Govt to approve Baha Mar
By BRENT DEAN
Deputy News Editor - The Nassau Guardian
brentldean@nasguard.com
As a result of negotiations between Prime Minister Hubert Ingraham and the Chinese, and subsequent negotiations between the Chinese and Baha Mar, subcontracts to Bahamians in connection with the Baha Mar project will increase from $200 million to $400 million.
“This will be the largest award of contracts to Bahamian contractors on a single project. Contracts will be awarded to large, medium, small-scale and individual contractors. This is in keeping with my government’s commitment to deepening and broadening economic opportunities for all Bahamians,” said Ingraham yesterday at a news conference at the British Colonial Hilton.
Ingraham used the news conference to update the country on his recent visit to China. During the trip, he met with Baha Mar’s partners – China Export-Import Bank (China Eximbank) and China State Construction Engineering Corporation (CSCEC) – about potential changes to the $2.6 billion Cable Beach development.
Before those meetings, Ingraham had expressed concern about several components of the project. These concerns included the resort being built in one phase; Baha Mar needing equity partners; and that under the plan, Bahamians would not work on the hotel core.
Ingraham was not able to win concessions based on all of his concerns. He said there has been no final agreement on the phased entry of rooms at the resort into the marketplace.
However, along with the increase in subcontracted work to local firms, Bahamians will now work on the hotel core, according to Ingraham.
The prime minister also confirmed that he has been advised by Baha Mar and the China Eximbank that Hyatt will invest $40 million into the development. Rosewood Hotels and Resorts and Morgans Hotel Group will invest $10 million each, he added.
CSCEC will invest $150 million into Baha Mar.
One of the early hurdles to approval of the project by the government was the resolution of Baha Mar’s loan payment to Scotiabank. The bank and developer recently settled.
Yesterday Ingraham revealed Scotiabank’s equity stake in the project.
“The Bank of Nova Scotia is leaving in its unpaid balance of its loan to the extent of 12 percent of the project,” he said.
China Eximbank is extending a $2.45 billion loan to the developers.
Baha Mar and its Chinese partners have also agreed to significant training opportunities for Bahamians, Ingraham said.
This will include the establishment of a training and service academy.
“The academy will be permanent, offering ongoing training opportunities for employees and prospective employees,” Ingraham explained.
According to the prime minister, Baha Mar has confirmed that in the 12 to 24 months before the resort’s opening, which is projected for early 2014, high performance individuals would be selected by the hotel operators and placed within their hotel systems throughout the world.
“These individuals will be placed in job shadowing programs, on the job training programs, and hotel specific systems training programs. Baha Mar will also be hiring executive staff and training individuals who will staff the anticipated job fairs and will be conducting employment interviews,” Ingraham said.
During the 12 months before the resort opens, it is projected that the hiring and job fairs would begin at Baha Mar.
“Baha Mar anticipates hiring and training approximately 7,000 employees during this period,” Ingraham said. “It is also expected that a number of the Bahamian construction workers in a variety of trades will be interested in filling ongoing maintenance positions since they will be very familiar with the project’s mechanical, electrical and plumbing infrastructure.”
The training initiative is expected to continue after the resort opens.
The Baha Mar resolution is scheduled to be debated in the House of Assembly on Wednesday and Thursday of this week.
The prime minister confirmed that the project would likely be approved by the government by the end of November. Contracts for Bahamian firms could be issued as early as December, with work beginning in January 2011, Ingraham confirmed.
He added that it is likely to take CSCEC three months to mobilize. Construction on the hotel core could start by the second quarter of 2011, according to the prime minister.
Ingraham did not specify a number, but he said that as a result of the changes to the development, the number of Bahamians employed would increase by thousands.
The Progressive Liberal Party (PLP) issued a response last night to Ingraham’s statements on Baha Mar.
“If the PM's apparent big accomplishment from his trip to China was increasing Bahamian participation in the Baha Mar project from $200 million to $400 million, then he in essence admitted that his recent trip to China was futile, a failure and a waste of public funds,” said the PLP.
Though the $400 million allocation of work to subcontractors is a new component of the deal, the PLP said Bahamian participation “was always substantially greater than $200 million, so the PM broke no new ground on this.”
The opposition party also criticized Ingraham for not having reached agreement to reduce the number of foreign workers helping to build the resort.
“Notwithstanding the PM’s public pronouncement that he did not agree with the large number of work permits required for this project, the numbers he affirmed today remain at a maximum of 8,150 permits over the scope of the project,” said the PLP.
11/15/2010
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