Marriott Guyana….US$51M investment cannot be supported
“Given the Govt’s perceived connection with the underworld and the narco-trade I wouldn’t rule out money laundering-” Pegasus owner
The controversy has been brewing for years; the silence has been deafening but this past Sunday Head
of State Bharrat Jagdeo along with other stakeholders turned the symbolic sod for the construction of a Guyana Marriot International Hotel leaving in its wake numerous unanswered questions.
Who are the shareholders? Why commit taxpayers’ money with less than a week to election? How will it be maintained?
These are questions that local hotelier, Robert Badal, is asking.
Badal is the principal owner and Chief Executive Officer of the Pegasus Hotel which has been recognized as the country’s premier hotel for decades now. He is of the view that firstly any investment in the hotel industry should be by the private sector and not an investment with taxpayers’ money, even a public/private partnership.
According to Badal, the government over the years has demonstrated its inability to prudently manage the taxpayers’ money which it has invested over time, on each occasion raising eyebrows.
Badal recalled some of the many failings. He pointed to the Skeldon Sugar Factory which he said should have only cost US$100M and would have performed better instead of having to plug US$65M more with the country yet to see benefits.
Despite this investment, Badal is of the view that the Guyana Sugar Corporation (GuySuCo) along with the families that depend on the sugar industry faces an uncertain future.
He spoke, too, of the Berbice River Bridge which was supposed to have cost US$30M but wound up costing some US$55M while attracting one of the highest tolls in the world.
“We have seen, over the years, so many failings by the government in the investment of taxpayers’ money…this Government has not been prudent with taxpayers’ money.”
Badal believes that any such investment in the industry should have been done by the private sector. He adds that if such an investment was feasible, the private sector would have been able to more effectively manage it and in the process receive a better rate of return.
Had the project, in his view, been feasible there would have been total private sector investment.
He questions the logic behind the investment saying that at present the country’s hotel industry as a whole operates at an average of a 30 per cent occupancy rate. “So why would taxpayers’ money be used to increase the inventory of rooms when there is no increase in demand?
“You tell me where the additional people will come from?”
Badal says that the people that travel to Guyana other than to do business generally are Guyanese returning to visit their families and they would stay with relatives while in the country. “They are not going to stay in a hotel.”
He said that under Jagdeo’s Presidency over the past 12 years the economy has only grown below the two per cent mark which would not enthuse any significant increase in traffic to Guyana.
Badal says that with an increased demand for rooms then such an investment would be justified and even if it were to increase then the only justifiable investment source would be the private sector.
The hotelier drew reference to the 2007 appeal by the Head of State for the country to increase its inventory of rooms available for the Cricket World Cup. According to Badal the majority of the new hotels that were built are now up for sale with no buyers available. “So why put taxpayers’ money to aid a multinational?”
Badal told this publication, “My issue is not putting up a hotel…If the Marriott wants to, it is a very rich multinational company, it should not depend on the taxpayers of this country to finance a US$51M investment and then it will come and run it…That’s not good business!”
The Pegasus owner vehemently said of the US$51M investment “…it will fail overnight.”
He said too that at present the vast majority of Guyanese don’t know what the deal is with the Marriott…“they are paying the Marriott to come and manage this.”
Badal said that an investment of US$51M would require at least a 10 per cent return which would mean some US$5M. The entire industry in Guyana does not make half of this.
The Hotelier says that for Republic Bank to put US$27M as was stated at the sod turning ceremony then there would have had to be a Government guarantee.
“I went through this process,” Badal said adding that Trinidadian banks would not finance a hotel even half the size of the proposed Marriott, without a Government guarantee.
The owner of the proposed Hotel is Atlantic Hotel Incorporated (AHI) which Brassington has described as a Special Purpose Company. To date the only names that have been associated publicly with AHI are Brassington and Marcia Nadir.
He reiterated that there is so much more need for the money, “look at the roads that don’t last a rainy season…public sector wages, a host of problems need to be taken care of …why build a hotel for the Marriott?”