The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Baha Mar’s receivers have yet to reach an agreement with its main Chinese contractor to resume construction work, even though Prime Minister Perry Christie said “very active decisions” were being made on the issue.

Tribune Business sources familiar with the Baha Mar situation, and speaking on condition of anonymity, said the Deloitte & Touche receivership team were “not there yet” in terms of concluding an agreement with China Construction America (CCA).

This came as the Prime Minister told the House of Assembly that he was seeking to “energise” negotiations between the receivers and their client, the China Export-Import Bank, and CCA over the resumption of construction at the stalled $3.5 billion development.

Meanwhile, social media postings sent to The Tribune said CCA had begun re-hiring foreign sub-contractors to resume work at the Baha Mar site from later this month.

“While all of this referendum stuff has been going on, CCA has been contracting people to begin work at Baha Mar as early as next week,” one posting said.

“My Dad’s neighbour begins on 23 June I know for a fact, hired by CCA. He is a foreigner who worked on it previously. Others have confirmed that work begins next week.”

They questioned what the Government had given away to the Chinese in terms of investment incentives, and whether it had used the attention focused on the gender equality referendum to quietly strike a deal.

Raymond Winder, Deloitte & Touche (Bahamas) managing partner and one of the three-person Baha Mar receivership team, declined to comment when contacted by Tribune Business yesterday.

However, other contacts familiar with developments said no ‘construction resumption’ deal had been struck between the receivers and the two Chinese entities yet.

“The receivers haven’t signed any construction agreement,” one source said. “Not yet. They are still working on it, but are not there yet.

“They have a lot to do, and everything is a work in progress. Things are moving positively along behind the scenes, and these things are never easy.”

Mr Christie effectively confirmed this yesterday in the House of Assembly, his comments during the Budget debate implying that the China Export-Import Bank and CCA have yet to implement the so-called ‘framework agreement’ he unveiled with much fanfare two weeks ago.

The two-page document amounted to much less than what the Government promoted it as, and was effectively an agreement for all parties to ‘keep talking’, with a view to the receivers and CCA reaching a ‘construction agreement’.

Mr Christie said the Government was “observing and energising” negotiations between the two state-owned Chinese entities, with a view to “persuading the acceleration” of construction at Baha Mar.

He again admitted, though, that the Government is effectively powerless in determining Baha Mar’s immediate fate, saying the administration does not control when construction will restart.

“The point I made in my previous conversation was that essentially the matter was between the financing bank and the receiver managers, and I laid on the table a statement which has now been acted upon,” Mr Christie said.

“Mr Speaker, very active decisions are currently being made with respect to the construction site. I do not control the activity; it is a matter between the bank, the receiver-manager and the courts.

“But because we are the Ministry of Finance in the Office of the Prime Minister, we are observing and persuading the acceleration and energisation of the construction site and it’s progress.”

Tribune Business understands that activity surrounding the proposed resumption in construction has picked up in recent weeks, in line with the timing of the Government’s ‘framework agreement’ with the Chinese.

One source emphasised that CCA did not need to wait for a construction agreement to “prepare themselves” for remobilisation, and expressed surprise if the Chinese contractor had only just started re-hiring sub-contractors.

Many have queried why construction would resume before a new owner is selected for Baha Mar, given that the latter may want design and construction changes to the $3.5 billion development.

And others have pointed out that allowing CCA to resume work might amount to a ‘conflict of interest’, and give it an unfair competitive advantage, should it also have bid to acquire Baha Mar.

The bidding process is running parallel to the construction resumption talks, and no preferred offer has been selected yet.

One source said: “One prospective bidder has more people on the ground than the Chinese.”

The ‘joint statement’ of the Government and two Chinese state-owned entities said: “It is expected that many contractors who have participated in the construction of the project will be re-engaged in the process.

“The requirements of the unsecured creditors will also be considered during the remobilisation.”

Mr Christie touted the agreement as providing “a pathway” for the $3.5 billion project’s construction completion.

The arrangement provides for a framework putting in place the financing required for completion of the project, and for CCA to remobilise and re-start construction “as expeditiously as possible.

“Negotiations between CCA (Bahamas) and the receivers appointed by China Export-Import Bank are underway to agree appropriate terms for construction to recommence, and to prepare a construction agreement, which will provide the scheduled timeline for completion of the project,” the statement added.