Jan 04, 2016 News
An audit into the state of affairs of the National Industrial and Commercial Investments Limited (NICIL) has revealed that the entity went on a selling spree in order to get cash to finance the construction of the Marriott Hotel.
NICIL’s audit report stated that decisions were made to sell government assets with haste.
It was noted that NICIL, under the leadership of the embattled Winston Brassington, decided to sell government’s share in the Guyana Telephone and Telegraph (GT&T) company and almost all the money received from that sale—US$20M—went into the construction of the Marriott.
But that was not all. According to the audit report, evidence indicates that in addition to the disposal of GT&T shares, “there was an acceleration of the disposal of State properties/assets in order to secure financing for the construction of the Marriott Hotel.”
A total of $9.7B was raked in from the sale of State assets/properties during the period 2002-2014.
However, between 2011-2012 alone, during the time financing for the hotel was being hastily sought, NICIL sold off a whopping $7.142B or 73 percent of the total sale of assets from 2002 -2014.
It has been revealed too that NICIL’s financing of the construction of the hotel during the period 2010-2013 was $5.371B, comprising $800 million share capital, $3.316B in interest-free loan and $1.255B in advances.
As at 7 July 2015, NICIL’s advances increased to $4.521 billion, giving a total funding of $8.637 billion.”
Auditors have also noted—in the Marriott audit report—that the hotel is operating at a loss.
It also stated that the government should proceed “with haste” to advertise for the sale of the hotel, bearing in mind that the Management Agreement with Marriott International is for 30 years, renewable for another 10 years.
Auditors noted that the Agreement does provide for the sale of the hotel to a reputable individual or firm so that it can roll over to the new owners.
“The vendor must have sufficient financial resources and liquidity to fulfill the obligations under the Agreement; be of good moral character with no criminal record; and does not have ownership interest in a branded hotel.”
Currently managing the construction shares of the company is Atlantic Hotel Incorporate (AHI), a subsidiary of the National Industrial Commercial and Investments Limited (NICIL) which falls under the Government.
“Once the hotel is sold, AHI should be liquidated. Alternatively, the Government could retain majority interest in the hotel and offer 49% of shares to the public and institutional investors, such as banks and insurance companies. However, the risks still remain in terms of the financial viability of the operations of the hotel,” the audit report suggested.
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), during its construction under the previous regime.
The project had been criticized for lacking transparency.
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.
Dec 04, 2020Kaieteur News – Windiescricket – Romario Shepherd hit a superb century which was the highlight as West Indies “A” made a magnificent comeback against New Zealand “A” on the first...
Dec 04, 2020
Dec 04, 2020
Dec 03, 2020
Dec 03, 2020
Dec 02, 2020
Kaieteur News – On December 2, there appeared a letter in the Stabroek News seeking an explanation as to why 26 Haitians... more
By Sir Ronald Sanders Kaieteur News – Human rights and constitutional violations in Haiti have been ignored for too... more
Freedom of speech is our core value at Kaieteur News. If the letter/e-mail you sent was not published, and you believe that its contents were not libellous, let us know, please contact us by phone or email.
Feel free to send us your comments and/or criticisms.
Contact: 624-6456; 225-8452; 225-8458; 225-8463; 225-8465; 225-8473 or 225-8491.
Or by Email: [email protected] / [email protected]