Govt “not rushing” Marriott sale, proper scrutiny must follow – VP Jagdeo

The content originally appeared on: INews Guyana
Guyana Marriott Hotel

Before Government seals the deal on the sale of the Marriott Hotel, the transaction must be properly scrutinised in protecting the country’s interests.

Vice President of Guyana, Bharrat Jagdeo made this remark during his press conference on Thursday, stating that there is no rush on Government’s end at the price of inadequate public scrutiny, and that of the Audit Office of Guyana.

His comments came amid concerns raised by American businessman, Ramy El-Batrawi regarding the pending conclusion of the transaction. El-Batrawi’s company – X, LLC – had emerged as the successful bidder with his US$90 million proposal to buy the Kingston, Georgetown hotel during the public tender process.

However, Jagdeo outlined, “We’re not rushing anything because there is no desperation for money from this deal. The asset remains 100 per cent Government. We went out to tender; we want the agreement concluded but it must be concluded in a manner that would reflect public scrutiny and scrutiny by the Audit Office.”

“Let me make it clear that this company put in a bid. They have to remain faithful to the bid. Our negotiators have to ensure that this country’s interests are protected in those negotiations, that the original concept of the bid is reflective in the signed agreements to conclude the sale.”

The Vice President also indicated that his Administration wants the matter concluded but the National Industrial and Commercial Investments Limited (NICIL) is involved at the technical level to ensure its finality.

“Once the bid was out, we left it to NICIL and their lawyers to deal with the negotiations at the technical level. We want the matter concluded but the executive will not intervene unduly into a technical process unless we believe that something is not being addressed to the satisfaction of the original bid.”

In a notice back in December 2022, NICIL had announced its intention to sell the State’s shares in Atlantic Hotels Incorporated (AHI), the State-owned holding company for the Marriott Hotel.

AHI is the NICIL special purpose company that fully owns the 197-room hotel, 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 banks and other creditors.

During the initial bidding round, X, LLC had submitted the highest bid of US$65 million. Among the other bidders were Pegasus Hotel Guyana, which bid at US$55.5 million; Georgetown Investments and Management Services Inc, which bid at US$50M; Muneshwers Ltd, which bid at US$25 million; Integrated Group Guyana Inc, which bid at US$55 million; and NCB Capital Markets Limited, which bid at US$33 million.In April, the Guyana Government said the bids received were “too low”, and decided not to pursue any of them. NICIL then wrote the six companies, informing them that a base price of US$85 million was set, and as such, recommended that they resubmit bids reflecting this new figure.

However, only two of the six companies responded by the May 16, 2023 deadline. New offers were received from X, LLC at US$90 million and Integrated Group Guyana Inc at US$86.1 million.

VP Jagdeo argued at the time that if the Government had gone ahead with any of the first set of offers submitted for the Marriott Hotel, then it would have lost out on as much as US$35 million in revenues from the sale of the property.

The Guyana Marriott Hotel, which opened in 2015, was constructed to the tune of US$58 million. A feasibility study conducted by a Miami-based firm, HVS Consulting, back in 2010 had outlined that the Marriott Hotel is likely to be sold ten years after its operationalisation at some US$76.1 million.