THE Organization for Responsible Governance has raised concerns about Prime Minister Perry Christie’s recent announcement of a deal with the Export-Import Bank of China to remobilise Baha Mar, noting that the agreement has not been transparent leaving many to question the long-term viability of the project.
The Organization for Responsible Governance (ORG) also said the government must be “cautiously aware of the number of key Bahamian assets that the Chinese government, their various agencies and offshore companies, own”.
In a press release, the not-for-profit foundation committed to improving accountability, education and the economy in the Bahamas said it is encouraged by the government’s announcement, but put forth a series of observations and comments about the matter.
“The lack of transparency around the agreement is gravely concerning,” ORG said. “It is every Bahamian’s right to know what concessions their government extends to any developer, as they will ultimately pay for these concessions.”
The organisation said although the Export-Import Bank of China and China Construction America, the resort’s general contractor, have agreed to complete the project, according to the prime minister, “the instalment of a number of reputable hotel brands (flags) is a critical missing component to the development.”
‘The government’s statements, to date, hold no mention of these. It is imperative that the owners and the government attract reputable flags immediately in order to provide much needed confidence to make the project successful and, more importantly, sustainable.
“Additionally, the advancement of construction without the involvement of such flags is concerning, as any reputable hotel brand will most likely require construction to be completed to their specifications and with their managements oversight. Involvement of such flags late in the development stage will inevitably cost the developer and/or the flags more money, which will ultimately hurt returns on investment and levels of competitiveness.”
The statement added: “China, like any other respectful foreign direct investor, should be welcomed to invest responsibly in our economy and development. However, it is imperative that any and all foreign investors in key industries maintain assets and operations at a high level and that these operations remain regionally and globally competitive in these industries.
“Many assets in the Bahamas, which are owned by Chinese government driven entities; such as hotels, shipping ports, airports, terminals, real-estate developments, are performing at sub-par levels which ultimately has a negative effect on the Bahamian GDP.
“Most developed nations have control over the number of assets being held by any one group through trade commissions. This is of great importance to assure that its citizens and the nation are protected against unfair or underhanded dealings. Given its non-democratic structure, China, and its offshore companies, can act as one goliath company. This puts private businesses, from a market like the Bahamas, at a significant disadvantage. In theory, Chinese government driven entities could lower their rates to drive out competing businesses, making it virtually impossible for a privately owned company from a free market nation to compete. The long-term success of the Bahamian economy is dependent upon a strong and competitive environment for local businesses to exist alongside foreign development projects. The Bahamas cannot put all of our eggs into one basket.”
ORG Executive Director Matthew Aubry added: “If the report is accurate, the government is to be commended for working to ensure that all Bahamian creditors will be paid a sizable portion of amounts owed to them. However, in any stable modern society, citizens must understand what their leadership and government are doing. It is also incumbent on the government to properly and responsibly provide its citizens with information on all contracts and deals that it signs on the people’s behalf.”
ORG also stressed that it appears as if the current Baha Mar plan “is neither clear nor open and citizens are left wondering if this is a good and responsible deal for The Bahamas.”
“This lack of transparency casts a shadow on the potentially positive news that the government has stimulated activity on the Baha Mar project,” the group said. “ORG contends that, despite the claims by government, the long term viability of this project and its benefits to the Bahamian economy and workforce still remain in question.”
Under the terms of the agreement announced by Mr Christie on Monday, EXIM Bank has committed to fund all remaining construction costs to complete the project.
Additionally, China Construction America (CCA) would resume and complete construction, and then sell the property to a “world-class hotel and casino operator”.
Bahamian contractors still owed money will receive a significant part, if not all, of their claims, while thousands of former Baha Mar employees will receive outstanding amounts due to them, the prime minister also said.
However, Mr Christie stopped short of naming the operator tapped to buy the resort once completed.
The government has also come under fire after it was revealed that the Supreme Court documents related to the deal have been sealed.