The long-questioned and controversial Kingston hotel project which was allegedly to carry the Marriott brand appears to have been finally consigned to the dustbin as the government yesterday advertised for expressions of interest in a joint venture for the same location.
In an advertisement in the Sunday Stabroek yesterday, the Privatisation Unit (PU) said the government was seeking interested investors for the project. It said the framework for the development was based on the following: a site consisting of 6.9 acres of land situated in the north-western part of Kingston bordered by the Atlantic and the Demerara River, the site is owned by the state and has been cleared for the construction of a hotel, a minimum capital investment of US$20M and a minimum of 150 rooms.
The PU said the expressions of interest (EoI) must contain the investors’ background including experience associated with developing and operating a hotel complex. This had been a source of public concern in relation to the putative investors for the earlier project. Strong concerns had been raised that the project which was being developed by a Pakistani businessman Michael Ahmad and an Italian, Natale Barranco, under the registered company Adam Development and Urbahn Associates (ADUA) with offices in Manhattan, New York did not have the construction experience with hotels of this size. Furthermore, the identity of the investors was kept a secret by both the government and the New York construction company despite repeated calls for transparency.
The PU notice yesterday also said that once a design has been completed and approved, construction of the project will be sourced competitively.
It added that the EoI’s must also cover the financial capability of the investor to undertake the project – specifically the prospective investors shall provide evidence of the financial resources available to the project. The level of technical capability to execute the project must also be included.
The PU said the expressions of interest will be used to guide the selection of a partner or partners who would work with the government on the project. “The project will be implemented via special purpose company financed with debt and equity contributions following a public/private partnership model. Construction is expected to start by September2009”.
In January this year, President Bharrat Jagdeo denied that the Marriott project was dead.
He said the government had been unable to close the local hotel deal because the Kingston project suffered financial setbacks. He said that reports of the deal being off were inaccurate, noting that he made no such disclosure as reported by the Kaieteur News.
Jagdeo stated that the sources of capital that had been identified for the hotel deal were simply no longer there.
But the President underscored the importance of the project, pointing out that government also made an investment.
He said the land at Kingston was now not only available but marketable, adding that even if the project failed to take off “the land is there for future investments”.
The project was expected to receive the Marriott branding and this had been played up for a number of years by the government.
But Marriott International had previously announced the operations of five new hotels for the Caribbean and Latin American region with two opening in 2008 and another three in 2010. No mention was made of one in Guyana. The first two of the five Marriott hotels was set to open in Ecuador and Suriname and the remaining three will be opened in 2010 in Honduras, Peru; and in Trinidad and Tobago.
Marriott Vice President with responsibility for Latin America and the Caribbean Rudolfo Guillioli had commented to Stabroek News during a telephone conversation last year that the Marriott has taken no decision on whether it was going to manage the hotel at Kingston. He said that although the developer Adam Development Construction Company and Marriott International have signed a letter of intent on the management of the hotel, the matter remained the same as it was when the Stabroek News had spoken with him almost a year ago. “The project is still in the process of being evaluated. Nothing has changed,” he said then.
In August of 2008, the developers of the hotel had said that funding in excess of US$50M had been secured for the Kingston hotel project and the sod-turning ceremony would be held when the developers received the environmental impact assessment (EIA) permits from the Environmental Protection Agency (EPA).
Opposition political parties had questioned the lack of transparency in the investment saying that opaqueness was one of the features of the Jagdeo government. They said there had been bidding for the land and no one knew on what terms and conditions the property was awarded and to whom. PNCR Chairman Winston Murray had said that in order for the government to maintain its own integrity and the integrity of the Kingston hotel project, it needed to publicise all the information. Murray said he was particularly concerned about the lack of transparency in the awarding of state lands to a consortium of unknown investors for the construction of the hotel and casino. He said that he saw no need for confidentiality in the awarding of state lands. Murray said too the government does itself no favours by getting into transactions in an opaque manner as it leaves room for rumours to run rife in the society which is not in the best national interests.
In May, 2008 ADUA brought in a team to construct new sewerage lines to allow the site to be cleared for construction. Local engineers had questioned the integrity of the work done and some of it had to be redone. Government had awarded the US$700,000 contract to the Courtney Benn Contracting Services Limited but it withdrew it to allow the investors to address the matter.
The release said too in May ADUA had also completed the initial clearing and demolition of buildings, including the former Luckhoo swimming pool at its own cost.
The project had been on the drawing board since 2006. Another plan for a hotel at Liliendaal hammered out with the PU had also fallen through several years ago.
Yesterday’s invitation for expressions of interest comes hot on the heels of the takeover of the Pegasus Hotel by a consortium in which local businessman Robert Badal has a key role. Government had signalled its discontent with aspects of this deal.
