The Tribune

Senior Bahamian Contractors Association (BCA) executives say they have yet to receive reports of local construction companies not getting due payments for work done on the $3.5 billion Baha Mar project.Senior Bahamian Contractors Association (BCA) executives say they have yet to receive reports of local construction companies not getting due payments for work done on the $3.5 billion Baha Mar project.

Godfrey Forbes, the BCA’s president, told Tribune Business that while the organisation was set to hold a regular meeting this week, it had yet to receive evidence or discuss any payment issues related to the Cable Beach redevelopment.

“There is nothing at this point,” he said. “I know that prior to this period there have been some contractors saying they were being paid late. It was not something that was discussed at the BCA level.”

Mr Forbes’s comments came after angry Bahamian electricians last week claimed they had not been paid for six weeks by the local construction company which hired them to do work on the Baha Mar project.

The responsibility for paying Bahamian construction companies working at Cable Beach lies with the project’s main contractor, China Construction America (Bahamas).

It is probable that China Construction has not been paying its Bahamian sub-contractors, who in turn have been left unable to pay their sub-contractors, as a result of the payment dispute it is now embroiled in with Baha Mar (the Izmirlian family).

The six-week timeline referred to with the electricians is certainly in line with when the dispute between Baha Mar and China Construction heated up. And a Bahamian contractor, too, also confirmed on condition of anonymity that he was awaiting payment for work - some of it dating back seven to eight months.

Stephen Wrinkle, the BCA’s immediate past president, told Tribune Business of the electricians’ plight: “There’s a reason it’s [payment] not happening.

“It’s a shame that it got to this point. But direct labour needs to be paid in a timely fashion. It’s disturbing.”

The ‘trickle down’ effect of the “Mexican stand-off” between Baha Mar, and its main contractor and equity partner, is now becoming apparent and is only set to increase the longer their differences remain unresolved.

The electricians’ complaints, reported in the media last week, indicate that Baha Mar’s woes are starting to take a toll among working Bahamians - a factor that only exacerbates the potential exposure to this nation and the political fallout for the Christie administration.

Multiple sources with knowledge of the situation, speaking on condition of anonymity, told Tribune Business that the dispute between Baha Mar and China Construction was “serious”, with both sides entrenched in their opposing positions.

China Construction believes it did not receive due payment for February’s work, and wants to receive what it feels it is owed before meeting Baha Mar’s demands to provide it with a projected opening date.

“The Baha Mar project is caught in a vicious argument between the main contractor, China Construction, and the developer, the Izmirlian family,” one source said. “It has to do with many issues that they thought had been resolved, but which have popped up again.”

The source added that he and others were trying to prevent numerous Bahamian workers from “coming down” on China Construction and Baha Mar, as a result of not being paid, and with no payment date in sight.

They told Tribune Business this would only “add fuel to the fire”, and emphasised that it was in the interests of neither side to let the $3.5 billion project fail.

The Government is desperately trying to mediate a rapid resolution to the two sides’ dispute, given the stakes for itself and the Bahamas as a whole.

Both Prime Minister Perry Christie and Baha Mar last week issued statements refuting claims that the developer has ‘run out of money’.

This, though, prompted a Bahamian businessman with an impeccable reputation to contact Tribune Business the following days about his troubles in receiving payment.

The businessman, speaking on condition of anonymity, said he was owed money by Baha Mar and not China Construction.

“They owe us a significant amount of money,” he told Tribune Business. “Our people went down there the other day to collect a cheque. They were told: ‘Do not show up here any more, don’t make any contact. The only way we make contact is by e-mail’.”

Robert Sands, Baha Mar’s senior vice-president of government and external affairs, declined to comment when contacted by Tribune Business.

“We do not respond to these types of rumours,” he said. “We’ve heard too many rumours and outright untruths about Baha Mar.”

Rather than speculate, Tribune Business will post here some of the questions that it has received from Bahamians over the Baha Mar impasse.

• Was the construction financing from the China Export-Import Bank used up as a result of what Baha Mar alleged was “shoddy workmanship” by China Construction? Did previously unsatisfactory work have to be redone, costing more in labour and materials, thus eating up the financing more rapidly than anticipated?

• If China Construction’s work was not up to Bahamian code and building standards, how did it get signed off by Ministry of Works inspectors? How closely was the Ministry and its team tracking progress, and were problems missed at an early stage when it would have been easier to rectify them? And who are the project managers/engineers monitoring the construction work, and signing-off on China Construction’s payment requests? How did Baha Mar not know until a week before its March 27 opening date that this was not going to be met?

• Was China State Construction required to guarantee its work by obtaining a performance bond? If not, why not? If it was, has Baha Mar submitted a claim to ‘call in’ the bond? If not, why not?