By TANEKA THOMPSON
Tribune News Editor
IT is estimated that the government has lost $315m in tax revenue from the beleaguered Baha Mar resort due its opening delays and the court appointed receivership process, according to an economic impact report of the $3.5 billion property obtained by The Tribune.
Of this figure, the government has lost an estimated $25m in stamp conveyance at a rate of 10 per cent; more than $30m in casino taxes on winnings; $16m in business license fees; $33m in National Insurance Board contributions; $13m in departure tax; $114m in import duty and $81m in occupancy tax/value added tax, among other losses.
The report also estimates that $451m in wages and salaries for direct and indirect workers has been lost, as well as a $48m loss in government utility payments and a gross domestic product (GDP) loss of $1.9m.
The report noted that more than 2,000 direct jobs were lost in 2015 due to the resort being placed into provisional liquidation and later receivership, adding that “the employment impact from (the) project once completed and fully operational (is) uncertain given slower ramp up resulting from delays and reputational damage.”
According to the document, the resort was expected to create more than 9,000 jobs, with 3,000 being direct employment at the property.
The study also revealed that an estimated 800,000 stop over visitors have been lost due to the resort’s opening delays, with each visitor expected to spend $576 per day.
The report takes into account estimated losses over an 18-month period.
Reacting to this revelation yesterday, Free National Movement Senator and former Attorney General Carl Bethel said the party would push for a Commission of Inquiry into Baha Mar if it wins the next election.
He said a large-scale investigation into the resort’s implosion is needed to “name and shame” those responsible.
“I recommended that the FNM should, once we return to office, have a full Commission of Inquiry into this debacle,” he told The Tribune yesterday. “I think that as you know by now, the estimated economic (losses) for this country are a disgrace, but putting aside project figures and numbers, the cost in human capital and lost expectations is equal distressing for this country.”
He said in view of this, there has to be a full accounting of what went wrong at the property.
He said the government’s apparent siding with Chinese entities involved in the project is an “affront to any principal of sovereignty.”
The Export-Import (EXIM) Bank of China is the resort’s secured creditor, while China Construction America (CCA) Bahamas is the property’s general contractor.
“It is unacceptable that Bahamian people are suffering - something went wrong,” Mr Bethel said.
He did not give a timeframe when asked how soon a Commission of Inquiry would be appointed if the Official Opposition wins the next election.
“We don’t want to just throw together any patchwork operation,” he said. “It’s a question of finding the very best people to assist the commission in their work. We’d be looking at a lot of contracts, status reports of the pace of the construction, room audits, so judgment can be made as to who did what.”
Baha Mar’s developer Sarkis Izmirlian filed for Chapter 11 bankruptcy protection in the United States in June 2015. The government vigorously opposed this process, saying it threatened the Bahamas’ sovereignty. The government instead petitioned the Supreme Court to place Baha Mar into liquidation. Baha Mar’s bankruptcy cases for its Bahamian entities were later thrown out of the US court. The reason given was that the Bahamas government made it clear that the US court’s decision would not be recognised because of “sovereignty”.
Mr Bethel said he never bought into the Christie administration’s legal argument for opposing the bankruptcy process in Delaware.
“The government decided that it would intervene for its own reasons and in doing so they basically came to favour one side over the other and that’s why we are where we are.”
Mr Bethel said Prime Minister Perry Christie “damaged” his credibility on Baha Mar through his continued assertions over the past year that good news was on the horizon and that the resort would be open soon. “One thing a prime minister has to be is if he is not liked, not loved, at least he should be believed, he is not any of these things. He is a shadow of what he ought to be and what the office should be. He is a nice man but he has put himself in a position that is untenable.
“He should do the honourable thing and go back to the people and step down.”
The report obtained by The Tribune also notes that other impacts of the resort’s receivership include “reputational damage for the Bahamas in light of project delay and handling of the situation” and “lost marketing spent on promoting the destination.”
In July, Mr Christie said he believes the EXIM Bank is prepared to present a possible buyer for the resort, as he declared a resolution to the Baha Mar debacle was “imminent.”
At the time, Mr Christie, while a guest on the “Ed Fields Live” show on Kiss FM, said the government is “closer than we’ve ever been before” on a resolution to the Baha Mar controversy, and that talks towards the same “have been taking place rapidly.”
Baha Mar was initially expected to open in December 2014 but has been delayed several times since then, something Baha Mar officials have blamed on CCA.
The Supreme Court placed the property into receivership last October at the request of the EXIM Bank.