Govt. rejects Pegasus offer for Marriott’s US$8M equity

Dear Editor,

Every country in the Caribbean takes pride in its hotels for the role they play in the local tourism industry, the backbone of its economy. Their industry has been built over many years of careful planning and execution. One thing the governments of these countries have in common is that they provide the infrastructure both physical and fiscal to spur private initiative of both local and foreign investors to invest in hotels and other components of the Hospital industry.

None of these Govern-ments use taxpayers’ money to build hotels for foreign companies and discriminate against local entrepreneurs. They encourage and support local hotels to refurbish, improve their standards, add rooms and build new hotels as the demand increases. There is no better policy strategy at a national level than providing a stable, certain and attractive fiscal environment that attract investments to particular industries.

Governments building hotels using taxpayers’ money for leasing to foreign Hotel Chains is not the best use of taxpayers’ money. Guyana with its narrow economic base and poor infrastructure of roads, unreliable electricity, poor drainage, rising crime, and uncontrollable migration should not even be thinking of building hotels for wealthy multinationals. Of more pressing need are clean water, reduced electricity rates, better health care, computers in schools for every secondary school child, a real highway to the airport, roads to the intermediate savannahs, and improved drainage in the city and the rest of our country. In addition, Government must, as a matter of priority restore long eroded independent democratic institutions to ensure transparency, accountability and fairness in the use of the national patrimony and resources. The repeated request by the private sector and other stakeholders for an independent integrity commission along the lines of the Trinidad model and the call for a Freedom of information Act have fallen on deaf ears while the President misuses our tax dollars for the benefit of his friends.

In my comments to the press last Friday I raised the issue of the increasing evidence that the Government of Guyana is squeezing out the private sector by unfair competition, and more directly that of the use of our taxpayers’ money to build a Hotel for the Marriott Group.

I take serious offence with Mr. Jagdeo’s outburst, among other comments, on the quality of water at the Pegasus Hotel and condensation in the rooms in reaction to my comments of serious governance issues in his misuse of our tax dollars. Let me remind the President that his Government has been a shareholder in the Hotel from its inception and that the primary responsibility for the supply of water to the nation rests with the Guyana Water Inc., a 100% state-owned entity. And is it not public knowledge that Pegasus is currently undergoing a US$8M upgrade that will bring this national forty-year-old icon to the very best of international standards of comfort and hospitality? Even as we do this no guest of the hotel has recently complained of room comfort or water quality. I invite President Jagdeo to stay at the Pegasus for a weekend with my compliments to see firsthand how guests enjoy themselves and why they keep coming back. It is highly unpatriotic for a President to criticise his country’s flagship hotel amid an audience that knows and fully appreciates the iconic role it has played on the Guyanese business landscape.

The Pegasus enjoys the highest level of occupancy of all hotels in Guyana, averaging 55-60% per annum compared with a national average of approximately 35%. If the demand for rooms increases we will mobilize the resources from local banks to add more rooms and expand facilities. It does not make economic sense to do so until then. When we do so the entire economy benefits, including the banks as well as the national coffers. Why since the President feels that the Marriott will bring more tourists doesn’t he ask his private partners and the Marriott to do likewise and borrow money instead?

A country whose people pay among the highest level of taxes in the world ought not to have their sacrifice squandered by its President for the benefit his friends and wealthy multinationals. If the Marriott’s shareholders so desire let them buy land on the open market and build their own Hotel. A Govern-ment’s overriding responsibility must be to its citizens and any public official who discriminates against any of them must be asked to resign.

Let me address a few issues that the President raised. Firstly, rates and taxes owed by Guyana Stockfeeds Inc. This company is always prompt in its discharge of rates and taxes obligations. The amount the President referred to relates to the land housing the Oil Mill transferred in late 2003 with accumulated rates which the Government did not settle on transfer of the land. The rest is the subject of  discussions with the Minister as the rates were arbitrarily increased 1000% after I took over the oil mill.

The Wharf the Company built cost $140m and benefits the livestock, rice and coconut industries tremendously by reducing the cost of transportation. It uses an access road 30ft by 100ft which my company has been using for the past 15 years. This narrow strip is not owned by NICIL as the President alleges. Why would the President have a problem with this?

The President claimed that I stole the Government’s shares in Guyana Stockfeeds Inc. He was referring to an issue of rights shares in 2002 in which the Government refused to take up the shares offered to it and which under the terms of the issue were purchased by other shareholders. This matter is the subject of litigation in the High Court. In addition to retaining some shares to harass the majority shareholders, it is now using its political bully pulpit to try to influence the court.

Mr. Jagdeo also alleges that I am afraid of competition. May I remind him that I have successfully dealt with competition all my life and have built highly competitive businesses even in the midst of deliberate and well known obstacles from his administration. He would recall refusing Guyana Stockfeeds concessions which he extended to another company owned by one of his friends.

My company has invested close to $4b in the last 12 years and is the market leader whose investments, careful planning and creative strategies spurred the rapid growth of the local livestock industry. The company boasts the most advanced value-added technology in the rice industry with its brand of parboiled rice, Angel, the Caribbean’s number one brand in supermarkets after just four years. In contrast the company which received lavish concessions went out of business for a long time and only by a Government guarantee (taxpayers’ resources) has it re-entered the market.

Competition is a way of life and every Government must ensure that competition in every sector is clean, fair, and non-discriminatory. I had to borrow money to purchase Pegasus and do refurbishment. Therefore the Marriott and Mr. Jagdeo’s undisclosed private partners must. Who really is afraid of competition by using taxpayers’ money?

No Head of State in the region abuses its private sector the way Mr. Jagdeo does. The very private sector which generates the economic activity that stimulates the economy, creates the funding for Government, and provides employment that builds and sustains families. In turn, these ensure social and economic stability and progress. In Jamaica, Trinidad and Barbados, the private sector plays an integral role in shaping the economic agenda of the country, is treated respectfully and as a partner, not a competitor.

Hopefully the Presidential hopefuls both within and outside the governing party will protest this aggression and abuse and make known their promise of accountability, transparency and prudent use of our taxes. This would finally signal a new order of politics in this dear land of ours.

Yours faithfully,

Robert Badal

Businessman Robert Badal yesterday endorsed the Alliance For Change (AFC) to lead the next government, calling the party “the most credible option” to take the country forward.

“Today we have not only a clear choice but a responsibility to ourselves and to each other to support a change in government,” Badal said at an AFC news conference. “I am a businessman not a politician, but as a businessman and a citizen of this country it is my duty to say something is wrong when it is wrong, free of any fear of intimidation or victimisation,” he added.

According to Badal, an AFC-government led by Khemraj Ramjattan, Raphael Trotman, Moses Nagamootoo and a dynamic team of young professionals would “restore decency and integrity to government, ensure transparency and accountability to Guyanese, and halt the accelerating web of corruption.”

In recent years, Badal, the Chief Executive Officer of Guyana Stockfeeds Inc (GSI) and owner of the Pegasus Hotel, has been one of the few voices in the private sector critical of the government. Last year, he criticized the government for agreeing to invest in the Marriott Hotel. His comments have drawn the ire of President Bharrat Jagdeo.

Robert Badal

Yesterday, he said that all over the world people are removing abusive, corrupt and repressive governments, and pointed out that after 19 years of “divisive and destructive politics under the PPP/C,” there is little to show for the billions of dollars spent and the huge sacrifices made by every Guyanese. “Physical infrastructure of roads and drainage in the city and around the country remain poor. Criminal activity, including daily robberies and murders go unchecked with no solution in sight. Corruption has become the culture in public office, evidenced by the unexplained wealth of those in power. All institutions of the state designed to ensure public accountability have been deliberately marginalised and [are] non-functional,” he added.

Badal blamed the state of affairs on the poor choices made by the PPP/C, particularly over the last 12 years—the tenure of outgoing president Bharrat Jagdeo. “How could an intelligent and resourceful people allow its country to degenerate to this level?” he asking before identifying “poor choices” over the past 12 years as the reason for this.

He said that in endorsing the AFC he was also asking for a judicial system which is independent of any political intimidation and influence:  “I think what the AFC stands for is to bring a progressive system in the civil service” similar to what exists in to other countries in the region. Badal said while members of the private sector are “very timid and very docile” due to the “systematic abuses” by politicians, in private they express their concerns on similar matters.

AFC presidential candidate Khemraj Ramjattan described Badal’s endorsement as a “big development” in Guyana saying that it is indicative that changes can occur even within the private sector. “Many businessmen suffer what is called the battered women’s syndrome and so they just take it as it comes every time because they fear that nothing else can be done,” Ramjattan added.  Ramjattan said that Badal’s endorsement could encourage other individuals who are fearful to come forward.

Endorsing what Ramjattan said, AFC leader Trotman said that although Badal is not on the party’s list of candidates, “he has struck the first blow against the dictatorship for the business community”.