Locked in talks: PM hoping for resolution to Baha Mar dispute

As of Tuesday, May 12, 2015

By NICO SCAVELLA and

SANCHESKA BROWN

AFTER chairing a meeting yesterday with Baha Mar officials and the resort’s main contractor over the property’s opening delays, Prime Minister Perry Christie said he hoped for a speedy resolution to the dispute between the two parties in the “interest of the Bahamian people”.

Mr Christie suggested some progress had been made in his mediation with the interested parties after he met with representatives from Baha Mar, China Construction America (CCA) and the Chinese ambassador, where he “articulated a position” he said he hoped would “result shortly in a shared position” by all parties.

He said because of the government’s contractual commitment to make contributions to Baha Mar, his administration has “no room for error, no room for mistakes with respect to the single largest investment in the history of this region.”

His comments came after a well-placed source in the Christie administration yesterday told The Tribune that Baha Mar does “not have the cash to finish the project or pay the contractor”.

The source, who did not want to be named, said Baha Mar executives have been locked in meetings with CCA attempting to work out a deal to finish the resort before the end of the year. However, the source said that is “unlikely”.

Speaking at the official opening of the Island House boutique hotel yesterday, Mr Christie said: “This morning I chaired a meeting with the representatives of Baha Mar, the representatives of the China construction company and the Chinese ambassador. And I articulated a position that I think and that I hope will result shortly in a shared position on the part of all of us which will give priority to the interest of the Bahamian people, in addition to, of course, the interest and reputation of the Izmirlian family and the China construction company.

“But we live in a country where the government has been required by the agreement to make substantial contributions to that establishment, and therefore we have no room for error, no room for mistakes with respect to the largest single investment in the history of this region.”

He added: “So as we herald the opening and the future success of (the Island House), we know that the health of our economy and the health of tourism is heavily dependent on our being able to move to an early conclusion with respect to what will be a spectacular resort experience, and therefore I trust that even as I’m speaking now, that I have been listened to and that the results will soon be evident to all.”

The prime minister’s comments came the same day a tabloid reported that he had negotiated a deal for the Genting Group to purchase 51 per cent of Baha Mar. While Mr Christie did not refer to this, The Tribune contacted Robert “Sandy” Sands, Baha Mar’s senior vice-president of external and governmental affairs who strongly denied the claim.

“There is absolutely no truth to that story and I categorically deny it,” Mr Sands told The Tribune.

The Genting Group is the Malaysia-based owner of Resorts World Bimini.

Mr Sands also said Baha Mar has still not set an opening date.

Last month, multiple Tribune Business sources speaking on condition of anonymity confirmed that Mr Christie chaired a meeting of all parties involved in the Cable Beach development in a bid to ensure they could still work together to get the project open.

At the time, there was speculation that CCA slowed down its work rate in the run-up to the then-planned March 27 opening due to a payment dispute. Tribune Business was told by well-placed sources with knowledge of the meeting, that the CCA “admitted they slowed down” in the lead up to the March opening date because of a dispute with the developer over the payments it should have received for February’s construction work.

Baha Mar, in announcing the March opening postponement, blamed CCA for the delay. It said CCA had given repeated assurances that the March date would be met, while also blaming the contractor for failing to meet the necessary quality standards.

China Construction subsequently responded by slamming Baha Mar’s comments as “totally inappropriate.”

In an address to the National Conclave of Chambers of Commerce last month however, Mr Izmirlian urged CCA to understand the “discontent” it was causing in the Bahamas by failing to complete the mega-project.

“Our general contractor needs to meet its assurances so we are in a position to properly open this world-class destination resort,” Mr Izmirlian said. “Indeed, this amazing property is supposed to be the symbol of international co-operation. It is now up to our general contractor to decide how this next chapter will be written.”

Baha Mar was originally scheduled to open in December 2014. The resort subsequently set a soft opening for March 27.

After that date was delayed days before the planned opening, Baha Mar officials said they were aiming for an early May opening.

Last week, Mr Christie said he fears more delays would cause job losses for Bahamians.

Well_mudda_take_sic 9 years, 6 months ago

This Baha Mar project is on the verge of failure principally because of Christie's dereliction of duty in allowing himself to be preoccupied with matters of much less import to our nation, e.g. efforts to legalize the illicit activities of the 'still illegal' web shops owned by foreign mobsters and run by their Bahamian front men, the proposed changes to our constitution regarding equal rights for women with the hidden agenda of sanctioning same-sex marriages, the IAAF Relays, Carnival, etc., etc., not to mention all the time Christie has had to devote to a smorgasbord of over-lapping scandalous crises involving senior officials within his government and the PLP. Truth be told, it was only recently that Christie began to appreciate the magnitude of the interest costs alone on the developers debt for each day that there has been undue delay in completion of the Baha Mar project. Christie's failure to properly ensure that he and his government did all that they could do in good faith to fulfill their contractual commitments to the Baha Mar developers has undoubtedly left our country exposed to major claims (with litigation likely to come) from the developers as they seek restitution. Christie will soon start shuffling and waffling ad nauseam as he attempts to deflect and shift the blame for his and his administration's dereliction of duty, failures and many other shortcomings which collectively have contributed greatly to the alarmingly high cost overruns incurred by the developers. These claims would of course have to be heard by one or more international tribunals located outside of the Bahamas that specialize in the hearing of evidence and settlement of large international disputes between investors and a government like ours. Both the Izmirlians and the Chinese appreciate that these would be legal matters that our Attorney-General's Office and Allyson Maynard-Gibson should be kept as far away from as possible in the interest of justice being properly and fairly served.

John 9 years, 6 months ago

Sounds so kindergarten. Guess you wanted to see the pm in construction hat and boots.

Well_mudda_take_sic 9 years, 6 months ago

I did see Christie with shovel in hand, hard hat on head but no boots on feet at the ground breaking ceremony for this project many years ago at which time he said Baha Mar was expected to be fully opened for business by the end of 2013. I can't help but wonder how much productive time he has spent since then, in meaningful Cabinet meetings with his sleeves rolled up and pen in hand, ensuring his Cabinet Ministers were exercising good faith in their efforts to meet the government's many substantial contractual commitments to the developers. There's certainly nothing kindergarten at all about the many financial woes and problems that this project has had to endure, and which now threaten its viability, thanks in large part to the many shortcomings of the Christie administration. You no doubt probably very much enjoyed both the IAAF Relays and the Carnival. That's good, but it does not mean Christie and his Cabinet should get a free pass for their apparent inability to chew gum and walk at the same time.

John 9 years, 6 months ago

Well according to e govern, the stand off is between the contractors (shoddy work) and the owners (lack of funds). According to Christie the government already made substantial contributions to the project and two things that cannot afford to happen is (1) the project is abandoned and left incomplete. (2) It ends up in the hands of government vis a vis the hotel corporation. We know in the second instance it will become a white elephant and another drain on the public purse, which is already empty. But again I still feel like you wanted the PM and his government to drop everything else and deal with Bah Mar. This project is already a large fish in a small pond and it may be operating for years without making a profit. What happens then, if the government (Christie) ignores everything else to birth and babysit Bah Mar?

TruthHurts 9 years, 6 months ago

@John

What he states is true and any blind man can see that! Where have you been for the past 5 years?? It's no longer a PLP or FNM thing; right is right and wrong is wrong and Perry & his cohorts have been dropping the ball! I grew up in a PLP household, and many are still oblivious; can't decipher when their party has done them such a huge disservice! Just overheard folks talking about how they can't wait until 'campaign season' so they can get their party on?!!

Wake up Please!!!! WAke Up!!

John 9 years, 6 months ago

Ok Mr. Echo...but who else mentioned anything about politics, PLP, FMN, carnival party except you. Is the chip on your shoulder getting to heavy for ya?

TruthHurts 9 years, 6 months ago

...

ThisIsOurs 9 years, 6 months ago

It's not kindergarten, it's the truth. In any one year, there are any number of events that the PM could focus on. The overarching truth is, he will never have time to focus on all of them, so he must chose and he must prioritize. Leave Carnival to Danny Johnson, don't show up at every party and every opening while the milestone dates for cornerstone projects like Bahamar are falling through the cracks. Bahamar's success is 1000 times more important than any carnival. Crime is 10,000 times more important than carnival.

killemwitdakno 9 years, 6 months ago

Why does the PM need to focus on an investment anyway, what's the job of finance minister? For a country that's lived on projects we should have a body of fitting professionals to seek out investors/investments, review proposals, and oversee our number one dollar which is foreign investment. Cant' afford them? Commission.

ThisIsOurs 9 years, 6 months ago

I believe we have that system, it's called Permanent Secretary but it's failing in light of the almighty cabinet minister post

Isn't the PM the finance minister? But I completely agree with you, I am tired of every Tom, Dick, Shane and Perry thinking that they can run a country. The truth is only a selected few can really lead, the rest of us will follow. I'd opt for a system where persons with relevant skills are made cabinet ministers. Key requirement is they've never been "let go" or fired outright for embezzlement, no domestic abuse, they have evidence of substantial success and excellence in their field. Will that exclude some people? YESS, good, no more Shane Gibsons.

For what we have in place today, the PMs focus needs to be on serious issues. The fact that he has time to make an appearance at every carnival opening is extremely disturbing

BahamaPundit 9 years, 6 months ago

I think the problem is not the PM's lack of oversight, so much as getting into bed with the Chinese. There was a complete failure of due dillegence as to Chinese laborer's construction prowess and ability to develop a first world resort. Using the Chines was the biggest mistake made. Also, the architecture of the resort is plain out ugly.

killemwitdakno 9 years, 6 months ago

I think inside is stunning.

ThisIsOurs 9 years, 6 months ago

If it's leaking, catching on fire and crumbling, it doesn't matter how pretty it is....

TruthHurts 9 years, 6 months ago

@BahamaPundit

I hear what you are saying in regards to the Chinese being able to deliver on their promises.. but I see the same thing happening as with the contractual road company in NP. They had a not so good rep in Jamaica, yet they were hired to do such a sub par job and still it was required of Bahama Hot Mix to come in and finish most of the work. Whilst our monies were still being pumped into the entity because they had by then depleted the resources initially given and hence failed to deliver as promised! Who's fault was it that time to perform due diligence on the foreign entity hired?? Wasn't it the governments job? The world knows the background and reputation of Chinese products etc.. Hell!!! I grew up knowing they don't put much effort into construction and detail like the Japanese. So please tell me why the hell do we have these brilliant minds running the Bahamas, if they can't perform simple and crucial background research??!! NO!!! Their agenda is to get things cheap that look pretty on the outside but is faulty while they line their pockets with OUR money!

Someone commented that it looked pretty good on the inside.. all smoke and mirrors hun! Watch London Bridge fall down~!

BTW.. I agree when you said it looks ugly! I find the design to be uninspiring and unimaginative!

BahamaPundit 9 years, 6 months ago

It's pretty sad when some are saying it would be better for the Bahamas to tear that monstrosity down and start over from scratch. When one looks at the wonderous architecture being built in Dubai, one must wonder if 3 billion could not have been put to better use. What did they spend the money on conch shells? Looks like a 500 million dollar resort at best. The British Colononial Hilton looks more modern than that train wreck.

killemwitdakno 9 years, 6 months ago

Atlantic city is rather cheap. That's casinos. Some of the investment money is probably to pay winnings.

well, I did say the inside. but it would be forever to sell and rebuild. Foam moulding can always be added on all over. Looks like marble, light like feathers. That part can be done by Bahamian artists.

John 9 years, 6 months ago

One thing Bah Mar needs to stop playing musical chairs about its opening day. Not only is this not sitting well with the guests who have booked the resort, but many Bahamians were expecting to by fully employed by the resort by not. They cannot continue to put their careers on hold with the expectation that the resort will open, only to find that it is delayed again. Bills don't come with extension dates.

TalRussell 9 years, 6 months ago

Comrades let this be warning, why the Chinese should never be allowed come within 100 feet buying the family held shares controlling Freeport?

TruthHurts 9 years, 6 months ago

@TalRussell

Here! Here!

duppyVAT 9 years, 6 months ago

What is Perry going to give up for the Chinese to finish the hotel for Christmas???????

How much more Crown Land or fishing contracts or government business contracts or Bay Street properties will be given to the Chinese???????????

We are on the brink of going over the tourism cliff with this $2.5 billion Chinese deal

killemwitdakno 9 years, 6 months ago

So is the speculation that both sides wants more stake and to boot the other out?

On one hand you have to consider that American investors (Harras) will pull out at the hint of a recession. On the other, if the two are disagreeing, how will they negotiate every new opportunity for growth?

(Did it have to be 51% and not 50?)

DEDDIE 9 years, 6 months ago

Bahamians are so easily deceive. The grime look on Perry's face, him talking about the reputation of the Bahamas and people having to be laid off are all a prelude to governments intervention. The Bahamian people will now have to foot the bill to finish Bahamar.

killemwitdakno 9 years, 6 months ago

There's no way they can run Baha Mar

concernedcitizen 9 years, 6 months ago

Every going blah ,blah ,blah bout the Chinese ..The Chinese put up the 2 to 3 billion after everyone walked away from Sarkis ,,If the revenue ,or his money can,t service the debt ,,Who you think goes ,, Sarkis and the Chinese are negotiating if Sarkis even ends up w/ a little piece ,,lol

John 9 years, 6 months ago

How much does Sol Kerzner own at Atlantis now? Or

duppyVAT 9 years, 6 months ago

That was a different investor and PM ................ dont compare them

John 9 years, 6 months ago

That is the only way you can have a yard stick. You have to have a standard of comparison. The good thing here is that it wasn't the Bahamians who messed up on the construction and, as far as we know, it wasn't them who haven't been paid for three months. Construction is never easy.

killemwitdakno 9 years, 6 months ago

Fine. New offers Idea:

Require licenses for locals. Use as a trial credit system, lose it when other bills aren't paid , suspend it for crime. VAT on casino concessions , most definitely Bahamian winnings. Provide SEPARATE CHIPS so that local winnings may be tracked for a different tax%. Don't make local chips more expensive. Allow tourist to buy local chips where there can be benefits such as tax free winnings (gambling, not VAT) so long as they sign up to store it in a Bahamian bank account complete with complimentary online banking and international debit card. Bahamian players can be determined by a band received from parking based on license plate, or restrict local chip buying to an app that dealer uses also. P

enalty for a local to play with another identity, tax evasion. Untaxable amounts to be deducted from tourist players with local chips can be determined by accounting and sign ups.

That way government would earn directly , preventing such revenue leaving the economy, and the two investors would have less reason to pander for government influence in negotiations.

Of course it would be nice if locals were also able to invest in their online gaming.

There's always the Native Indian model that could kick in should Baha Mar or Resorts World ever earn at a ratio of x% more than GDP per island capita.

Ie: Gdp per capita is 30k. multiplied by say 300k persons earning less than that = $9B. Should a casino earn more than $9B per annum, then distributions of some amount can begin. This might be a replacement to taxing casinos. Benefits for them would be steady local players (can ban membership) and eager promotion. Bahamian word of mouth marketing is no doubt the best. It would generate community support making strikes unlikely.

The Bahamian inclusion factor doesn't have to start in the first two years, giving Baha Mar less to develop initially and the webshops time to analyze their adjusting. Inclusion might be having them issue and manage licenses where they may be able to integrate their loan programs.

http://www.economist.com/news/united-st…

However government should consider whether Bahamian casino gambling would stunt a national lotto.

http://tribune242.com/users/photos/2015…

There's payroll loans for businesses though which should be available to him already. Although it's probably more than construction.

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