The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamian Contractors Association’s (BCA) president yesterday urged the Government to intervene on behalf of local companies who are owed millions of dollars for work on the Baha Mar project, describing it as “a major issue” with significant economic and social repercussions.

Godfrey Forbes told Tribune Business that while the BCA had received no official complaints from its membership, he had heard several Bahamian contractors were owed “tremendous amounts of money” and had not been paid for five to six months.

This situation was confirmed to Tribune Business by a leading Bahamian contractor yesterday who, speaking on condition of anonymity, said the company was owed $1.5 million for Baha Mar-related work and had not been paid since January 2015.

“The whole thing has closed down because we’ve not been paid since January,” the contractor told Tribune Business. “Every contractor on that job has not been paid.

“We’re out by millions, but only single digit millions - $1.5 million. It’s put everyone under extreme pressure, and the banks are not being very co-operative.

“There’s so many people waiting for payment. It’s the whole industry and nobody cares. The Bahamians are getting shafted. It’s pretty dire, and it’s hurting cash flow tremendously.”

The dispute between Baha Mar, represented by the Izmirlian family, and its Chinese contractor partner, China Construction America, has brought work on the $3.5 billion Cable Beach development to a standstill.

Construction companies are maintaining ‘skeleton’ crews on-site to preserve and secure work already completed, but no new building activity will occur until the two sides resolve their differences and pay what they owe.

Tribune Business’s contractor source said they had been reassured payment was coming in two weeks, “but that was eight weeks ago”.

They added that without payment, they were themselves unable to pay the numerous sub-contractors and tradesmen they had hired for the Baha Mar job, causing the negative ‘trickle down’ impact to percolate right through the Bahamian construction industry.

The BCA’s Mr Forbes yesterday suggested the Government was neglecting the Bahamian construction industry’s plight over Baha Mar, and appeared more concerned with assisting the Izmirlians.

He added that contractors who had made overdraft arrangements with commercial banks to finance their Baha Mar work commitments would now be suffering “irrecoverable losses” as they were receiving no payments to cover the interest due on these facilities.

“I have not had any official complaint made to the BCA,” Mr Forbes said, “but unofficially I’m just hearing from a number of contractors who are owed tremendous amounts of money at this point in time.”

The BCA president said the absence of official complaints meant he was able to confirm the sums owed, but he added: “I know there is some [Baha Mar] work contractors have pending which they have let out, and up to this point in time they’ve been unable to make the deposit and get this work mobilised. That’s been up to in excess of two-and-a-half months ago.

“Any time any individual contractor is not being paid for work they’ve carried out, it’s a major issue,” Mr Forbes told Tribune Business

“If we as Bahamian contractors in this country can’t go ahead and work for foreign developers and, at the end of the day, it comes to a point where Bahamians have difficulty getting their monies, it’s something the Government should go ahead and look into.”

Calling for the Government to pass legislation that would protect Bahamian contractors and other local professionals from non-payment by foreign developers, Mr Forbes said: “This is something the Government needs to pay attention to.

“I would say it would be a good thing for the Government to intervene on behalf of the local construction industry.

“The way I look at it, the Government seems to be more interested in intervening on behalf of the developer, as it is looking forward to the finish of this project [Baha Mar] and hundreds of new job opportunities for the country as a whole.

“Here it is. You’re looking at new jobs with this project coming to a finish, but you have an entire industry in this country that has not been paid,” he added.

“This industry has a domino effect. These are local contractors that employ local construction workers, and if they are not paid they will have difficulty in paying their workers.”

The Baha Mar ‘stand-off’ has indeed resulted in hundreds of Bahamian contractors and sub-contractors not being paid.

Mr Forbes said he had even heard whispers that some construction workers were talking of ‘doing a BAMSI on Baha Mar’, a reference to the alleged burning down of a dormitory at the former location by a disgruntled worker claiming they had not been paid.

Disagreeing with such sentiments, which are born out of frustration, Mr Forbes added: “It’s just sad to say that people are thinking these things, which are going through their head because they can’t get their money after they’ve worked.”

Tribune Business understands that it is China Construction America’s responsibility to pay its Bahamian contractors and sub-contractors, rather than Baha Mar.

However, no payments have been forthcoming since China Construction America and Baha Mar disputed the payment due to the former for February 2015 work - a row that escalated after the contractor retaliated by deliberately slowing down the construction work rate in the run-up to the planned March 27 opening.

Baha Mar accused its construction partner of “shoddy workmanship”, a public rebuke that seems to have created fury at China Construction and in Beijing.

The Chinese appear to have ‘dug their heels in’ and are playing a hardball game of ‘you blink first’ with the Izmirlians.

Baha Mar is also likely negotiating with two Chinese state-owned entities, as it is understood to require more financing from the China Export-Import Bank to complete the project.

Responsibility for the construction delays, and how much money each side should kick-in, are likely to be holding up resolution of their differences.

Robert Sands, Baha Mar’s senior vice-president of external and government affairs, said yesterday: “All the parties are working very hard to get it resolved as soon as possible.”