By NEIL HARTNELL
Tribune Business Editor
Relations between Baha Mar and its Chinese partners hit a new low last night, after it blamed the lead contractor for forcing it to abandon plans to open the $3.5 billion development this Friday.
In a blunt, terse statement issued last night, Baha Mar pinned the blame for missing its March 27 opening date totally on China State Construction, and slammed the quality of its workmanship.
“In setting our opening date for March 27, we relied in good faith on the representations of the resort’s construction manager and lead contractor,” Baha Mar said in statement.
“Last Friday, based on this party’s repeated assurances, Baha Mar announced that it would begin a paced opening beginning March 27, and culminating in its grand opening scheduled for early May.”
The developer then added: “Subsequently, it has become clear that the contractor has not completed the work with an attention to detail consistent with Baha Mar standards of excellence.
“Anything less than a world-class facility and best-in-class guest experience is not acceptable to Baha Mar. As a result, Baha Mar will not begin its paced opening on March 27.”
It added that everything was now pushed back to its ‘grand opening’ date for early May but, given that Baha Mar has now missed two opening deadline, and the emerging row with its Chinese partner coupled with the amount of construction work that remains, even that date will be in doubt.
The behind-the-scenes relationships between the various parties involved with the Baha Mar project are likely to be cool to the point of frosty, given that China State Construction also holds an equity stake in the development. And the China Export-Import Bank is also Baha Mar’s main financier to the tune of $2 billion-plus in debt.
It remains to be seen how the seemingly fractured relationship between the Izmirlian family and their Chinese partners is repaired moving forward, and what impact this has when the $3.5 billion project finally opens.
And it is also unclear how this development may affect diplomatic relations between China and the Bahamas, given that both Chinese entities are state-owned, and the Christie administration is heavily reliant on Baha Mar to drive its job creation and economic turnaround strategy.
This is not first time though that problems involving China State Construction, and its role at Baha Mar, have surfaced. Bahamian contractors last year disclosed it was “a grind” to obtain timely payment for work done on the $3.5 billion project, with waits up to 90-120 days hitting cash flow and eating into already-thin profit margins.
Robert Myers, Caribbean Landscaping’s principal, confirmed to Tribune Business that his company was among those that were enduring “frustrating” waits to receive payment for work done on the Cable Beach redevelopment.
Emphasising that it was a case of ‘when’, not ‘if’, payments were forthcoming, Mr Myers said the delays “have to be hurting performance” on Baha Mar’s construction and its timely completion.
He revealed to this newspaper that there were times his company, which has performed landscaping work on the golf course and new roads, “literally had to stop work” because it could not afford to carry the Baha Mar development with its own cash flow.
While unsure of the reasons for the delayed payments, Mr Myers suggested it might have something to do with the long communications line between Nassau and Beijing, plus the constant turnover of personnel at both Baha Mar and its Chinese partners.
Still, Baha Mar’s comments about China State Construction and the quality of its work may be seen by some as a ‘bad omen’ for what will occur at the British Colonial Hilton, a property that the Chinese firm acquired late last year. And it has also submitted a proposed ‘masterplan’ for the whole of downtown Nassau and Bay Street.
The one part of Baha Mar’s statement that does not quite ‘ring true’ is the suggestion that is was relying on the contractor’s assurances as late as last Friday, despite the fact that everyone passing the project could see it was not going to be ready for March 27.
Still, Baha Mar’s decision to postpone the March 27 will likely be welcomed by most observers as the correct one, given that ensuring the guest experience matches the ‘five star’ expectations is paramount. A bad opening would undermine the property’s credibility in the eyes of all prospective guests.
The statement issued last night said: “From its inception, Baha Mar has committed to creating a gaming resort destination that will be unparalleled in the world.”