… possible involvement of Dr ‘Bobby’ Ramroop as an investor-Christopher Ram
By Gary Eleazar
The bounty of concessions handed to Atlantic Hotel Inc (AHI) for the construction and ownership of the Georgetown Marriott
Hotel, spells the death knell for the Pegasus Hotel and possibly the Princess Hotel—concessions the likes of which are reminiscent of those handed to Queens Atlantic Investment Inc (QAII).
This is the position held by Chartered Accountant, Christopher Ram, who, following extensive research and analysis, has surmised that there is absolutely no way any investor can compete with the AHI project unless he receives similar concessions.
In his writings, Ram documents that under the agreement negotiated by Winston Brassington with the Guyana Office for Investment (GOINVEST), the new facility is being granted for 10 years, exemption from corporation, property and withholding tax (including the payment of interest and dividends to debt providers and equity holders.)
Withholding Tax is income tax withheld from employees’ wages and paid directly to the government, by the employer.
Ram added that the developer has received an undertaking that it will be granted a licence to operate a casino.
Among the sleuth of concessions handed to the project is guaranteed relief from duty and excise tax on capital repairs or replacements, including machinery, equipment and buildings costing more than US$10,000.
“And on top of that, the developer is entitled to a one-off retrofitting of the project if so required for a period of ten years (sic) from the commencement of commercial operations…There is absolutely no way any investor can compete with AHI’s project unless it receives similar concessions.”
According to Ram, it is either that the hotel will make super-profits or competitors will simply be run out of business.
“These concessions spell the death-knell of the Guyana Pegasus and possibly the Princess Hotel as well…The only other entity in Guyana that came close to such generous concessions is the (Dr Ranjisinghi ‘Bobby’) Ramroop-owned Queens Atlantic Inc,
lending credence to the rumours that the investor will be the same group.”
Ram in his analysis also points out that the Agreement, as signed, has no conditions regarding ownership. It means that AHI can sell the hotel one day after completion with all the massive concessions which amount to a windfall to whoever the buyer turns out to be.
“The Guyana Government has now taken on the role of venture-capitalist and procurer of concessions, licences and permits for an unknown entity(ies) which is not willing to invest any money upfront…It is hard to think of any similar arrangement across the Caribbean!”
Further, compounding the situation, according to Ram, is the re-negotiated terms and conditions under which the Chinese Contractor—Shanghai Construction Group—caused to be finalized and agreed to by Winston Brassington, who heads AHI.
According to Ram, the Memorandum of Understanding (MOU), dated June 14, 2011 and signed by Brassington and Michael Zhang, notes that SCG had submitted a tender of US$65M based on an original design but that the amount was considerably above the US$41M budgeted cost for the construction.
“The MOU goes on to state that SCG “ and apparently no one else “ was allowed to submit an alternate design meeting Marriott international design standards…The MOU reflects a situation in which SCG went for the kill, realising that it had all the cards and that its opponent was either weak, compromised by circumstances or grossly incompetent.”
According to Ram, the Chinese demanded, in exchange for a reduction of US$14M in the contract price, a number of
The Chinese Contractor demanded, firstly, the removal of any obligation on SCG to pay all taxes, duties and fees, and obtain all permits, licences and approvals … placing these on AHI.
Moreover, SCG demanded that it receive full exemptions from all taxes and according to Ram, Mr Brassington agreed.
He said that the Chinese Contractor also demanded that it be allowed to import any personnel necessary for the execution of the project.
Brassington agreed to this and turned out that the Chinese imported 100 per cent of its labour force thus sidelining Guyanese.
The Chinese also demanded that its obligation to repay an Advance Payment be removed from the agreement to which Brassington also agreed.
Brassington also agreed to have the principal provisions regarding Claims, Disputes and Arbitrations be deleted in their entirety.
“The result is a complete sell-out of every principle that served Guyana’s interest, an agreement that was re-written by SCG for SCG. And Mr Brassington agreed.”
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