By NEIL HARTNELL
Tribune Business Editor
The Bahamian Contractors Association’s (BCA) president yesterday said the 120 local companies collectively owed $74.3 million for work performed on Baha Mar needed to be fully paid before they would return to the construction site.
Godfrey Forbes, in his last interview before demitting office as BCA president, told Tribune Business it was a case of “first things first” when it came to the $3.5 billion Cable Beach project.
While Bahamian contractors were willing to complete the mega resort development, he added that they first needed to receive a “substantial” amount of what they were owed “if not 100 per cent”.
Mr Forbes explained that some contractors may currently not be in a financial position to re-engage at Baha Mar, especially if they had obtained their initial contracts using borrowed money, as the six-month construction hiatus had left them behind on payments to banks and other lenders.
As a result, without Baha Mar’s joint provisional liquidators or China Construction America (Bahamas) paying them what they were owed, these Bahamian companies would be unable to return to the work site.
Mr Forbes yesterday revealed to Tribune Business that 120 Bahamian contractors and building materials supply companies were “owed in excess of $74 million” for work previously completed on Baha Mar.
“There is some $58.7 million owed to these companies by CCA, and $16.6 million owed to this group by Baha Mar,” the outgoing BCA president disclosed, adding that some 1,035 local construction workers had also been affected by work stoppage.
These companies have been forced to carry their Baha Mar ‘receivables’ on their balance sheets, impacting cash flow and leaving some unable to service their debts. And, for their employees and sub-contractors, this has meant reduced work, incomes and lay-offs.
Mr Forbes, meanwhile, did not confine his sympathies and concerns to the Bahamian construction industry. He told Tribune Business that local investors had invested a combined $43 million in becoming retail and restaurant tenants at Baha Mar, and in obtaining contracts to supply and service the project.
“You have local investors who have already signed contracts with Baha Mar to operate stores or offer services. Some have invested significant sums to enter into those contracts,” he added.
“There is somewhere in the vicinity of $43 million already expended by local investors looking at having some kind of relationship with Baha Mar, once the resort was open and operational.
“It’s extremely important for that to happen, because these are some extremely large sums local investors have put out to get in there. Once the resort is open, only then will they see something coming back to them in terms of a return on their investment.”
Meanwhile, Allyson Maynard-Gibson, the attorney general, this week expressed “excitement” that CCA (Bahamas) willingness to restart work on the Baha Mar project would lead to the re-hiring of Bahamian contractors, with the provisional liquidators finding a way for them to “be paid as much as possible of the money that is now owed to them”.
But Mr Forbes, effectively delivering a ‘not so fast’ message to Mrs Maynard-Gibson, said: “As far as Baha Mar is concerned, we want to address first things first. This is monies owed and due to be paid.
“Once that is done, the contractors will be more than willing to look at construction and the completion of Baha Mar.”
Mr Forbes questioned whether Baha Mar was in any position to pay what was directly owed to Bahamian contractors, and sums due to CCA (Bahamas), given that it was under the control of the Supreme Court and its joint provisional liquidation team.
This issue was brought into sharp relief yesterday by the joint provisional liquidators, who requested Supreme Court approval to borrow $25 million to cover insurance payments and costs incurred in their two-month appointment. There was no indication that one cent of this sum would go towards paying Bahamian contractors.
Tribune Business understands that the joint provisional liquidators met with leading Bahamian contractors, including Cavalier Construction, CGT and Mosko, two weeks ago to update them on the Baha Mar situation and appraise the industry of their role.
Few specific details came out of it, and Mr Forbes reiterated: “It’s safe for me to say that all our contractors would like to see the monies owed now addressed and paid, or that there is some kind of guarantee put in place to ensure they are paid before they get back on site and inflate the sums they are owed now.”
The BCA president added that “it’s going to be extremely difficult for some contractors to re-engage and participate without being paid”.
This, he explained, especially applied to contractors that had taken out overdrafts or other facilities with the bank to finance their initial Baha Mar contract bid and its fulfilment.
“The bank will only go so far, and at some point you’re left without a leg to stand on,” Mr Forbes said, as the construction interruption had left companies unable to service these facilities.
“They’re only going to open things up to a certain degree of risk, and cut you a certain amount of slack. That is hanging over the heads of some contractors being able to re-engage in Baha Mar.”
Mr Forbes called for all contractors to immediately be paid 100 per cent of what was owed “or get some substantial payment”.