WASHINGTON, July 13 -- Developers of a Gaza hotel and business center to be operated by Marriott told a Senate panel Thursday that their project is in jeopardy due to roadblocks raised by a U.S. government lender. The head of the project, Ziad Karram, and other American businessmen told members of the Committee on Foreign Relations that the proposed 275-room Gaza Marriott Business Center is being seen as a bellwether for future private investment in Gaza. But they said new requirements imposed by the Overseas Private Investment Corporation have made funding the $72 million project untenable. Karram said the OPIC last month suddenly raised the raised the amount needed as a construction guarantee, or down payment, and lowered its maximum loan amount. During a signing ceremony at the White House in September, Vice President Al Gore and OPIC President Ruth Harkin praised the project as a sign of the administration's commitment to lead private investors into Gaza. The project fit with the administration's view that economic development is the cornerstone to the Middle East peace process. Former Congressman Mel Levine, who now serves as president of Builders for Peace, a group set up to facilitate development in Gaza and the West Bank, told the committee that OPIC's reluctance to guarantee the loan amount 'was demoralizing the Palestinians who have worked on this for more than a year.' 'We believe OPIC would support the hotel if it were being built elsewhere, and that it is the political risk associated with Gaza that drives performance guarantees to levels that are unattainable to the investor,' Levine said.
'Unfortunately, this is not just any project -- this is the Marriott in Gaza, with all of the impact that implies...This says 'come to Gaza and do business like Americans'...But if the current (slow) momentum is sustained, this project will never be approved,' Levine warned. OPIC Executive Vice President Christopher Finn, who also testified before the panel, defended the lending requirements as a necessary guarantee against the 'high risk' involved. He said 'we have spent more resources on this project than any other in the last two years,' but he did not say whether it would gain final approval. The Gaza Marriott project is envisioned as a full-service hotel/conference center with a fax in every room and satellite telephone links. It has the strong support of Israel and the Palestinian Authority, which transferred 12.5 acres (5 hectares) of beachfront property, valued at $15 million, to the project free and clear. The Marriott Corp. has invested $1 million to the project and several studies by financial analysts have concluded the hotel would be profitable. The project would provide 2,000 construction jobs initially, while the completed hotel would employ 250 people on-site and 1,750 off-site, Karram said. There are no other modern hotels in Gaza, which is an impoverished enclave of 700,000 people, and anyone hoping to do business there must stay in Israel and endure three-hour crossings through several military checkpoints. Businessmen, international lenders and aid workers say current conditions for working in Gaza are unacceptable.
