Latest update March 29th, 2024 12:59 AM
Mar 03, 2013 AFC Column, Features / Columnists
– That scandalous Marriott Hotel Project Ponzi scheme
By Khemraj Ramjattan AFC Leader
One year ago, in this same column I argued that the Marriott Hotel Project was a Ponzi scheme. In a Ponzi scheme it is the monies of others which are illegally appropriated and then unlawfully used to unjustly enrich its schemers.
This is just to put it in easily comprehensible terms, as the Ponzi scheme generally incorporates some clever, complicated steps. Ingenuity is required, and rule of thumb, there is always a top brass financial expert being its intellectual author.
Indeed, the public was given certain information concerning this project.
But from even a perfunctory gleaning of the documentation supplied in Parliament, upon certain questions asked by me, there is every indication that this earlier presumption is being vindicated by what is happening one year after. Guyanese taxpayers are going to be ripped off and some cronies of the PPP will be fattened with a good deal.
Public monies, which are in NICIL’s accounts but which ought to be in the Consolidated Fund, are going to be used to substantially underwrite this proposed Hotel project.
Ponzi schemers manage to deceive the victims into parting with their monies in a grand design of some sort after fooling them that they will get massive returns on their investments.
In the case of this Marriott Ponzi, it is the taxpayer’s money which is being extracted out from a surprisingly gullible PPP Government.
Our Government, like the hapless victims of Stanford and Madoff, is walking into this with eyes wide open. It is on this score then that I must conclude that all of those who comprise this infantile government must be incriminated.
Many in the Government today have indicated to me that they were unaware that a deal was worked out for only Chinese workers to be on the site. None of these, however, can publicly say so.
They are forced then to circle the wagon and effectively support the unsupportable. My pleas that they show some principle and fearlessness are sidetracked with a number of irrelevant comments.
But I want to persist that character should be shown by some of these PPP officials who may still have a modicum left, by placing the following fact on the table. It is this.
All the studies show that a Marriott-type hotel as is being built at Kingston, will (as a general rule) have as a cost per room/suite the maximum sum of $100,000 US. This rule of thumb figure includes the cost for ancilliary facilities like bars, restaurants, pools, casino, etc.
It is said that this Marriot will have 197 rooms and/or suites. Hence, a cost of at most, only US$20 million.
The estimates I have in my possession show the cost as being in the USA where American workers charge probably the most.
Here we have Chinese workers who I understand are the cheapest when the equivalent skills are taken into account.
Now this is a far cry from the US$52 million which Winston Brassington and Ashni Singh are claiming to be the final cost. A very far cry!
It is my firm assessment that approximately US$32 million are going to be siphoned off by the Ponzi schemers in this Project. Well you may say I am on the ridiculously high side. OK then….US$22 million only. Alright man…..US$12 million!
In a speech I made in Parliament in 2008, I quoted extensively from one of the finest authorities on matters economics, an author who used to be at the World Bank, and who is currently at Oxford University as Director of Centre for Studies of African Economies, Paul Collier. He wrote a book which has already become a classic – “The Bottom Billion – Why the poorest countries are failing and what can be done about it.”
He asks and answers this question at page 66: “Why is bad governance persistent in some environments? One reason is that not everybody loses from bad governance.
The leaders of many of the poorest countries of the world are themselves among the global super rich. They like things the way they are and so it pays to keep their citizens uneducated and ill-informed…..Unfortunately, many of the politicians and senior public officials are villains.”
And later in the same page says: “Nobody likes being coerced, least of all newly powerful local elites that are hypersensitive about sovereignty and don’t want scrutiny from overseas because they see that as threatening their gravy trains.”
At page 137 he says: “Corruption has its epicenters.” And one such he argues is the construction sector. He continues: “Corruption in the construction sector has been a dirty secret. Construction has all the ingredients conducive to corruption. Each project is a one-time only thing, and so cannot readily be priced.
There are so many uncertainties in execution that it is not possible to draw up what economists refer to as a “complete contract”. As a result, it is easy to evade the discipline that would otherwise be imposed by competitive tendering. A crooked construction company colludes with a public official to win the contract with an artificially low bid, but then they re-contract on points of detail that crop up during construction”.
What happened here with the Guyana Marriott Ponzi is that crooked officials have jacked up the price to US$52 million because it is not their monies to invest, but the public monies that will allegedly be used to pay for it! The end result will be the same.
Monies siphoned off from the State coffers, wholly unconstitutionally, by NICIL to fund a US$20 million hotel which during the construction process will see manipulation of a further expense of US$32 million which latter amount, a number of the schemers will run away with.
I had earlier pointed out that the Marriott Hotel will not be profitable and the PPP Government will be forced to sell it out in another privatisation deal in which friends and family will be the beneficiaries. Roger Luncheon has now confirmed what a number of us have been deducing since one year ago.
But there is another observation I have to make. It is the stupendous speed with which it is going up. Are the precautionary steps concerning safety measures being taken? Is the construction being scrutinised by the relevant geotechnical experts? And by the way who are they? Is our good City Engineer, Lloyd Alleyne, up to the task here?
I am skeptical about the integrity of the construction from what I have been hearing from questioning engineers who are not allowed to take a peek at what is happening there in Kingston, much less to gain entrance onto the grounds and precincts.
Brassington and Singh have instructed the Chinese that no questions be answered, nor any trespassing be allowed on that territory. Yet every damn cent is awe public monies.
Watch out and talk to me when the bubble bursts. It will!
THIS IDIOT TELLING GUYANA WE HAVE NO SAY IN THE 50% PROFIT SHARING AGREEMENT WE HAVE WITH EXXON.
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