The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Baha Mar’s principals so wanted to believe that their $3.5 billion project would open on target that they “were in denial” about what was before their very eyes, a businessman said yesterday.

Sir Franklyn Wilson said the developer likely had many Bahamians for company, as all so desperately wanted Baha Mar to come to fruition that they “closed their eyes” to the construction realities on the ground.

The Arawak Homes and Sunshine Holdings chairman revealed that he toured the Cable Beach site several days before the scheduled March 27, 2015, opening and immediately realised Baha Mar was nowhere near finished.

“When I went down to that site a few days before it was due to open, I said to myself: ‘How the hell can this be opened?’,” Sir Franklyn told Tribune Business.

“We went down there and refused to see what we were seeing. I went down there, and thought how could that hotel property could open on the day they said it was going to open, when there were so many things to finish?

“We were all in the frame of mind that we were so dependent, that we needed this thing so bad, that we said: ‘Let’s close our eyes and pray’,” Sir Franklyn continued.

“The people making the decisions, they were also in denial in terms of what they could see. You look out, and can see that this is impossible.

“I remember going down to this thing two, three, four days before it’s opening, and I said: ‘How could this be?’ I think we all wanted this thing so badly that we said somehow they’re going to do it. But we could just look and see that it was not possible.”

Many other Bahamians have also questioned how the project was taken unawares by the missed opening, given that it was obvious to most informed observers driving past the construction site that it would not be ready on time.

Baha Mar and its principal, Sarkis Izmirlian, have repeatedly said they were misled as to the project’s construction status, and whether it would meet the target opening, by their main contractor.

They have alleged that China Construction America (CCA) consistently assured them all was well, even though an internal CCA memo disclosed by Tribune Business earlier this week suggests the contractor knew at least two months in advance that March 27 was likely to be missed.

Sir Franklyn, though, sidestepped commenting on the contents of the CCA memo and its implications, telling Tribune Business that to do so would “just lead down the path of more rowing”.

The Christie administration, too has been notably tight-lipped on the issue and Tribune Business’s exclusive interview with Sir Sol Kerzner’s joint venture partner, Andrew Farkas, who said their Baha Mar bid’s “hands are tied” because the project’s debt financier is refusing to provide essential due diligence information or enter into meaningful negotiations.

Mr Farkas also predicted that winter 2017 is the earliest that Baha Mar can fully open, provided the China Export-Import Bank strikes a deal with a purchaser/investor immediately.

Prime Minister Perry Christie, in particular, has been noticeably silent on the matter, even though Mr Farkas’s comments on the opening timeline directly contradict the line he has been pushing.

Sir Franklyn yesterday conceded that when Sir Sol and his joint venture partner said something, it merited careful attention.

“Obviously, Sir Sol Kerzner’s knowledge of the Bahamas, the hotel product in the Bahamas, and the restoration of it, that speaks for itself,” he told Tribune Business.

“Anyone who, on a matter like this, would question what Sir Sol is saying, you would have to ask whether they are being reasonable.”

When it came to Mr Farkas’s opening projections, Sir Franklyn said it depended what they meant by opening. He added that the duo may be intending to redevelop Baha Mar beyond its original concept, an undertaking that would prolong its opening.

“You look at Sir Sol’s reputation, the way he’s transformed Atlantis, and there’s a possibility they’ll bring a different concept,” he added.

“I don’t know to what extent that impacts their judgment, but when he says something, we should listen carefully.”

Sir Franklyn, though, also agreed that Baha Mar’s construction completion was distinct from its actual opening, conceding that the project had physical as well as economic/business prudence issues to overcome.

“One of the realities of tourism in the Bahamas that Bahamians would do well to understand is the power of this cycle,” he told Tribune Business.

“We think of tourism as year-round, but for hoteliers the winter season is particularly significant as they get the chance to have better room rates.

“Whether it’s economically prudent [to open in the summer months] is a different decision. It seems to me that a business person looking at this has to look at two angles; what is physically possible, and what makes economic sense.”