marriott Hotel project, a British Virgin Islands-incorporated investor has offered to purchase the superstructure with a view to finishing it, Stabroek News has learnt.
However, while Government might be willing to relinquish and sell the edifice, this newspaper understands that it is demanding a lot more than the $2 billion the investor is willing to pay – this amount representing what Government has already spent in the construction of the structure, scheduled for completion in August 2014.
Government through the National Industrial and Commercial Investments Limited (NICIL) paid to Atlantic Hotel Inc. (AHI), a special purpose company, the sum of $2 billion, which represented some 20% of the construction cost for the hotel.
“They (Government) are not finding the syndicated lenders and the investors with the money to complete the hotel. Government is said to be preparing to sell what it has. The money has been used up and the contractor is stalling now,” said Alliance for Change Member of Parliament Khemraj Ramjattan.
“The [BVI] investors are saying if you spent US10 million on it sell it to us for that amount and we will fix it,” said Ramjattan.
Attempts yesterday to reach Executive Director of NICIL and Chief Executive Officer of AHI Winston Brassington for a comment on the future of the Marriott proved futile. However, in speaking with this newspaper last weekend, Brassington was reluctant to release any details on the investors into the project or what progress was being made. He cited the issue of confidentiality for his reticence.
In recent weeks, work on what was supposed to be the Marriott-managed hotel in Kingston seems to have slowed down significantly.
AHI was incorporated on September 10, 2009 as a public private partnership to engage in development of the hospitality sector, including the construction, ownership and operation of a five-star international hotel.
Overall, government will provide 1/3 of the project funding with the balance in subordinate loan stock. Republic Bank will provide US$27 million of senior debt to the project. Collectively, the total common equity of AHI will amount to US$12 million and the government via NICIL will be a minority partner owning 33% of AHI’s equity, amounting to US$4 million.
Observers have criticised the proposals made in terms of the cost of construction and the financing arrangement inclusive of senior debt and syndicated loans to some of the investors. There is concern that should there be a failure of the project, there will be differentiated prioritising of categories of investors in terms of recouping what they invested.
In a motion put to the National Assembly in November 2012, Ramjattan had moved to stop unapproved public funding for the Marriott Hotel by NICIL and AHI that has not received the authorisation or approval of the National Assembly.
In the motion, Ramjattan had said that “an illegal course” is being taken by NICIL and its directors and officers, which is being aided and abetted by the government.
Ramjattan also contended in the motion that the government is using NICIL as an instrument to unlawfully acquire and then lease public lands and to spend billions in public funds while evading the authorisation of the National Assembly.