Gov’t exposes ‘fast-track’ Ed Ahmad land deal

-Jagdeo says lease was cancelled since 2009

State Minister Joseph Harmon yesterday said the APNU+AFC government was moving to rescind a controversial lease that was granted by the former Bharrat Jagdeo administration to fraudster Ed Ahmad in 2008 for 3.4 acres of land but Jagdeo says the deal had already been rescinded.

The Ahmad deal pertained to land at the corner of Irving Street and Thomas Lands and was for the building of a 150-room hotel and casino. This deal had apparently never been announced by the Jagdeo administration and yesterday’s disclosure by Harmon was the first time it had been publicized.

While Harmon said Ahmad had defaulted on agreed annual lease payments of $500,000 after the first year, Jagdeo yesterday said the land had been given back to his government since 2009.

The land, located opposite the Guyana Defence Force base camp Ayanganna, was the subject of a dispute in 2009 between the then Jagdeo-led PPP/C government and the Guyana Public Service Union (GPSU), which claimed ownership.

The plot of land in question
The plot of land in question

Ahmad, who had been a prominent businessman, pleaded guilty in 2012 to conspiracy to commit bank fraud and wire fraud in the United States. He is due to be sentenced next year.

Harmon yesterday released the lease agreement to the press and it shows that the then government processed the application and approved the deal within just one week to Generations Complex Inc., a company owned by Ahmad.

On the 22nd of May, 2008, the company applied to lease the land, at a yearly fee of $500,000, and on the 29th of May, it was granted approval to begin works.

“The lessee acknowledges, accepts and agrees that it shall construct a modern hotel complex with a minimum of one hundred and fifty rooms at an estimated total investment of USD 75,000,000(seventy five million US dollars),” the agreement states.

The company would have also been given the option to purchase the land, for approximately $60M, at any time during the duration of the lease once at least sixty percent of the construction was done.

“The Lessee shall have an option to purchase the demised unit. The lessee may be allowed to exercise the option to purchase the demised unit at any time throughout the duration of this lease provided that the development (construction and investment) is at least 60% completed as at the date the option to purchase is exercised. For clarity, the overall investment shall be no less than fifty million US dollars, with the option being exercised once a minimum of thirty million US dollars has been expended on the project site,” the clause under ‘Option to Purchase’ states.

It adds that the lessee would be allowed to purchase the land at $20M per acre.

According to the agreement the company was to use the land for at least a 150-room hotel, restaurants, bars, a casino, clubs and trade exhibition halls.

Jagdeo told Stabroek News yesterday that he was confused by government’s announcement since the disclosure was not new. “I think they are just looking for things and are not doing their research properly… because it is not like it wasn’t reported on before… it’s a non-story basically,” he said.

“How come they are cancelling, now, something that was already relinquished back to government? That is what I am saying now. This matter was reported on widely in all the papers when the lease was given for a hotel project and it did not go ahead and it was relinquished back to government,” he added. Stabroek News could find no reference yesterday to this project in its archives.

Jagdeo said the government needs to explain to the public what the issue now is, given that government already owns the land.

As he noted the week-long gestation period for the deal, Harmon said the fast-tracked process not only raised concern about how it was so swiftly executed but also about the fact that it did not adhere to the normal processes. “In effect, what you had was a sort of a backdoor arrangement whereby this company was granted a lease within seven days and given the option of purchasing that land without going through the normal advertisement processes that you would normally do,” Harmon noted.

“On the 22nd May, 2008 the application was made it was approved on the 27th May, 2008 and a cadastral survey done and the plan registered on the 29th, May… the lease was issued on the 30th May…,” he further said.

Harmon charged that the arrangement “reeked of corruption,” while noting that there was no way that the sequence of events that led to the issuance of the lease could be completed in seven days.

The GPSU had claimed that the land was given to it as a gift by the previous PNC government and it had records to prove its claim.

GPSU President Patrick Yarde had said in November, 2009 that when the PPP assumed office in 1992, the GPSU and the government had several discussions on plans to develop the parcel of land. He noted that the two sides met on February 14th, 2008 and then on May 23rd, 2008, one day before Ahmad’s application was made.

The PPP/C government had claimed that the parcel of land was leased for a brief period of time by the Guyana Lands and Surveys Commission (GL&SC) and that the lease was subsequently relinquished to the GL&SC in 2009.

 

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