The Tribune

By AVA TURNQUEST

Tribune Chief Reporter

aturnquest@tribunemedia.net

THE FREE National Movement yesterday accused the government of prematurely inserting itself into the Baha Mar legal dispute to the detriment of Bahamian workers.

FNM Deputy Leader K Peter Turnquest said the government’s decision to pay the salaries of some 2,400 employees at the stalled project appeared to be emotionally motivated and “short-sighted” given the protracted nature of legal disputes, and the temporary financing strategy already put in place by the developer.

He said the move suggested that the government had taken sides on the issue despite its earlier stated position of neutrality; however, he did not reveal which side he thought the Christie administration was on when asked.

On Friday, according to published reports, the government released a statement saying that it had paid out $2m for the salaries of Baha Mar’s Bahamian workers. However, some employees The Tribune spoke with said they had yet to be paid.

Mr Turnquest said: “A better move was to try and separate the temporary financing from the bigger picture of Chapter 11, but allow the developer to be able to facilitate these payments. In its statement, I don’t see where the government has indicated a long-term plan.”

“While we are hopeful negotiations will be completed within a short period, we all know that when matters go to court it could be months, maybe even years before there is a resolution.”

He added: “While it’s gratuitous to offer to pay salaries this month, what next?”

Prime Minister Perry Christie last week suggested that the government had been blindsided by the bankruptcy filing of Baha Mar and its affiliated companies in a Delaware court. He said the news came on Monday without notice to the government.

The resort blamed its contractor, China Construction America (CCA), for the construction delays that caused it to miss previous opening deadlines. Baha Mar also took legal action against CCA’s parent company, China State Construction Engineering Company in the English High Court last Tuesday.

The government, along with project lender China Export Import Bank, is expected to make their presentations before Justice Ian Winder on Tuesday at a Supreme Court hearing on whether it would ratify a US Delaware Court’s ruling. The ruling would allow the resort to begin tapping into $80m in debtor-in-possession financing as part of its bankruptcy filing. Thirty million of this financing is to be used over a 30-day period.

In a letter to Baha Mar employees last week, the resort’s CEO Sarkis Izmirlian said the Supreme Court’s decision to adjourn Baha Mar’s application for recognition of US bankruptcy proceedings until this week would delay payments for the most recent bi-weekly payroll period.

He said the resort has turned over the information the government needs to meet staff payroll. According to documents filed in support of Baha Mar’s bankruptcy, employee payroll is around $7.5m a month.

Yesterday, Mr Turnquest questioned what kind of precedent the government intended to set given its detached position on outstanding labour disputes, namely former City Market employees and CLICO policy holders. He argued that the government should have moved to pool resources until such a time that Baha Mar had exhausted all measures to pay its employees or if the matter came to an “unfortunate end.”

“The government ought not to be inserting itself in a legal matter,” he said, “we’re operating on an emotional level.”

“While we feel for workers at Baha Mar and all workers in the Bahamas, we must utilise our intelligence and business acumen to work ourselves out of this situation.”

Former FNM Deputy Leader Loretta Butler-Turner also questioned the government’s motives yesterday, pointing to the outstanding $21m owed to Baha Mar for the West Bay Street road works.

She said she understood that Baha Mar employees expected to be paid last Thursday but are now in limbo due to the government’s intervention.

On a local talk show yesterday, the Long Island MP also suggested that funds to remediate construction issues and complete the project be raised from the private pension funds of hotel unions and other private pension fund holders.

She insisted that this effort would allow the government to amass the reported $300-400m needed to finish the project and become an equity stakeholder in the project.

Clarifying that she was speaking in her capacity as a parliamentarian, and not offering the FNM’s position, Mrs Butler-Turner furthered that the government should then employ Bahamian contractors to complete the work instead of waiting for a resolution between the resort and its general contractor.

“Why has the government delayed paying the $21m that it actually owes the developers?” she asked in an earlier interview with The Tribune yesterday.

“It must be very clear to determine whether the $7.5m is being deducted from $21m, because if so then there is a direct interference with the way a private entity runs its business.”

She added: “But in the short term, the workers don’t care who pays them. They want their money now, and they have yet to receive their money because of the government intervention. The government is very slow in doing many things we’ve seen and it’s very clear they’ve dropped the ball in so many instances.”