The Tribune

Richard Coulson offers a succinct (and opinionated) summary of the recent spate of hot news topics.

Baha Mar

News of the huge unopened hotel project ranged from initial euphoria to later depression. First, Sarkis Izmirlian, the gutsy initial promoter, announced that he was stepping back into the ring with a bid to secured creditor Chinese Export Import Bank to buy out their $2.45 billion loan at par, as they have always demanded to save face with their political bosses in Beijing.

He would also pay off the $75m owed to Bahamian contractors and other unsecured lenders. Surely his dad, the hard-headed billionaire Dikran, must have arranged that the funds would be available, so it looked like a sweetheart deal, particularly since Prime Minister Perry Christie reversed his previous cold-shoulder and called the bid “worthy of consideration”.

Will Cabinet Ministers Fred Mitchell and Shane Gibson and PLP Chairman Bradley Roberts now eat their words of anti-Sarkis invective and join the new party line?

Then accountant Ray Winder, bankruptcy receiver for Baha Mar, threw cold water on Sarkis’ initiative. He warned that Sarkis could not make any proposal to the Chinese, nor could they request it, without going through the complex bidding procedures laid down by our Supreme Court in supervising the bankruptcy.

Technically, this may be correct, as a temporary obstacle. But it’s hard to believe that a serious offer from Sarkis, backed by the Prime Minister, would not prevail over legalistic red tape. Only he and his team have the intimate familiarity with the project, together with loyalty of the 2,000 fired employees. It will not be easy to revive the wounded market image of Baha Mar, but Sarkis is better equipped than any other buyer to undertake the task.

The one non-negotiable condition of his bid is the refusal to re-engage the Chinese company CCA as the prime contractor to finish off the 98 per cent-completed Baha Mar. This should be a no-brainer. CCA is now fully committed down the street in building the glitzy Le Pointe project, adjacent to the British Colonial Hilton.

Danny Liu, the loquacious engineer in charge, should concentrate on promoting this wholly-owned Chinese venture and cease his sniping at Baha Mar.

The ever-smoking garbage dump

Hundreds of Nassau residents showed up for a peaceful demonstration, marching past the delegates at the Inter-American Development Bank (IDB) annual meeting in the new Baha Mar Convention Centre.

PLP Chairman Bradley Roberts as usual bloviated against any news reflecting on his party, calling the event “unpatriotic”. But every Bahamian knows it was the final frustrated act of citizens sick of breathing noxious fumes damaging their health and forcing nearby schools to close to protect the kids. The organising group RABL (Reviving Awareness about Bahamian Landfill) is being praised for its website and active Facebook publicity.

A national disgrace that has lasted several years, the landfill smoulders constantly and periodically bursts into flame and clouds of acrid smoke. The answers from Government ministers say nothing more than “we’re working on it”, while their chosen agent Renew Bahamas admits that things got out of control as a recent explosion damaged equipment and offers nothing more encouraging than “we inherited a big problem that will take years to fix”. South African Gerhard Buekes, a property financier known to Deputy Prime Minister Brave Davis, heads the opaque company whose contract conditions and ownership have never been publicly disclosed and appears out of its depth in handling a solid waste facility.

Landfill management is not rocket science, but it does need experienced specialists, like the Florida firm that built a state-of-the-art landfill in Barbados and several years ago doused fires at our own dump. The Ingraham administration unwisely failed to accept their detailed proposal for a long-term fix, rebuilding and relining the various cells at a cost of 20 million well-spent dollars. The experts pointed out that the risk of downward leaching into the water-table is as dangerous as upward air pollution.

Demonstrations are fine, but specific solutions are what’s needed. I know the Florida company well, and have encouraged RABL to invite them for a serious sit-down with Government. If Renew Bahamas cannot be removed or replaced, at least they could accept help from a partner with a proven track record.

National Development Plan

The Prime Minister took the opportunity of the IDB annual meeting to announce, and actually get published, the State of The Nation Report. It’s an extraordinary document.

The drafters, led by senior civil servant Nicola Virgil-Rolle, under the eye of Secretariat Chairman Felix Stubbs, deserve our congratulations. I had expected a typical Government puff-piece. Not at all: it’s a warts-and-all disclosure that tells us how we really stand, upright or downcast, with specific remedies for our failings. All Bahamians should, as I did, at least browse through its 79 pages and formidable tables to get the high points, then go back and check the details.

Despite our high ranking in the democratic principles of “Governance”, they will find under “Human Capital” that recently more than half of our births were to unwed mothers, surely a key factor in poverty, crime and unemployment, still hovering at near 15 per cent, and worse for youth. Pastors, where is your preaching on the sins of fornication?

Despite a blizzard of statistics about improved diploma-ranking of our high-school graduates, they can read that the biggest problem faced by Bahamian employers is the lack of job candidates with basic skills.

BEC is being reorganised, but they can read that its ratio of employees to customers has been miles above the Caribbean average, a sure sign of feather-bedding that led to our region-wide high electricity costs. We had 52 customers per employee; in Jamaica it was 415.

This report is designed to be the underpinning of the National Development Plan until 2040. We trust that, unlike innumerable similar studies, it will not simply gather dust in the archives of the present PLP politicians and their many successors.

To be useful, it must be continually used and updated.

Bacon v Nygard

The continuing battle was summarised in Vanity Fair as simply a spat between two equally spoiled billionaires - a grossly misleading view shared by some of our local media.

Every week, new ramifications have real consequences for The Bahamas, affecting our renowned financial confidentiality and the constitutional tradition of parliamentary privilege. It’s clear that the blame falls on Peter Nygard, not Louis Bacon.

Look at history: the unknown Canadian ex-Finn Nygard bought the virginal Simms Point in 1984 from the trustees of the late Shirley Oakes Butler (second daughter of Sir Harry), then in an irrecoverable coma from which she soon died. The trustees had to accept Nygard’s high bid without an FBI-like examination, and neither they nor Government could have predicted how he would ravish the property.

He soon constructed a monstrous pagoda of architectural bad taste, big enough for a path to drive a jeep upstairs, and began a series of noisy celebrations adorned with bevvies of pretty girls admiring his bronzed torso and stylishly ripped blue jeans. All the in-and-out was carried on the main Lyford Cay Road over which he held a legal right of entry, naturally offending his quiet neighbours.

The well-documented accretions of marine property were begun and never prevented, saved either by political contributions or simple bureaucratic indifference.

Meanwhile, Louis Bacon acquired the Point House, an elegant single-storey residence just outside Nygard’s gates. Once owned by the late Sir Harold Christie, the Bahamian-styled bay-view terraces were little altered by Bacon, who kept a low profile managing his successful hedge fund Moore Capital. But he then entered the fray by joining, and financing, Save The Bays, a licensed Bahamian environmental charity that publicises and litigates against the ecological harm caused by Nygard’s accretions.

The battle was joined. It’s unknown whether Nygard actually poured funds into the PLP treasury (there is no law against it), but we can see photos of Perry Christie, Jerome Fitzgerald and other PLP stalwarts warmly accepting Nygard’s hospitality overlooking Clifton Bay - never on Bacon’s premises.

So it was not unexpected when Fitzgerald recently stood up in the House with the startling accusation that Save The Bays was a hidden front trying to destabilise our Government - what could be called an act of sedition. What’s more, he backed up his accusation by quoting, without apology, from correspondence about clearly confidential matters.

When I first knew Jerome, he was a rational businessman working hard to create RND Cinemas. Maybe his duties as Education Minister do not satisfy the energies of his muscular stature, the largest among his fellow ministers. While revelations from the Panama Papers are damaging the credibility of all offshore financial centres, Jerome is adding his bit to shatter faith in our own system. He justifies this by claiming his undiluted right to parliamentary privilege, which he can exercise because he has discovered the gunpowder plot to blow up the Government!

His real discovery is, at most, an environmental campaign that might blow up the PLP. To him that is the same as destroying the state, but many Bahamians do not share that view - and indeed may feel just the opposite. We’re barely a year from an election to decide whether they are a majority.

Cash in, but not out

One of our major automotive dealers revealed that, for up to 18 months, he has been owed $260,000 by the Ministry of Finance, with many assurances of payment but no cheque received.

He was rash enough to import a fleet of vehicles, pay the excise tax up-front, then sell to Government agencies that are tax-exempt. His tightly budgeted cash-flow needs are in peril and his employment figures suffer. Other dealers chimed in with the same complaint, and VAT recoveries are often tardy, while draconian fines are imposed for the slightest delay in feeding the Treasury.

Minister of State Halkitis is not slow to praise the efficiency of his tax-collecting mechanism, but the efficiency is found in taking from the private sector, and then not giving back what’s legally due. It’s this kind of state behaviour that calls into question all the worthy objectives of the National Development Plan.

Mutual trust between Government and people is essential for the Plan’s success, but won’t be won by stiffing creditors with slow-pay policies.

Bank of Bahamas

Continuing dissatisfaction by the minority shareholders was the one clear message sent by this month’s annual meeting - “mutiny” might be a better word if that action were feasible under the Bank’s corporate structure.

The promised election of two directors by the minority is a band-aid for the mortal wounds revealed by the announced violation of Tier 1 capital rules and the probable need for $30m new equity.

To be provided by whom? Clearly the minority shareholders are in no mood to sink more capital into a vessel still steered by exactly the same Chairman and board majority appointed by Government, with no plan of reorganisation even summarised. And it’s certain that no new investor will be found, unless a controlling 51 per cent stake is offered. The bullet must be bitten: Government must relinquish control and negotiate to sell its stake to a well-run commercial banking institution.

After huffily refusing comment on a consultant’s unflattering report, Chairman Demeritte tried to inspire his audience with the fatuous lament that a failure of the Bank means “we as a people fail”. Nonsense. Failure is the child of a specific group of Bank directors and executives, casually unsupervised by the owner’s formal representatives, Mr Christie in his hat as Minister of Finance and Mr Halkitis as his Minister of State with the finance portfolio.

Our long-suffering “people” can be declared innocent.

• Richard Coulson is a retired lawyer and investment banker born in Nassau and from a long line of Bahamians. He is a financial consultant and author of A Corkscrew Life - adventures of a travelling financier.