He made the statement when contacted recently by this newspaper with regard to the details of the project, for which construction has commenced and is progressing following the release of $2 billion by Atlantic Hotels Inc (AHI) to a Chinese construction company Shanghai Construction Group. The money advanced to the contractor represents 20 per cent of the construction cost of the hotel.
Opposition parties in the National Assembly and other civil society actors have severely criticised the government for using public monies as part of the equity for the hotel’s construction. They have also slammed the proposals made for financing the debt aspect of the investment and the arrangements which include senior debt and syndicated loans to some of the investors.
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 is US$12 million and the government via NICIL is a minority partner owning 33% of AHI’s equity amounting to US$4 million. 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.
Alliance for Change Member of Parliament Khemraj Ramjattan said he wants the government to come clean with the details of the investors and the financing of the project.
Following questions posed by Stabroek News, Ramjattan called on the government to say what was the total amount advanced thus far on the Marriott construction and by whom.
“Is it AHI, NICIL or the syndicated group of investors?” he asked. “Are monies available for further advances and who the sources of those additional advances are?” he posed.
Ramjattan wants to know whether any agreement has been finalised with an investor or investors. “If so, could the investor(s) be identified and the amount each will invest? Could the agreement with them be made public? If not, are any discussions underway with any investor? Could the name, and proposed amounts intended to be invested be given?” he asked.
He also wanted to know whether the US$25 million that government earned from the sale of its shares in the Guyana Telephone and Telegraph Company (GT&T went towards financing the project.
On December 17, the National Assembly carried a motion that Ramjattan had piloted to have funds devoted to the construction of the Marriott Hotel taken to the House for scrutiny and to halt the project until that is done.
The motion resolved that no further expenditure must be incurred by NICIL or its subsidiary AHI on the Marriott Hotel project without the authorisation and approval of the National Assembly. Although the motion was passed, no action was taken by the government.
