The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Prime Minister was yesterday urged by a former Baha Mar director to stop “unnecessarily raising the Bahamian people’s expectations” that the $3.5 billion project’s fate will be resolved quickly, adding: “It’s out of his control.”

Dionisio D’Aguilar told Tribune Business that Baha Mar’s future was solely in the hands of China’s state-owned Export-Import Bank and its Deloitte & Touche receivers, and suggested their timetable did not match the rapid progress sought by the Christie administration.

“He has absolutely no control over the fundamentals of it, and the quicker he recognises that, it will cause him not to raise expectations unnecessarily,” Mr D’Aguilar told Tribune Business.

“He has absolutely no control over the outcome of it. It will be decided in China. The Export-Import Bank is not a private company; it has no shareholders to report to; no quarterly profits to report; and it is completely motivated by things other than a desire to make money.

“While I’m sure it’s anxious to get this matter settled, it is in no rush to do so, and not to the timetable of the Government of the Bahamas.”

Mr D’Aguilar was speaking after Perry Christie used the formal appointment of Paul Andy Gomez, the Grant Thornton (Bahamas) managing partner, to again restate his position over the stalled $3.5 billion development.

The Prime Minister’s comments again held out hope to the Bahamian people, not least the 2,000-plus laid-off employees and the contractors owed a collective $74 million, that the impasse would be resolved shortly.

Mr Christie said there were a “huge number” of globally-recognised hotel, casino and corporate brands and investors interested in investing in Baha Mar, raising expectations that a deal might be imminent.

In what was effectively a repetition of what he has said for the past six weeks, the Prime Minister said he was speaking regularly to the China Export-Import Bank’s president, and that he wanted Bahamian contractors to be fully paid what they are owed.

Tribune Business understands, though, that the Baha Mar project is in for a long work-out, something that does not align with the Christie administration’s political agenda with a general election on the horizon by May 2017.

The window to complete Baha Mar, and get it open before then, is narrowing rapidly for Mr Christie, hence his determination to almost ‘will’ a solution in time.

Setting aside the politics, there are obvious economic and social imperatives to resolve the Baha Mar standstill as rapidly as possible, not least the low growth, high crime and unemployment environment that the Bahamas faces, and the scrutiny of international rating agencies over a potential further creditworthiness downgrade.

“This is not for him to pontificate on,” Mr D’Aguilar told Tribune Business yesterday. “I’m sure they’ll [the China Export-Import Bank] will tell him, yeah, there are a lot of people looking.

“But that’s what they [the Chinese] told us on the construction: ‘Yeah, it’ll soon be completed’. I wouldn’t believe anything until you see the signed and completed sales agreement.”

Mr D’Aguilar reiterated that the China Export-Import Bank’s seeming desire to recover 100 per cent of its $2.45 billion debt financing would make for a long Baha Mar sales process.

He said this objective does not match the goal of any Western-led investment group or buyer, which would be looking for “a deal” and the China Export-Import Bank to take a ‘hair cut’ or loss on its $2.45 billion.

“He’s unnecessarily raising the expectations of the Bahamian people, and this is not going to be a deal done in an expeditious manner,” Mr D’Aguilar said.

“Anyone interested in buying it will only buy it for a deal. Until the Chinese reduce their expectations on what they are going to realise, we’re all going to be in this quandry of sitting there, looking at it [Baha Mar] every day with nothing happening.”

He added that it was “water under the bridge” and “too late” now to suggest that the Government would have done better to allow the Chapter 11 bankruptcy protection proceedings in Delaware to continue.

“It was a disastrous decision,” Mr D’Aguilar told Tribune Business. “They should not have got involved. Despite their $1 billion of investment concessions, they should have let commerce take its course.

“We’re certainly no better off under their plan than the developer’s plan. There’s no end in sight. You may get a deal in six months, but it will not be completed in six months.”

It is incorrect, though, to suggest that the Delaware Chapter 11 case would have been able to continue had the Government elected not to support the Chinese case.

For it was the China Export-Import Bank that largely persuaded the Supreme Court not to recognise the Chapter 11 proceedings, and give them effect, in the Bahamas.

The bank also teamed with China Construction America (CCA), Baha Mar’s main contractor, to successfully get the Chapter 11 case thrown out in Delaware.

While the Chinese achieved the latter outcome without any support from the Christie administration, the Government might have forced CCA to negotiate more seriously with Baha Mar and its principal, Sarkis Izmirlian, had it remained ‘neutral’.