The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

PROMINENT contractors yesterday said they “absolutely believe” Baha Mar’s critical construction defects have been remedied, as they warned against “re-opening old wounds”.

Leonard Sands, the Bahamian Contractors Association’s (BCA) president, acknowledged the seriousness of the allegations made by the project’s original developer, Sarkis Izmirlian, in his Boxing Day lawsuit against China Construction America (CCA).

Mr Izmirlian listed multiple alleged defects in CCA’s workmanship that he claimed could have threatened the health and safety of Baha Mar guests, but Mr Sands said it was difficult to validate his claims two years ‘after the fact’ without proper access to the necessary documents and files. The BCA chief added that the Government would never have granted Baha Mar is occupancy certificate (CO) without being sure that all deficiencies were addressed. And he pointed out that new owner, Chow Tai Fook Enterprises (CTFE), would also never have completed the purchase if it feared exposure to such potential liability.

“I saw Mr Izmirlian’s allegations and he has a right to make them,” Mr Sands told this newspaper. “The challenge from the BCA perspective is we can’t say those comments are accurate and valid without the documents to support them.

“We need to be able to validate his allegations properly. The seriousness of the comments he made, we understand that, if it could pose a big risk to the public.”

Mr Izmirlian’s construction defect claims all relate to the period prior to Baha Mar’s Chapter 11 bankruptcy protection filing in late June 2015, and much has changed since then, with CCA subsequently completing Baha Mar’s construction - a condition required for the project’s ultimate sale to CTFE.

Mr Sands said Baha Mar’s new owner would have insisted that any construction problems be addressed “so it does not own the risk and liability associated with defective work”.

“I believe that the new group, recognising the risk by taking over a property with these noted and documented defects, which may not have been addressed, would make it its business to address it before taking over ownership,” he added.

Reiterating that CTFE would not risk its reputation among the high-end visitors it is seeking to attract, Mr Sands also said the Ministry of Works would not have granted Baha Mar its full CO unless all health and safety issues were in order.

“The Government would not have allowed it to get an Occupancy Certificate if those matters were not addressed,” the BCA president told Tribune Business, while expressing concern that Mr Izmirlian’s lawsuit would attach fresh negativity to Baha Mar.

“We’re seeing the turnaround of the property,” Mr Sands said, “with the last of the hotels being opened in the Spring. We have to be very careful not to re-open an old wound and cause fresh injury.”

Desmond Bannister, minister of works, yesterday told The Tribune that the Government would investigate Mr Izmirlian’s latest claims of sub-standard work at Baha Mar. This assertion, though, comes just weeks after his ministry issued Baha Mar with its full occupancy certificate - a development signalling that the development was in compliance with all health, safety and other life-essential requirements in the Bahamas Building Code.

The Ministry of Works had employed Reiss Engineering as its Baha Mar ‘code enforcer’, with responsibility for performing all inspection procedures under the Buildings Regulations Act.

Reiss Engineering, acting as the Buildings Control Division’s ‘eyes and ears’, was responsible for inspecting all building and structural works, including mechanical, engineering and plumbing services.

Tribune Business sources familiar with the inspections process said the Ministry and Reiss Engineering were confident that Baha Mar was in compliance with “all life and safety” requirements in the Bahamas Building Code, and therefore merited a full occupancy certificate (CO).

“It’s my understanding that everything got cleared that needed to get cleared,” one contact, speaking on condition of anonymity, told this newspaper. “To the best of our knowledge it was all done, and all life and safety matters were taken care of.”

Stephen Wrinkle, a former BCA president, yesterday backed his successor, Mr Sands, by arguing that Baha Mar (and China Construction America) must have remedied all construction defects to obtain a full occupancy certificate.

“If they got the occupancy certificate, they’ve passed all the inspections by the Ministry of Works, and they’re stringent,” Mr Wrinkle told Tribune Business. “You would have to assume that.

“I feel comfortable going on the property if they’ve signed off on it. We have a very stringent Building Code. Hopefully it’s safe and sound. We need it [Baha Mar] desperately.”

Mr Wrinkle, meanwhile, expressed surprise at the extensive list of alleged construction defects cited by Mr Izmirlian, questioning how the former developer and CCA allowed such widespread problems to both exist and persist.

“I can’t imagine how they could run a fire suppression system in a non-fire resistant conduit,” the ex-BCA president said. “They’re supposed to have inspections all along the way.

“One has to wonder where the oversight was, what the inspection procedures were, and what control they had over the contractor. If, on a job, there’s a mistake by the contractor, they normally get written instructions to replace it within a specific time period by the management team or specific authorities. Somebody had to issue written instructions to remedy the defects.”

While CCA has argued that design delays and changes, together with more than 1,300 construction change orders (CCOs) issued by Mr Izmirlian and his team, were responsible for Baha Mar’s missed opening deadlines, others have blamed the contractor for failing to deliver ‘on time and on budget’.

“If they needed to they should have worked 24/7 to fix it,” Mr Wrinkle said of CCA. “They had a deadline and obligation to meet it, and couldn’t.”

He added that assertions by all parties that Baha Mar’s construction was ‘97 per cent complete’ at the time of the Chapter 11 bankruptcy filing in late June 2015 “don’t sound right”, given the length of time and $600 million sum required to complete the project since work restarted in November 2016.

Mr Wrinkle suggested that Baha Mar’s loss was, for Mr Izmirlian, akin to “an arrow through his heart” given that CTFE now stood to benefit from a finished product that was largely his design and vision.

The Progressive Liberal Party (PLP), including members of the former Christie administration that assisted with Mr Izmirlian’s ousting, have accused the former developer of being “vindictive” and “seeking revenge to injure the Bahamas” and Baha Mar through the filing of his lawsuit.

Mr Wrinkle, though, argued that Mr Izmirlian “deserves his day in court”, adding that the nature of his lawsuit - directed solely against CCA - was designed to avoid any impact to Baha Mar, the Bahamian economy and local jobs.

“Mr Izmirlian waited until the property was open and then did that out of respect for Bahamians, as that would muddy the waters further for the local economy,” he said. “He waited until it was up and running, which is a testament to his character. We’ll see how it pans out.”