The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Downtown Nassau Partnership’s (DNP) co-chair has backed China’s acquisition of the British Colonial Hilton and wider plans for redeveloping downtown Nassau, with the Asian nation now “an essential part” of the country’s economy.

Charles Klonaris told Tribune Business that China State Construction and Engineering Company’s plans to develop both the six-acre parcel immediately to the British Colonial Hilton’s west, plus the city of Nassau, “will add so much more” to the area’s economy.

He added that China State Construction would set the “model template” for the type of redevelopment activity that could occur in downtown Nassau, and suggested its involvement would create more opportunity - not less - for Bahamians.

Emphasising that he “welcomed” the British Colonial Hilton’s sale to China State Construction, Mr Klonaris said that although he did not know the latter’s plans, developing the six vacant acres immediately to the resort’s west would “enhance the city itself”.

At Friday’s ceremony to celebrate the signing of the sales agreement for the British Colonial Hilton, it was suggested that China State Construction plans to develop a luxury condominium hotel on that site.

The project will also feature a marina and retail shopping centre components, plus entertainment (nightclub and cinema).

This is the plan that the British Colonial Hilton’s vendors, Aubaine Capital (formerly Adurion) and the Canadian Commercial Workers Industry Pension Plan (CCWIPP) had been attempting to get off the ground for years, but with no success. A proposed joint venture with Island Global Yachting fell through six-seven years ago.

‘The British Colonial Hilton has been a landmark, and this adds much more to it. The property to the west is enormous,” Mr Klonaris told Tribune Business. “I welcome that so much. We should be pleased and welcome what the Chinese have done in terms of Baha Mar, and now the Hilton.

“They’ve now become an essential part, not just of downtown Nassau, but the Bahamas. They’re essentially part of the future in this island, and have done a good job.

“It will add so much to the entire economy of the Bahamas. I think whatever they do, it is going to be first class, and in essence will set a kind of template for what could take place in downtown Nassau. I think it’s going to be amazing.”

Many Bahamians, though, have been quick to voice concerns that Chinese-state controlled/owned interests, in the shape of China State Construction, are gaining too much power and influence as result of their extensive interests in this country.

And, while the terms for the British Colonial Hilton’s purchase are currently unknown, as are the incentives offered to the Chinese, many believe the development could follow the template established at Baha Mar - extensive use of Chinese labour and materials.

All of which is not made to maximise employment and entrepreneurial opportunities for Bahamians, but Mr Klonaris took an opposing view.

“Whatever they [the Chinese] do is positive,” he told Tribune Business. “I don’t think we should look at it as limiting or taking away from Bahamians.

“Whatever they do will enhance the city, and give Bahamians more opportunity to participate in the development of the city of Nassau.”

This newspaper has extensively reported the almost two-year effort to sell the British Colonial Hilton, and has written several articles on the negotiations between China State Construction and the previous owners.

While the sales agreement has now been signed, the purchase’s closing will likely take a little longer, although this will be a formality.

And Tribune Business exclusively revealed two months ago that China State Construction had submitted a ‘Masterplan’ for the redevelopment of the entire downtown Nassau/Bay Street area to the Government.

This was finally confirmed by Prime Minister Perry Christie on Friday, who said: “The developer has indicated its willingness to join in a public/private sector partnership with the Government and other stakeholders along Bay Street to implement an overall plan for redevelopment, extending from Arawak Cay in the west to Potters Cay in the east.

“Some of these stakeholders with whom I meet in the next fortnight are ready to move ahead with their redevelopment plans.”

Someone who did not share the Prime Minister’s optimism on Friday was K. P. Turnquest, the Opposition’s finance spokesman, who questioned whether China State Construction’s wider Bay Street plans were in the Bahamas’ national interests.

The MP, who previously urged the Bahamas to be careful about allowing foreign companies owned by sovereign nations (such as China State Construction) to establish a dominant position in this economy, said: “We ought to be careful about what out national objectives are.

“How does this advance our national objectives to be self-sufficient, and economically empower Bahamians?

“Again, the Government came in on a pledge of Bahamians first, and since the election they’ve seemingly done nothing but look after foreign interests.”

China State Construction, apart from being the main contractor for the $2.6bn Baha Mar project, also has a $150m equity stake in the project. And the Beijing controlled China Export-Import Bank is Baha Mar’s main debt financier, having provided at least $1.9bn to the development.

This effectively makes China owner, financier and contractor for the Bahamas’ second mega resort/casino development, which is being counted on to play the lead role in turning around this nation’s moribund economy and high unemployment rate.

Along with China State Construction’s interest in the British Colonial Hilton, it is also thought to be the favoured bidder on the generation aspect of the Bahamas Electricity Corporation (BEC) restructuring. If successful, it would be a major player in the utilities and hotel industries — two of the major sectors of the Bahamian economy.

Mr Turnquest also expressed concern over whether job opportunities on the British Colonial Hilton redevelopment would be limited for Bahamians.

Mr Christie on Friday said development of the six-acre property to the resort’s immediate west would create 200 construction, and 500 full-time, jobs, but Mr Turnquest questioned if China State Construction’s Baha Mar workforce would simply move east once that development comes to an end.

“After all the furore they [the PLP} raised about Chinese working at Baha Mar, it would be incredible if they allowed that workforce to move to the Hilton when we still have a significant unemployment situation in the Bahamas,” Mr Turnquest told Tribune Business.

“Again, we wonder what the objective is. Do they [the Chinese] see something we don’t see, or is there a bigger strategic objective? Interesting times, interesting times.”