The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A key Sarkis Izmirlian ally says The Pointe’s Heads of Agreement shows the Christie administration was “hopelessly conflicted” in how it handled the Baha Mar dispute.

Dionisio D’Aguilar, the FNM MP for Montagu, told Tribune Business he was “absolutely shocked” that the Government had signed an agreement with China Construction America (CCA), permitting it to move men and equipment from the Baha Mar site to its downtown Nassau development, at the height of its dispute with Mr Izmirlian.

Mr D’Aguilar accused the Government of being “two faced”, saying that while it was presenting itself as an ‘impartial mediator’ in seeking to broker a resolution to Mr Izmirlian’s dispute with CCA, it was at the same time negotiating with the latter on another investment deal.

“I was absolutely shocked to see the collusion that was going on,” Mr D’Aguilar told Tribune Business of this newspaper’s revelations on Friday.

“On the one side, Christie was supposedly being neutral in the whole arrangement, when on the other side he was making a backroom deal with the Chinese. It’s almost two-faced.

“They were trying to be a neutral arbitrator on one face, and with the other face they were making a deal to allow CCA to move all their assets and management, piggybacking off Baha Mar’s infrastructure to start this thing.”

Tribune Business revealed on Friday how the Heads of Agreement for the $200 million The Pointe project, which is owned and being developed by CCA next to the British Colonial Hilton, contained two clauses allowing Baha Mar’s main contractor to move manpower and equipment from Cable Beach to its new development.

The Heads of Agreement were signed by the Government, and the CCA entities that owned the British Colonial Hilton and The Pointe development site, on June 18, 2015.

Just 11 days later, on June 29, 2015, Mr Izmirlian, filed for Chapter 11 bankruptcy protection in the Delaware courts.

The dates show that as the dispute between Mr Izmirlian and CCA, as Baha Mar’s main contractor, heated up from January 2015 onwards, the Government was simultaneously negotiating with CCA over The Pointe - a situation that undoubtedly created a ‘conflict of interest’ for it in seeking to mediate a resolution at Cable Beach.

Indeed, the Christie administration could have used CCA’s desire to ‘redeploy’ equipment and manpower, and the negotiations over The Pointe’s Heads of Agreement, to require Baha Mar’s main contractor to finish construction at Cable Beach before switching its attention to downtown Nassau.

Instead, The Pointe’s Heads of Agreement could be interpreted as letting CCA ‘off the hook’ for failing to complete Baha Mar on time and on budget, amid allegations that it committed “shoddy workmanship” that was responsible for the delays.

Backing this interpretation, Mr D’Aguilar, a former Baha Mar director, charged: “The Christie administration has been in bed with the Chinese from day one. Sarkis never had a chance.

“It’s slowly coming to light now. It allowed them [CCA] to begin with the full knowledge that if this deal did not come through, they could go on to the next one.

“Here’s a project, Baha Mar, that was not completed, did not meet the deadline, caused $2.5 billion in damage to our economy two years later by not completing the deal, and here we were giving them another deal.’

Mr D’Aguilar also queried whether Baha Mar had helped to finance The Pointe development, suggesting that the manpower and equipment ‘transfer’ effectively meant that the Cable Beach-based development had absorbed some of CCA’s costs.

“God knows what assets were taken from Baha Mar,” he told Tribune Business. “I’m sure there were a lot of items brought from Baha Mar, and with Sarkis out of the picture there was no accounting, no checking.”

Mr D’Aguilar’s comments came as Allyson Maynard-Gibson, the attorney general, sought to change the ‘narrative’ on Baha Mar following a week in which it was confirmed that the property will open on April 21 despite Chow Tai Fook Enterprises (CTFE) not having closed its purchase.

Mrs Maynard-Gibson touted the jobs that had already been created by the Hong Kong-based conglomerate, and the work made available by CCA to Bahamian contractors, to show progress was being made at Baha Mar.

This came after Robert Sands, Baha Mar’s senior vice-president of governmental and external affairs, said the CTFE purchase would only close once CCA finished construction.

The construction completion is only likely to occur in November/December 2017, when the SLS and Rosewood properties open, with CTFE having agreed to operate Baha Mar and open certain parts of the property in the meantime.

This arrangement, though, has led Opposition politicians such as DNA leader Branville McCartney to question who is hiring the 1,500 Bahamians supposed to be engaged by April 2017, given that Baha Mar’s secured creditor, China Export-Import Bank, still holds the title and ownership of Baha Mar through its Perfect Luck vehicles.

Mr McCartney also questioned the job security for the 9,000 Bahamians who had applied for posts at Baha Mar, stating: “In light of the fact that the resort has not, to-date, been sold, the question remains as to who or what entity the Bahamian people are applying to for these so-called jobs.

“It certainly cannot be the proposed owner, who has not closed or purchased that property. So, it can only be the Chinese bank, which at this stage holds the title to the resort. But is the Chinese bank able to execute an employment contract with the Bahamian people? I think not. I am very curious to see the employment contract for the Bahamians. Bahamians…beware.”

Mrs Maynard-Gibson, seeking to reassure, said CTFE had formed a Bahamian company, ‘CTF BM Operations Ltd’, to facilitate Baha Mar’s opening.

“To date, it has been reported that 15 contractors and 322 Bahamian employees have been engaged by CTFE. It is anticipated that a total of 1,500 Bahamians will be engaged by April 2017,” Mrs Maynard-Gibson said.

“CCA reports that to date there are nearly 100 Bahamian vendors and contractors, and 500 employees, involved in the Baha Mar completion. CCA also confirms that it has paid the CCA Bahamian contractors who had little or no hope of being paid in Delaware.”

It is unclear why Mrs Maynard-Gibson, rather than the Prime Minister, issued the Government’s response to the latest furore surrounding Baha Mar.

She added yesterday that the National Training Agency “has been actively involved in the recruitment process”, with some 300 of its trainees set to interview for posts at Baha Mar tomorrow.

“It is anticipated that by the end of next week, 2,100 Bahamians will be interviewed for various levels of employment,” she said, adding that the 2,000 former Baha Mar staff who were terminated in November 2015 will “be given the opportunity to be” re-hired during CTFE’s February 8- 11 recruitment drive.

“The significant levels of investment made by CTFE attest to the fact that investor-confidence in the Bahamas remains strong: Our country is still a great place to invest,” Mrs Maynard-Gibson said.

“The Government celebrates these major steps forward, knowing that the jobs and opportunities will have a major impact for many Bahamian families.”