Marriott’s agreement likely a breach of competition rules … AFC threatens review, sanctions over questionable arrangements

February 1, 2015 | By KNews | Filed Under News, Source - Kaieteur News

Months before Guyana’s flagship Marriott Hotel is due to open, the Alliance For Change (AFC) has vowed to revisit, review and if necessary, impose sanctions if it gets into Government.

Finance Minister, Dr. Ashni Singh

The party, which controlled seven of the 65 seats in the National Assembly, said that in any agreement with investors, the interest of Guyanese companies and Guyanese citizens must be put first.

“The provision contained in this agreement that Government signed gives everything away to Marriott Hotel and nothing to our people. With a 10-year tax holiday, Marriott Hotel would be paying no corporate tax, no withholding tax, no property tax, no tax on consumables and benefit from capital renewal for 10 years,” says AFC Leader, Khemraj Ramjattan.

By contrast, local businesses in the hotel industry have no such concessions. “In fact, local hoteliers, the bedrock of this industry, have contributed to the national economy for years and have invested substantial sums in their businesses even with long-term bank financing. These hoteliers have contended that if Marriott wants to operate in Guyana it ought to invest its own money and operate on the same conditions as local hotels.”

The “specially favoured” concessions given to Marriott places local hotels in a highly disadvantageous and uncompetitive position, and may very well be in breach of the Competition and Fair Trading Act and CARICOM Competition Commission Rules, he said.

“To add to the dislocation this agreement is creating, Marriott Hotel is not creating new employment as was intended but taking employees from other hotels and offering more than 50 percent hike in salary.

AFC Leader, Khemraj Ramjattan

“This hike in salary is being charged to the Guyanese taxpayers as are the salaries of Marriott’s entire expatriate executive management team.

Marriott has earned no income since it appointed its General Manager last June yet all branding cost, electricity, security, and salaries are being paid by Guyanese taxpayers.”

The AFC official said that while Guyanese have to protest for long periods for a five percent salary increase, the Government of Guyana is paying the “fat salaries” to Marriott’s management.

“In fact, the obscenity is made even worse when taxes are deducted from Guyanese workers before they even receive their salaries and companies are hounded by GRA (Guyana Revenue Authority) to pay Value Added Tax and all sort of taxes when  Marriott Hotels is exempted.ý Why this discriminatory application of our tax laws? The general rule as to the best application of tax laws is uniformityý.”

The AFC believes that the Marriott situation represents another most blatant abuse of public office in Guyana’s post-independence history. “Which Government in any part of the world would agree to this kind of investment? This agreement borders on fraud and is totally anti-Guyanese.”

AHI’s Head, Winston Brassington

Last week, owner of Pegasus Hotel, Robert Badal, which is located next door to Marriott in Kingston, complained that his staffers were being recruited. Other hotels, too, were approached.

Badal disclosed that all of the executive management personnel recruited by Marriott are foreigners.

“In recruiting lower level staff, Marriott is pulling staff from reputable local businesses in Georgetown including the Pegasus Hotel. One city hotel has even banned Marriott Hotel officials from entering its compound because of unethical practices in pouching its employees.”

The businessman said that Marriott is tempting its employees with much larger salaries which are being covered not by Marriott, but by the Guyanese taxpayers.

Government had formed a special company, Atlantic Hotel Inc. (AHI), which is managing the construction and shares of the company. Under the financing arrangement, Government invested just over US$20M and was looking to raise US$27M more from a syndicated loan arranged by Republic Bank Trinidad. Another US$8M would have been coming from two Hong Kong businessmen. However, a court case filed by Member of Parliament, Desmond Trotman, blocking the transfer of the land, has held up those monies.

The US$8M would have controversially allowed the two Hong Kong businessmen to gain a 67 percent control of the hotel. But that investment is held up by the court case.

Marriott Hotel is due to open in a few months.

Government has remained silent where it found the monies to carry on construction as the hotel is set to open in a few months.

The Opposition has been asking, but Head of AHI Winston Brassington, and Government, have refused to answer. The extravagant incentives and other benefits to Marriott have left other hotel operators extremely worried as the new 197-room hotel in Kingston, when it comes on stream this year, is more than likely to close them down.

Last month, Brassington admitted that financing for the project was in jeopardy because of the court case filed by Opposition Member of Parliament, Desmond Trotman.

Government said that the new hotel will be giving Guyana branding and attract high-end clientele.