The Tribune

“IT should not be a mystery to us what the Chinese want: it is what all powerful countries want. It’s not about interest earned on a loan or making profits from operating a hotel. They want resources for the mother land,” so writes an “Observer” on page 8 of today’s Tribune.

“Observer” sees Baha Mar, the resort on which The Bahamas has pegged its future, as eventually, if it remains under the influence of the Beijing government, bringing down the curtain on a Bahamas that we once knew.

From the day that Beijing appeared on the horizon as the major lender for the proposed resort we were satisfied that its interests were strictly political. At the beginning, everything seemed to be moving smoothly for Baha Mar under young Sarkis Izmirlian, but still we were not satisfied. We went to our Atlas, gave it a spin and traced the Beijing influence encroaching into and eventually encircling the United States in her own Basin of Influence. Here was Hutchison-Whampoa’s container port at Freeport (a Hong Kong based company, reportedly under the influence of Beijing). Hutchison was also strategically located at the other side of the Panama Canal. It was later joined by China Construction Company, which was instrumental in seeing Baha Mara securely in the clutches of the China Export-Import Bank. Slowly Beijing’s influence crept through the string of Caribbean islands on the Atlantic side of the US continent. The great United States was indeed encircled and imprisoned in her own sphere of influence. We have been uneasy ever since.

The Baha Mar story began several years ago when Phil Ruffin, a one-time partner with US President Donald Trump, decided to sell his Wyndham Crystal Palace Hotel. Former prime minister Perry Christie was his lawyer. We understand that it was Mr Christie who went to the wealthy Izmirlian family to interest them in the purchase. Twice he was turned down. On the third approach, it is understood that Sarkis Izmirlian told Mr Christie that he would not be interested in one hotel, surrounded by rundown hotels in an unkept area. Instead of a hotel, he would be interested in creating a destination. He would purchase the three hotels in the area and the large area of land surrounding them. Mr Christie bought into the idea and so a deal was struck. Plans had started.

Mr Izmirlian got such hotels as Harrah’s in Las Vegas interested and the project was well on its way. However, when the time came to sign the contract with Harrah’s and its group, the Christie government seemed reluctant to sign off on government’s side. It got to the point where Mr Izmirlian had to write a stiff letter to Mr Christie warning him that the closing date was nearing and all would be lost if his government did not sign onto the agreement. Still no signatures for a firm contract. Meanwhile the world economy collapsed. Harrah’s was eventually sold and because of the economic climate, the new owners were not prepared to continue with the Baha Mar dream.

This left Mr Izmirlian with a large project on his hands that he was anxious to get started, but no partners and no one — except the Chinese— in the market to grant loans because of the world’s economic downturn. The China Export-Import Bank undertook the loan, but one of the conditions was that China Construction America (CCA) had to be accepted as the contractor for the project.

Before the 2002 election, Mr Izmirlian had signed heads of agreement, but no final contract. This was to be left until after the election, which Mr Christie lost and Prime Minister Hubert Ingraham won. It was now up to Mr Ingraham to act on the heads of agreement, which had contained certain confidential clauses, which only came to light at the change of government.

Mr Ingraham was severely criticised by the PLP then in Opposition for taking his time to study the heads of agreement and in the end renegotiating them. It was discovered that the Christie government had proposed selling parcels of land that could not be sold. Mr Ingraham flew to Beijing to renegotiate certain sections of the loan, one being that instead of Bahamian construction companies only getting $200m of the business, they would get $400m. He took the number of Chinese workers that the Chinese wanted to engage to the House to get the approval of both government and Opposition members.

Speaking in the House of Assembly on November 18, 2010, on the question of a foreign state owning so much Crown land, Mr Ingraham had this to say:

“It is the view of my government, that it is an untenable position to permit any foreign state to own land in the Bahamas. Under the law, any financial institution providing funding for a development in the Bahamas has a number of alternatives to protect interest should that project fail. One of these protections is foreclosure.” He said should this happen with him as prime minister “my government would not agree to foreclosure on these properties (previously Crown land) to any foreign state or any entity which is owned by a foreign state.”

Mr Christie was returned as prime minister and the project continued under his government. Thanks to CCA, the construction company, unresolved problems brought construction to a standstill and eventual closure. Mr Izmirlian’s’ attempt to save the company by apply for the protection of Delaware’s bankruptcy laws was thwarted. Nassau adjudicated the case, invited purchasers, but refused to give them enough information to make an intelligent bid.

Sir Sol Kerzner of Atlantis fame, and his partner were interested in the purchase, but eventually gave up. “Our hands are tied,” said Mr Kerzner’s partner, Andrew Farkas of Island Capital, because they could not get enough information to make an offer. Of course, Mr Izmirlian was completely bared from bidding. The Beijing bank found a large Hong Kong company, which will now purchase Baha Mar once it has been completed.

The thread running through this whole sordid story indicated that China wants a footprint in this hemisphere. When CCA failed to deliver, the China Export-Import Bank, instead of being concerned by loss of revenue, seemed not to care. The key to the story seemed to be to get Sarkis Izmirlian out of the picture with a large tract of Bahamian land under Beijing’s control.

When Mr Ingraham was dealing with the matter in its earlier stages, he was renegotiating heads of agreement. The Minnis government is now studying a contract. We trust that it will make certain that The Bahamas is well protected from what we all fear.

We would be surprised at any foreign investor avoiding The Bahamas if the double-dealing behind the Baha Mar resort could be told. We trust that The Bahamas will always remain The Bahamas for Bahamians.