The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamian Contractors Association’s (BCA) president has “no doubt” the local construction industry could have completed Baha Mar on time if it had been “invited in” by the Chinese.

Leonard Sands told Tribune Business that Bahamian contractors would “have outperformed the expectations” of China Construction America (CCA), and relieved the pressure of demanding an extra 450 Chinese workers from its parent.

Speaking after Tribune Business last week exclusively revealed the contents of an internal CCA memo, which requested several hundred more workers if it was to hit Baha Mar’s March 27, 2015, opening date, Mr Sands expressed confidence that Bahamians would have been able to “bridge the gap”.

“That’s an interesting observation,” he replied, when asked by this newspaper whether CCA should have sourced manpower and materials in the Bahamas, instead of Beijing.

“I think it would have presented an opportunity for us to fill the gap. My position is yes, had we been invited in, I have no doubt the Bahamian contractors would have outperformed expectations with CCA. Absolutely we could have done it.”

Mr Sands, though, expressed concern as to whether Bahamian contractors would have ended up being owed a greater sum than the collective $74 million debt now outstanding had they completed the $3.5 billion project.

“The only concern and fear I would have had, and hindsight is 20/20, is that had we been more engaged, would more persons have been left holding the bag if we had completed it, given that it was a payment dispute more than anything else.”

Tribune Business also revealed last week how Baha Mar’s former developer, Sarkis Izmirlian, had accused its financier, the China Export-Import Bank, and its receivers of failing to pursue one of the best recovery sources for all creditors.

That is the $192 million claim launched against CCA’s Beijing parent in the UK High Court, and Mr Izmirlian alleged that the stance adopted by the bank and receivers was disadvantaging all creditors - including Bahamian contractors.

Mr Sands told Tribune Business that the industry was “in a Catch-22” over the multi-million dollar debts owed to it, as it was uncertain which party provided “the best opportunity to get paid”.

He added that CCA, as the entity which hired most of the Bahamian contractors, would likely refer any demands for payment to either the developer or project financier.

Pointing out that the China Export-Import Bank and CCA were effectively “partners”, given that both are owned by the Beijing government, Mr Sands said it would “ease some of the burden” if the bank could at least part-pay local contractors.

“The bank could give us a shot in the arm and pay out some of the contractors directly,” he added. “The now own it [Baha Mar]. That’s an ideal situation that we’d like to have, and we want to see what comes out of that.”

The BCA president, though, said CCA’s $250 million development, The Pointe, continued to be a source “of much concern and frustration” when it came to the level of Bahamian construction industry participation.

“We have to find better ways of negotiating construction projects that include majority participation for the Bahamian workforce,” Mr Sands told Tribune Business.

“I’ve been told by the Minister of Works that there will be Bahamian expertise in the construction project, but when, when we need it now, and the level of participation is going to be a challenge.”

Some 200 Bahamian construction jobs were touted at last summer’s groundbreaking for The Pointe, but little - if any - work appears to have gone to Bahamian contractors and workers to-date.

Mr Sands said the Bahamian construction industry needed to be at the negotiating table when major foreign direct investment (FDI) projects first arrived in the Bahamas, arguing that this nation “just can’t afford” to be excluded from majority involvement.

“It’s not good for business, it’s not good for the industry for that to happen,” he added, emphasising that the BCA had not reason to doubt the Deputy Prime Minister’s pledge.

“That’s what a lot of people are believing in and hoping for,” Mr Sands said. “We certainly hope that that becomes the reality. We really, really hope so.

“I can’t say that it won’t, because I have no evidence to doubt the promise by the Minister of Works. I have to take Mr Davis at his word, but until it does happen, we have to wait and see.”

Mr Sands acknowledged the dilemma faced by the Government when a developer presented a major investment project that was likely to benefit the Bahamian economy, but wanted to import its own foreign workforce.

CCA has done this at both Baha Mar and The Pointe, and Mr Sands said confronting the issue from the start of negotiations was the best way to prevent it from happening in the future.

Developers, he added, needed to be told that an almost-100 per cent foreign workforce was “going to be an affront to our population”. The BCA chief suggested that, at minimum, construction workforces had to be split 60/40, with Bahamians in the majority.

Otherwise, it was “a very bad deal” politically for whichever administration was in power.