The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Resorts World Bimini has this week switched the location and provider of its Florida-based ferry service, selecting an operator that previously claimed the deal was "stolen" from it.

The resort, owned by the Malaysian conglomerate, Genting, has swapped FRS Caribbean for Balearia Caribbean with effect from Monday. The change means that the regular sailing from Florida to Bimini is also moving from Miami to Fort Lauderdale's Port Everglades, with the new service set to begin this week.

A notice on FRS Caribbean's website said: "FRS Caribbean has stopped its service on the route Miami to Bimini with effect from August 5, 2019. The service will be provided by Balearia Caribbean. The vessel will depart from Port Everglades.

"Customers with existing reservations will be offered the option to travel from Port Everglades or to cancel/refund their reservation. Passengers affected will be contacted. If you booking was made through a travel agent or third party vendor, please reach out to them for refund requests."

It is unclear whether, and how, the provider switch will impact the Bimini end of the service. Multiple inquiries by this newspaper yesterday were unable to establish whether any Bahamian jobs will be lost, although one possibility is that any positions will merely transfer from one operator to the next.

Kai Knocke, chief executive of FRS Caribbean, told the Miami Herald that the change was based on "commercial considerations".

"In our opinion the relatively small market between Florida and The Bahamas allows at the moment only room for one shipping company for a year-round service," he said.

The Bimini ferry service contract was embroiled in controversy earlier this year after a US federal court judge ordered the former chief executive of Balearia Caribbean to pay his ex-employer $2.844m in damages for effectively stealing the deal from under them.

The Spanish ferry operator, which already services Freeport from Fort Lauderdale on an almost-daily basis, was deprived of the chance to bid on the initial Bimini contract because Hernan Calvo concealed the opportunity from it.

Calvo, according to a US court ruling obtained by Tribune Business, first entered into secret talks to steer the Resorts World contract to a rival Argentinian ferry company, Buquebus. When it pulled out in April 2016, he found a German transportation company, Forde Reederei Seetouristik GmbH (FRS), to take over the deal and it duly signed a contract with the Bimini resort's owner.

Judge Kathleen Williams found that Calvo, while still working at Balearia, was competing against his then-employer for two months over the Resorts World deal prior to his eventual departure. She ruled that he had "breached his fiduciary duty" to the Spanish ferry operator, and therefore needed to pay it $2.844m compensation for loss of profits.

Documents filed with the the US south Florida federal court, which have been obtained by Tribune Business, also allege that Calvo kept secret negotiations he was holding with the Bahamian government over investment incentives for the Resorts World Bimini ferry route.

"The Government of the Commonwealth of The Bahamas figures prominently in any proposed tourism activity affecting The Bahamas," Balearia, in its original action, alleged. "Calvo, as Balearia Caribbean's chief executive, knew that on Balearia Caribbean's existing ferry operations between Fort Lauderdale and Grand Bahama, Balearia Caribbean was able to obtain through negotiations a reimbursement of certain marketing expenses from the Government of the Commonwealth of The Bahamas as an incentive to promote these ferry operations.

"Calvo also held discussions with Bahamian government representatives when he was negotiating the Genting ferry deal for Balearia Caribbean, and these discussions would have included the marketing reimbursement tourism incentive.

"Calvo kept [Balearia] in the dark about the discussions he was having with representatives of the Government of the Commonwealth of The Bahamas at the time he was also negotiating the Genting ferry deal."

Balearia claimed that a representative for Genting Group, the Malaysian conglomerate that owns Resorts World, informed it that the agreement with FRS involved the ferry operator "ceding to Genting the marketing incentives that FRS would obtain from the Bahamian government".

In other words, Resorts World and Genting would be the ones to benefit from substantial concessions granted on the Bahamian taxpayer's behalf - in addition to the multi-million dollar tax breaks and other incentives already granted to them for the resort's development.

Meanwhile, Balearia has now gained the very contract it was deprived of some three years ago. Genting and Resorts Word were not involved with Calvo's actions, and there is nothing to suggest they or their executives did anything wrong.