The Marriott Hotel is making itself marketable as government prepares to sell it in two years’ time with outfitting of an Entertainment Complex and Casino set to begin soon even as other works such as correcting defects are ongoing.
“I don’t expect it to be any longer than a year or two to finish the project and then we sell it,” Chairman of the Board of Atlantic Hotel Inc (AHI), Beverly Harper told Stabroek News yesterday. Ownership of the hotel was vested in AHI by government.
In an ad in the Sunday Stabroek yesterday, AHI said it is embarking on Phase 2 of the Marriott project which includes outfitting the entertainment complex and casino. The ad stated that the hotel, which is managed under contract by Marriott International, was looking for persons to fill three key positions: Engineering Officer, Legal Officer and Accountant.
“To ensure the smooth, efficient and cost-effective execution of Phase 2 of the project as well as the conclusion of Phase 1, the Board of Directors are now inviting applications for three senior management positions,” the ad said.
Harper told Stabroek News that the members of the Board are finding it an arduous task overseeing the management of the hotel while simultaneously juggling their own careers. It is to this end, that the advertisement to find a suitable team was placed.
“This is not to run the hotel or anything like that, this is just to ensure that we finish off and complete what was done because we are still in the phase of fixing defects, and finish off that with the banks and everything like that and make sure that the money is there, that everyone gets their money back and we sell it,” the Board chairwoman explained.
“That is what that team is there for, that is why they want engineering, legal and accounting. It’s basically us finding a project management team but it’s not on a long term basis at all,” she added.
Continued state support for the hotel has been an issue of much controversy after a 2015 audit said that uncertainty about the financial viability of its operations and rising costs could take the final price tag for the project to at least US$98 million. The hotel was built largely with state funds.
‘Recuperate monies’
The audit, conducted by former Auditor General Anand Goolsarran, said that the escalating cost of the venture, as well as the fact that the former government proceeded to channel funds into construction without parliamentary approval and struck a deal that would give Hong Kong investors full ownership for just over 10% of the total cost of the project, was reason to sell the hotel. The report had urged government to either sell the hotel or retain a majority interest but pointed out that in the latter case, there is uncertainty about its financial viability. The Hong Kong investors later pulled out.
“The Government of Guyana should proceed with haste to advertise for the sale of the hotel, bearing in mind that the Management Agreement with Marriott International is for 30 years renewable for another 10 years. The Agreement does provide for the sale of the hotel to a reputable individual or firm so that it can roll over to the new owners,” the report, submitted to government last year October, had said.
“Alternatively, the Government could retain majority interest in the hotel and offer 49% of shares to the public and institutional investors, such as banks and insurance companies. However, the risk still remains in terms of the financial viability of the operations of the hotel,” it added.
The Marriott hotel had reported an 85% occupancy rate last month, mostly due to the influx of persons for Guyana’s 50th Independence anniversary celebrations.
Harper said that the Board agrees with selling but to make the entity more attractive to buyers, it had to be completed.
“What is happening is…just to finish off the entire project, prior to selling, hopefully locally. This is my recommendation. Basically the Board, as it stands, we all have other jobs right now. We are doing daily kinds of management and we can’t do it. We have to have the overriding story. So basically NICIL used to do it with Winston Brassington and so forth but what needs to happen is it just needs some persons to look after this,” she said.
“This isn’t anything permanent (the project team’s management of the hotel). This is to ensure we finish off Phase 1, the defects and so and then we go into Phase 2 which is the actual outfitting of the casino and then, at that stage, we think it is in a better position to sell. Once it gets to that stage, in other words, it is in a better position that we can get back the money. The Guyanese people can recuperate their money,” Harper added.
