Nov 12, 2015 News
By Kiana Wilburg
If the price is right, Finance Minister Winston Jordan said, Government would be willing to rid itself of the controversial Marriott Hotel located in Kingston, Georgetown.
Jordan was asked to provide an update on what Government has decided to do with the Hotel it inherited from the previous regime.
He recalled that the government has made it clear on several occasions that it has no intentions of being competitively involved in the hotel industry.
When asked about the possibility of Government selling the hotel, Jordan responded, “Let me put it this way, if Government gets a credible offer or buyer, it will divest itself of the hotel.”
The Finance Minister said that Cabinet has established a subcommittee that is looking at the issue and the best way of relieving the government of any responsibility in owning the hotel.
He noted that the Committee includes members such as Business Minster, Dominic Gaskin and Junior Finance Minister, Jaipaul Sharma.
The Finance Minister reiterated, “Government is determined not to own the hotel.”
Minister of Tourism, Cathy Hughes had, early on, made it clear that Government does not want to be in the business of owning and operating hotels.
The US$60M Marriot Hotel was met with much contention by the then Opposition bloc A Partnership for National Unity (APNU) and the Alliance For Change (AFC), when it was being constructed under the previous regime. The project had been criticized for lacking transparency.
Managing the construction shares of the company was Atlantic Hotel Incorporate (AHI), a subsidiary of the National Industrial Commercial and Investments Limited (NICIL) which falls under the Government.
AHI had invested over US$20M in taxpayers’ dollars and was looking to raise US$27M more from a syndicated loan arrangement through Republic Bank, Trinidad.
Another US$8M would have been coming from two private investors reportedly out of Hong Kong, which would have subsequently led to them gaining 67 percent control of the hotel. However, the transfer was blocked via a court case that was file by then Parliamentarian, Desmond Trotman.
The Marriott was also given “extravagant incentives and benefits”, which left other local hotel operators screaming over the unleveled playing field.
Despite the controversy, the hotel officially opened its doors last April 16 to begin its phase one operations while other sections of the Marriot are still under construction.
Three months later, the 197-room facility was already showing signs that it was not going to be the overnight success the PPP claimed it would be.
In fact, Marriott racked up a $60M loss up to the end of June, according to Government officials. The state-owned hotel’s biggest expense is its electricity consumption. Its monthly bill to Guyana Power and Light (GPL) is in excess of $25M.
This has been a major factor why construction of a critical component of the hotel- the adjoining entertainment complex- has not started.
Marriott’s electricity tab would contrast starkly with that of its nearby competitor, the Pegasus Hotel, whose electricity consumption averages $15M monthly.
Marriott also has a five-megawatt generator with the capacity to power the Kingston area. It has been using this from time to time.
While in Opposition, the AFC, of which Hughes is a member, had made it clear that the party would revisit, review and if necessary impose sanctions on the hotel should the party get into Government.
However, the Minister explained that while the former Opposition was critical of how the hotel was handled, it has no reservations about the actual Marriot franchise itself.
“I want people to understand that the concerns we had about the Marriott were purely in terms of the fact that we as an administration did not feel that the Government should spend (US) millions on a hotel,” related the Tourism Minister.
She said they had felt that the private sector or international investors should have been the ones to put their money into the Hotel, without spending taxpayers’ dollars.
Minister Hughes had said that while she and the coalition were on the campaign trail, they encountered communities just off the East Bank Demerara Public Road without electricity, portable water and with insufficient infrastructure.
Minister Hughes had said that some of these communities, like Friendship Squatting Area, are on the way to the Cheddi Jagan International Airport. The Minister related that she wondered whether the millions in US dollars could have been spent towards improving such areas, instead of one hotel.
According to the Tourism official, Guyana has an ample number of local hotels and accommodations, which can serve to build the tourism sector already. She contended that for these hotels to improve standards an “incentive regime” needs to be adopted. This would ensure that local hoteliers are given the requisite opportunity to invest in Guyana’s tourism industry.
“We have a tremendous advantage in Guyana, in that most of the hotels are owned by Guyanese and have been here for the last 25 years trying to push the industry forward. And therefore, some of the concessions, I feel that are given to foreign investors, should be given to the (local) hotels,” said Minister Hughes.
For a long time Minister Hughes said that smaller hotels (with less than 30 rooms) did not qualify for concessions, but shared that as head of the tourism sector, she wants to put forward an argument to Cabinet which will change that.
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