The Procedures and Processes of NICIL

Hits: 4475 | Published Date: 17 Dec, 2012

| Speech delivered at: 32nd Sitting- Tenth Parliament

| Speech Delivered by : Hon. Mohamed I. Alli, MP

Mr. Ali: What we have just witnessed was, indeed, the Hon. Member Mr. Ramjattan waffling truly Gangnum style. I want to say that the Hon. Member Mr. Ramjattan sole intention in bringing this motion to the National Assembly is to present a blockade on the development of this country, and the private sector has been loud in its endorsement of this project. For a matter of fact a group of the hoteliers endorsed this project but we still see the Hon Member Mr. Ramjattan and the AFC, especially, on a prolonged campaign to blockade this development. It is not any secret that this prolonged approach by the AFC, in particular, is driven by self interest, cemented in protectionism and it is doing it the great American tradition way, that is, by lobbying. This miniature political entity has now become a political lobbyist entity. It is no secret that the owner of the Pegasus Hotel, who is a close friend of Mr. Ramjattan and a strong financial supporter of the AFC, has been publicly driving the blockade on this major development. The Hon. Member Mr. Ramjattan must also come clean and declare his personal and party interest in this matter. It is without a shadow of a doubt that the AFC and the Hon. Member Mr. Ramjattan have personal and political interest in this matter and their very political existence and financial viability depend on this matter. I dare the Hon. Member to contradict me here tonight.
Mr. Ramjattan: You are contradicting, Sir. There is absolutely…
Mr. Speaker: Are you rising on a Point of Order?
Mr. Ramjattan: Yes, because he is making a statement that is…
Mr. Speaker: Let us hear the Point of Order.
Mr. Ramjattan: The point is that he wants me to come clean…[Interruption]
Mr. Speaker: Allow Mr. Ramjattan to address me please.
Mr. Ramjattan: … misinforming the House and misleading the House.
Mr. Ali: Mr. Speaker, I have declared to the House nothing but the truth and nothing but positions that are factual.
Let me say that this issue about accountability and transparency is an issue that does not embrace the Government alone. We have a responsibility to be accountable and transparent. That is why we are going to ensure that all the financial statements of NICIL, as a company, are laid in this National Assembly and you are aware, Mr. Speaker, as well as the Hon. Member, that those financial statements are being laid right here in the National Assembly. Now we are hearing, “Yes, but it is after ten years and after five years.” I have never heard the Hon. Member Mr. Ramjattan speaking about after twenty-eight years we got an audited financial statement presented to the National Assembly.
Let me say that accountability is not spoken; accountability is manifested in action. We know, the public knows, that the President has given a public invitation to the Opposition, just as the Opposition came and got all the information it requested on the hydro project, to come to the Office of the President and a full and complete presentation of the Marriot Hotel project would have been made, but the intention of the AFC and the Hon. Member Mr. Ramjattan is clear. He described this project - which we would want to ensure is a national asset, which we would want to ensure is an integral part of the development aspiration of our people - as an inevitable failure. A national politician, a man who is supposed to be having the interest of Guyana at heart was describing an investment, such as this, as an inevitable failure, yet in his entire prolonged dancing around he could not have given us one solid economic analysis to show that this project is not viable.     [Mr. Ramjattan: Occupancy rate is low.]       Even your pronouncement on occupancy rate is wrong. I will prove to you that it is wrong.
He then sought to accuse the Minister of Finance of many things – of incorporating a private company and of using this company for the sultanate. It was some my riddle, my riddle. What he failed to understand was that NICIL, as a company, was incorporated by a Hon. Member right in this House.      [Mr. Greenidge: I hope that you will not talk that nonsense again.]        I am presenting facts. NICIL was incorporated by the PNC Government under the Company’s Act at the time when the Hon. Member Mr. Carl Greenidge was the Minister of Finance. Dr. Ashni Singh was not around then. It was this Hon. Member who saw the merit in incorporating this company. It was this Hon. Member who saw the necessity to incorporate this company and that led the charge in incorporating it.
Let us take a moment to examine what was some of the functions he perceived at that time. The primary objectives of NICIL were set out in its Memorandum of Association by the 1980 Government. I would only read the notable ones:
“ (a) To subscribe for, take or acquire or hold shares, stocks, debentures or other    securities of any company, co-op society or body corporate.
(b) To carry on business which the directors consider capable for the company to    carry on.
(c) To purchase or acquire all or any part of a business, property or liabilities of    another company.
(d) To purchase, accept transport for, take a lease on or acquire for the purpose of the    company any estate, lands, buildings, wards or other interest in immoveable    property and To sell, transport, let or lease or dispose of any right in any     immoveable property held by the company.”
[Ms. Manickchand: Is who incorporated this…]        again, it was not the Hon. Dr. Ashni Singh who incorporated this. It was indeed the then vibrant Carl Greenidge as Minister of Finance.
Let us go to (f). [Interruption]
Mr. Speaker: You know it is ironic, Members, that more noise is coming from the Government side while a Government Minister is speaking and I am not being able to hear.
Mr. Ali:
(f) To issue or guarantee the issue of or the payment of any interest on the shares,    debentures or other security of obligations of any company in association.
(g) To establish, promote any or otherwise assist any company or companies for the    purpose of carrying on or acquiring any of the property or furthering any of the    objectives of the company.
(h) To invest the money of the company not immediately acquired in such manner    and from time to time as may be determined by the Board of Directors.
(i) To erect, maintain, reconstruct and adopt any buildings, offices and to construct,    maintain and improve roads, water works, canals, railways and other roads for the   purposes of the company.
I would agree that whilst in those days the Government had very limited assets, we must appreciate the work of the then Hon. Minister of Finance Mr. Carl Greenidge in defining the objectives of this company and in incorporating it so that today we can use this instrument to further enhance the development aspirations of our people and of our country.
Let us look at this now. The Hon. Member said that the Government, being an investor, would deny the taxpayers and the revenue based of this country important duty, taxes and other concessions that go together with a development such as this. The Hon. Member is in such haste to put a blockade on this development that he does not understand or he has failed to recognise the fact that any hotel project with thirty-five rooms and above can benefit from this fiscal incentive in taxes and duties and this is public knowledge. Any company investing in a hotel in the tourism sector, with thirty-five rooms and above, is entitled to certain incentives. Statement of facts cannot be denied.
The Hon. Member Mr. Ramjattan began his presentation by saying imagine President Obama was selling Texas, half of Texas, and putting it into a private company and that   company would be making the investment. Well, Mr. Speaker I have news for the Hon. Member, spend some time researching the subject before dancing around it.
I have here a study by the well known Brian. H. Stress and he concluded in that study…
Mr. Speaker: Who is that person, Sir - D.J. Stress?
Mr. Ali: Mr. Speaker, may I continue?
Mr. Speaker: But we need to have the source.
Mr. Ali: I will read it for you.      [An Hon. Member (Opposition): Source?]        I am going to give you the source. The paper in entitled, “Using Public Private Partnership to Fund Development Projects”, Brian H. Stress...      [An Hon. Member (Opposition): It is a Robb Street paper.]        It is a Robb Street paper… Henry Stewart publication 1479–1110, Journal of Retail Leisure Property, volume 3, number 1, pages 21 to 31. He identified more than thirty-six examples of pubic private partnership in the hotel sector in the United States of America. It is all outlined in this journal.     [Mr. Ramjattan: …[inaudible]]       When factual positions and studies are cited, hear what the Opposition will say: “What kind of nonsense you are citing”, but the Hon. Member Mr. Ramjattan can come here and make a statement and provide no empirical evidence, no study, no analysis, or nothing, and that is accepted.
Mr. Speaker: Mr. Ali, the debate is to the Chair. I have accepted your reference, even though I have never heard of the journal, and that is the most important thing that you should be focused on.
Mr. Ali: Mr. Speaker, that is a problem we have nationally. We have to encourage people to read more.
I wish now to turn my attention to six headings in which I would analyse this investment and seek to present the factual position based on theoretical analysis to show that, indeed, this investment is not only a viable one but one that would create and open up many economic opportunities for the people of this country. When examining a project, such as this one, there are some important parameters on which we must do our analysis. The financial viability, the social and economical benefits, the important sector that would benefit and how this investment would capitalise that sector and add to the value of that sector, to examine the country’s strategic plan for that sector and how the investment fits into that strategic plan and vision and what is the net effect, in terms of the structured transformation, that the project of this magnitude would bring.
I have said before that this investment is expected to yield an estimated return of $6.4 billion, based on a ten-year holding period. This is equivalent to a rate of returns of eleven per cent on the overall project, with NICIL equity investment attracting a rate of return of approximately 16.6 per cent.     [Mr. Ramjattan: What is the return of NIS and CLICO?]      Now we have gone to CLICO and NIS. Bring the motion and let us debate it. This immediately debunks that argument that the project is not economically viable and it does not present viable rate of returns.
Let me say this too, that the Hon. Member misled us when he said that the project cannot attract private investment, when he said that the project is not viable enough to the interest of the financial sector – the commercial banks. This is far away from the truth. We know that there are commercial banks and private capital that will flow into this project. I think that we should not allow our selfish political agenda to blind the rest of the people. To avoid this, we must tell the entire story and we must not stray from the truth. The truth is the financial sector and the private sector have both expressed that this project is indeed viable and they are investing in it, so the notion by Mr. Ramjattan is, indeed, one who is misleading.
Mr. Speaker: Mr. Ali, if you know that fact and it has not been broadcast and made known to the public then Mr. Ramjattan is not in error, and if mentioned or not mentioned the names of the investors…
An Hon. Member (Government): We need statistic.
Mr. Speaker: Okay, but then you cannot accuse the Member of misleading the House if that is a fact known only to one side. Go ahead please.
Mr. Ali: Mr. Speaker, I wish to humbly differ by saying this: that the fact that I am relating to you and the Hon. House tonight would have been available to the Opposition if the Members would have accepted the invitation of the President to go for that briefing.
Mr. Speaker: Very well. Thank you.
Mr. Ali: It would have been available, and it still is available, if the Opposition would have gone to that briefing.
This project based on the input output model of the Bureau of Statistics in Guyana… The total wealth creation or value added impact of this project is estimated at approximately $17.4 billion, if the input output model is used.      [Mr. Greenidge: By whom?]      You go and use the model. [Mr. Greenidge: Well tell us.]      We have a responsibility to use our training to analyse anything. It is also projected that this project would create more than two hundred and fifty jobs, directly. It will also create indirectly more than one hundred jobs.
As I said, one of the key sectors, which will benefit from this investment, is the tourism sector and we must analyse the potential impact of this project on the sector itself. It is a fact that Guyana has witnessed significant growth in its tourism sector and we have seen a manifestation of it is several… [Interruption from Opposition Members.] I have all night.      [An Hon. Member (Opposition): You have all night, you can go.]     Will go.
Mr. Speaker: Move on with the debate.
Mr. Ali: The tourism sector has seen, over the years, investment in several new hotels. For a matter of fact hotel rooms in the year 2007 were standing at seven hundred and fifty. Today, as I speak, here, there are in excess of two thousand seven hundred hotel rooms which are available. Are we saying that the private sector lacks vision? Are we saying that all those people who invested in those rooms did not understand the market? All of these investments were backed by the commercial banks. The projection is clear. They are all projects that were financially viable and the financial sector sees in the tourism sector here in Guyana great viability in the future.
We have seen the expansion of arrivals here in Guyana. For example, in the year 2001, the arrivals stood at ninety-nine thousand three hundred and seventeen. At the end of the year 2011, the arrivals went up by fifty-eight per cent to one hundred and fifty-six thousand nine hundred and ten.
Mr. Speaker, can I enquire from you…
Mr. Speaker: Could you allow the Hon. Member to complete his presentation, please?
Mr. Ali: I was just to enquire from you, Mr. Speaker, whether the protection of the Speaker is only for the Opposition.
Mr. Speaker: Mr. Ali, I would allow that one in the spirit of Christmas and it is because my birthday and the Prime Minister’s are around the corner, but be careful.
Mr. Ali: In the interest of Christmas and fairness we have to be opened and transparent and all of us in here…
Mr. Speaker: Are you laying a specific accusation that I am not being fair and transparent this evening, if so, do so now, if not withdraw it?
Mr. Ali: No…
Mr. Speaker: If you are saying that I have not been fair and transparent this evening, say so. I am asking you, Sir, is that your accusation against me?
Mr. Ali: I am directing my…
Mr. Speaker: No, but you are skirting. You are being smart and you are skirting to suggest as if I have not given you protection and given your colleagues protection this evening. I said I would allow that first one and you came with a second one to imply that I am not being fair with you. Mr. Ali, I will allow you to continue your speech until you withdraw it. If you will not withdraw it, I will not allow you to continue speaking.
Mr. Ali: I withdraw on this very important…
Mr. Speaker: No, Mr. Ali, you will withdraw it unconditionally or I will not allow you to continue to speak.
Mr. Ali: Mr. Speaker, I wish to withdraw.
Mr. Speaker: Thank you very much. Proceed.
Mr. Ali: Let me say also, occupancy rate in 2012 were estimated at the following rates: Georgetown, seventy per cent and Rupununi ninety per cent. For a matter of fact, at various periods during the peak season there was indeed one hundred per cent occupancy at most hotels. This is indeed a statement of fact.
What would the establishment of this first major international hotel brand bring to Guyana? The Marriott Hotel is one of the leading lodging companies in the world, with more than three thousand seven hundred properties in seventy-four countries and territories. The Marriott Hotel will therefore see the establishment of the first major international hotel brand in Guyana.
What would this do? This would in turn serve as a benchmark for all local hotels, thereby encouraging them to improve their quality and rage of services to meet international standards. I want to say that the Guyana Tourism Authority and Ministry of Tourism have made it very clear that they are going to proceed towards the formalisation of regulations that would see the grading of hotels.
Mr. Speaker: Hon. Member, your time is up.
Mr. Hinds: Mr. Speaker, I beg to move that the Hon. Member be given another fifteen minutes to continue his presentation.
Mrs. Backer: Mr. Speaker, I rise to move that that motion be amended and that the Hon. Member be given fifteen to conclude his presentation.
Ms. Teixeira: Mr. Speaker, this is unprecedented. I am just asking for you… We have not done this to each other in this House and we have been allowed to have debates and considerations that both sides are able to speak. If you are now going to block, then that is a problem.
Mr. Speaker: Hon. Members, we have had, as Ms. Teixeira pointed out, a history and a practice of allowing latitude, even though it is abused on both sides. I will ask that we do not crib and confine Members in their speeches, but at the same time Members ought to be aware of the limits. If it was that the Whips did not work out the time before, well then I would say let us give some of latitude. I am asking for that as a favour, as it is Christmas.
Question put, and agreed to.
Mr. Ali: Thank you very much Mr. Speaker. This project would also encourage other reputable international brand name hotels to invest in Guyana and we have seen this in many other countries. This project is going to boost our capacity of the local sector to tap into high-end tourists and business customers. It will also promote Guyana as a meeting incentive conference event or exhibition destination.
How important is this project in the context of our five-year tourism development plan? The Marriott branded hotel is intended to support the tourism development plan which is aimed at:
• Positioning and maintaining tourism as a national priority, with a commitment of sustainable development of the tourism sector.
• Streamlining and strengthening the organisation of tourism will increase annual budgetary allocation, facilitating donors support and institutional strengthening of the Guyana Tourism Authority, to increase market demand within the diaspora, vacation and business target market.
• Establishing and securing a clear position and image of Guyana’s tourism in the market place as a quality, friendly, safe, green, pristine and sustainable destination - rich in cultural biodiversity.
• It will enhance the quality of the natural and built environment benchmarking and monitoring tourism performance based on revenue, employment, investment, spacious spread, travel and tourism competitiveness, index and contribution to Gross Domestic Product (GDP).
• Priortising and produce bio free access that is competitive and compensates for Guyana’s strategic and access advantages.
• Supporting tourism enterprises through industries-friendly policies regulations, investment policies and proactive actions and services to boost growth competitiveness and development.
This project allows us the clear opportunity to build our infrastructure as a corporate head quarters for conferences. We must not look at this investment in isolation of the new airport because, as we speak now, Routes International is working with us in extending our market access and promoting Guyana as an important transit point for major airlines. Indeed, from all the studies and all the analysis, Guyana is well placed geographically to benefit from this.
Much is said about this partnership, about this collaboration, between the public and private sector, but I wish to say that this is not in novel idea. This is not an investment model that has not been tried and tested. For a matter of fact, it will be recalled that in Port of Spain, Trinidad, a few years ago announced, what was termed then, the Port of Spain International Waterfront Centre and it was not only talking about investment in a Hyatt Hotel, it was talking about the twin towers, the Nicholas Towers, the hotel and conference centres. What it was doing was to build the infrastructure which would have allowed Trinidad to be classified as a developed country by the year 2020. It is to guess who the investor was – it was the Government of Trinidad and Tobago.
Mr. Speaker, go to Jamaica and you will see an example; St. Kitts, you will see examples. Let us also look at the State of Baltimore. In the State of Baltimore a decision was taken to invest US$112 million to develop a convention city. In Awka, Nigeria, the State took a decision to invest in two new four-star hotels. In Niger, $19.6 billion was spent by the State on the development of the five-star hotel. A city state Government invested in one hundred and sixteen hectares of land for the tourism sector and the hotel sector. There is the Cuban joint venture to build hotel in Venezuela, $94 million. If you go to India, the State of Lucknow, there is a hotel commercial complex of 2.48 hectares.
There is enough evidence; there is enough information out there that would substantiate the fact that investments, and all investments that I have listed, are all viable and have contributed to the transformation of those States. Look at the desert in the United States of America that was transformed into casinos…   [Mr. Lumumba: Las Vegas.]     It was Las Vegas that was transformed into casinos and hotels. We need to understand that projects such as these which create a transformational effect, which create an enabling environment to pour greater investment and we must not shy away from making bold decisions as leaders; we must shy away from understanding the context in which these decisions are made.
Before I conclude, I would like again to reinforce the call for President Ramotar by inviting the Hon. Members in the Opposition to meet with him, meet with the technical team and the Minister of Finance and ask all the questions that they want to ask. I am sure that all of these questions will be answered. Let us also ask the Hon. Member Mr. Ramjattan on the AFC to stay away a bit from their personal and party interest in this matter, their personal and party interest in blockading this investment and ensuring some sort of protectionism as lobbyists for one hotel or one businessman.
Mr. Speaker, with these few words, I thank you. [Applause]