Intercontinental leased for 30 years

After months of protracted negotiations, the goverment has finally agreed to lease the Kigali Hotel Intercontinental and Kivu Sun to Serena Group of Hotels. The decision to lease the five-star facility was unanimously endorsed in the October 25, Cabinet meeting.

Chaired by President Paul Kagame at Village Urugwiro, the government agreed to fully lease Intercontinental Hotel and Kivu Sun for 30 years. Under minute 12 of resolutions signed in the Cabinet meeting, a copy of which The New Times has obtained, it was highlighted that the government is to lease the two hotels for 30 years, based on substantial agreements between the national negotiator, Prime Holdings and Serena Group of Hotels. The Hotel Group is owned and operated by the Aga Khan Fund for Economic Development (AKFED).

“The meeting has agreed that the final leasing contract of Intercontinental Hotel and Kivu Sun be signed very soon,” the Cabinet paper reads in part.

The Board Chairman of Prime Holdings, John Milenge, could not be reached for comment as his phone was switched off. Sources in his office have confirmed he is out of the country. But, the Managing Director of Intercontinental Hotel, Claudine Masozera, confirmed the development yesterday, saying they were only waiting for a date to append signatures to the deal.

“We have agreed that the two hotels be leased to Serena Group of Hotels for 30 years and this is a land mark achievement for us,” Masozera told The New Times in a telephone interview yesterday. She disclosed that a concrete agreement on the lease terms will be sealed by the two Boards in a meeting to be organised soon.

“Even financial terms remain pending,” she said. The development comes after a series of negotiations between government and Serena Group of Hotels. The renowned property holder, expressed interest to buy the Kigali facility early this year. It committed itself to investing in the hotel and had requested to perform a Due Diligence Report but discussions were stalling due to differences in modalities. In fact, earlier reports from Manasseh Twahirwa; the Executive Secretary of the Privatisation Secretariat, openly indicated that the negotiations, which were being coordinated by the Rwanda Investment and Export Promotion Authority (RIEPA) and Serena Group of Hotels had hit a deadlock. Both parties disagreed over a four million dollar difference of the purchase value floated by government, contrary to Serena’s price offer of US$18 million (about Frw10bn). The government insisted on US$22 million (about Frw12.3bn) for the hotel although Serena was presenting an investment project proposal to expand the hotel by 50 rooms and upgrade it to a higher star level. “It is a landmark achievement in sealing the deal because, even after endorsing the leasing contract, the facilities (Intercontinental and Kivu Sun) will remain under ownership of the government,” Masozera said. Meanwhile, plans to privatise Hotel Intercontinental, date way back when Southern Sun Africa, a South African consortium, contracted to manage it (for fifteen years) after its opening in 2003, failed-a point when the government investment arm, Prime Holdings came in.