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Contractor Chief: Pm’S Baha Mar Pay Pledges ‘Don’T Mean Anything’

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Prime Minister’s repeated promises that Bahamian contractors will be paid for Baha Mar work “doesn’t mean anything to us”, the Bahamian Contractors Association’s (BCA) president said yesterday, adding: “It’s all up in the air.”

Leonard Sands told Tribune Business that the sector, which is owed a collective $74 million for work on the $3.5 billion project, was waiting for “definitive information” on who would be paid, when and how much.

Giving an insight into the industry’s frustration, Mr Sands said it was impossible to know if the Prime Minister was “speaking accurate information” through his insistence that the 123 impacted contractors will be fully compensated.

He added that the BCA and its members wanted to hear from the party with “proper authority” to pay what was owed, and called on Mr Christie to start providing specifics on Baha Mar.

Mr Sands added that contractors were not waiting on Baha Mar compensation to be their “saviour”, and pointed to the sector’s resilience in finding “very creative ways” to ensure their businesses survived.

His comments came following a subtle change of language by Prime Minister Perry Christie earlier this week, which seemed to imply that Bahamian contractors will not be ‘made whole’ - paid 100 per cent of what is owed to them - on Baha Mar.

Mr Christie, speaking during an interview on Kiss FM with radio personality Ed Fields, confirmed that the China Export-Import Bank and its receivers are under no obligation to compensate Bahamian contractors - and any other unsecured creditors - for work completed at Baha Mar.

He then said: “We have asked for the Bahamian contractors to be paid as near to 100 per cent of what they’re owed as possible.

“So in any negotiations going forward, we expect that to be a major point, where up to over $100 million in debt is owed to Bahamian contractors, and we want Bahamian contractors to be paid.”

Baha Mar’s collapse into Chapter 11 bankruptcy protection one year ago, and subsequent stalled construction progress, has meant that Bahamian contractors have effectively financed the project’s progress to-date out of their own pockets.

Sources familiar with the situation at Baha Mar have even suggested that one Bahamian contractor is owed as much as $32 million, although this has yet to be confirmed.

Osprey’s joint venture with the US contractor, Yates, was identified as owed the greatest sum, some $5.3 million. And Cavalier Construction, another major Bahamian contractor, is understood to be owed $1.5 million.

Mr Sands yesterday said neither the BCA, nor its members and individual contractors, had received official information on the fate of their outstanding payments.

He indicated that the industry was confused over who had the power to make a decision on paying it; whether it was China Construction America (CCA) as general contractor; the China Export-Import Bank as secured creditor, and its Deloitte & Touche receivers; or a new Baha Mar owner.

“They’re waiting to have word. They’ve not heard anything at all,” Mr Sands told Tribune Business of Baha Mar contractors.

“I think the BCA’s position on that is until somebody with the correct authority can give us a position, either coming from CCA, Baha Mar or the Export-Import Bank as when payment will be made, by whom, and in what amount, we’re just sitting here hearing all these things.”

The BCA president continued: “We’re just waiting for someone with authority to give us definitive information.

“We can’t say if the Prime Minister’s speaking accurate information, or whether he’s hearing it from someone else. We’re still waiting for someone from these entities to speak to us properly. It’s up in the air.”

Referring to Mr Christie’s payment promises, and insistence that a Baha Mar resolution is “imminent”, Mr Sands told Tribune Business: “We don’t know what that means.

“‘Very close’ doesn’t mean anything to us at this time. Dates matter. The Prime Minister can’t say ‘very close’. He’s got to say that on such a date this is going to happen.

“We want to have definitive information at this time. Until such time as CCA and the Export-Import Bank give us definitive information, we wait and see.”

The Government has frequently touted the ‘framework agreement’ between itself, CCA and the China Export-Import Bank for Baha Mar’s construction restart as showing evidence of a Chinese commitment to make Bahamian contractors whole.

Yet the language employed is very vague, and hardly represents a binding commitment by the China Export-Import Bank and CCA to do this

The ‘joint statement’ says: “It is expected that many contractors who have participated in the construction of the project will be re-engaged in the process.

“The requirements of the unsecured creditors will also be considered during the remobilisation.”

Jerome Fitzgerald, minister of education, science and technology, who sits on the Cabinet’s Baha Mar sub-committee, also confirmed to Tribune Business that the Christie administration had set making all Bahaman creditors whole as a ‘condition precedent’ for it to approve any new Baha Mar sale and purchaser.

That is when the Government will have the leverage to force payment to be made to all Bahamian contractors and other Baha Mar creditors.

No buyer will likely want to take on the extra expense involved, meaning that the burden will fall on the Chinese. Some Bahamian contractors will also enjoy additional leverage if their skills are required to complete Baha Mar, as they can simply refuse to return to the work site until all outstanding debts are settled.

Mr Sands, though, said Bahamian contractors were not just sitting around waiting to recover their Baha Mar payments.

He said many had found new sources of revenue to sustain them, with general contractors becoming electrical and plumbing specialists, and doing “base work”in those areas.

“While we’re waiting to be paid, we’re not holding on to that as a saviour for our businesses to survive,” Mr Sands told Tribune Business. “We’re moving on, finding ways to keep the doors open and not waiting on that as the solution.

“Contractors are finding different types of services, things they don’t normally do. They have found very resilient ways, very creative ways to keep their doors afloat, get revenue in and be profitable.

“It [Baha Mar] make take five months, it may take 15 months, but we’re not sitting here doing nothing. We’re finding creative ways to keep going.”

Comments

TalRussell 11 months, 1 week ago

Comrade Prime Minister and his Cabinet Colleagues have often overlooked their mistakes and outright incompetence - or allowing politics play roles in granting contracts - and we're not talking but a few - as"teachable moments" for his government.
A 'teachable moment' would be NO contracts for anything to do with Baha Mar, should be signed -unless financial security bonds are posted in advance of all contract letting to local contractors and suppliers. It's simple. No bond, No Work Preformed. In fact, make this bond posting a strict mandatory condition for all foreigners entering into building, products supplied and service contracts with locals in The Bahamaland.

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Franklyn 11 months, 1 week ago

  1. If you hold a contract from (Developer) Baha Mar Ltd., Baha Mar Boulevard - Nassau, Bahamas. Then you wait for the legal debacle to work itself out. You have no guarantee of a settlement. And any settlement would be from the mercy of the Chinese Owners - and this is highly unlikely, understand their business philosophy.

  2. If you hold a contract from (General Contractor) CCA Bahamas, Ltd., West Bay Street - Nassau, Bahamas. Then you have one of two options.

a. you enter a claim in The Supreme Court (Common Law and Equity Division) for the balance owed to you, plus interest and cost. CCA Bahamas has not file for bankruptcy and should not be confused with the bankruptcy of Baha Mar.

b. you enter a claim in New York Southern District Court (a class action) would be the best action to take - considering cost and the collective effort of your group.

Current action against CCA Bahamas: Controlled Demolition, Inc. v. CCA Bahamas, Ltd.

ORDER: IT IS HEREBY ORDERED that a settlement conference shall be held in the above captioned action on November 10, 2016, at 2:30 p.m., in courtroom 228, 40 Centre Street, New York, New York. The parties are directed to review and comply with the undersigned's Procedures Applicable to Cases Referred for Settlement, a copy of which is being provided to the parties with this Order. Additionally, at least seven days prior to the settlement conference, the parties must confer, in person or by telephone, to engage in good-faith settlement negotiations. Should the parties resolve the litigation prior to the conference date, they must notify the undersigned, in writing, expeditiously. (Settlement Conference set for 11/10/2016 at 02:30 PM in Courtroom 228, 40 Centre Street, New York, NY 10007 before Magistrate Judge Kevin Nathaniel Fox.) (Signed by Magistrate Judge Kevin Nathaniel Fox on 5/27/2016) (cf)


Current action against CCA Bahamas: BenMoore Toote Development Co. v. CCA Bahamas, Ltd.

Commonwealth of The Bahamas, In The Supreme Court - 2016/CLE/gen/No.00088 case management conference was held on the above captioned action on July 13, 2016, at 10:00 a.m., before The Honourable Justice Ian Winder.


The only language that will be heard is action, and you need to act now.

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lkalikl 11 months, 1 week ago

Nothing the PM or the PLP say means anything. They are s$%^ talkers, liars and thieves!

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