$6bn Project Confident 'Approval In Principle' Coming Early Next Week


Tribune Business Editor


The developers behind a $6 billion resort project yesterday said they were confident the Prime Minister will “immediately issue an approval in principle” for the development following their meeting on Monday.

Ken Russell, the former FNM MP and Cabinet Minister, told Tribune Business that the Blackwood Pointe Resort & Spa proponents were next week supposed to deliver documents providing proof of the project’s financing to Mr Christie.

Confirming the planned October 21 meeting with the Prime Minister, Mr Russell said: “We are supposed to deliver some documents to the Prime Minister, and once he gets those documents and confirms they’re authentic, he will give us approval in principle to move forward immediately.

“If nothing causes a delay, by the end of next week we should be getting good news.”

Mr Russell, who is very much the ‘public face’ of lead developer, Kylin International, said the agenda was based on the understanding reached at the last meeting between Blackwood Pointe’s principals and the Prime Minister last month.

The former Minister expressed complete confidence that the necessary documents would arrive, promising Tribune Business: “They will be delivered.”

Mr Russell also confirmed previous revelations by this newspaper that China Development Bank (CDB) had emerged as Kylin’s lead financier. Additional financing is set to come from another Chinese state-owned entity, understood to be a construction company.

Khaalis Rolle, minister of state for investments, told Tribune Business last month that Kylin’s principals had moved “a little bit closer” to kickstarting the formal government analysis and approvals process, with ‘proof of financing’ the last major impediment to the east Grand Bahama project.

One source confirmed to this newspaper that Blackwood Pointe’s financing was in place, disclosing that “the lion’s share” was coming from China Development Bank.

“The funding is in place, and they’re contributing 85 per cent of the total project,” the source said.

Numerous observers, including former Prime Minister Hubert Ingraham, had previously expressed scepticism that the Kylin project would get off the ground, with financing identified as the major obstacle.

However, Tribune Business sources have become more optimistic about Blackwood Pointe’s prospects in recent weeks, given the apparent willingness of Chinese state-owned entities to finance it.

China and the Middle East are the two markets that still possess multi-billion dollars’ worth of assets looking for an investment home somewhere in the world, and Beijing - as evidenced by Baha Mar and other projects - has a good track record of delivering on what it promises.

Such projects also provide an opportunity for China to export its surplus labour, but Mr Russell yesterday pledged that Blackwood Pointe would maximise the use of Bahamian labour - unlike the agreement with Beijing over Baha Mar.

“We will ensure through our planning that Bahamian workers and contractors have work throughout the project,” he said. “Everybody will be working straight up from beginning to end. It will not be like Baha Mar.”

Mr Russell added that the Cable Beach project had provided Bahamian workers and contractors with “low level” work at the front end, but left the Chinese to perform all the high rise, more lucrative work.

“The impact from this project will be great for the entire Bahamas,” the former MP said. “It’s desperately needed. People need to work.”

With Grand Bahama’s workforce unlikely to meet Blackwood Pointe’s labour needs, Mr Russell said the project would draw workers from Abaco, Grand Cay, Bimini, Nassau and the Exumas.

The scale of the proposed $6 billion investment would make Blackwood Pointe the largest single investment in the Caribbean, but Mr Russell dismissed concerns that the project was too large for east Grand Bahama, given the absence of infrastructure in that area.

“It always looked as if it was going to be a go to me,” he said of Kylin’s prospects for success. “Freeport was too large 50 years ago, so it can be done.

“We can do it, because we have the expertise and management team to cause it to happen. Grand Bahama and the Bahamas need this to happen, and we will ensure it does.”

Kylin and its partners, who are said to include Fairmont Hotels, owner of New York’s The Plaza property, and hospitality firm Cipriani, are proposing to construct seven hotels and 2,700 rooms on a ‘greenfield’ site in eastern Grand Bahama.

Other amenities confirmed previously include a cruise ship port, marinas, multiple tourist attractions, sporting facilities, a liquefied natural gas (LNG) power plant, water and sewerage plants, and manufacturing facilities.

Mr Russell previously said the developers were projecting that every permanent job at Blackwood would create another three in the wider economy.

Based on Mr Russell’s estimates that Blackwood Pointe will create between 6,000-10,000 full-time jobs, it thus appears the developers are forecasting that the spin-off impact will generate another 18,000-30,000 employment opportunities.

Tribune Business previously reported how both the former Ingraham administration and Hutchison Whampoa, Grand Bahama Development Company’s (Devco) managing partner, were extremely sceptical that Kylin could raise the necessary project financing when it looked at developing the Sharp Rock site within the Port area.

The company, which is headed by Lawrence McDonough and his Chinese-born wife, some of whose family hold senior positions within the Beijing government, initially targeted a $1 billion development in the Sharp Rock area of Freeport before focusing on eastern Grand Bahama.

The Sharp Rock development, as originally conceived, was contingent on acquiring 2,000 acres, at a purchase price of $100 million, from a combination of Devco and Port Group Ltd, the latter being the GBPA’s sister company and affiliate.

A copy of the original 2010 Kylin submission to the Government, which has been obtained by Tribune Business, talked of constructing five luxury hotels, a cruise ship port, Blue Flag Marina, and gaming, retail and restaurant facilities.

“Kylin will invest more than $1 billion in the physical development of the resort,” the submission said. “It is anticipated that the resort will employ over 5,000 staff.

“Kylin has negotiated a construction loan commitment in the amount of $1.5 billion from Beijing Construction-Engineering Group. While an agreement in principal has been reached, the loan commitment is contingent upon the approvals of the Port Authority and Government of the Bahamas.”

Tribune Business sources previously confirmed that when Hutchison attempted to do due diligence on Mr McDonough, several details – including an address given for an office on the outskirts of Shanghai – did not check out.

This, though, has been disputed by other Tribune Business sources, who have informed this newspaper that all the details and promises given by Mr McDonough to-date – including the office address – have been confirmed and fulfilled.


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