The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A former Bahamian Contractors Association (BCA) president yesterday said he had “no doubt” that Baha Mar’s main contractor would use its seat on the creditor payout committee to ‘beat down’ the value of local claims.

Stephen Wrinkle told Tribune Business that refusing to settle Bahamian contractor claims had been China Construction America’s (CCA) “modus operandi”, adding that he would be “pleasantly surprised” if the entire local construction industry was ‘made whole’ over Baha Mar.

He argued that if Baha Mar’s main contractor was among those determining how much Bahamian companies received, then either the BCA or experts in mediating construction disputes should also have a seat on the committee to protect local interests.

Pointing out that construction industry payment battles were often highly complex, Mr Wrinkle questioned whether any committee members - apart from CCA representative, Tiger Wu - possessed the necessary expertise and specialist knowledge to handle disputed Baha Mar claims.

“It’s not going to be a win-win for all,” Mr Wrinkle told Tribune Business of the construction completion agreement that the Christie administration has struck over Baha Mar. “I would be pleasantly surprised if all Bahamian contractors were made whole.

“They are certainly entitled to it because the works were performed. Unless there were some anomalies in the billing structure, one has to assume the work was performed in accordance with the contract.”

However, CCA has challenged whether sub-contractors performed the necessary quality and standard of work in three separate court cases brought against it in both the Bahamas and New York over alleged non-payment for services rendered at Baha Mar.

When asked whether CCA was likely to exploit its position on the creditor payout committee to challenge and ‘beat down’ Bahamian contractor claims, especially those from its own sub-contractors, Mr Wrinkle replied: “Without a doubt.

“It’s been their modus operandi all the way through. Beat them down, find reasons not to settle... That’s been the problem all along.”

Mr Wrinkle recalled the case of a contractor friend, who he declined to name, who had a series of meetings with CCA in a bid to resolve a payment dispute.

An agreement was eventually reached, only for CCA to then say it needed to be approved by its Beijing head office.

“He was dangled like a ping pong ball, and told he had to stay on site and keep producing if he was to receive any payment,” Mr Wrinkle recalled.

“Certainly, if CCA has representation on the committee, it only follows that the BCA should have representation on the committee.

“If all the parties are represented at the table, somebody should be on the committee representing the contractors, be it a legal consultant, quantity surveyor or professional arbitrator - somebody familiar with the settlement of these type of disputes.”

Arguing that construction was “a specialist field”, Mr Wrinkle queried whether the other four committee members - other than Mr Wu - were “versed” in the industry, and associated claims and settlement procedures.

“In light of the history of this project, in light of the situation with the Bahamian contractors, in light of the fact that the original developer is out of the picture, some representation is warranted for the contractors in regard to the monies they are owed,” he reiterated.

The committee’s creation, and the proposed structure and formula for determining how much Bahamian creditors will receive, has already been approved by the Supreme Court.

Given that the China Export-Import Bank has no obligation to compensate any of Baha Mar’s Bahamian creditors, the Government probably had little choice over the committee’s membership, even though many believe CCA’s inclusion represents a ‘conflict of interest’ because it is itself a creditor.

Mr Wrinkle, who acknowledged that he is owed no money over Baha Mar, said those construction firms collectively owed $74 million were likely reluctant to speak out for fear of ‘cutting off their nose to spite their face’.

Apart from endangering their payout chances for work already performed, Mr Wrinkle said such actions could also damage prospects of being recalled to complete Baha Mar’s construction.

“Nobody is speaking up at the moment,” he told Tribune Business. “For their part, speaking up at this point makes no sense, as they want to see what cards the Chinese will play. There are a lot of monies on the table.”

Conceding that the Chinese would likely “dangle a carrot in front of” Bahamian contractors in terms of further Baha Mar work, in a bid to smooth over any disputed claims, Mr Wrinkle said the local industry would likely take a long-term view.

“A lot of the contractors are looking at the bigger picture as opposed to being petty and made whole,” he added.

The ex-BCA president also admitted that the agreement struck by the Christie administration with the Chinese to get Baha Mar completed may have been the best thing possible in the circumstances.

“This thing is so far down the river, the Government is between such a rock and a hard place in trying to get this project completed, sold and open,” Mr Wrinkle told Tribune Business.

“There’s no easy solution at this stage of the game. There’s no sense in looking behind; they can only look ahead to get this thing open and operating. If a better deal can be made, it would probably have been made already. All things considered, all the circumstances, they’re doing the best they can.

“It’s easy to play Monday morning quarterback, but it’s a substantial mess they’re trying to sort out. If they get this completed, open and operational it will be a hallelujah moment.”

Mr Wrinkle admitted that “the lack of information from the Government on the deal is causing a lot of unnecessary public outcry”, given the lack of trust in the Christie administration being displayed by many Bahamians.

However, he added: “Every week it [Baha Mar] sits there, it gets more complicated and expensive to finish. They [the Government] just have to bite the bullet, take the blows and get this thing opened.

“Our economy desperately needs that. We’ve not got much else at this point. By and large, the housing market has collapsed, and commercial work is dead. We need an impetus to get it stimulated, and hopefully Baha Mar will be that catalyst.”