Dear Editor,
We finally got around to looking at the NCN TV debate on corruption dealing with the Marriott Hotel. We examined the rules of debate as outlined by Oxford University which clearly stated that a debate must be designed to foster the idea of a deliberative democracy, meaning a debate among equals with an equal number of representatives on both sides in a forum that offers all the participants an equal opportunity to make their points. Yes, the AFC leader Khemraj Ramjattan is an excellent debater and throughout the debate he skilfully tore his opponents apart, but in the grand scheme of things it was four PPP representatives against one from the AFC. This was a violation of common decency and a lack of respect for the rules of the debate. And even though the four PPP debaters, Ashni Singh, Winston Brassington, Odinga Lumumba and Gerry Gouveia tried to ensare the AFC leader Khemraj Ramjattan in an environment devoid of any fairness and equality, they did not succeed. The moderator had to step in many times to save his comrades from the barrage of attacks unleashed on them by Mr Ramjattan. It appeared as though Mr Ramjattan was waiting for this open forum to pounce on them and he did so convincingly and condignly. It was a slam-dunk for Ramjattan who gave them a stinging lecture on corruption.
Minister Ashni Singh has stated repeatedly that the Marriot project is a “public/private partnership” and justified the state’s investment as fostering a transformational project. But for whom? It is clear that Parliament did not authorize the use of taxpayers’ money to fund this project. Yet the regime was arrogant enough to tell the taxpayers that they plan to use some $4,300 billion of their money without their permission and that is, if everything goes according to plan. The worst case scenario is the taxpayers could end up funding some 86% of this project if the plan fails, and the chance of that happening remains very high. We know from experience that the PPP has not done a good job in the execution of several mega-projects including the Skeldon Sugar Factory, the Enmore Sugar Packaging Plant, the Amaila Falls Road Project, and the Roll-on-Roll-off Supenaam Stelling. Mr Ramjattan did not mince his words in criticizing his former PPP colleagues for their blatant misuse of power and their shameful exploitation of the taxpayers.
For the Finance Minister to make statements like “all the norms of accountability are being followed on the Marriot Hotel project” is quite brazen and troubling. So let us examine the facts on the financing of the hotel.
The table below indicates that this project is estimated to cost just under $12 billion. The PPP government through NICIL and without the people’s permission has invested some $4.3 billion of the state resources up front with zero commitment from any private partners so far. The regime has a commitment in principle from the Republic Bank to arrange for the additional $5.6 billion deal that is expected to come from private financing to add to the $4.3 billion of taxpayer funds. But all the Republic Bank will be doing is advising the PPP regime on the private financing for a fee to be paid by the taxpayers. The Republic Bank is also expected to lead the negotiations with the syndicate of private financiers and could invest directly in the project if it foresees that it is a profitable venture. However, what the Republic Bank would not do is underwrite the debt or offer any loan guarantee. That responsibility is being imposed on the taxpayers.
Table
US$M G$M
Republic Bank senior debt 27 5,535
Government equity (NICIL) 4 820
Subordinate loan stock (NICIL) 15 3,075
Development cost (NICIL) 2 410
Hotel investor group 8 1,640
TOTAL 56 11,480
If this project fails to offer the rate of return that the syndicated agreement instructs, then the private investors have a right to call upon the National Treasury for the difference. Further, if the project fails completely, then the $5.6 billion will have to be funded in full by the National Treasury, hence the taxpayers. This means that in the worst case scenario, the taxpayers could be called upon to fund 86% of this project (some $10 billion). Is this what Mr Brassington calls 1/3 financing from the taxpayers? Is this what Minister Ashni Singh calls the overwhelming majority of the funds will be private funds? And why is the PPP regime using the taxpayers’ money without Parliament’s approval to fund a project that only their leaders know about?
If this project fails, the government will have to liquidate its financial assets to a consortium of third party at a huge discount. Its this another potential Clico? And why should Guyanese believe in the political directorate?
As the table shows, there is irrefutable evidence for the government not to execute this scheme.
The fundamental question remains: Is there a need for another hotel in Guyana at this time after the significant investment in the industry in the run up to World Cup cricket? No! Is there a need for another mega hotel in Guyana when hotel occupancy in the country is roughly 50%? No! Then why is the PPP so flippant about spending taxpayers’ money on such a risky venture? The combined opposition has to do more than just talk, but take whatever actions are necessary to stop this project. Mr Ramjattan has done his part in the debate, but it is now time for real action and for the opposition to show the people the mettle they are made of. The ball is in Mr Granger’s court and he cannot abscond from his responsibilities. Enough is enough. He must follow in the footsteps of Sharma Solomon and Vanessa Kissoon, who taught us what leadership is all about.
The PPP spin doctors have the gall to go on public TV and make false statements about the project which are a stretch of the imagination and furthest from the truth. Why are the international private sector and the business elite in Guyana not lining up and rolling over each other to get to the front of the line on this investment? There are several families that have the financial capability to fund this project as well as consortiums such as DDL and Banks DIH.
These conglomerates have shown no interest in investing in the project.
In conclusion, we hope that this letter would add to the exposure of why the PPP should not pursue the building of the Marriott Hotel. We are convinced that this project has nothing to do with improving and expanding the tourism sector, but all about the new ideology of enrichment of the few while ignoring the poor and the working class in Guyana.
Yours faithfully,
Asquith Rose
Harish S Singh
