The Government of Guyana, NICIL and the Privatisation Unit in a response to a Kaieteur News article on Wednesday, entitled `Controversy looms over Duke Lodge neighbour’, have asserted that in any tender, Government is not bound to sell or sell to the highest bidder or any bidder.
On July 27, 2009, Cabinet approved the sale of Lot 52 or 93B Duke Street, Kingston to Anthony Reid for the sum of $63M plus VAT. Subsequently a Notice of Award was dispatched to Reid in late July notifying him of Cabinet’s decision but on August 10, 2009 Reid issued a letter withdrawing his bid, leaving the next highest bid of $49.5M from El Dorado Trading.
According to a press release issued through the Government Information Agency (GINA), the Government has pointed out that a second ranked bidder has no automatic right to succeed the number one ranked bid, if the number one bidder does not conclude a purchase or withdraws their tender, as happened in the current case.
The statement also noted that “a firm principle which is stated in all GoG/NICIL/PU advertisements for property sales is that “Government is not bound to accept the highest or any bid.” “This point is reiterated in all tender packages purchased by potential buyers/investors as well as other terms regarding the award of tender where the sale does not materialize,” the statement noted.
For the record, the release said further, the property called the Office of Empowerment was advertised for sale from May 31, 2009 to June 16, 2009. Five bids were received and a recommendation was made by NICIL to sell to the highest bidder who was Reid.
According to the Kaieteur News report on Wednesday, the second bid on the property was $49.5M by El Dorado Trading while owner of Duke Lodge, Capt Gerry Gouveia had bid $43M. It was stated in the report that the property should go to the second highest bidder.
However, the Government has said that where it opts to sell a property to a party other than the highest bidder, it either does so due to price being one of a number of criteria or it adopts a position that the sale price shall be no less than the highest available bid price and development benefits accompany the sale to maximize the economic benefits to the country. Meanwhile, the release through GINA recalled that in early 2009, Government considered a similar case with the sale of Herdmanston House to Michael George, who was the second highest bidder. Although the second ranked bidder by price, Cabinet approved the sale to George at a price no less than the highest bid price, having regard to the development considerations such as:
George operates a hospitality business immediately next to Herdmanston and wished to expand this business; considerable investment will be expended to upgrade the Herdmanston property to that of a boutique hotel; the expanded business would create an expansion of employment; and the business would add to the growing tourism and hospitality industry.
The release said further that the Privatisation Unit has in the past been accused of sometimes looking only for the best price and ignoring the development benefits. It is well known that the hospitality industry offers many development benefits including investment and employment of a large number of persons.
And the case of Roraima Duke Lodge is no different from Herdmanston Lodge. Roraima currently employs in excess of 20 persons at the Duke Lodge location, next to the Office of Empowerment.
Should GoG/NICIL conclude a sale with Roraima, it will be on the basis of a price no less than the highest available price, (currently $49.5M from El Dorado Trading) and after consideration of the development benefits of an expanded Duke Lodge operating in the hospitality sector.
With this approach, the release stated, the Government would not lose any income from the sale while at the same time promoting the expansion of the hospitality industry and employment. This approach is not inconsistent with the tender documents issued and precedents established such as the recent sale of Herdmanston.
The release also recalled that in 2007 when the sale of Duke Lodge was advertised, Roraima bid the highest price of $140M, plus VAT, from a total of nine bids. Cabinet approved this sale in 2008 and the sale was subsequently concluded. The sale was based on a public tender. As a result of the sale to Roraima, Duke Lodge has been expanded into a small boutique hotel/entertainment center.
“Despite the public advertisement and Roraima submitting the highest bid, Kaieteur News has on a number of occasions suggested that the sale was not transparent,” the release said.
