– total audit of project needed
The known…
Even as the construction of the Marriott Hotel nears completion and the opening soon but uncertain, the role of Winston Brassington, Chairman and CEO of Atlantic Hotel Inc., continues to raise serious questions about his honesty and integrity and those he retains to speak for him. Indeed as recent as Sunday January 18, I have had cause to expose the lack of integrity on his part and that of his spokesperson Mr. Kit Nascimento when they created a fictional column for me.
It is public knowledge that the hotel’s construction has been financed mainly from the proceeds of the sale of Government shares in the Guyana Telephone & Telegraph Company Ltd. and from other public resources diverted to or vested in the company through means that many consider completely illegal. It is also public knowledge that the National Assembly passed a motion on December 17, 2012 that, among other things, neither NICIL nor Atlantic Hotel Inc. incur further expenditure on the Hotel Project without the authorisation and approval of the National Assembly. Needless to say, the directors and officers of NICIL and AHI have ignored that motion.
It is known that the Hotel has been granted concessions rare to any entity in Guyana – even Queens Atlantic, Jagdeo’s people. Those concessions, in addition to land at below market price, are no more than crude government subsidies. It is also known that the contractor has been allowed, illegally, exemptions from the laws of Guyana which even the diplomatic community does not enjoy. Central to and facilitating every well-known violation associated with the company is Winston Brassington. See Soul for Sale series of articles on chrisram.net beginning February 17, 2013.
And the unknown
Other facts are less well-known. Other than payments to the contractor, details of most other transactions with other parties have been carefully hidden away by Brassington. Sometimes it requires the detective skills of Sherlock Holmes, the criminal expertise of Crime Chief James, or the forensic resources of Ernst & Young to piece together Brassington’s acts. He and Nascimento speak about feasibility study but do not tell us that this came long after contracts had been advertised, awarded and money paid.
The report on the feasibility study for the project prepared by a Miami-based consulting firm was dated September 2012. Yet the contract for the project, comprising several documents, were signed by Brassington and Michael Zhang, Managing Director of S.C.G. International (Trinidad and Tobago) Ltd. in October 2011. Shortly thereafter the contractor was paid billions of dollars on a project whose feasibility was under study. What if the feasibility study had proved the project uneconomic?
It was typical of Brassington’s usual response to concerns about the feasibility of any project: get a study done by someone to whom you dictate all the favourable parameters. With concerns expressed about the need for another hotel given the surplus capacity following the building boom to meet the expected demand for rooms for World Cup 2006, Brassington scrambled for a justification. It was similar too to his opportunistic hydrological studies of the Amaila Falls and traffic projections for the Berbice River Bridge.
Deception
So pathological is the deception is that the feasibility study released evidences further deception. It is either that the report was poorly done or the report was doctored. No half decent consultant would submit a report without a Contents page and with unnumbered pages. The pages of the document are not only un-numbered but several chapters including the key Chapter 3 Market Analysis are excluded. The Executive Summary which is followed by Chapter 5 emphasises that the projections which establish the feasibility “are contingent on the assumption” that a portion of the economic development initiatives contained in that Chapter will gain traction. The exclusion of Chapters 1 to 4 is gross dishonesty on Brassington’s part.
The project was always touted to be a public-private sector partnership but there appears to have been a parade of potential investors identified by Brassington as majority equity shareholders. The most recently named investor is a Hong Kong company about whose principals little is known. Brassington negotiated with these persons but refuses to say who they are. Must be a strange investor who wishes to invest in Guyana but who is unwilling to have their identity revealed. And Brassington joins in the conspiracy of silence.
Outright lie
And when it comes to the Chinese Brassington is prepared to lie outright. On February 9, 2013, the Stabroek News, citing a GINA publication, reported Mr. Winston Brassington, Chairman of Atlantic Hotel Inc. as stating that it was a condition of the construction contract that the “labour be from China”. Contract documents bearing the signatures or initials of Brassington and Michael Zhang, Managing Director of S.C.G. International (Trinidad and Tobago) Ltd. show Brassington’s statement to be far from the truth.
On October 1, 2011, Mr. Brassington sent a letter to Mr. Zhang in which he wrote “I am pleased to present to you the following [ten] agreed documents for your initialing, representing terms and conditions relating to the construction of the Georgetown Marriott Hotel and Entertainment Complex.” One of these – # 6 – was a standard international design and build contract for the construction industry while # 5 comprised the amendments proposed by the contractor, all of which were agreed.
Clause 6.1 Engagement of Staff and Labour of the standard contract provided that “Except as otherwise stated in the Employer’s Requirements, the Contractor shall make arrangements for the engagement of all staff and labour, local or otherwise, and for their payment, housing, feeding and transport.” Nothing about “labour from China”, as Brassington tells Guyanese.
In response, S.C.G. proposed to Brassington the inclusion of a new sub-clause 6.12 Foreign Staff and Labour:
“The Contractor may import any personnel who are necessary (emphasis added) for the execution of the Works. …..” Again, there is nothing about “labour from China”. This new sub-clause appears to have been used by the Chinese contractor in the same way that the Greeks used a horse to fool the citizens of Troy. Mr. Brassington must now explain whether in addition to this addendum he entered into an oral variation to insert after “may import” the words “from China”. He must also explain why it was necessary to bring from China every one of the contractor’s workers and why not a single Guyanese labour was employed.
Make belief
In the said Stabroek News article, Brassington is also quoted as saying that “the construction company said they could lower their contract cost provided they provided their own labour.” Deceptively, Mr. Brassington has chosen to pretend the non-existence of clause 6.2 Rates of Wages and Conditions of Labour which provides as follows:
“The Contractor shall pay rates of wages, and observe conditions of labour, which are not lower than those established for the trade or industry where the work is carried out. If no established rates or conditions are applicable, the Contractor shall pay the rates of wages and observe conditions which are not lower than the general level of wages and conditions observed locally by employers whose trade or industry is similar to that of the Contractor.”
In other words, the nationality of the labour is immaterial. Even if it was Chinese labour, the minimum applicable rate is that prevailing in Guyana. One must have utter contempt for Guyanese labour to think that Guyanese porters and labourers are any less capable than the Chinese. If Brassington wishes to know about Guyanese productivity working under proper supervision, he should ask Norman McLean about Omai.
In addition, clause 6.4 Labour Laws requires the contractor to comply with all the labour laws applicable to the Contractor’s personnel, including laws relating to employment, health, safety, welfare, immigration and emigration, and shall allow them all their legal rights.
Taxes
Returning to the additional sub-clause 6.12, the contract provides that “Payroll taxes and NIS will be payable by all employees in accordance with the Laws of Guyana.” There is every indication that neither PAYE nor NIS has been paid. This is a violation of the Income Tax Act and the National Insurance and Social Security Act. And for those who followed my 2013 series we know that the contracting company was operating without incorporating or registering under the Companies Act. Another violation.
Brassington knows that section 10 B of the Corporation Tax Act requires a 10% deduction of withholding tax on payments to non-resident contractors. He should tell Guyana whether this applied to his Chinese contractor and if not who authorised the exemption.
Conclusion
Brassington has been part of one of the gravest violations of the country’s laws involving billions of dollars. The directors and officers either initiated or were negligent in the violations. Brassington himself has lied big time. He stands accused of perjury, among other things.
Meanwhile, the final payment to the Contractor ought not to be made until a total forensic audit has established that it has honoured all its contractual obligations and complied with the country’s laws. There is a strong likelihood that the Treasury has been deprived of revenues lawfully payable to it, as has the NIS. Yes, the presence of Marriott offers assurance about the standards and quality of service. But its role and responsibilities are necessarily limited.