The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The prospects of Baha Mar re-hiring its 2,000 laid-off employees are “growing more remote every day”, the Opposition’s deputy leader said yesterday, given predictions that winter 2017 is the earliest the property can open.

K P Turnquest told Tribune Business that Bahamians had to question what Prime Minister Perry Christie was speaking about, when he both promised them imminent “good news” on Baha Mar, and suggested the property could be physically completed by summer 2016.

Sir Sol Kerzner’s joint venture partner in a bid to acquire Baha Mar, Andrew Farkas, on Tuesday told Tribune Business that it would likely be another 20 months at earliest before the property fully opened, given the construction and pre-opening work that needed to be done, plus the timing of tourism ‘high season’.

These estimated timelines are completely at odds, though, with the Prime Minister’s December 2015 pledge that there will be “good news” soon over Baha Mar, and his suggestion that construction could be completed by this summer.

“That is incredibly disappointing,” Mr Turnquest told Tribune Business of Mr Farkas’s forecast, “and once again one has to consider what exactly the Prime Minister was referring to when he said there was going to be good news, and his confidence that this property was going to be open by this summer.

“On the face of it, it appears he has been very badly informed on the subject, consistent with his lack of detailed knowledge on the status of the project all along.’

Mr Turnquest said Mr Farkas’s interview with Tribune Business, and this newspaper’s publication of an internal China Construction (America) memo suggesting it knew in advance that Baha Mar would miss its target March 27 opening last year, had further exposed the “questionable decisions” taken by the Christie administration.

“This is showing the series of bad decisions made in managing the [Baha Mar] dispute, and the reliance on one side over the other, when the developer [Sarkis Izmirlian] had a vested interest in the property and would be more aggressive in trying to complete it.

“I don’t want to say that they backed the wrong horse, but they’ve certainly made some questionable decisions over this project and the resolution of the dispute.”

The FNM’s deputy leader said Mr Farkas had also confirmed that a resolution to Baha Mar’s standstill was being “made more complex” by the China Export-Import Bank’s insistence that it fully recover its $2.45 billion outlay.

Mr Farkas said this week that Baha Mar’s financier, which controls the $3.5 billion project’s fate via its Deloitte & Touche receivers, was not entertaining any of their proposals and instead insisting that it be ‘made whole’.

He added that the state-owned Chinese bank was also failing to engage in meaningful negotiations with their joint venture, failing even to submit counter-proposals to their offers.

“The Chinese bank is not going to be interested in making a deal in terms of taking cents on the dollar, which makes the project infinitely more complex to resolve and find a buyer,” Mr Turnquest told Tribune Business yesterday.

“I think we now have a number of concerns here. First off, the immediate concern would be for the employee who were unfortunately let go as a result of this calamity.

“The prospects of them returning to full-time employment with Baha Mar seem more remote every day.”

Some of the 2,000 former staff will already have been able to find alternative employment, but many others will doubtless still be looking for work, given the anemic economy and unemployment rate that remains close to 15 per cent.

Looking beyond the former employees, Mr Turnquest added: “Further to that, the contractors, vendors and service providers who have invested in works at the project, and are at risk of losing their investment, are in a very serious bind which could have knock-on effects for employment at those entities to continue.

“Then, of course, you have the retailers and restaurants who are themselves exposed as a result of the failure to open.”

Mr Turnquest reiterated the concerns previously expressed by Democratic National Alliance (DNA)leader, Branville McCartney, that the conditions cited by Standard & Poor’s (S&P) as creating justification for a further downgrade of the Bahamas’ sovereign credit rating - possibly to ‘junk’ status - were now in place.

“We must bear in mind that S&P has put fairly heavy weight on this project to facilitate the necessary growth, and sustained growth, in the economy,” he said.

“That has to be a very serious concern for all of us. We certainly understand the implications of that.”

Mr Turnquest expressed hope that the Government’s planned meeting with S&P, in a bid to head off a potential further downgrade, would be “successful”, given that such an outcome was in the best interests of all Bahamians and the economy.

Michael Halkitis, minister of state for finance, recently revealed to Tribune Business that the Government plans to meet with the rating agency imminently, once the mid-year Budget has been released.

He emphasised the Christie administration’s belief that the attainment of its key fiscal targets, notwithstanding the Baha Mar dispute, merited more consideration by S&P and were justification for maintaining the Bahamas’ current rating.