The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government wants the principals behind the proposed $6.3 billion development for east Grand Bahama to prove its “viability” by conducting a feasibility study, Tribune Business was told yesterday.

Khaalis Rolle, minister of state for investments, told Tribune Business that Kylin International needed to provide strong evidence that its proposed project is “doable” before it can even begin to go through the Government approvals process.

The Minister’s comments came as Kylin officials told this newspaper that proof of the project’s financing, which was accompanied by certifications by local and Chinese professionals, had been submitted to the Office of the Prime Minister.

Former Cabinet Minister and MP, Ken Russell, who has acted as spokesman for Kylin and its principal, Lawrence McDonough, said yesterday that he anticipated the feasibility study would be completed in 12 weeks.

He told Tribune Business that the prospective developers were now further advanced than ever, and anticipated that the required report would place Kylin “on the track towards the finish line”.

Mr Rolle, though, sounded less optimistic when contacted by Tribune Business, telling this newspaper: “They’ve provided us with some information, and we’ve started reviewing everything they’ve submitted.

“There’s another component that we’re actively in discussions with them on, and that’s the feasibility study for the project.”

Mr Rolle emphasised that Kylin would be responsible for financing the study, with both it and the Government “mutually agreeing” which consulting firm would conduct it.

Reiterating that the selected firm needed to be “a reputable company, one we’re familiar with, and one that is consistent with the quality the Government would need”, Mr Rolle said: “That’s in Kylin’s court.

“Once that’s done, then they’re good to go. Then they go to the approvals process. We want to make sure the project is viable and practical, and the feasibility study will demonstrate that.

“The feasibility study has to say this is a doable project. Once that is done, we move to the next phase, which is the approvals process.”

The Government’s cautious approach to Kylin and Mr McDonough is understandable, given the size/scale of the proposed project and the fact that its total investment - $6.3 billion - is greater than Atlantis and Baha Mar’s combined.

The Kylin proposal is for 3,000 new hotel rooms spread between five-six properties, a cruise port, marina, residential housing, casino, light industrial and manufacturing hub, new power plant, and new airport and avionics capabilities, not to mention huge infrastructure investment in ‘virgin’ territory.

Scepticism over whether Mr McDonough and Kylin have the necessary financing to pull off a project of such magnitude - has been rife for some time, and heads the list of government concerns.

Kylin has been exploring Grand Bahama as the site for a multi-billion dollar, resort-based investment project for several years, having had a presence on the island since before the 2012 general election.

It initially focused on a site in the Port area for a project said to be valued at around $1 billion, before setting their sights on a development six times’ larger in the island’s eastern end.

Tribune Business sources at the time confirmed that the Grand Bahama Port Authority and Hutchison Whampoa were sceptical that Kylin would be able to obtain the necessary financing, raising immediate questions over whether it could raise funding for a much larger project.

Other questions have revolved around whether Kylin can legally construct what, ‘in effect’, would be a second Freeport given the restrictions of the Hawksbill Creek Agreement.

Many observers have argued that it would be cheaper, and quicker, for Kylin to pull off its ambitious plans by either acquiring the Grand Bahama Port Authority or the former Ginn project in West End, given that both already have hundreds of millions of dollars worth of infrastructure in the ground.

Mr Rolle’s comments indicate that Grand Bahama residents, and all Bahamians for that matter, should not get their hopes up just yet where Kylin is concerned.

But, in a recent interview with Tribune Business, Mr McDonough said Kylin already had the necessary financing “sitting with HSBC Hong Kong”.

And, dismissing the financing concerns, he added: “People are going to take pot shots at you. People said there’s no money. I don’t care.”

The former Ingraham administration viewed Kylin’s proposals as “a pipe dream”, which was one factor in Mr Russell’s departure from the then-Cabinet.

Tribune Business understands that some in the Christie administration feel the same way, but believe they have to give Mr McDonough every opportunity to deliver on his promises.

Mr Russell yesterday said Kylin had hoped to start making its way through the Government’s investment approvals process before starting the feasibility study, but now accepted the need to do it first.

The former MP, though, appeared to differ with Mr Rolle over how this process would work, suggesting that the Government - not Kylin - would be responsible for contracting the consultant.

He suggested that the chosen firm would be The Innovation Group, a leisure, gaming and resort industry consultancy that has done extensive work globally.

Mr Russell said the feasibility study would examine “all aspects” of Kylin’s proposal, and added: “We figure that in about 12 weeks that should be in the Government’s hands.

“We are confident that this report that is coming will position us on the green track headed towards the finish line.”

Asked to respond to the disbelievers who feel Kylin lacks the necessary financing, Mr Russell said: “They never bothered me before. I wouldn’t waste my time talking to them.

“The naysayers can keep on naysaying. We are moving forward to cause Grand Bahamians, and Bahamians, to have jobs, a positive outlook on life, which they haven’t seen for a long time.

“We believe in ensuring people have comfortable lives, lead their lives and educate their children. That’s what we believe in. We’ll continue to push that until we can’t push any more.

“Right now, we are very confident with our position with the Government and the project.”

Mr Russell said Kylin “always had the financing”, and had taken several steps to prove it.

Dismissing suggestions that Mr McDonough was already looking elsewhere in the Caribbean for development opportunities, Mr Russell added: “We are in the Bahamas to stay. We are here to stay.

“We always had plans to go down into the Caribbean with two other major developments, and always said we’d look at them some time in the future.

“Once Grand Bahama gets going, we will be able to branch off and go to other countries. Grand Bahama remains the flagship.”