“We have not paid a single cent to any secret investor” – Jagdeo on Marriott Hotel

Vice President Dr Bharrat Jagdeo has once again rubbished allegations that there are secret investors in the Guyana Marriott Hotel, and reiterated that the facility is 100 per cent owned by the Government of Guyana.
He made these remarks in light of persistent allegations that Government is selling the state-owned Marriott Hotel in order to payout private investors.
“This project is 100 per cent owned by the Government of Guyana… There has not been a single cent paid to any secret investor,” the Vice President insisted during a press conference on Thursday.

According to Jagdeo, at the time when the hotel was being built, a Hong Kong company that operates casinos wanted to invest in the project but they were driven away by the negative narrative that was being peddled.
Hence, the then Guyana Government was forced to take out a US$15.3 million loan from Republic Bank Limited to complement its equity in order to finance the completion of the hotel.
“The project was being developed as a Public-Private-Partnership, where there was an investor. At some stage, because of the assault, the investor walked away. So, you had to get a loan… So, Republic Bank produced a loan to the Government to conclude the Marriott – it’s a loan, as far as I know and that’s factual,” he posited.
The Vice President went onto say explain that even if RBL had to seek investors to finance the syndicate loan to the Guyana Government, it does not mean that there are secret investors since the loan is solely with the commercial bank.
“The government of Guyana owns the hotel with a loan… If you have a company and take a loan, the bank don’t own your project,” he stated.
In the case with the Marriott Hotel, Jagdeo further noted that “…they raised the capital as the bank and then they make the loan. Republic Bank could have 100 investors [but] all our concern is, is that we have one loan from Republic Bank and we’re paying that loan. There is no secret investor,” the Vice President contended.
Back in December, the National Industrial and Commercial Investments Limited (NICIL) had invited bids to be prequalified for the purchase of the State’s shares in Atlantic Hotels Incorporated (AHI).
AHI is a state-owned special purpose company that owns the 197-room hotel that opened in 2015, whose financing structure had depended on a casino and entertainment centre to make enough money to repay up to US$30 million in debts to the bank and other creditors. But that addition to the hotel was scrapped.
Last month, Jagdeo had said that now the right time to sell the Marriott Hotel, which is currently operating at a profit even without the casino and entertainment centre.
A portion of the money from the sale of the hotel will go towards repaying the bank loan.
“Once the loan is paid off, then all the other proceeds will come into the coffers of the Government of Guyana [not to any secret investor],” VP Jagdeo noted.
So far, there have been eight Expressions of Interest (EoIs) submitted for the hotel.
Interested bidders were required to have financial capability which NICIL had set as a minimum net worth of approximately US$250 million, audited financial statements for the last three financial years and letters of financial capability from a recognised financial institution.
AHI told another local newspaper last month that the EoI applications were received from diverse local, regional and international companies and consortiums.
The construction of the Marriott Hotel, which started in 2011, had sparked widespread controversy. At the time, Jagdeo was the President and his administration had faced heavy criticism over the use of taxpayers’ monies to finance the hotel.
However, he explained last month that this was a necessary move to catapult the hospitality industry in Guyana at the time.
“The Government didn’t need to own a hotel at that time but the era was that we were not getting new hotels built and we had to trigger the investment,” he stressed.
According to the Vice President, now that the hotel is operation at a profit and provides some 500 jobs to Guyanese, directly and indirectly. He insists that selling the Kingston, Georgetown hotel now would bring in “maximum value” to the state that could go towards triggering other investments in the country.
“There is no particular supreme benefit to government owning [the hotel] …it’s a pure business decision [to sell now]… this is probably the best time when you can maximise the value before you get competition from seven other hotels coming into the market within a year or two,” he had noted.
Jagdeo pointed out last month that there was controversy surrounding the construction of the Marriott since persons thought it was going to be a “white elephant.” However, the Vice President said he is pleased that people are now seeing that “…the Marriott was a good decision and it’s a profitable venture. And without it, frankly speaking, I don’t know what we would’ve done in the last few years in terms of hosting people in this country.”
While in Opposition during the 10th Parliament, the APNU and AFC had individually criticised the construction of the Marriott Hotel. In fact, during the 2015 elections campaign, the coalition party had talked about selling off the multi-million-dollar tourism flagship project as well as making it into a hospital facility.
The US$58 million Guyana Marriott Hotel was completed in 2015, the same year ExxonMobil first found oil in Guyana’s waters. The hotel has since gone on to play an important part in Guyana’s developing oil and gas sector, as it being used to accommodate local and overseas offshore workers. It is also a prime venue to host numerous private and state-sponsored events. (G8)