The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government gave China Construction America (CCA) permission to redeploy equipment and manpower from Baha Mar to The Pointe some 11 days before the former project filed for Chapter 11 bankruptcy protection.

The approvals are contained in two clauses in the newly-released Heads of Agreement for the $200 million downtown Nassau-based project, which is owned - and being developed - by Baha Mar’s general contractor.

“The Government agrees to allow the owner [CCA] to transfer such existing equipment as may be required for the development from the Baha Mar construction site to the development, under terms and conditions to be approved by the Prime Minister and Minister of Finance, and the Customs Department,” states clause 2.9 of The Pointe Heads of Agreement.

Continuing with this theme, clause 2.10 states: “The Government agrees to allow the developer to transfer employees, who are work permit holders, from the Baha Mar project to the development on terms to be set out in a protocol between the owner and the ministries responsible for Immigration and Labour, and upon payment of the prescribed Immigration fees.”

The Heads of Agreement were signed by the Government, and the CCA entities that owned the British Colonial Hilton and The Pointe development site, on June 18, 2015.

This date was confirmed in Parliament by Khaalis Rolle, minister of state for investments. Just 11 days later, on June 29, 2015, Baha Mar’s developer, Sarkis Izmirlian, filed for Chapter 11 bankruptcy protection in the Delaware courts.

CCA is likely to have insisted upon these terms as a prudent cost-saving measure, given that it only made commercial and logistical sense to redeploy equipment and workers already in the Bahamas from Baha Mar to its own development.

However, given that CCA was already embroiled in a bitter, protracted dispute with Mr Izmirlian over its failure to complete Baha Mar’s construction on schedule, many observers are likely to be surprised at the Government’s willingness to formally consent to such ‘redeployment’ in The Pointe’s Heads of Agreement.

Indeed, the Christie administration could have used CCA’s desire to ‘redeploy’ equipment and manpower, and the negotiations over The Pointe’s Heads of Agreement, to require Baha Mar’s main contractor to finish construction at Cable Beach before switching its attention to downtown Nassau.

Mr Rolle could not be reached for comment yesterday on the rationale for including the ‘redeployment’ clauses in The Pointe’s Heads of Agreement, and when they were negotiated and placed in the document.

However, Branville McCartney, the Democratic National Alliance’s leader, told Tribune Business yesterday that the clauses gave an insight into the depth of “collusion” between the Government and CCA.

He added that it also showed Prime Minister Perry Christie and his administration could never have acted as “impartial mediators” in resolving the Baha Mar dispute, as he had billed the Government’s role in mid-2015.

“It shows the Government are colluding with CCA. That’s what you can interpret from that,” Mr McCartney told Tribune Business of the two clauses.

He suggested that The Pointe’s Heads of Agreement had effectively let CCA ‘off the hook’ for failing to complete Baha Mar on time and on budget, amid allegations that it committed “shoddy workmanship” that was responsible for the delays.

Mr McCartney reiterated that it was impossible for Mr Christie and his government to act as mediators in the dispute between Mr Izmirlian and the Chinese when it was, at the same time, negotiating a separate investment deal with CCA - a project that it eagerly wanted to happen.

“When the Prime Minister said he was going to be a mediator, and those were his words, I said: How can this be,” the DNA leader, and leader of Opposition business in the Senate, said.

“My concern was this. How can it be that you are going in as a mediator, yet on the other hand you are negotiating another investment deal with CCA at the same time? It shows that the Prime Minister and his Cabinet were completely disingenuous.”

The 500 permanent jobs promised by completion of The Pointe appear to have satisfied the Government that the project is of “positive and significant economic benefit” to the Bahamas, leading it to approve the development ‘in principle’ - prior to the relevant agencies granting the necessary permits.

Mr Rolle told the House of Assembly on Wednesday that the project no longer involved seabed reclamation to make way for The Pointe’s hotel and condominium facilities.

Yet the Heads of Agreement grants CCA permission “to mine sand from the seabed in order to facilitate the ongoing renourishment of beaches within the development”. This is subject to the developer obtaining the necessary approvals, and paying certain royalties.

The Government’s agreement with CCA also commits it to financing necessary upgrades to Bahamas Power & Light (BPL) and Water & Sewerage Corporation infrastructure in the downtown area to accommodate The Pointe.

Should the utility companies not move fast enough, CCA is able to undertake the work itself, at a cost to be agreed with the Government and the latter reimbursing the developer.

As for full-time employment, the Heads of Agreement allows CCA to bring in 75 work permit holders for posts where qualified Bahamians are unavailable “at competitive industry compensatory levels”.

This was agreed given “the need for the development to continuously meet the international luxury standards for the hotel, marina and restaurants, and in light of the demands for skilled and professional labour which will be made on the Bahamian workforce by numerous other projects now underway”.