Christie silent, Baha Mar confirms another delay

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April 22, 2015

Almost a week after Baha Mar CEO Sarkis Izmirlian went on a tirade at an employers gathering in Nassau, there has been relatively little public response to the obviously incensed investor's commentary, and once again Baha Mar appears to have committed itself to a timeline for opening that it will not meet.

Add to that reports of tension between Baha Mar and general contractor China Construction America (CCA) and public statements from Bahamas Electricity Corporation (BEC) Executive Chairman Leslie Miller that he had been "reliably informed" that the resort will not open until June, and it is clear that concern is mounting about the fate of the showpiece development.

Prime Minister Perry Christie, who has been the primary cheerleader for Baha Mar and likely considers the mega resort a major feather in his political cap, has reportedly been attempting to mend fences between the developer and the contractor. He has made no public statements acknowledging, addressing or in any way responding to Izmirlian's assertions that for 12 years, the government has broken its promises.

Former Prime Minister Hubert Ingraham has also not made any public statement.

Late... again

The most recent opening date from resort spokespersons was that the Baha Mar Resort and Casino would open in May. And that there would be a grand opening in June, with all of the other Baha Mar properties - the SLS Lux, the Grand Hyatt and the Rosewood - open by that time. However, it now appears that rooms at the Baha Mar Resort and Casino are not available for booking until June, and the other three properties are not available for bookings until August.

So as for when the resort village will in fact open, that remains unclear.

In fact, when he spoke last week, Izmirlian very carefully did not give an opening date for the resort, regardless of the March 27 statement that Baha Mar would open in May.

And when Guardian Business questioned Baha Mar's Senior Vice-President of Administration and External Affairs Robert Sands about the status of the project, given Izmirlian's apparent unhappiness, the first order of business was whether or not a decision had been made to open in June, rather than May.

"No decision has been made to that effect," Sands said. "We are fully committed to our available inventory in June but we have not set an opening date."

Sands also spoke to the question of how Baha Mar and CCA continue to work together if there is - as there very clearly seems to be - a rift between the two.

"CCA is our partner and we look forward to them meeting their assurances so that we can deliver a world class destination resort," he said.

Skin In The Game

The Bahamas, the Izmirlian family, China, CCA and its parent company China State Construction Engineering Company (CSCEC), Baha Mar, even the United States (U.S.) (through taxes from construction materials imported from U.S. manufacturers) - a raft of disparate parties have an interest in the success of the $3.5 billion investment. At stake for Izmirlian is the $850 million his family invested in the project, while CCA has both a financial stake ($100 million in equity) and an institutional stake: in October 2014, CCA chief Yuan Ning told China Daily News Baha Mar is the largest construction project it had undertaken to date, and the largest overseas project for its parent company, CSCEC.

Said Ning, "This project will be a very good showcase for us to show the world that we are capable to build that size of project...This is really a huge project, and maybe the largest in the western hemisphere."

China Export-Import Bank (Ex-Im Bank) is in for $2.5 billion in financing.

And The Bahamas government has yet to answer the charges laid against it by the CEO of the largest resort development in the region. For instance, two of the three largest hotels under construction in the Caribbean are the Baha Mar Resort and Casino and the Grand Hyatt at Baha Mar.

First, Izmirlian contended that Baha Mar has had to deal with a less-than-ideal business climate.

This charge would appear to have been fairly levied, given that in another presentation at the same conclave - one which had nothing to do with Izmirlian - Minister for Investments Khaalis Rolle confirmed that The Bahamas had in his view fallen out of "best-in-class." Rolle pointed to the jurisdiction's persistent slide in ease-of-doing-business rankings, and chronicled some of the steps necessary to address those concerns.

Izmirlian complained about the reliability and cost of power, which is among the major costs of most such developments in the jurisdiction, and voiced concern about education and training programs that appear to have been promised, but not provided.

And of critical importance, Izmirlian implied very strongly that there was a problem relying on the government's commitment on growth incentives.

Guardian Business put the question to Minister of Tourism Obie Wilchcombe, who was candid about the whole affair.

"A public spat with the CEO of Baha Mar will gain us nothing. His concerns are noted. We are working assiduously to get the hotel resort opened, ensure that we deliver the highest quality of service and enhance "Brand Bahamas" globally," he said.

Click here to read more at The Nassau Guardian

News date : 04/22/2015    Category : About Bahamians, Business, Nassau Guardian Stories

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