I want to hear Chang say in his ruling that the government has the right to squirrel away assets of the state for the enrichment of its special selection of "investors"

Court action could halt Marriott funding

- Motion filed to have NICIL pay over US$25 million to Consolidated Fund

The Marriott Hotel under construction

A court action filed to force the government to transfer monies for its investment arm NICIL into the Consolidated Fund could, if approved, halt public funding of the Marriott project.

On Friday, Parliamentarian Desmond Trotman, through a team of high profile attorneys, filed a motion in the High Court seeking to compel NICIL and its Chief Executive Officer Winston Brassington to pay over into the Consolidated Fund, the US$25 million it received from the sale of shares in the Guyana Telephone and Telegraph Company, GT&T.

The government had announced that the US$25 million has been paid into the accounts of NICIL.

But in the said motion, Trotman is asking the court to recognize that under Article 217 of the Fiscal Management and Accountability Act, no money shall be withdrawn from any public fund other than the Consolidated Fund, unless the issuance of those Funds has been authorized by or under an Act of Parliament.

If the court so asserts, it would have a direct bearing on the current funding of the Marriott Hotel project. Under a company created by NICIL, some $2 billion has been paid over to a Chinese contractor to build the Marriott Hotel project, which would cost over US$50 million.
Trotman is claiming that NICIL is an agent of the state and collects large sums of monies on behalf of the state from the sale of state lands, other state assets and dividends from other government owned companies.
The government had $20 per cent shares in GT&T which it sold for US$30 million. While US$25 million has been paid over, US$5 million is outstanding.
Trotman argues that NICIL has a constitutional duty under the Fiscal Management and Accountability Act to “fully and promptly” pay into the Consolidated Fund all monies collected from the sale of Government property or assets.

He quotes Article 216 of the Constitution which states that “all revenues or other monies received by Guyana (not being revenues or other monies that are payable, by or under an Act of Parliament, into some fund established for any specific purpose or that may, by or  under such an Act, be retained by the authority that received them for the purpose of defraying the expenses of that authority) shall be paid into the Consolidated Fund.”
The construction of the Marriott-branded hotel is so far being funded by Guyanese taxpayers and does not involve any local construction workers.
The government over the weekend said that it got a reduction of US$9 million in the bid price by Shanghai Construction Group under the condition that it could have control over whom it hires.

As such, the firm opted for a Chinese workforce.
The government had boasted that the project, which is costing some US$60 million, would create hundreds of jobs. Now the government is saying that the Guyanese jobs would come when the hotel is completed.

In late 2011, former President Bharrat Jagdeo officially turned the sod for the construction of the hotel with the promise that the project will create hundreds of jobs in the construction phase, and beyond when it becomes operational.

The 160-room hotel and entertainment complex is expected by February 2014.

Despite pressure by opposition parliamentary parties and a Parliamentary motion to halt Government funding for the project, the government is stubbornly pushing ahead with the project.

The government is so far using tax dollars to fund the project. It has already handed over US$10million (G$2 billion) to SCG. Private investors are expected to contribute US$27 million.

The government has some special arrangement that guarantees the private investors that they would get their money if the project folds.

So, if in a scenario where the project fails and the value of the property depreciates to a value below what the investors have plugged, then the investors will get back their money, and there would be nothing to return to NICIL. Taxpayers’ dollars would go down the drain.

The government will participate in the project by way of equity, in the sum of US$4 million. This will be committed through NICIL, one of the investment arms of the government which holds its assets.

The equity contribution determines the government’s strength in Atlantic Hotels Incorporated – the company created to see the project through. As it stands, the government is currently the sole shareholder in the company.
However, apart from the equity contribution, financing for the project would also come from “subordinate loan stocks” of US$15 million invested by NICIL.

Adding the US$2 million, NICIL will end up spending in development costs for the project, including design and other preliminary studies altogether, US$21 million.

So, in total, the amount of money the government is pushing into the project is just about what it should cost in Guyana to complete the project, industry experts say.

The additional US$40 million remains a mystery to industry experts.