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Baha Mar's Contractor Relations Hit New Low

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

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.”

Comments

GrassRoot 5 years, 6 months ago

to make this perfectly clear. Baha Mar and its management never cared about investing in relationships with any of its providers, constructor, subs. We participated in two RFP's that were handled very unprofessionally. I am glad we did not get the job, we would probably have to fight for every dollar. If you lay down with dogs, you may wake up with flees. Am not surprised that a further delay in opening is announced three days before the soft opening is supposed to happen. So - the tourists that booked stay home now until May?

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Cobalt 5 years, 6 months ago

Bahamar is blaming the Chinese when if it weren't for the Chinese, there would be no Bahamar!!

The Chinese really didn't have to take on this Bahamar project. Hubert Ingraham was the one who begged and solicited their help after the initial investors for Bahamar pulled out. And one of the only reasons that the Chinese obliged HAI was because Hubert moved the Bahamian embassy from Taiwan to China!

The Bahamar executives are making these outlandish claims that they had relied on China's lead contractors reassurances that the resort would be completed on time. When the truth of the matter is, any fool driving past the cable beach resort could see that barring a miracle, it would never make the March 27th deadline.

These Bahamar executives need to stop passing blame and learn to take responsibility for their own ineptitudes. The Chinese possess major stakes in the resort and are majority owners! So take it or leave it. The bottom line is..... Bahamar is and will be a colossal failure. And so is the Bahamas.

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TruthHurts 5 years, 6 months ago

BOOM! Couldn't have said it any better!

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TalRussell 5 years, 6 months ago

Comrades, is this the first sign of more serious "corporate fallout smoke" rising over the future of who will really own Bah Mar?

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Publius 5 years, 6 months ago

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.

Exactly. And look at Baha Mar's website for the hotel that was supposed to open Friday. One placeholder image is still featured as the image for ALL rooms. If the hotel was finished and the rooms ready, why are the images for each of the rooms not uploaded? Such images are produced long before a resort's opening.

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duppyVAT 5 years, 6 months ago

Irreconcilable differences ......................... slippery Turk vs the Chinese ......... and Sandy

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TheMadHatter 5 years, 6 months ago

This is ONE reason why I keep saying we need a larger Parliament. 38/39/40 members is simply not enough.

It is too small a group, too easy to keep secrets, too easy to split/share-up pies, too easy to handle everything in a wrong way and nobody finding out.

People argue with me that the salary cost of a 200 member Parliament is too high. That is just silly. Those couple dollars pale in comparison to the millions of lost potential dollars this country loses EVERY WEEK. We lose money in lost opportunities and inefficiencies that are simply mind boggling. Our stupid Bahamasair jet is one fine example of extreme waste. We can't afford to have a jet - so we just let National Insurance "pay" for it, in constant loans.

This kind of nonsense and lots of other kinds would be dramatically reduced if we had a 200 member parliament. You would also be able to meet with your MP in a timely fashion. Bills on the floor that are STUPID would be more easily able to be voted down.

Think about it. Think about the advantages of a 200 member parliament. I cannot think of a better answer for our country right now. Oh, and of course, we wouldn't want 199 of the 200 to be from Nassau, like they are now.

TheMadHatter

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duppyVAT 5 years, 6 months ago

Yep .............. we need proportional representation based on % of party votes. Then all of this political tribalism will be a mute point. Right now we would have had a FNM & DNA coalition running the country with a 2 0r 3 seat majority based on the distribution of votes ......... not this disguised dictatorship. .................. Just look at Israel's election process

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TheMadHatter 5 years, 6 months ago

Yes I am familiar with Israel's system. They even let prisoners vote there, because unlike us and the USA they do not consider prisoners to be sub-human non-citizens. Here in the Bahamas if you go to jail, you can never get a good job for the rest of your life. In the USA if you go to jail on a felony (and almost anything is a felony now in the states), then you can never vote again unless you petition a judge to "restore" your voting rights.

duppy- I would like your comment on ...

http://user463836.websitewizard.com/">This Link

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duppyVAT 5 years, 6 months ago

Bahamians have taken on "the powers that be" and effected proactive change ...... in 1942, 1953, 1956, 1958, 1967, 1992 for example ........ but what we need now is a wholesale constitutional review to remove the dictatorship-in-disguise that we inherited from SLOP and QE2. That is the 800 pound gorilla in the room.

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TheMadHatter 5 years, 6 months ago

I agree with you. But HOW will we get it. That is what that website is about. Action. I have not finalized (based on other people's input etc) what specific action to take on Tuesdays. I don't like the idea of a general boycott of purchasing, although that idea did garner a lot of support on Facebook a few weeks ago. I'm toying with the idea of a boycott of all banks on Tuesdays. Do not use the ATM, do not go inside, if at all possible. Try to avoid it. Let's see if we can make a noticeable change in their customer levels on Tuesdays. Of course, there will be wankers out there that will take advantage of the "slack" time and get their stuff done - just like in the past when taxi unions tried to strike you always had a few sell-outs that would go around a pick up all the people. There are always TRAITORS. However, I believe there are more good people than bad, and if we band together to do something LEGAL like this and make a difference, it could get attention. Banks have the power to pressure Govt to make changes too. They might, if we convince them to.

This is not asking for much. And my feeling is that if people are not willing to do something simple and easy like this - then we as a country simply deserve to die. When our country dies, it will not be a tragedy or a shame or anything like that - it will simply be what we wanted. A chosen suicide.

Would YOU be willing to get your money out of the ATM on Monday instead of Tuesday? Hold off on cashing that cheque or making that deposit until Wednesday? Don't worry about what others will/won't do. Will YOU? A fire starts with a spark.

TheMadHatter

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Stapedius 5 years, 6 months ago

Words, words. Action is what is needed. The Bahamar fiasco only serves to empathize how these large mega resort models can be so unstable. It also highlights the need for serious economic diversification. Tourism has been good to us but it's time to make some serious decisions about the economy. I find it hard to believe that the PM relied so heavily on this project. Then again I shouldn't put anything past these jokers. So Junkanoo Carnival is approaching and the hotel is not done. What an embarrassing situation to be in. The Bahamar folks saw this coming and steadily made public statements of readiness to open. It is a reflection of how they intend to operate in the future. Just watch.

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TruthHurts 5 years, 6 months ago

"So Junkanoo Carnival is approaching and the hotel is not done. What an embarrassing situation to be in. The Bahamar folks saw this coming and steadily made public statements of readiness to open. It is a reflection of how they intend to operate in the future. Just watch."

Yes I agree!~ I knew something about this establishment was not right from the word 'GO'! But it appears we fail to read the warning signs, red flags for oncoming issues. The fact that there was a huge reconstruction of the road to build that monster of a hotel was the first indication for me that this was 'gonna be long.' Not saying that change is not good or welcomed, but this was such a big change that if this hotel were not to succeed in it's endeavors in the future, what's to become of such an eyesore? Furthermore, I for one are not impressed with the look and feel of the resort community itself. Looks like a upscale Holiday Inn if you ask me! Nothing exemplary or exceptional about the look and feel of it.

I just don't know what to say. Shakes head*

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killemwitdakno 5 years, 6 months ago

It's going to finish within a yr. The biggest and most prestigious hotel in the caribbean is worth it.

Long as we can earn more than entry level jobs or hopes that tourist wonder off premises to spend change. I want in on their web gaming. Trade shows and Chinese products will make a killing for them. Imagine when the Redmii smart phones sell from here to avoid a lawsuit with apple. That could be billions in purchases shipped from here. Bahamians should hop on such opportunities. It doesn't have to be them or the hotel that introduces these things.

Time to tune into the tradeshow industry. Diversify tourism.

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Sickened 5 years, 6 months ago

Excellent point! Trade Shows in the Bahamas could be a huge draw.

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Baha10 5 years, 6 months ago

Problem with BahaMar is it represents a rich kid's dream funded by daddy's apparent endless wealth with absolutely no experience or management support to execute and deliver on a Project of this magnitude. Herein lies the "true" blame, not CSC, who are in fact the savior of this "dream" and without whom even daddy's money would have been exhausted by now. It follows that to blame your savior at this stage in the game is truly distasteful and demonstrates just how far the kid will go to cover his own shortcomings in a desperate effort to save his rapidly dwindling inheritance, ironically caused by his own ineptitude.

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TruthHurts 5 years, 6 months ago

"...to blame your savior at this stage in the game is truly distasteful and demonstrates just how far the kid will go to cover his own shortcomings in a desperate effort to save his rapidly dwindling inheritance.."

Red Flags I tell yah! Red Flags!

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killemwitdakno 5 years, 6 months ago

One man isn't management, even CEO can be hired. He's a role model. A local kid can own a big hotel.

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killemwitdakno 5 years, 6 months ago

Could hire more Bahamians with a contract that ensures full payment within 12 months that covers interest on payroll loans or other contractor expenses taken out. Signing off on the budgets to be repaid doesn't take too much communication with Beijing. The few months after launch should definitely cover everyone's checks.

Or just go slow.

If they own it , that's motive to open. Are they still waiting on more gaming legislation?
Maybe it's BEC concerns.

I hope this thing don't go down in a hurricane.

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TalRussell 5 years, 6 months ago

I thinks just maybe the China State Engineering Corporation gone done a 3.5 Billion dollar K.B. "Carnival 2015 Flip flop" on Comrade "Baha Mar" Izmirlian. I'm guess no visitors to Carnival 2015, will be staying at the Baha Mar properties?

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proudloudandfnm 5 years, 6 months ago

Chinese are famous for one thing and one thing only.

LOW QUALITY.....

Nuff said.....

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lumi 5 years, 6 months ago

Make that 2 things: plenny damn people.

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rosiepi 5 years, 6 months ago

The Brt Colonial won't have this problem as the Chinese own it and will BahaMar in the end. You can't fire key construction mgt team members mid stream and deliver a promised opening date.

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