Introduction
Last week I wrote that the Government of Guyana through the instrumentality of President Jagdeo was about to enter the tourism sector as a major investor while simultaneously getting out of a major lucrative investment in the telecommunication sector from which it, or rather the increasingly infamous NICIL, received some $3,458,000,000 in dividends. Business Page noted that these decisions, are taken in the name of the people of Guyana, without consultation, logic or justification.
The government and its handmaiden NICIL, completely ignoring the calls by the press and the taxpayers of the country for information on the decision, have taken the investment in the hotel one stage further. The Atlantic Hotel Inc, a creature of NICIL of which NICIL’s CEO Winston Brassington and its Deputy CEO Ms Marcia Nadir-Sharma are the sole officers on record, has put out an advertisement for pre-qualification applications from contractors to undertake the construction of a hotel and entertainment complex in Georgetown.
According to the advertisement the works comprise the construction/erection of a 275,000 square foot compound that will include:
(i) A 200,000 square foot hotel facility; and
(ii) A 75,000 square foot “entertainment complex” outfitted with common services areas/amenities that will be the site for a casino, restaurant, nightclub and other unfinished spaces available for retail.
Keeping the promise
Readers will recall that Mr Jagdeo was embarrassed after an earlier attempt to have a Marriott hotel built at the same location, and after substantial sums of money had been forked out by NICIL on sewerage diversion, consultancy and other big ticket items of expenditure. Of course NICIL, which is chaired by the Minister of Finance and includes some top ministers, does not file annual returns, and with its officers failing to provide the press and the public with financial information, accurate figures on the actual amounts expended cannot be ascertained.
Jagdeo is one president who appears not to tolerate being embarrassed. The impression is conveyed that he has pursued a Marriott Hotel because that is what he had announced. One might ask, for example, why it could not have been a Hilton, or an Inter-Continental or a Holiday Inn, each of which might have offered a better deal, including making an actual investment in a hotel.
No FIA, no Procurement Commission
If any Guyanese wants to understand why Jagdeo is not interested in a Freedom of Information Act, just look at NICIL, a company that breaks the law on a daily basis. If any Guyanese wants to understand why there will be no Public Procurement Commission under Jagdeo, just look at NICIL, a company that has flouted the Procurement Act with impunity in the past.
The stage is being set once again for the flouting of the constitutional and statutory arrangements regarding procurement. One taxpayer and citizen has challenged NICIL’s role in the award of the road contract to Fip Motilall. That challenge has regrettably been stalled by a slothful court system even as Mr Motilall’s failure to start the G$3.4 billion contract on time is being tolerated and ignored by the government. In fact, the role of the government has been reduced to periodic bulletins to the nation of the location of the most tracked ship. According to Minister of Public Works and Communication Robeson Benn, the ship, like that of Antonio in Shakespeare’s Merchant of Venice has successfully navigated the storms, is now out of the Bermuda Triangle and should soon be home to help in delivering hydro-electric power to the nation, another of President Jagdeo’s promises.
Even if there was ever a probability that the penalty clause in the road contract would be imposed, Mr Benn has now made the case for its non-operation by a plea of act of God by Mr Motilall. From commencement to conclusion the road contract to Mr Motilall has been tainted. It characterises so much that is illegal, improper, immoral and irrational, in a haste to deliver on President Jagdeo’s promises, including the new hotel.
The birth of a hotel
First touted as a government/private sector partnership, Atlantic Hotel Inc is at this stage a 100% state-owned company. You would think then that with a strict Fiscal Management and Accountability Act the task of knowing where the government will find the billions to build the Kingston hotel is an easy one. After all, that Act defines public monies and lays down the rules for their accounting and expenditure. You could not be more mistaken.
It will take more than investigative journalism to ascertain the labyrinthine sources from which the funds for the hotel will be derived. It will take an enquiry with full powers to demand information and explanations. It needs to look into the books of the Consolidated Fund, NICIL, GuySuco, the Lottery Funds, and other unknowns at this stage. It may even reveal that some public officers should be charged for the glaring breaches of the Fiscal Management and Accountability Act. But then reality in Guyana does not work in such structured, legal and proper ways.
Under Cheddi Jagan there was a Privatisation Unit which was a department of the Ministry of Finance. That proved too inhibiting and so NICIL was resurrected as a hybrid called NICIL/PU. But that also required some semblance of accountability. So the twain parted and NICIL became the front for a number of misdeeds. And now NICIL has created its own company, Atlantic Hotel Inc, a company that was born, secretly as from an unsuspected pregnancy. The child will be even more wayward than the parent. It is that child that has now placed the advertisement, apparently convinced that it could ignore section 24 of the Procurement Act. This is what that section states:
(1) Public corporations and other bodies in which the controlling interest is vested in the State may, subject to the approval of the National Board [the National Tender Board which the government uses as the substitute for the National Procurement Commission], conduct procurement according to their own rules or regulations, except that to the extent that such rules and regulations conflict with this Act or the regulations, this Act and the regulations shall prevail.
(2) If funds are received from the Treasury for a specific procurement, then the corporation or other body shall be obliged to follow the procedure set out in this Act and the regulations.
(3) Employees of any procurement entity who by their job description are responsible for procurement shall declare their assets to the Integrity Commission.
The Procurement Act, as readers of this column are aware, covers not only the procurement of goods but also services, including construction services. Maybe the two executive officers and the directors of NICIL wrongly believe that by the creation of a subsidiary they are insulating that subsidiary from the reaches of the law. That by the funds for the hotel coming from its parent NICIL and not the Treasury, the provisions of the Procurement Act will not apply. This may not be how the nation sees it or how the law was intended to operate. But the government has other motives and the force of power on their side. That is all they need in practice, if not in law.
Breach of faith and the CIOG
Before I consider the possible sources of the funding of the hotel some general points seem to be in order. Under this new dispensation of direct government involvement in the economy, no business is safe from unfair competition by the government. The government gave valuable land and support to Buddy’s which realised a vast capital gain by selling out to Princess. Now the Princess, under foreign ownership, is criticised by President Jagdeo as a below par hotel, deserving of competition from the government. Unlike Robert Badal, a Guyanese, the Princess Hotel would feel intimidated to challenge the government on bad faith. But would they have paid such a vast sum for Buddy’s Hotel had they known in advance of the impending Marriott? And indeed would Badal have bought the Pegasus if he had known that he would sooner rather than later be facing stiff competition from the government?
Would any investor feel confident enough to even approach the government with any business ideas and initiatives if it cannot trust the government to keep information confidential, or worse, to use it for its own benefit and against the interest of the investor, possibly as a competitor? Competition is of course necessary and beneficial to the consumer, but that must at a minimum assume that the competition will be fair and proper. The PSC cannot criticise the government on the competition issue only on internal flights because the GDF may affect the business of one of its leaders. It must take a position on principle in relation to all businesses. Its failure to address the issue on principle rather than on the basis of personal interest will seriously affect the country’s image as a credible host country for investment.
That can hardly be the focus and intent of the expensive National Competitive Strategy on which the government spends billions of dollars of borrowed funds and for which the Chairman of the Private Sector Commission is the principal cheerleader.
The raison d’etre of the Kingston hotel has hardly been justified to a skeptical Guyanese public, but it seems that big-time gambling is the new strategy of the Jagdeo administration. The CIOG has arrived at a convenient relationship with President Jagdeo while the Christian community has given the appearance of being more concerned about individual lifestyle choices than by policies that will affect the nation.
To be continued