The Tribune

THIS IS no longer a dispute between two giant investors. This matter is now of national concern, a worried Bahamian told us recently. Too many Bahamians, he said, encouraged by government to believe that Baha Mar was the Promised Land, have given up good jobs in anticipation of improved employment in the new hotel. Almost every profession has been affected and is represented among this staff-in-waiting, including a former police officer.

The Bahamian with whom we were speaking was also tempted to give up his own employment during the Baha Mar “fever”, but had the wisdom at such an uncertain time to wait and see. He remembered the old saying that “a bird in the hand is worth two in the bush”. He had sense enough not to be tempted by the two beauties in the bush, who were not immediately within his reach.

We have been told that almost 2000 staff needed for the operation of Baha Mar had already been hired. However, a major problem was created because there was no need for them in a closed hotel.

However, Mr Sarkis Izmirlian, chairman and CEO of Baha Mar is determined to see his dream through to completion. An investor with less enthusiasm for this country, would have given up a long time ago. However, instead of sending these Bahamians home – those already employed for the yet-to-be-opened hotel – were sent into the community to do volunteer work. Two weeks ago, for example, they sanded down and painted the Seahorse Institute, a school for autistic children on Soldier Road. They cleaned the various beaches, did work at Goodman’s Bay and with the Salvation Army. They were about 1,000 Bahamians in all — and all of them were paid out of the pocket of Sarkis Izmirlian.

At a Chamber of Commerce luncheon last month, Mr Izmirlian made it known that despite the announcement of an opening date, the $3.5 billion Baha Mar project was facing problems.

“Our general contractor,” he told the Chamber, “needs to meet its assurances so we are in a position to properly open this world-class destination resort. 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.” Mr Izmirlian’s reference was to his Chinese partners, the state-owned China State Construction and Engineering Company (CCA).

It has been reported that at a meeting with Prime Minister Christie, CCA shocked the room when it admitted to slowing down work to gain commercial leverage. Although CCA has condemned Mr Izmirlian’s comments to the Chamber as “totally inappropriate”, their behaviour – especially their admission that everything has come to a halt because of them — has not endeared them to the people of this country. This is the same CCA that promised the Bahamas government that it would complete Baha Mar before starting work at the downtown Hilton, yet in the past weeks they have started clearing the Hilton’s parking area in brazen defiance. Today, Bahamians are particularly worried that our government is doing business – not with a private company – but with the government of China.

As the March 27 opening date neared and it was obvious that CCA was falling behind its promised completion date, a statement from Baha Mar said: “Last Friday, based on this party’s repeated assurances, Baha Mar announced that it would begin a paced opening beginning March 27, and culminating in its grand opening scheduled for early May.”

The statement then added: “Subsequently, it has become clear that the contractor has not completed the work with an attention to detail consistent with Baha Mar’s standards of excellence.

“Anything less than a world-class facility and best-in-class guest experience is not acceptable to Baha Mar. As a result, Baha Mar will not begin its paced opening on March 27.”

The argument was on with Prime Minister Christie moving in as peacemaker.

Even Bahamian businessmen were complaining about doing business with Baha Mar’s Chinese partners — delayed payment was their chief complaint.

One contractor told Tribune Business that it was a “grind” to be paid on time by the company. There were times, he said, when work had to be stopped because he could not afford to carry the Baha Mar development with his own cash flow. He speculated that one of the problems might be the length of time it took to go through Beijing. It is understood that CCA’s project manager is responsible for all payments to contractors/sub-contractors – including Bahamians – on the development.

Further, we have been told that money is not the issue as Baha Mar has about $200m undrawn on its credit facility and its hotel partners are also committed to invest almost $100m.

On March 16, 2013, Richard Nalley of Forbes Life wrote of Baha Mar: “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. Expect a full-on Junkanoo in December, 2014 – and an outbreak of fireworks that will rock windows all the way.”

Unfortunately, much face has been lost on this one. December 14, 2014, was the first opening date to be announced. In the Business section of The Miami Herald on January 13 this year, Mimi Whitfield wrote: “Golfers were supposed to be swinging their clubs at the Baha Mar Jack Nicklaus signature golf course by now and gamblers placing bets at the $3.5 billion resort’s state-of-the-art casino.

“But Baha Mar is behind schedule, and the Bahamas’ newest resort, which was largely financed by the Chinese government and built with the help of about 4,100 Chinese labourers, will miss all but the tail end of the all-important high season.”

March 27 was the next date set for the soft opening leading up to the grand opening in May. Now that is all off with an opening date still up in the air.

We do not pretend to understand all of the problems, but based on the information available, it is difficult to understand why China Construction would effect a go-slow, instead of pushing for completion so guests can start arriving, money can start flowing in, and Bahamians, already engaged, can take up their positions.

These delays are not only a loss of face for Prime Minister Christie who had been promised in his state visit to China that Baha Mar would be completed by March 27, and to the contractor for not having met CCA’s obligations to the country and to Baha Mar, but also a loss of face for the government of China as Baha Mar had become a symbol of China Inc in the region. However, we understand that China might be coming to the rescue. Realising that its subsidiary, CCA, has made such a mess, the parent company, China State Construction and Engineering, is sending a specialised team of 100 to complete Baha Mar.

Let us hope that is the case and that finally China has realised that the success of Baha Mar means the success of China in the Caribbean. Baha Mar needs to open soon so that its Bahamian employees can start earning a living and the investors can see a return on their unequalled patience through this process.