The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Cabinet Minister yesterday conceded that Baha Mar’s owner was “not incorrect in some of his complaints”, agreeing that this nation had to move more rapidly on energy and education reform.

Khaalis Rolle, minister of state for investments, told Tribune Business that there “has to be a better relationship” between the Government and private sector, with both sides realising it was a ‘two-way street’.

Responding to Sarkis Izmirlian’s comments that Baha Mar had to contend with 12 years of “unfulfilled promises” and a “less than best in class business environment” while developing its $3.5 billion resort destination, Mr Rolle also pushed back against such claims.

He suggested the Government could “make similar claims” on certain issues, suggesting that these related to whether Baha Mar had met all its obligations and commitments under its various Heads of Agreement.

“In any relationship, there’s a process of negotiation,” Mr Rolle told Tribune Business. “I’m sure the Government can make similar claims in some regards.”

When asked what he meant, Mr Rolle said his comments were a reference to Baha Mar “meeting obligations and how they met them”.

That could be a reference to the Government’s ongoing dispute with Baha Mar over how much it should pay as its contribution to the costs associated with re-routing West Bay Street, but Mr Rolle acknowledged: “There has to be a better relationship between the Government and the private sector.”

Backing Mr Izmirlian’s concerns over the education system’s inability to provide the qualified graduates sought by employees in sufficient numbers, Mr Rolle said the Government “can’t opt out of” reforming this key sector.

He added, though, that education reform could not be left solely to the Government, but required input and commitment from the whole of Bahamian society.

“He was not incorrect in some of his complaints,” Mr Rolle said of Mr Izmirlian. “On education, we have to move quicker. On energy reform, we have to move quicker.”

However, reaction from the Free National Movement (FNM) camp branded Mr Izmirlian’s Wednesday address as “damning” and “horrifying” in terms of the negative message it sent to other potential investors about coming to the Bahamas.

John Bostwick, the former FNM senator, told Tribune Business that it was a major indictment of successive Bahamian governments for the Bahamas’ largest private sector investor in the past 20-25 years to state it had “endured 12 years of hell” to get its $3.5 billion development completed.

“He’s said a lot, but he could have said a lot, lot more. He seems to have a lot on his mind,” Mr Bostwick said of Mr Izmirlian.

“What he did say was damning. For him to give a report suggesting he is unable to get any co-operation from the Government of the Bahamas, and had to endure 12 years of hell, is unacceptable and doesn’t encourage any foreign investor of any size to explore options in the Bahamas.”

With Baha Mar’s $3.5 billion investment exceeding Sol Kerzner’s $3.2 billion, which was spread over several phases, Mr Bostwick continued: “I am incredibly concerned that It [Mr Izmirlian’s comments] will be nothing but a detriment to the desire of other investors.

“To say they didn’t have everything they needed 12 years ago, this is frightening to me. It is horrifying.”

Mr Bostwick said the fact Baha Mar, as the country’s largest investor, appeared to be “openly fighting” and “having issues with everyone” was also failing to send the right message about the Bahamas as a haven for foreign direct investment (FDI).

Apart from the roads dispute with the Government, Mr Bostwick said Baha Mar was also embroiled in a nasty spat with its construction and equity partner, China Construction America.

Then there was the litigation with SuperClubs Breezes over their ‘land swap’ agreement, plus the court battle with the hotel union over the Melia gratuities.

This had resulted in much negative international media coverage of Baha Mar over the past two years, and Mr Bostwick told Tribune Business: “It’s just one horror story after the next.

“Could you imagine the chief executive of a $3.5 billion project anywhere on earth saying what that man said on Wednesday? It’s crazy....

“Making those statements knowing the financial and fiduciary responsibilities of a chief executive.... that’s amazing and frightening.”

Less charitable observers, though, speaking on condition of anonymity, yesterday questioned whether Mr Izmirlian’s address was effectively a ‘cover story’ and attempt to deflect attention from Baha Mar’s own issues and failings.

Mr Izmirlian said Baha Mar had received “less than ideal support” during its construction, and said: ““Unfortunately, a number of promises critical to the future of the Bahamas, over the past 12 years, have not come to fruition.

“All of the business community must be concerned about the unfulfilled promise of improvement in the reliable supply of power and the reduced costs of power.

“We should all be concerned about the gap in necessary education and training programmes that would allow workers to be better prepared for jobs, and we all should be concerned that growth incentive commitments are not viewed as reliable.”

Highlighting what he, and doubtless others, view as the urgent need for wide-ranging reforms, Mr Izmirlian told the private sector: “In short, all of us here today need this nation to truly position itself to attract the crucial investments necessary to grow, expand business and create the necessary financial reward and incentives for the young Bahamians who will graduate from schools over the years to come.

“Let us not kid ourselves if we think that today we are competitive versus countries like Dubai or Singapore.”