THERE are varying opinions about the first signs that Baha Mar might be starting to move towards a long delayed opening.
Whatever the outcome, the tinsel and bright lights have dimmed over a project that three years ago promised to be the most spectacular resort in the Caribbean. Although it will reopen sometime in the future — time still uncertain — it will never have the glitz and glamour promised at its first scheduled opening in December, 2014. It was then that the public learned that something had slipped when a new opening was rescheduled — and missed — for the spring of 2015. By May 2015 it was clear that the future was bleak. The dream was gradually fading into a misty sunset. By June 2015, the resort, about 97 per cent complete, had filed for voluntary liquidation under chapter 11 in the Bankruptcy court of Delaware. “The financial consequences of the repeated delays by the general contractor, and the resulting loss of revenue” was the reason given. All construction stopped and the resort has laid dormant since then. Instead of remaining an independent bystander —as prime minister Ingraham did when Brookfield Asset Management took over Atlantis from Kerzner International, also involved in a chapter 11– Mr Christie sided with the Chinese in agreeing that if Baha Mar’s case was heard in a US court it would have been a breech of the Bahamas’ “sovereignty.” As a result it was transferred to our court system, which offered no chapter 11 that would have given a troubled company time to gather its forces, pay its creditors, and start again.
From that moment on it has been a downward slide behind a screen of secrecy. The developer has always blamed the closure on the Chinese construction company which it was forced to hire as the condition of the loan from the Export-Import Bank of China for the construction of Baha Mar. Apparently wherever the Export-Import Bank goes so goes China Construction America and CCA Bahamas.
Sarkis Izmirlian, the developer of Baha Mar, has always blamed the CCA Bahamas for deciding the opening dates for the hotel, but never delivering on its promises. There was heavy investment in training staff and international publicity to prepare for the openings. Bookings were made - even a large wedding had to be cancelled at Baha Mar –ostensibly the fault of CCA and its failure to deliver on the dates it had promised. About 2,000 Bahamian employees had to be laid off.
Now at long last there is movement and Prime Minister Christie is euphoric – the 2017 election is approaching and he needed to at least get Baha Mar’s doors open and Bahamians hired before then.
Although pleased that at last there is movement, few agreed with Mr Christie who described the outcome as “one of the most brilliant set of negotiations ever done in advancing the cause of the Bahamas”.
However, most would agree with FNM deputy leader KP Turnquest, who told Tribune Business that the prime minister has “put the Bahamas through a traumatic period that was unnecessary, and caused almost irreparable damage to this jurisdiction’s reputation as a safe investment destination.”
If Mr Christie and his government had taken a hands off approach in the summer of 2015 and let the Chinese and Mr Izmirlian argue their positions in Delaware, many believe that Baha Mar would have been open and flourishing by now. Bahamians would have been employed, tourists would be filling the resort and Standard and Poor would not have found it necessary to look at our worsening economic position and write the Bahamas off as “junk.”
Bahamians are now complaining that Baha Mar will be exempted from paying VAT. We agree with contractor Stephen Wrinkle who told Tribune Business that it was normal for such tax breaks. However, as Mr Wrinkle pointed out that in the case of Baha Mar, the benefits - Bahamian employment and greater GDP growth - “outweighed” any revenue foregone.
Mr Wrinkle also observed that the Bahamas was now in a position where Baha Mar had to be completed and opened at almost any price, and that China had to be incentivised to finance this to prevent a $3.5 billion “white elephant” emerging at Cable Beach.
He added that having “hitched their wagon to the Chinese pony” in opposing Baha Mar’s original developer, Sarkis Izmirlian, the Government now had little choice but to bow to Beijing’s demands.
When one calculates the losses over an almost three year period while this white elephant at the western end of New Providence remained closed, Bahamians indeed have to decide whether the heavy price they were forced to pay for their “sovereignty” was worth it.