The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Democratic National Alliance’s (DNA) leader yesterday backed the decision to resolve the Baha Mar dispute via mediation, adding: “It’s always better to negotiate in the Boardroom than fight in the court room.”

Branville McCartney told Tribune Business that yesterday’s adjournment of Supreme Court proceedings gave the Bahamian people “better news”, as he urged all sides to the dispute not to let the $3.5 billion property “waste away”.

Bahamas-based properties tend to depreciate rapidly if left unoccupied for a lengthy period, Mr McCartney said it was vital to the Bahamas’ short-term economic future that Baha Mar open because there was “nothing else on the horizon” of similar magnitude.

But he added that Baha Mar’s travails showed the wisdom of not relying on any one project or investor to act as the Bahamas’ economic saviour.

Mr McCartney also described the Government’s decision to pay Baha Mar staff salaries as “a political move more than anything else”, as its intervention in the Supreme Court Chapter 11 recognition proceedings last week meant it helped ‘block’ the developer from paying its employees itself.

“That is what needs to happen,” Mr McCartney replied, when told by Tribune Business that all parties to the Baha Mar dispute were leaving the court room in favour of returning to the negotiating table.

“It’s always better than in the court room. It’s always better to negotiate in the Board room than fight in the court room.”

The DNA leader, though, warned that it was hard to predict whether the four-way negotiations between Baha Mar (the Izmirlian family), the China Export-Import Bank, China Construction America and the Government would produce the much-hoped for resolution that would enable the $3.5 billion resort project to complete and open.

The starting point for the talks, which will be mediated by the Government, is likely to be the financial contribution ‘framework’ that the Prime Minister thought had been agreed prior to Baha Mar’s Chapter 11 bankruptcy filing.

Subject to a quantity surveyor verifying that $300 million was the sum required to complete Baha Mar, its main debt financier, the China Export-Import Bank, had agreed to contribute $150 million- 50 per cent of the sum required.

The $150 million balance was to be split evenly between China Construction America, the project’s contractor, and the Izmirlians.

Both would have kicked-in $75 million, or 25 per cent each, with Sarkis Izmirlian, Baha Mar’s chairman and chief executive, also providing further security via a personal guarantee.

Mr McCartney, warning that it was in the interests of none of these parties to allow Baha Mar to sit idle, told Tribune Business: “It’s good that they’re willing to talk, willing to negotiate.

“I think they ought to bear in mind it is essential this development, whether it is Baha Mar or otherwise, moves forward and is not allowed to sit there and waste away.”

The DNA leader warned that should Baha Mar remain incomplete, and no solution is found outside the courts, then the “trickle down” impact would affect “everyone in the country”.

Mr McCartney said these impacts were already showing, as expatriate Baha Mar staff broke leases and left the Bahamas, and their children were removed from private schools.

“It will ultimately affect the whole country,” he added, warning that the potential termination of Baha Mar staff would exacerbate a moribund economy that was not growing, and was still reeling from Value-Added Tax (VAT) and a 15.7 per cent unemployment rate.

“There is not other substantial investment on the horizon. It’s not a good picture,” Mr McCartney told Tribune Business. “We feel it in business. Businesses have taken a hit, speaking to a number of people, from VAT. People just don’t have the money, just don’t have the work.

“It’s really the Government that needs to mend its ways, and it should never have put all eggs in one basket, relying on one entity to save the economy, as opposed to bringing in new industries.”