Marriott Hotel project

–  Auditor failed to request core documents

The forensic audit conducted by former Auditor General (AG) Anand Goolsarran into the construction and operationalisation of the Marriott Hotel is weak and speculative, as he failed to seek clarification or request key documents before forming conclusions, the National Industrial and Commercial Investments Limited (NICIL) said in response to the audit report.

Many had raised objections over Goolsarran, a former Auditor General under the People’s National Congress (PNC) Government and Christopher Ram, both staunch supporters of the A Partnership for National Unity+Alliance For Change (APNU+AFC) coalition, pointing out that their reports will be biased since they have always openly accused the former People’s Progressive Party/Civic Aministration of widespread corruption.

NICIL contested most of Goolsaran’s report into the Marriott on the basis that he did not request the source documents on many occasions, but formed ill-informed opinions.

For example, Goolsarran alleged that the Guyana Water Authority (GWI) made a $353 million contribution to rehabilitation of the sewerage system, while NICIL in turn made two payments totalling $53.098 million to the utility company, which he claimed was for the drilling of a well for the Marriott Hotel.

“NICIL’s $53 million payment to GWI represents payment for relocation of a well. It is recognised that the forensic auditor has made some general statements regarding the uncertainty on spending but it is pointed out that the forensic auditor did not seek clarification of these issues. Consequently, the forensic auditor connotes that such uncertainty is by extension a reason for concern,” NICIL said in response.

He also stated that during 2010-2013, NICIL’s financing of the Marriott Hotel totalled $5.371 billion, comprising $800 million share capital, $3.316 billion (equivalent to US$15.5 million) in an interest-free loan and $1.255 billion in advances.  As at July 7, 2015, NICIL’s advances to the Marriott Hotel increased to $4.521 billion, giving a total funding of $8.637 billion. It is evident that the acceleration in the disposal of state assets/properties, and the sale of Guyana Telephone and Telegraph (GT&T) shares and the investment in Berbice Bridge Company Incorporated (BBCI) were done to secure financing of the cost of construction of the Marriott Hotel.

However NICIL in response said such a statement by Goolsarran is “entirely speculative” and should be struck out.
“The facts show that NICIL had enough funds for its targeted investment in AHI of US$19.5 million. At the end of 2012, NICIL had over $8 billion in cash. At the end of 2013, this figure totalled over $6 billion, despite the fact that NICIL had already invested the full targeted investment of US$19.5 million into AHI (Atlantic Hotel Inc),” NICIL said, adding that “GTT proceeds were kept on NICIL’s balance sheet for some years before being used for AHI, with it being used only after efforts to prevent the funding of US$27 million committed by Republic Bank and similar efforts to prevent the private investor from investing US$8 million in equity.”

NICIL further stated that the sale of the preferred shares to the National Insurance Scheme (NIS) was intended to add liquidity to NICIL but also provide an investment to NIS, given its lack of good investment opportunities.

It added that it is a fact, the NIS received dividend for 2012 and 2013 from this investment at the rate of 11 per cent, and at the time of the sale, of these shares by NICIL, BBCI was showing healthy profits.

Almost immediately after assumption to office, the APNU/AFC Administration hurriedly and arbitrarily launched a series of forensic audits into several State agencies with the aim of unearthing corrupt practices by the previous Administration with the sole intention of “sending them to jail”.

The most recent report from Government is that Finance Minister Winston Jordan is yet to read the report and that the recommendations from the report needed “Cabinet’s blessings” before any further steps can be taken.