May 08, 2013 News Comments Off on Businessmen rank Marriott Hotel lowest national priority project
– None ready to invest
Georgetown’s leading businessmen have ranked the Marriott Hotel project at Kingston among the lowest on a list of national priority projects. The businessmen shared their views in a survey conducted by the Georgetown Chamber of Commerce and Industry (GCCI). The results of the survey were announced by Clinton Urling, the President of the Chamber.
Despite the mounting criticism, the government pushes stubbornly ahead with the project; Chinese labour built it from scratch and at rapid speed. It has imposed itself over the Kingston skyline, so much so that those at sea, who so require, are now unable to detect the signal from the lighthouse. The government plans to mount additional lighting to facilitate accordingly.
But the project, in which billions upon billions of taxpayers’ dollars are being spent, does not find favour with the city’s top businessmen. The news comes as little surprise since no Guyanese businessman has taken the risk of investing in the project, sending the government scurrying to Republic Bank Trinidad Limited to pool together a group of financial institutions; but there is no certainty if even that deal has come through.
At least there has been no announcement by government of any investor whatsoever.
Finance and industry sources say the Marriott Hotel project is a high risk one, given that existing hotels are struggling to fill their rooms, but Government is pressing ahead and could end up putting US$24 million into the project. The overall cost of the project was put at US$51 million.
Finance Minister Dr. Ashni Singh had said that there was a market feasibility study conducted by the Marriott Hotel Group and one conducted in 2010 by an independent American firm. The American firm was not named, nor was the study by Marriott released.
The opposition has voted to halt public funding of the project and it says it wants the so-called confidential documents released to the public.
The government, under Atlantic Hotels Inc. has entered into a contract with Shanghai Construction Group International of Trinidad (a subsidiary of Shanghai Construction Group, China) to construct the hotel.
The government has so far been pouring taxpayers’ money into the US$51 million project. In total, US$27 million is expected to come from investors for the main property and another US$8 million for the casino, nightclub and restaurant.
Dr Roger Luncheon, the Head of the Presidential Secretariat recently told Kaieteur News that the only gap in funding at the moment is the US$8 million.
The rest of the money is coming out of the government’s coffers, and when construction is completed, Marriott International is expected to bring in a management team to run the hotel. The group will manage the hotel in accordance with standard Marriott rates per annum. The management fee would be a percentage of gross revenue with an incentive fee being a percentage of operating profit as well as other fees based on services.
The financing structure for the hotel locks in private investors for a return of their dollars but taxpayers’ money risks being washed away if the ambitious project fails.
Pessimism about the feasibility of the project stems from the fact that many of the country’s hotels concentrated in and around the capital, and built for Cricket World Cup 2007, are operating on less than favourable occupancy rates.
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