The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A key Sarkis Izmirlian ally has accused the Government of being “scared to show” the Baha Mar deal to the Bahamian people, suggesting it must come at “an enormous cost” to taxpayers.

Dionisio D’Aguilar, a Baha Mar Board member under the original developer, told Tribune Business that there was no good reason to withhold the details now that the $3.5 billion project’s sale is a “done deal”.

Questioning why the Christie administration was seemingly “afraid” to reveal details of the agreements, now that Baha Mar’s sale to Chow Tai Fook Enterprises (CTFE) was all but complete, Mr D’Aguilar said the situation again reflected poorly on government transparency.

He also slammed as “laughable” the trip to the Far East, undertaken by two Cabinet ministers and the Prime Minister’s senior policy adviser to conduct due diligence on CTFE, suggesting they had travelled far at taxpayer expense for something that has already been decided.

Adding his voice to those calling on the Government to fully disclose all its agreements over Baha Mar, Mr D’Aguilar said it would try to “bamboozle” Bahamians by focusing solely on the potential benefits while ignoring what was lost to the economy over the past 18 months.

“We still don’t know what the deal is,” the FNM’s Montagu candidate for the upcoming election told Tribune Business. “What has it cost the Bahamian taxpayer?

“Show us the money. Show us the deal. What’s it costing the Bahamian taxpayer? It must be a lot if they’re scared to show it. What are they afraid of? It’s our money.

“What about transparency in government? They’ve already done this deal with the Chinese; they’re not going to back out of it now. Show us both sides. We can’t forget how much it’s cost us.”

Justice Ian Winder sealed details of the agreement between the Christie administration and the China Export-Import Bank, Baha Mar’s secured creditor, for the project’s construction completion and eventual opening.

He did this on the basis that confidentiality was necessary to “protect the integrity” of the Baha Mar sales process, which at that time was still active.

However, given that the Prime Minister and CTFE are both speaking as if the latter’s purchase of the Cable Beach-based resort assets is a formality, Justice Winder’s rationale for sealing the construction agreement seemingly no longer applies.

Then there is the ‘second deal’ between the China Export-Import Bank (as vendor) and CTFE as buyer, with the latter also having to conclude a ‘Heads of Agreement’ with the Christie administration to consummate its purchase.

Tribune Business previously reported that the Government approvals process for CTFE is effectively complete, and has since received further confirmation of this.

Of particular interest to many observers, given the Public Treasury’s cash-strapped condition, is whether CTFE will be paying the 10 per cent ‘transfer tax’ (split into 7.5 per cent VAT, 2.5 per cent Stamp Duty) on the purchase price.

This newspaper understands that no such tax was paid when Baha Mar’s assets were ‘purchased’ out of receivership by the China Export-Import Bank. This move was justified by sources close to the deal as a reasonable trade-off in return for the bank agreeing to pay Bahamian creditors what they were owed, even though these liabilities were not its own.

However, given that CTFE is likely to pay between $1 billion to $2 billion, this would leave $100-$200 million due to the Treasury - an extremely useful sum at a time when the Government is struggling to pay its bills, and has been forced into an unexpected $150 million borrowing to defray Hurricane Matthew restoration costs.

Mr Christie has to-date focused on the employment and investment benefits from CTFE’s purchase, but has made no mention of the investment incentives (concessions) that the Hong Kong conglomerate will receive, or commented on other aspects of the deal.

He has previously promised to reveal further details on the Baha Mar agreements at the appropriate time, while adding that he had been warned against disclosing too much by the Government’s attorneys.

It remains to be seen whether the Government will now ask the Supreme Court to unseal the agreement details.

Mr D’Aguilar, meanwhile, said the Government would seek to portray resolution of the stalled $3.5 billion Baha Mar project as “a huge victory” for itself just months prior to a general election.

He, however, pointed to the millions of dollars lost to the Bahamian economy in wages, GDP impact and taxes as a result of the battle that Mr Izmirlian was forced to fight against the Chinese.

“The Government is going to count this as a huge victory, but what we all have to remember is that there has been $400 million in lost revenues that could have gone to the Treasury,” Mr D’Aguilar told Tribune Business, “the lost $2.5 billion in GDP impact and the $600 million in lost wages to Bahamians.

“That has been the effect of this decision and delay, and while they will slap themselves on the back and say they’ve done a tremendous job in sorting this out, we must not forget the impact on the Bahamian people and economy as a result.

“They spent a fortune, and went through an enormous cost, to open this project.”

Mr D’Aguilar suggested that the Beijing government, through the China Export-Import Bank, had effectively told the Christie administration who Baha Mar’s new owner will be, and that it had little choice in the matter if it wanted the development to at least be partially open by May 2017.

“It was laughable that the Attorney General, the Minister of Tourism and Sir Baltron Bethel went out to do due diligence,” he added of the Government delegation’s visit to Hong Kong and Macau.

“I don’t know why they sent those people on that for. This is already a done deal. They’ve already made up their minds what they’re going to do. The Chinese have won.”

Mr D’Aguilar continued: “Let’s face it. The Export-Import Bank has told them this is the people you have to deal with [CTFE], and our government is so desperate to get something going they’ll do it.

“They’ve sold out to the Chinese, that’s the bottom line. The Bahamian government is in bed with the Chinese, lock, stock and barrel. There is nothing we can do about it now.”