The Tribune

“I WISH to be very clear, and very frank. Unless your Government delivers on the much advertised partnership between the Government and Baha Mar, I am seriously considering whether investing billions of dollars in this country is the right decision……Indeed in order to meet firm board commitments of the partners, these matters must be finalized no later than the first week of February (2006).“

This letter, written by Baha Mar developer Sarkis Izmirlian, CEO of Baha Mar Resorts Ltd on January 26, 2006, was addressed to Prime Minister Christie. Although the Heads of Agreement had been signed by both parties on April 6, 2005, government had done nothing to move the matter forward. Continued Mr Izmirlian: “If we cannot achieve the early February (2006) timeframe for accomplishing the above, I will have to inform Harrah’s and Starwood that despite my best efforts these past three odd years, the Government of the Bahamas has failed me. I certainly do not want to be known as the developer (and I’m certain you don’t want to be known as the Prime Minister) that lost Caesars and Starwood. Today, more than ever before, I need your unambiguous support, Mr Prime Minister.” Mr Izmirlian’s desperate cry seemed to fall on deaf ears. It appeared to be obvious that the Christie government wanted no deal signed with Baha Mar until after the 2007 election. This was one election the PLP was confident of winning.

Prime Minister Christie was negotiating the Baha Mar deal up to April 30, 2007, just two days before the general election when his government was defeated at the polls. Although the Christie government had tabled the documents in the House, months later in a meeting with the Baha Mar/Izmirlian group the then Ingraham Opposition was told that because of a confidentiality issue the investors could not give the Opposition certain documents. “We were specifically informed by the proposed investors,” Sea Breeze MP Carl Bethel told the House on March 6, 2008, “that there remain secret clauses and/or agreements whose contents have, in fact, not been disclosed to the Bahamian people.”

Today, with the Baha Mar developers locked in a dispute with its contractor, thus bringing the resort, which was scheduled to open in December last year to a halt, there are disgruntled whispers among Bahamians that blame the Ingraham government for allowing a Chinese group to partner with Baha Mar. Nothing could be further from the truth. Because of the initial delay it was the Bahamas’ misfortune that because of the indecisiveness of its PLP government, the door of opportunity was opened for Beijing to step in.

If the Christie government had not delayed the Izmirlian-Harrah’s and Starwood agreement, Baha Mar would have by now been a going concern with a group that would understand the rules of doing business in a democracy. Instead when the world’s financial crash came, the money markets were tight. It would seem that China was the only country with the means and the willingness to spread its influence through its continuing ability to finance viable investments. All other sources had dried up.

Although the Ingraham government continued to deal with the Izmirlian-Harrah group, the latter, despite declaring up to September, 2007 , that it was still keen on completing the $2.6 billion agreement with Baha Mar, eventually decided that because of the depressed world market, it should pull the plug and walk away. By January 29, 2008, an investment company had bought Harrah’s Entertainment and expressed “grave doubts” over the increased costs and risks attached to the Baha Mar project. Also the uncertainty over land transactions (the original “secret clauses”), financing and whether Baha Mar could fulfil its obligations on time was the deciding factor.

If the Christie government had not dragged its feet on the negotiations, Baha Mar could have indeed have been the Christie “legacy”. Instead we have a stalled resort that still — if given a chance—has promise of making its mark in the tourism industry.

As Richard Neiley of Forbes magazine wrote on March 16, 2013, in describing the “astounding” fireworks display for the “topping off” celebrations of pouring concrete for Baha Mar’s 25th floor and its planned December 2014 opening:

“This is a project whose success or failure will send massive ripples throughout the Bahamas and maybe the region beyond, and one whose cooperation between governments— local, Bahamian and Chinese — and private enterprise may provide a model for such mega-developments going forward.”

What is happening now at Baha Mar is a model that all sane business persons would be well advised to avoid. Imagine having to fly to Beijing to have a construction problem solved at a resort site in the Bahamas.

Last year lawyer Carey Leonard gave an excellent talk at the Grand Bahama Chamber of Commerce’s business luncheon in which he assessed the influence of Hutchinson Whampoa Limited, a Hong Kong based company, on Grand Bahama’s development. “Hutchinson’s investment on Grand Bahama… have they performed?” was the title of his talk. He concluded that Grand Bahamas’ depressed market can be laid at the door of Hutchinson, which has bought up most of Grand Bahama’s assets but has failed to develop them to create employment for the people.

“It is Hutchinson Whampoa’s board of directors that decides our fate,” he said. “All the decisions are made, outside of Freeport outside of the Bahamas, in Hong Kong where Hutchinson Whampoa is located. Hutchinson Whampoa must take responsibility for much of the unemployment and hardships currently experienced by Grand Bahama. Hutchinson Whampoa’s Hong Kong management must take responsibility as they are the ones who make the decisions, 9,000 miles away. Nothing gets done here without Hutchinson Whampoa’s Hong Kong management’s approval.”

Is that the eventual fate of New Providence? We hope there is no truth to the street gossip that there are certain members of the Christie government who are now actively trying to get the Import-Export Bank of China further involved in investment in this country. If Baha Mar is any example of how the People’s Republic does business, it’s about time that Bahamians draw a line in the sand and inform the Christie government: “This far, but no further.”

If Bah Mar is to be Mr Christie’s legacy, and Beijing is where all the decisions are made, then Beijing is where Mr Christie should now be negotiating, because the longer Baha Mar remains closed, the more Bahamians will be jobless and this country’s whole economy will continue to decline.

Also we would suggest that no further work should be allowed by China State Construction Engineering company’s newest acquisition — the British Colonial Hilton— until it has finished its work at Baha Mar and those welcoming doors are opened to visitors.

It is interesting that China State’s licences, permits and compliance requirements for construction at the British Colonial have obviously gone through at unusual speed, while Bahamian Bay Street property owners still await an audience with their prime minister to present their ideas for the development of downtown Bay Street. Remember this country still belongs to Bahamians.