Feb 13, 2018 News
-loan payments halved after renegotiations
The Marriott Hotel in Kingston, controlled by Government, was on the verge of being taken over by Republic Bank Trinidad last year because of non-payments. But some tough negotiations ended up with the hotel being granted some legroom, Government officials have confirmed.
Opened in early 2015, the 197-room hotel ran into early problems of not making enough money to repay the almost US$27M-plus syndicated loan it took from Republic Bank.
In fact, without the adjoining annex being completed and converted into a casino to an independent operator, the hotel will never realize a profit, even if all the rooms are filled.
Last year, up to June, the payments due to Republic Bank was a staggering US$2.356M.
Operating under tight checks and balances, the Coalition Government was unable to come up with the money in a hurry.
Marriott sources and Government officials over the weekend explained that it has managed half the payments after Republic Bank agreed for restructuring of the loans.
Payments semi-annually now have been brought down from US$1.750M every six months to US$899,000, or almost half.
By 2030, the Atlantic Hotel Inc. (AHI), the special company which owns the facilities, has to repay the US$26.970M it owes to the bank.
Currently, four companies have reportedly shown serious interest in the hotel, including the Princess Group at Providence, and one from Suriname.
With inspections of the annex completed by the interest groups, AHI is now moving to have an independent consultant conduct due diligence.
With the renegotiation, the hotel has managed to bring down its interest rates from a hefty nine percent to just over six percent. The administration has been facing pressure to give up the hotel.
In fact, the sale of the hotel is being seen as a means to help the beleaguered Guyana Sugar Corporation, which is badly in need to cash injection to operate its three estates that has remained open.
The hotel was birthed under the Bharrat Jagdeo administration with promises of local jobs being created. However, save for a few contracts for sand and other material, the jobs went mostly to the Shanghai Construction Group and its imported Chinese workers.
Even the landscaping jobs were handled by them.
But the outgoing Government under the People’s Progressive Party/Civic was unhappy with the quality of works of SCG. It withheld some of the money from the contractor and used part of it to fix the defects that were cropping up – from floors to walls to the pool area.
For more than two years, SCG staffers camped out in the adjoining annex demanding the money, forcing AHI to secure a court order which agreed for the locks to be changed in December.
The hotel cost over US$50M to build, with total costs including land running up US$80M, government officials said. That meant excluding the loan, the people of Guyana sank almost US$50M in land and cash worth.
The government is now admitting that it will be difficult to sell the hotel and recoup the costs. What is known, Government officials say, is that it is difficult to sink bailout money into Marriott to keep it alive, while the plug has been pulled on a few estates of the Guyana Sugar Corporation, affecting thousands of workers.
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