Pegasus unveils 15-storey tower in US$100M expansion- Badal urges tax, fiscal incentive reforms

Pegasus unveils 15-storey tower in US$100M expansion

Yesterday morning (March 8, 2018), the sod was turned in the hotel’s adjoining property near the tennis court with Chairman, Robert Badal, hailing the investment as the city’s largest investment.   

The businessman took the opportunity to call for tax and fiscal incentive reforms to encourage investors.
The contract has been awarded to China Harbour Engineering Company (CHEC), the same company that is in charge of the US$150M airport expansion at Timehri and the MovieTowne project at Liliendaal, East Coast Demerara.

Photo:  With Badal was his wife, Mrs. Priya Badal, Minister of Business, Dominic Gaskin, and other officials  at the sod turning.

At the sod-turning, the businessman disclosed that facilities comprising a seven-storey state-of-the-art corporate office complex would be adjacent to a 15-storey tower offering luxury accommodations of “Grade A” class.

The project is bringing an entirely new concept called “business tourism” where persons will be able to live upstairs and work downstairs.

The new facilities – dubbed the Pegasus Suites and Corporate Centre – will boast offices – the best in terms of first world quality, says Badal, with secured parking, high speed internet, televisions, access control and high-curtain walls.

The businessman was convinced that the innovative project is badly needed by Guyana with an oil production start looming in two years’ time. It has been planned for a long time.

According to Minister Gaskin, the investments are a clear sign of the confidence in Guyana and a sign of vision by Pegasus.

“While we see an empty field, this investor sees more, and is putting his money where his mouth is,” Gaskin stated.

The Business Minister said that facilities will complement the nearby Marriott Hotel.

“Guyana needs Grade A accommodations. There are clearly opportunities and confidence is being created,” Gaskin said.

Meanwhile, Badal during a cocktail and project launch last evening at the Pegasus Hotel, Kingston, said that it represents a historic leap in the architectural landscape of the city of Georgetown, and of the iconic Pegasus Hotel itself.

LARGEST INVESTMENTS
The initiative would represent the largest private sector investment ever undertaken in Georgetown, he boasted.
“It will be equipped with the latest building management systems, curtain walls providing floor to ceiling views of the Atlantic Ocean and the city skyline, the best security systems and access control, secure parking, high end restaurant, gym, salon and spa, and one of the best ever courtyard scenes, all at the best address in Guyana.”

The facilities will also boast a state-of-the-art convention centre, “which would make those existing here look primitive”, the hotel’s chairman said.

It is the plan to place over 30,000 square feet of solar panels to supply part of the energy needs. “With rainfall catchment and lush landscape we would, I believe, qualify for LEED certification. This would be the only Grade A building in Guyana.

“As a consequence, it would be possible to live upstairs and work downstairs, workout at the gym, have a massage, and then have lunch and dinner at the best restaurant in Guyana, and of course, have drinks with friends at our Ignite Bar or tea at Aromas.”

This project, he said, will respond to the need for first world facilities demanded by the evolving oil and gas sector, in particular, and other sectors as well, as the country moves forward.

TAX REFORMS
He said that Government must create a supportive and friendly investment regime.
“I applaud the assistance received from the Ministry of Business and its arm GO-Invest for this project. However, I am of the opinion that our country’s fiscal incentive regime needs to be more supported and needs urgent reform.”
Badal urged that the Withholding Tax on capital projects like this, needs to be removed, regardless of the contractor’s origin.

“In fact, there should be no Withholding Tax in the first place. Any foreign services such as consultancies, trip advisor, booking agents, interest payments on loans to a non-resident carries up to 20% Withholding Tax. Why should you tax a business that’s not yet off the ground? Similarly, stamp duty on the legal process of registering debentures and Withholding Taxes on the cost of foreign expertise not available locally, are costly, and need to be removed.”

Likewise, Property Taxes on a project like this under the current regime would amount to close to US$750,000 annually.

“I couldn’t believe when I ran the figures yesterday (Wednesday) morning. What is the rationale of having to pay corporate taxes on a company’s income and then property taxes on the assets that generated that income? These all add to the capital cost and affect a project’s viability.

It is not good policy to tax what does not exist or what is being built. A project needs to be nurtured and strengthened until it becomes profitable and generates free cash flows, not being laden with taxes. The main reason for the lack of investment enthusiasm among the local private sector is the current fiscal regime.”
He noted that history will tell one that it is “impossible to tax ourselves into prosperity”.

“We are far behind other countries in the region in terms of infrastructure and I would certainly ask that Government reviews its current investment regime to offer better incentives for capital projects like this. Otherwise our dream of a better life for all would continue to be nothing but a dream.”

The businessman noted that over in Trinidad, the rental market provided by oil and gas companies has resulted in a hike in private sector investments there, as is visible in the many high rises around the Savannah in Port of Spain.

He said that Pegasus will welcome working with ExxonMobil and other oil and gas companies to meet their needs.

“Ladies and gentlemen, this hotel has been built just around our independence and around the time I was born. Men build buildings to make money and as contributions to society of today and tomorrow, but are outlived by what is built. No doubt, the Pegasus that has hosted so many VIPs with unmatched service and true Guyanese hospitality and been the centre of businesses and big deals over the years would outlive me and all of us in this room, and the next generation and beyond. And so would this expansion, with all its beauty and exquisite charm and iconic presence. This will no doubt be my contribution to my country and future generations.”

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Comments

  • Mark  On March 9, 2018 at 3:20 pm

    White people like to live in tall buildings because their roots are from the Caucus mountains. But why would the corporate community in Guyana try to appease the white man by constructing a tall building even when the Exxon stakeholders have already gotten leases for land near Ogle airport?

    What Guyana needs is better sea defence, new roads, new housing projects, better hospitals, modern schools and allivaiate poverty. Constructing 15 story to 30 storey towers for the white man in Trinidad & Tobago isn’t stopping poverty right now.

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