There are some worrying signals coming from Baha Mar, and we should all take note. As the country waits for the mega Cable Beach development to open its doors, a harsh tone has emerged from a clearly frustrated Baha Mar CEO Sarkis Izmirlian. It has spilled into the public domain with likely implications for Baha Mar's relations with the government and with its Chinese partners.
No doubt, this is creating jitters among those in government and it is also creating concerns in the wider community that is waiting for Baha Mar to take off.
With the economy still in desperate need of revitalization seven years after the global financial crisis, a lot continues to ride on Baha Mar's success.
Speaking at the second annual Bahamas Chamber of Commerce and Employers Confederation Conclave last week, Izmirlian expressed that the "discontent and concerns" surrounding the project are now felt across nearly all sectors of the country.
Obviously, the Baha Mar CEO has reached a breaking point in his dealings with government and in waiting for the Chinese builders to meet certain commitments to get the $3.5 billion development open. Izmirlian's words were worrying on multiple levels.
"As Baha Mar has been developed, we have had to do so with less than ideal support and a less than best-in-class business climate, which are critical to The Bahamas' success," he said, adding that a number of promises important to the future of The Bahamas have not come to fruition.
"All of us must be concerned about the unfulfilled promise of improvement in the reliable supply of power and the reduced costs of power.
"We all should be concerned about the gap in necessary education and training programs that would allow workers to be better prepared for jobs, and we all should be concerned that the growth incentive commitments are not viewed as reliable."
The airing of Baha Mar's frustrations in this manner speaks to an obvious deterioration of relations between the investor and the government of The Bahamas. We imagine the relations must be in a terrible state for Izmirlian to address them in such a public manner.
Many Bahamians are understandably disturbed by the tone of the Baha Mar CEO. Where is the prime minister in all of this? We assume he must be making interventions in the face of these latest public statements by Izmirlian.
We think it is time for the prime minister to speak publicly to the issue of the delayed opening and report on the government's efforts to address the investor's concerns. We are in need of assurance that confidence surrounding Baha Mar and its success is not threatened.
Izmirlian's comments came as we continued to question the status of the government's long promised deal for the reform of the Bahamas Electricity Corporation. Reform of the energy sector in general is crucial to the national economy. High energy costs are among the most substantial burdens for business people, Baha Mar being no exception.
Small consumers too have grown tired of the wait. Three years into this administration it is time for action on energy reform. This seems like an appropriate time for an explanation from Prime Minister Perry Christie in this regard.
We imagine that Izmirlian's lashing of the government would have been picked up in many circles, including among other investors in The Bahamas and prospective investors.
What impact are his words likely to have on the generation of more investments in The Bahamas?
Smart investors don't go in where there is substantial uncertainty. If a major investor like Izmirlian is expressing doubt about the competency of the government to meet Baha Mar's needs, this could discourage future investments.
Christie has repeatedly pointed to the tremendous impact Baha Mar is projected to have on the economy. He has repeatedly touted Baha Mar as the centerpiece of economic revitalization. In his speech last week, Izmirlian disabused the government of this notion that it alone will be an economic savior, however.
He said, "I continue to strongly believe that The Bahamas can successfully compete with the best tourism destinations in the world, and Baha Mar will prove that.
"But Baha Mar in and of itself is not The Bahamas and cannot solve all the ills of this country. I can assure you this: There are not that many Sarkis Izmirlians or Sol Kerzners out there who would be willing to invest in The Bahamas as we have."
That warning to the government was among the most startling aspects of Izmirlian's presentation, and reflected a level of frustration even deeper than originally thought. Added to its delayed opening, its concerns with a lack of urgency on energy reform and troubles with doing business in The Bahamas, Baha Mar continues to lock horns with the government over costs associated with the rerouted West Bay Street and related roadwork. The last we heard from the prime minister on this issue, the matter seemed bound for arbitration. Izmirlian previously said he was unhappy with the way negotiations with the government were going in this regard.
Blame
More worrying though might be Baha Mar's public wrangling with China Construction America (Bahamas) Ltd.
Days before it was scheduled to open, Baha Mar said despite repeated assurances from the contractor that the resort would be able to open on March 27, "it has become clear that the contractor has not completed the work with an attention to detail consistent with Baha Mar standards of excellence".
As a result, the opening was delayed. This is the second delay for Baha Mar. Undoubtedly, these delays have been costly.
It is unclear exactly when the property will open. This is undoubtedly creating widespread tensions between Baha Mar and its Chinese partners. A day after Baha Mar publicly blamed the delay on China Construction, the company responded to the criticism in a public statement of its own.
"The statements by the developer of the Baha Mar project laying blame upon CCA (Bahamas) for its decision to delay the announced opening of this project are wholly inappropriate and inconsistent with the history of the project," the company said.
In rejecting the blame and criticism by Baha Mar, the contractor pledged to deliver a resort of the highest standard.
"That said, CCA (Bahamas) will continue to perform its obligations in a professional manner and will deliver a quality resort in the earliest possible time," CCA Bahamas said. "CCA (Bahamas) remains committed to constructing a resort that will bring pride to the Bahamian people."
We all should be concerned, not only about the delayed project, but about the growing public tensions that surround this project. Baha Mar is billed by the government as the greatest hope for a rejuvenation of the country's economy in the near to medium term.
Definitive answers are needed regarding when the project will open, its marketing efforts and renewed projections and timelines for economic impact. We are also in need of signs that the bruised relations between Baha Mar and the government on the one hand, and between Baha Mar and its contractor on the other, are undergoing healing.
We expect that our government will take Izmirlian's concerns with a great degree of seriousness and make urgent attempts to reach mutually agreed positions to address them.
We have all watched Baha Mar rise from the ground after major setbacks that brought the project dangerously close to collapse. It is in the country's interest for the project to overcome the hurdles that remain. We are in no position to stomach another round of bad news as it relates to Baha Mar.
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