-seeks transfer of NICIL revenues to Consolidated Fund
AFC leader Khemraj Ramjattan is moving to stop unapproved public funding for the construction of the Marriott-branded hotel at Kingston.
Ramjattan, through a parliamentary motion, is seeking to clamp any further funding for the project by the National Industrial and Commercial Investments Limited (NICIL) and Atlantic Hotels Inc (AHI) that has not received the authorisation or approval of the National Assembly.
The motion, which was tabled on Thursday, says “an illegal course” is being taken by NICIL and its directors and officers, which is being aided and abetted by the government.
It also calls for the NICIL to immediately pay into the Consolidated Fund all revenues and proceeds from the sale of all properties and shares of companies belonging to the state and vested in the name of the company over the last two decades.
The motion comes in the light of what Ramjattan contends is the failure by Finance Minister Dr Ashni Singh to fully comply with a previous motion passed by the National Assembly for financial disclosure about NICIL. It also coincides with the recent start of construction of the US$51 million hotel at Block Alpha, Kingston, which is being executed by contractor Shanghai Construction Group. The contractor has been advanced some $2.036 billion by NICIL through AHI, representing 20% of the construction cost for the hotel.
AHI was incorporated on September 10, 2009 as a public private partnership to engage in development of the hospitality sector, including the construction, ownership and operation of a five-star international hotel. Collectively, the total common equity of AHI will amount to US$12 million and the government via NICIL will be a minority partner owning 33% of AHI’s equity, amounting to US$4 million. Overall, government will provide 1/3 of the project funding with the balance in subordinate loan stock. Republic Bank will provide US$27 million of senior debt to the project.
The opposition has criticised the use of taxpayer dollars as part of the equity for the hotel’s construction. Observers have also slammed the proposals made in terms of the cost of construction and the financing arrangement inclusive of senior debt and syndicated loans to some of the investors. There is concern that should there be a failure of the project, there will be differentiated prioritising of categories of investors in terms of recouping what they invested.
Ramjattan is contending that the government is using NICIL as an instrument to unlawfully acquire and then lease public lands and to spend billions in public funds while evading the authorisation of the National Assembly.
According to his motion, the prime state lands known as Block Alpha, Kingston was unlawfully vested to NICIL in November 2010 by Finance Minister Singh. He contends that vesting Block Alpha to NICIL was an illegality since NICIL is not a public corporation.
In addition, the motion charges that another illegality took place when Block Alpha was leased for 99 years to AHI.
“…The monies being invested by NICIL into Atlantic Hotels Incorporated are public monies as defined by the Constitution and Fiscal Management and Accountability Act, which monies ought to be made payable into the Consolidated Fund,” the motion states.
“…The expenditure of public monies, to be constitutional and lawful, has to be authorised for spending and/or investment by the majority approval of the National Assembly,” it adds.
AHI recently advertised for casino, restaurant and nightclub operators to manage an entertainment mega complex, which is to be part of the Marriott-branded hotel project.
The advertisement said that the entertainment complex, which will be located on the western portion of the hotel site at Block Alpha, Kingston, overlooking the Atlantic Ocean and the Demerara River, is expected to comprise a specialty restaurant of 777 square metres, a nightclub with 595 square metres and a casino with 1,372 square metres.
