The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Neither Baha Mar nor its main contractor were last night able to confirm whether Sunday's 'substantial completion' target for the $4.2 billion project had been met.

Robert Sands, Baha Mar's senior vice-president of government and external affairs, told Tribune Business he was about to board a plane in Charlotte and unable to "verify" if China Construction America (CCA) had hit its October 15 target.

"I can't answer at this point in time," Mr Sands replied. "I'd have to verify and double check, and get back to you."

He referred Tribune Business to senior CCA Bahamas executive, Daniel Liu. But when this newspaper contacted Leslie Pindling, Mr Liu's spokesman on CCA's The Pointe project, he said the executive with responsibility for the Baha Mar project was Tiger Wu.

Unable to confirm whether the October 15 'substantial completion' deadline had been hit, Mr Pindling said he would e-mail Mr Liu, who is currently in China, with Tribune Business's inquiry and get back to this newspaper.

The uncertainty over whether CCA has hit target came as well-placed Tribune Business sources last night revealed that Baha Mar has yet to obtain a full certificate of occupancy (CO).

The $4.2 billion project is still operating under the temporary certificate of occupancy (TCO) issued in March 2017 prior to its 'soft' opening, this newspaper was told, meaning there are still construction-related issues to be addressed.

However, Tribune Business's contacts said this was unlikely to be a major impediment to Baha Mar's full opening - with the main implications likely to be for CCA's 'substantial completion'.

"They don't have a certificate of occupancy. They have a temporary certificate of occupancy," one source said of Baha Mar. "Does CCA's contract require that they have a full certificate of occupancy as part of the substantial completion?"

They added that "part of the challenge" for Baha Mar in obtaining a certificate of occupancy "is a project like this never ends. They are always constructing some new facilities.

"They have work that isn't complete," the source said, "but it doesn't stop them operating in the manner they are, as they're not trying to fill 2,300 rooms yet."

Baha Mar's SLS Lux and Rosewood properties are due to open in November 2017 and March/April 2018, respectively. Graeme Davis, the destination resort's president, told the media during a July tour of the property for the Minnis administration that the project was "on target" to obtain its full occupancy certificate.

The TCO gives Baha Mar and its prospective owner, Chow Tai Fook Enterprises (CTFE), "full rights" to use all Baha Mar amenities in the first phase 'soft opening', including the convention centre, casino and casino hotel. However, it remains "on the hook" for any unsafe, non-compliant Building Code issues that need to be addressed.

Once these matters are dealt with, the Ministry of Works releases any remaining authority over the project via a full Certificate of Occupancy (CO), with all permits and approvals granted to Baha Mar. CTFE's purchase of the mega-resort destination is supposed to close by December 1 this year, and is contingent on CCA completing the project's remaining $700 million construction.

Baha Mar's October 15 'substantial completion' target was revealed in CCA's lawsuit against Source Outdoor, the Florida-based supplier that it accused of withholding 50 per cent of the project's lounge chairs.

Failure to hit that date, CCA claimed in its late June 2017 lawsuit, will expose it to penalty fees of $150,000 per day - rising to $250,000 per day after one month - under the terms of its construction contract with the China Export-Import Bank, Baha Mar's secured creditor.

CCA, though, in a subsequent amended version of its action, dropped all the alarmist language about fears of missed completion deadlines and financial sanctions. It merely said that it had been "damaged", and added: "It now must find an alternate source for chairs that may not match the chairs already received, detracting from the appearance of the five-star resort for which they are intended.

"It must do so on an expedited basis in order to meet its contractual obligations to the owner of the Baha Mar project. It is expected that it will incur extraordinary costs because of the predicament in which it finds itself as a consequence of Source's intentional, malicious misrepresentations."

Baha Mar's main contractor has thus been forced to source from an alternative supplier, and now appears quite relaxed about its dispute with Source Outdoor. It told the south Florida federal court on October 12 that the matter has gone to mediation, with a professional mediator to oversee talks.

And case management filings show that, should the need arise, the dispute will only go to trial on October 1, 2018, at earliest - more than one year after it kicked-off.