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Was Pm Misled On Baha Mar? Chinese Builder Knew It Was Likely To Miss Deadline

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

WEEKS after Baha Mar’s contractor assured Prime Minister Perry Christie and the developer, Sarkis Izmirlian, that all was on track for a scheduled opening at the end of March 2015, the mega-resort’s contractor knew the $3.5 billion project was likely to miss the deadline.

In a confidential memo sent to its Beijing parent company on January 20, 2015, China Construction America (CCA) warned that the Cable Beach project and its stakeholders faced “irreversible and catastrophic loss” unless drastic action was taken.

The memo, entitled ‘Report regarding request for extra workforce for the Baha Mar project’ and obtained by The Tribune, shows CCA requesting that China State Construction Engineering Corporation (CSCEC) send it at least another 450 Chinese workers to give it a chance of hitting the March 27 target.

CCA warned that the construction situation at Baha Mar “is very difficult” and in urgent need of fixing.

It admitted that several deadlines for key Baha Mar components had already been missed and blamed this on the failure of CSCEC “sub-contractors” to supply an adequate workforce.

“Currently, the project is at a crucial dash to meet the final deadline,” CCA warned in the note addressed to Mr Yi, a CSCEC director, adding that it would incur a $250,000 daily fine for each day beyond the deadline that the project remained incomplete.

The memo was sent two weeks after the Prime Minister and a Bahamian ministerial delegation visited China in early January 2015. Mr Christie and Mr Izmirlian and their respective teams held joint meetings with officials from CCA and the China Export-Import Bank, Baha Mar’s financier, during which they were assured that the March 27 opening would be hit.

It was also written three weeks before the Prime Minister’s Office and Baha Mar issued a joint statement on February 10, 2015, in which they said: “Prime Minister Christie and the chairman of Baha Mar, Sarkis Izmirlian, jointly met with officials from China Construction of America (CCA) and the Export-Import Bank in Beijing in January. In that meeting, they received the necessary assurances that the resort will be ready for guests on March 27.”

Baha Mar’s president, Tom Dunlap, had earlier gone public with confirmation of the March date on January 9, following the meeting in China.

The contents of the memo raise several questions, not least whether CCA and its Beijing parent misled both Mr Christie and Mr Izmirlian during their January meetings in China over the construction status of the project. In particular, those meetings seemingly induced Mr Izmirlian to “ramp up” hirings for Baha Mar’s workforce in anticipation of hitting the March 27 opening.

Had CCA seemingly been more forthright, and informed Mr Izmirlian as soon as it feared missing March, it is possible the 2,000-plus Baha Mar lay-offs last October – and other significant financial losses – could have been avoided.

The nature of the CCA plea also raises the issue of why the government threw the full weight of its support behind the Chinese after Baha Mar filed for Chapter 11 bankruptcy protection in late June, given that the document admits the contractor was at least partially responsible for the construction delays.

The CCA memo is attached to documents filed in the Supreme Court on Friday as an exhibit to an affidavit sworn the previous day by a former Baha Mar executive, who described its contents as “particularly striking”. Whitney Thier, Baha Mar’s ex-general counsel, said it was “all the more extraordinary” that CCA failed to inform the developer that the March 27 target would be missed, given that the two sides’ senior executives had been meeting weekly.

Set alongside Baha Mar’s repeated complaints about CCA’s workmanship quality, Ms Thier alleged: “The letter is particularly striking when viewed in the context of the evidence. At a Board meeting of the company on December 5, 2014, CCA had assured the company that the project would open on March 27, 2015, prompting the company to commence accepting reservations from the public. In meetings in Beijing in early January 2015, CCA had assured not only the company, but also the Prime Minister of the Bahamas and the China Export-Import Bank, that the project would open as agreed on March 27, 2015.”

The former Baha Mar executive added that the memo also provided “strong corroboration” of the developer’s complaints against CCA. “The letter makes it all the more extraordinary that CCA failed to raise with the company its likely inability to complete the project on March 27, 2015, despite weekly meetings at a senior level with the company during early 2015 and – as is clear from this letter – when at least its own parent company was plainly aware of that likelihood as early as mid-January 2015.”

The CCA memo, originally in Mandarin but also translated into English, is understood to have been among documents that were part of “discovery” exchanges last year, amid the battle between Baha Mar and the Chinese in the Delaware Bankruptcy Court over the former’s Chapter 11 filing.

The request for more workers outlined in the memo also backs one of Baha Mar’s main complaints that CCA did not provide enough construction workers to ensure the development would meet its various milestones. Baha Mar had already been forced to postpone its planned December 2014 opening, due to the fact construction was not completed. The developer’s relationship with CCA, never strong, had already been deteriorating progressively for months.

“However, because the professional sub-contractors failed to provide a sufficient workforce in time, several deadlines for sub-projects were missed and the target completion for several sections got delayed,” the CCA memo said. “This will directly impact the target of opening on March 27. The situation is now very difficult which, if it cannot be turned around, will soon cause irreversible and catastrophic loss.”

It added that “unmeasurable damages to the brand and reputation of CSCEC will also be caused” should Baha Mar’s target opening date be missed. “CCA gratefully requests CSCEC to co-ordinate and order the sub-contractors to take emergency measures, organise the labour force in a timely manner and provide extra technical workers and experienced managers to the project by the end of January in order to meet the target of opening by March 27, 2015,” CCA pleaded.

CCA subsequently blamed Baha Mar for “mismanaging” the $3.5 billion development, suggesting that it was never compensated for – or given adequate time to perform – more than 1,000 construction change orders.

FULL STORY AND ANALYSIS, SEE BUSINESS

Comments

Godson 5 years, 7 months ago

"The memo, entitled ‘Report regarding request for extra workforce for the Baha Mar project’ and obtained by The Tribune, shows CCA requesting that China State Construction Engineering Corporation (CSCEC) send it at least another 450 Chinese workers to give it a chance of hitting the March 27 target."

So they needed an extra "450 Chinese workers" not... "450 workers" or Bahamian workers for that fact.

And they say you should not used expletives to express they way you feel when Foreignors come in your Country and your Government allows them to treat you like this?

Ikalik.... Where are you??? Put a number on this for me please. Thanks.

Godson 'Nicodemus' Johnson

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John 5 years, 7 months ago

If this and what is on the front page of "The Punch today is correct then the government of the Bahamas, led by Perry Christie did a serious injustice to Sarkis Izmriilan and further allowed him to be taken advantage of by China Construction Company and the China EXIM Bank. The fact that Bah Mar is not open today sits squarely on their shoulders because not only did they act in error against Bah Mar, but they teamed up with China EXIM Bank and China Construction Company to wrestle control of the property from its owner and only to have it sit there, idle and incomplete and as the dirt begins to blow in the wind, the eye of the Bahamas continue to be darkened and the government comes across as being severely incompetent in this entire matter and/or they are a group of modern day pirates who suckered an innocent investor to bring his millions to the Bahamas, then allowed him to be lured into shallow waters (Baja Mar in Spanish) where he became shipwrecked and was robbed. Izmirilian was crying from 2013 that the construction company was doing shoddy work, that they did not have enough workers and that they were responsible for the property missing several opening dates. Now there are claims that some $800 million is unaccounted for. Where did the money go? This government should be made to resign forthwith but the operators of China Bank and china construction company may face an even greater punishment.

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Godson 5 years, 7 months ago

Sarkis Izmriilan can't lose. His capital and its gain are legally secured according to this and the details that came out long time ago.

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proudloudandfnm 5 years, 7 months ago

Of course they needed 450 × $20.00 a month chinese workers.....

Hiring free men is always more expensive....

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B_I_D___ 5 years, 7 months ago

Of course he was misled...but it's not hard to do when the man is delusional!!

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asiseeit 5 years, 7 months ago

Nothing to see here folks, just supposed upstanding entity's in The Bahamas doing what they do best, lying, cheating, and in general being less than upstanding. There is a theme here that the Bahamian people should pick up, telling untruths seems to be in vogue with those that hold power in this country. Our P.M. is a god dam liar, the Chinese are god dam liars, seems the only one telling the truth was IZZY!

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Godson 5 years, 7 months ago

Do you realized what you are saying asiseeit? As a child, First Consul Napoleon Bonaparte Uncle told him that he is bound to be a great world leader one day. When ask why... Uncle replied that Napoleon lied so much and so fluently as though it was his first and core nature.

Should I start praying for the Lord... to teach me how to lie too?

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Honestman 5 years, 7 months ago

The empty twin towers of BahaMar will remain a monument to the PLP god of greed. Christie and his band were not interested in exercising due diligence when it came to the Chinese. Why would that be I wonder? Izzy was the fall guy but the Bahamian people have lost the most. Every honest Bahamian should be disgusted at what has been allowed to happen.

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SP 5 years, 7 months ago

...................... Sarkis Izmirlian was mislead by a Chinese "beautiful lie" ..........................

Chinese culture differs greatly from western culture when it come to honesty. Saving face and honor to Chinese is paramount and telling what they call "beautiful lies" is acceptable if that's what it takes to do so.

P.M. Christie easily fell hook line and sinker for the Chinese beautiful lies because he too had spun some whooper beautiful lies of own and no longer knows truth from fiction himself. Christie and the Chinese were caught in the their own web of "beautiful lies" and now its time to own up.

Sarkis Baha' Mar minutes of meetings with CCA and Christie should be more than enough evidence to haul both beautiful liars before a court of law and sue them to make good as per the contract.

P.M. Christie had absolutely no business interfering with a private development and should have left Sarkis with his chapter 11 suit, which never mentioned Bahamas government and also that the U.S. judge admitted was an excellent and proper vehicle to resolve the dispute and restructure the development.

I hope and pray Mr. Izmirlian wins at the end of the day. He and he alone truly deserves it!

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Godson 5 years, 7 months ago

Man I gotta learn to tell lies... this is the in thing... and seem bound to propel one to success. After all, they making the headlines and we get to discus them. I have already completed law school... but does anyone wants to suggest a Lie Learning Institution I can attend???

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banker 5 years, 7 months ago

So the Chinese lied. Quel surprise! So Christie lied. Quel surprise! Birds of a feather flock together. The interesting thing here is that the PLP thought that they were giving it up the rear to Izmirlian, and they were in fact getting it up the rear from the Chinese, and Izmirlian gets it from both.

Just reading in my Bloomberg screen how Lumber Liquidators stock fell sharply today. They were selling cheap Chinese flooring that causes cancer - 33 cases per 100,000 just for being exposed to the formaldehyde that outgasses out of the flooring. Can't wait to see what they put into Baha Mar. If it ever opens, we could be number 1 in cancer causing hotels. The PLP could pin up the badge right up their with the "We're #1 in Rapes in the Caribbean " booby prize.

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TalRussell 5 years, 7 months ago

Comrades if accurate as being reported the confidential memo sent by CCA to its Beijing parent company on January 20, 2015 requesting that CSCEC send at least another 450 Chinese workers to the Baha Mar Cable Beach’s work-site to give the resort project a chance of hitting its March 27, 2015 opening target – should raise serious questions, because wouldn’t we be correct to assume that if the 450 newly requested workers being requested out China to facilitate a March 27th, 2015 opening target, that it meant please put the 450 workers – on the damn plane like now?
Certainly, it begs the question. Did the Chinese partners think they could completely bypass making a request to the PM’s office for 450 additional work permits?
It would seem if the part of the story about the PM being misled is accurate, does it also mean that at no time was the PM told about the need for an additional 450 Chinese work permits?

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Tarzan 5 years, 7 months ago

For the tenth time, there is only one explanation for the government's refusal to permit the U.S. Bankruptcy Court to handle this matter in a workout, as requested by the developer, which would have seen all Bahamian subcontractors paid 100%; all the work necessary for completion performed by Bahamian contractors using Bahamian labor; the resort opened in a few months; and, all the Bahamians promised resort employment, long ago fully employed. That one reason is that if a U.S. Court was permitted by the Bahamian government to take jurisdiction of this matter, all the corrupt dealings between the Chinese entities and certain well connected persons in the Bahamian political class would have been fully exposed, with lawsuits to follow. That is the whole sordid story.

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Publius 5 years, 7 months ago

That one reason is that if a U.S. Court was permitted by the Bahamian government to take jurisdiction of this matter, all the corrupt dealings between the Chinese entities and certain well connected persons in the Bahamian political class would have been fully exposed, with lawsuits to follow. That is the whole sordid story.

Essentially

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SP 5 years, 7 months ago

We all agree they only moved to hide behind sovereignty nonsense to cover corruption from U.S. scrutiny. However, they also must have known they would only succeed in delaying the inevitable. Especially given they too had minutes from Sarkis and CCA meetings.

Their goose is now parboiled and well cooked and they will finally get they deserve.

Couldn't happen to a better group of pirates that outsmarted themselves so well there is no way out!

Good riddance to bad trash!

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Godson 5 years, 7 months ago

Thought you got lost... "F%^& the PLP and f$%^ the corrupt a$$holes in CCA and China State Engineering that are lording over our corrupt politicians like the third world African style government jokers they are."

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John 5 years, 7 months ago

Subtle and disquised racism is the worst kind. What do any of you Trump clowns know about Africa? Or is it he same one clown chasing his shadow?

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TruePeople 5 years, 7 months ago

I know African Politicians are known to be corrupt at the expense of their people

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killemwitdakno 5 years, 7 months ago

"F%^& the PLP and f$%^ the corrupt a$$holes in CCA and China State Engineering that are lording over our corrupt politicians like the third world African style government jokers they are"

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realfreethinker 5 years, 7 months ago

F%^& the PLP and f$%^ the corrupt a$$holes in CCA and China State Engineering that are lording over our corrupt politicians like the third world African style government jokers they are"

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BoopaDoop 5 years, 7 months ago

F%^& the PLP and f$%^ the corrupt a$$holes in CCA and China State Engineering that are lording over our corrupt politicians like the third world African style government jokers they are"

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TruePeople 5 years, 7 months ago

F%^# the PlP cus they done F$&%ing us!

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Well_mudda_take_sic 5 years, 7 months ago

Just like with Ruffin; the P.M., Davis, Maynard-Gibson and Baltron ("Bag Man") Bethel ain't too worried cause they got theirs; and they say (to dem selves), just too damn bad da Bahamian people ain't get theirs!

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Well_mudda_take_sic 5 years, 7 months ago

Funny how Peter Turnquest, Loretta Butler-Turner and Obie Wilchcombe all seem to be crying for the corruption involving the Bahamas Prime Minister (Perry Christie), Deputy-Prime Minister (dirty sticky fingers Davis) and Donald Trump's good friend Phil Ruffin to be investigated by the Public Accounts Committee but have done no such similar crying when it comes to the mega-millions of dollars of outright fraud that has occurred at the Bank of The Bahamas ("BoB"). We can only wonder why! Lkalikl would be better off publicizing to the U.S. media through a number of well placed tweets Phil Ruffin's ties to Donald Trump and the very corrupt Christie-led PLP government! Lest we forget, when Donald Trump cancelled his participation in the Fox News Republican National Committee Debate immediately before the Iowa Caucuses, Trump held a nationally (U.S.) televised fund raising event in Iowa for U.S. Veterans at which he proudly paraded Phil Ruffin on stage with him, touting all about his friendship with Ruffin and just how much of a great man and great American Phil Ruffin is. What a joke! Lkalikl needs to vent pent up frustration by taking all of this to the U.S. political pundits and watch how quickly it goes viral. Just might do so myself!

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killemwitdakno 5 years, 7 months ago

That change order they forgot about when rushing to counter sue before they back-peddled. Now here's proof they owe Izmirlian and probably the government for having to take action based on partial information. Abuse of discovery. They could ask daddy China Exim for the money.

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birdiestrachan 5 years, 7 months ago

Mr: Izmirlian is the one who used bad judgment in this whole deal. He is the one who went to the Chinese bank to build his hotels. but yet you people blame every one except him. What went wrong he and he alone knows. No one waits until their home is 95% or 97 % completed to find faults with their Contractor. The Government and the people of the Bahamas
would have loved to see the place completed .It was Mr: Izmirlian who continued to put off the date of his hotels opening. Hate as much as one likes. But it is important to be honest.

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realfreethinker 5 years, 7 months ago

Birdie catch ya self. Blame perry for stopping the bankruptcy procedings.

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gangof4 5 years, 7 months ago

So sayth the bahamian version of Baghdad Bob/Comical Ali!!

Jesus.....

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newcitizen 5 years, 7 months ago

You're right Birdie, he did show bad judgement, he chose to invest money in the Bahamas. That was by far his worst decision in this whole mess.

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birdiestrachan 5 years, 7 months ago

Mr: Ismirlian messed up in the first place that is why he had to file for Chapter 11. I am sorry for him. But some where along the way he used bad judgment. He did not count the cost. The Chinese Bank was his choice. They were all good then. now they are no good.

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BoopaDoop 5 years, 7 months ago

Mr. Izmirlian didn't use bad judgement; he got drilled in the a$$ without Vaseline.

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Honestman 5 years, 7 months ago

Birdiestrachan - the PLP apologist and the font of all knowledge concerning BahaMar! Get a life!

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happyfly 5 years, 7 months ago

Birdie, this document justifies why Izmirlian did what he did. I think he was a fool to get involved with the Chinese but if you are going to blame it all on him for getting involved with the Chinese, why not go one step further and blame him for trusting the Perry in the first place. My God. Perry and his cronies weren't checking for nobody else when they ripped the project from Izmirlian and handed it to the Chinese and told him he needed to get his head examined.

Any other civilized country in the world, a Government involved in this kind of miscarriage of justice would be lined up to resign right now. I can only hope all the unemployed and financially straddled (because of the Governments meddling) rise up and make that happen.

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MonkeeDoo 5 years, 7 months ago

Everyone seems to have forgotten the Adam Christie got the Baha Mar Pools and Waterways contract and Steffan Christie had already sold the British Colonial and the Pointe to the Chinese. Perry Christie was bought and paid for by the Chinese when this all went down so he couldn't do a damned thing to either CCA or CEXIM Bank. I wonder if he or his children or his wife have any of those bank accounts with HSBC in Switzerland.

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TruePeople 5 years, 7 months ago

I ein forget that. But to call up all the corrupt dealings what is go on, bey, I-man would have to write a volume series of BOOKS for every comment

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DillyTree 5 years, 7 months ago

Not just the African countries. Have you seen what the Chinese have done in Central and South America?

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