In his letter (‘SN should not have published Ram’s letter’ SN, April 3) Mr Winston Brassington insists that I have misrepresented the facts about the construction contract and the feasibility study for the Kingston Hotel. He persists with his “story” that a feasibility study was carried out before the signing of the construction contract and cites in support, NICIL’s Chairman and Finance Minister Dr Ashni Singh’s statement in Notice Paper No 12 of the Tenth Parliament on February 15, 2012.
That statement was made in response to a question whether there was a feasibility study done prior to agreements being signed. Dr Singh’s clever answer was: “Yes, there was a market Feasibility Study conducted by the Marriott Hotel Group and one conducted in 2010 by an independent American firm which is being updated to 2012.”
Dr Singh was asked about one thing and he answered another. A feasibility study and a market feasibility study are two very different concepts, with the latter being narrow in scope and coverage while the other is quite comprehensive. A feasibility study is a study carried out to determine the viability of a proposed project and addresses key areas such as country, political, economic, social and industry analysis, a market analysis, a technical analysis, an environmental analysis, a financial and investment analysis, analyses of production, management and supply, Porter’s Five Forces (competition) analysis, management and manpower requirements and availability, marketing and administrative expenses, and detailed financial projections with clearly articulated assumptions on cost of capital, interest, inflation and exchange rates, room occupancy by month, rack rates and discount rates for rooms. The depth of the study will be determined by the size of the investment and the risks involved.
To support his castigation of the Stabroek News and his attack on my integrity and motive, Mr Brassington provided to the Stabroek News the following: i. the exchange (Q&A) with the Minister in Parliament; ii. a copy of the relevant pages of the HVS Market Study and ‘Feasibility Analysis,’ effective date October 4, 2010; iii. the Marriott Market Study and Estimates of Future Operating Performance (January 2010), cover page; iv. the Marriott Estimates for Future Operating Performance (Feb 2011) cover page; v. the Kaieteur News article dated Sunday, May 13, 2012 headlined ‘Marriott Feasibility …“show and tell” session for opposition could be arranged – Finance Minister.’
Let me address these and then cite some other contradictory documents: i. Dealt with in paragraph 2 hereof. ii. Neither a market study nor a feasibility analysis constitutes a full feasibility study. iii. The same comment applies to the Marriott Study and estimates for which only a cover page appears to have been offered by Mr Brassington. iv. This too is not a feasibility study, unless Mr Brassington has some limited notion of what a feasibility study is.
Readers will note that the September 2012 document I cited in my letter published in SN on March 27 is described by HVS as a Feasibility Study, quite unlike their description of their October 4, 2010 document.
I am more than ever convinced that the heavily redacted documents provided to Stabroek News were contrivances to lend support to a decision made much earlier on the direction of former President Jagdeo. Here is why I say that: Atlantic Hotel Inc was incorporated on September 3, 2009 for the express purpose “[to] Engage in hotel development and hospitality services. This includes the construction, ownership and operation of a five star international hotel.” This was followed by a news item dated June 22, 2010 on Marriott International website that reads under the caption ‘Marriott International Announces First Hotel in Guyana’: “Marriott International, Inc. announced today that it will open its first Marriott branded hotel in Guyana in 2013”… “It will operate under a management agreement with Atlantic Hotel Inc (AHI).”
In summary, AHI’s incorporation with the express purpose of building a five-star hotel preceded every study, however limited; Marriott announced the opening of the hotel several months before their own January 2011 Estimates for Future Operating Performance and before the HVS Market Study and Feasibility Analysis.
Since Dr Singh and Mr Brassington are directly responsible for the investment they would seem to be duty bound to respond to the following:
The 2012 Feasibility Study
Why were the page numbers on the document shared with the members of the National Assembly removed?
Did the study have a Contents page and if so, why was it excluded?
Were any pages of the entire report excluded and if so, how many?
Would he deny that 30 of the 45 pages of the redacted 2012 Study were written by AHI, and that he was the author, while the consultant wrote only 15 pages?
What were some of the prospective developments assumed in the chapter on Market Demand?
Where are the financial projections and assumptions and why were these excluded?
Where is the Environment Impact Study and why was that excluded?
Would he deny that the 2012 report was for a Proposed Marriott Hotel and Entertainment Complex?
Can he explain why the 2012 Feasibility Study never once mentioned an update.
How much has NICIL invested or advanced, in loans, debts and advances to the Hotel Company as at December 31, 2014?
Does any of this sum have a guaranteed return in any form?
Who were the directors who passed or signed a written resolution creating subordinated, interest-free, fifteen year loans for G$3,255 million from NICIL?
Which individual represented NICIL when a resolution was passed creating an additional 25,125 subordinated loans to the company with a value of G$527.6 million?
How much would NICIL lose in present day value if the entire amount of the subordinated loans is not repaid until the end of the fifteen years?
Is there any security for this interest free loan?
If no, what recourse does AHI have if the loan is not repaid?
Would Mr Brassington make public the subordinated loan bond which is all financed by public funds?
Was it the Chairman of NICIL who approved a 10 year tax holiday for the Hotel Co, NICIL’s subsidiary?
If so, does Mr Brassington consider that a conflict of interest/duty?
What would have been the ROCE (return on capital employed) if there was no ten year tax holiday and no G$3,500 million interest free loans?
How much Corporation Tax did AHI withhold from payment to the contractor during the years 2011 to 2014?
What was the last year for which NICIL tabled its annual report including statutory consolidated financial statements in the National Assembly?
Would Mr Brassington confirm the date on which Share Subscription and Shareholders’ Agreements were executed with ACE Square Investments Ltd and would he make these public?