The Tribune

WITH Baha Mar due to open at the end of next month, the Christie government is still haggling over government’s agreement to reimburse Baha Mar in the region of $45.3m as its contribution to the road works on West Bay Street and the airport connector road.

Sarkis Izmirlian, Baha Mar chairman, has reason to be both concerned and disappointed over government’s questioning its financial contribution for the improvement of the West Bay Street roadway, which has drawn much praise from both Bahamians and visitors. This discussion has been going on for more than two years with government seemingly determined not to give an inch — despite a very clear agreement of what it should pay.

In August, 2013, Prime Minister Christie explained that efforts to revisit the Baha Mar agreement was over the cost per mile for the West Bay Street roadworks as compared to the costs of the Airport Gateway Project. At the time, Mr Christie was chastising Mr Ingraham for writing a letter to the press outlining the terms of the completed agreement, a part of which had already been settled by the first Christie government, but which had to be completed by the Ingraham government after the PLP was voted from power.

In August, 2013, Mr Christie, whose government had been returned the previous year, dismissed Mr Ingraham’s apology to Baha Mar and the Chinese government for the Bahamas government’s failure to honour its contract as a mere “little blip in the screen”. Mr Christie said that the government and Baha Mar were partners and would work their differences out “quickly”. He confirmed that his government had a similar relationship with the Chinese government. However, over a year later with the hotel about to open, the problem is yet to be solved.

Baha Mar executives said that under its heads of agreement with government, the latter had no right to “exclude, discount or modify” any of the infrastructure cost included in the company’s estimates. However, the executives were satisfied that government would honour its agreement.

In May last year, it was made clear that Deputy Prime Minister Philip “Brave” Davis was government’s chief negotiator in this dispute. Mr Davis said at the time that the talks were important as “I’m talking about the public’s funds”.

Added Mr Davis: “I’m talking about my money, your money and the people’s money and I want to ensure that when I pay the people’s money I’m getting value for my money and living up to the commitments that the government made once I’m satisfied of that and what that amount is we will pay.”

Mr Christie reaffirmed that the government was only interested in protecting the best interests of Bahamians, while Foreign Affairs Minister Fred Mitchell later declared that the government would not “pay one red cent more than it should” for the work.

But let’s examine the agreement and compare the quality of the work on the two sections of the roadway — from Westview Memorial to the airport and from the airport to Baha Mar. The naked eye should tell you which section of the roadworks would cost more. This involved the JFK Drive connector road, the redesigned Bay Street road and all the infrastructure, lighting, footpaths and the various amenities needed to complement a first class hotel.

According to former prime minister Ingraham’s letter, published in The Tribune on August 12, 2013, when his party became the government in 2007 it had to complete negotiations started by the Christie government to conclude the Supplementary Agreement with Baha Mar “to take into account the developers’ interest in doubling the size of their investment from some $1 billion to $2.6 billion”. Mr Ingraham said that the supplemental agreement tabled in the House in February 2008 reflected improved terms for the government.

However, when the American partners and financiers withdrew to be replaced by the China Export Import Bank and the China State Construction Engineering Corporation (the Project Company), another agreement was concluded and tabled in the House in February 2011.

Under this the Project Company agreed to pay the entire cost of the work. The Bahamas government was then to reimburse it with a payment of $45.3m.

In addition, the Project Company was to be reimbursed for work on the JFK connector road. Government confirmed that this would be an additional $2.8m. The total of this agreed debt was to be paid by the government once the concrete superstructure of the 1,000-room casino hotel reached 100 feet above grade.

However, if the total work of the public infrastructure was less than $70m then it was agreed that the Project Company would split the costs 50-50 with the Bahamas government. However, the Project Company would not be responsible for any overruns initiated by government. In the end, the total project ran way over budget, at no extra cost — thanks to the agreement — to the Bahamas government.

Last year, government paid $30m on the agreement. Mr Davis has confirmed that no further payment has been made.

According to Mr Davis, the improvement of West Bay Street should be valued per mile at the same rate as the airport connector road.

One only has to look at the long, drab road constructed by government and compare it with the airport connector road with all of its infrastructure and beautification to realise that there is no comparison. It is obvious – even to the blind — which costs more.

There are so many other ways that Mr Davis can — and should be protecting the public purse, but in this one there is no contest.

In his contribution to the 2013-2014 Budget debate, St Anne’s MP Hubert Chipman pointed out that parliament had authorised government to borrow $47.8m to repay government’s obligation to Baha Mar under the agreement. He demanded to know where the money had gone.

Maybe Mr Davis would like to answer this question, and recognise that in addition to paying attention to the public purse, it is also important to guard this country’s integrity as a nation that honours its agreements and pays its debts.