Baha Mar Resolution Tabled In Parliament

Statement to Parliament on the Baha Mar Development by Prime Minister the Rt. Hon. Hubert Ingraham:

THE PRIME MINISTER: Mr. Speaker,

I rise to Table a Resolution meant to garner the position and sense of the representatives of the people on the proposed Resort development by Baha Mar at Cable Beach, New Providence and to ensure that the Bahamian people are fully informed on the requirements, consequences and benefits which are projected to result for The Bahamas if the development proceeds as now proposed by the principals.

The Baha Mar project is to comprise six hotels with approximately 3,500 rooms and condominiums, an approximately 100,000 square foot casino, 200,000 square feet of convention facilities, a twenty acre beach and pool experience, an 18-hole golf course and a 60,000 square-foot retail village and additional residential products.

The total value of the project is estimated at $2.5 billion. A contract for the amount of $1.918,965,693 billion has been negotiated with the China Construction Company as primary contractors for the project.

The Resolution results from the fact that the foreign labour component intended during the construction of the Resort exceeds levels ever experienced in The Bahamas and is beyond anything ever contemplated by my Government.

In the earliest of times in the development of the tourism sector in our country in the 1950s the law and the Government permitted as much as 25% of the labour force in construction and or operation of a tourism development resort to be foreign. The Hotels Encouragement Act 1954 permitted “for the admission into The Bahamas of key personnel and special workmen both during the construction period and operation of the new hotel, subject to the proviso that at all times seventy-five per centum of the total number of persons employed in the construction or operation of the new hotel shall be natives of The Bahamas if such natives of The Bahamas are available to perform the several and respective services required.”

While that provision remained in the law, following Majority Rule a move toward Bahamianization of the work force brought change.

Beginning in the 1980s the practice evolved where large foreign components were engaged in the construction of hotels, and a smaller number of foreigners were allowed to work in the hotel upon completion.

Honourable Members will recall the substantial foreign work force engaged to construct the Crystal Palace Resort and casino, today the Wyndham Crystal Palace Resort and the US Departure Terminal at the then Nassau International Airport. At those two projects Indian, Brazilian and other foreign nationals far out-numbered Bahamian nationals on the work force.

When my Government first came to office in 1992 we determined not to continue this practice of the former Government. When, in 1993 we agreed terms for the commencement of a Five Phase redevelopment and Expansion of Resort Properties on Paradise Island by Sun International (now Kerzner International) we established that notwithstanding the demonstrable need for the engagement of large numbers of expatriate experts and labour for the timely completion of the project, the ratio of Bahamians to non-Bahamians on the construction site would not exceed 30% foreign to 70% Bahamian, increasing on the required Bahamian component above the 1954 statutory base of 25%.

It is noteworthy that this ratio obtained during Two Phases of construction of the Kerzner International resorts under FNM administrations and was continued when Members Opposite most recently formed the Government during the Third Phase expansion of Kerzner International on Paradise Island. (70% Bahamian : 30% Foreign)

Members Opposite at the same time however, did not require an adherence to this accepted ratio of Bahamian to foreign workers in the construction of the Bimini Bay Resort at North Bimini. As a result foreign workers, principally from Mexico, far exceeded the number of Bahamian nationals engaged on that construction site in the middle of the last decade.

The Bahamas Government now has for consideration the construction of the Baha Mar Resort in Cable Beach. The terms of the funding obtained by the developers of the Resort include a requirement that the overwhelming majority, if not virtually all of the workers to be engaged on the “Core Project”, over the life of the project, be foreign workers - some 8,150 persons.

It is projected that some 1,200 Bahamians will be engaged in the construction of the non-Core project that is, the new West Bay Street, the new Commercial Village and the initial site preparation for the Core Project. More specifically these projects include:

• Construction of a new West Bay Street/Corridor including utilities with a value of $75 million

• Construction of a new Commercial Village at Cable Beach and related “back of house” on Gladstone Road with a value of $30 million

• Construction of free standing buildings including the golf clubhouse and buildings around the beach and pool area and retail village with a value of $20 million

• Major earthwork, irrigation and landscaping related to the construction of the new Golf Course with a value of $10 million.

I have been advised that the principals of Baha Mar are in discussion with their Chinese partners and financiers with a view to additionally, engaging Bahamian contractors in a number of “trade packages” related to the Core Project to include general site clearing and preparatory work, masonry, dry wall, ceilings, painting, electrical, mechanical, site security, fencing, beach restoration, remediation, and landscaping having a total estimated value of $40 million.

It is further expected that many of these jobs will carry over to continued employment in the “trade packages” for the Core Project I mentioned. This we are informed is expected to result in the engagement of 3,300 Bahamians at the height of construction of the Core Project.

Honourable Members are aware that the basic justification for permitting the engagement of foreign workers in The Bahamas has been the transfer of technology and of skills. This occurred, very measurably, during each phase of the Kerzner International developments on Paradise Island and is occurring now, at the first phase in the expansion of the Lynden Pindling International Airport.

Based on the numbers, in the case of the Baha Mar Project it is proposed that 71% of the work force will be foreign and 29% Bahamian. This represents a complete reversal of conditions imposed upon Kerzner, for example.

What must be determined is whether this invaluable benefit of skills transfer and improved exposure to new technologies can or will occur in a project where contact between Bahamians and foreign experts is likely to be limited.

I also believe that the Government has an obligation to explain to the Bahamian people other requirements of The Bahamas unrelated to labour issues which arise from this project. Principally this will involve the transfer of Government-owned and Crown Lands to the developers. Because of the conditions precedent set by Baha Mar’s financiers – China Import Export Bank and the China Construction Company – these lands are required to be transferred in advance of the start of construction of the project.

As you are aware, the Cable Beach Hotel, now the Sheraton was transferred to Baha Mar in 2005.

The Crystal Palace Resort and Casino, now the Wyndham Crystal palace, was acquired on leased land by Baha Mar in 2005. That hotel, like the Nassau Beach Hotel, is constructed on leased Crown Land.

Approval for the Baha Mar Project requires the transfer of the following publicly-owned land:

Wyndham Hotel & Casino Land - 13.450 acres

Nassau Beach Land - 7.546 acres

Hobby Horse Hall parcel - 70.964 acres

Fidelity Bank - .866 acre

Cecil Wallace-Whitfield Centre - 2.259 acres

Cable Beach Police Station - 1.377 acres

Old West Bay Street - 11.228 acres

New Corridor #7 - 1.610 acres Plus an additional parcel of .783 acre

Gladstone Road back of House - 50.00 acres

Prospect Ridge Parcel - 2.365 acres

Water and Sewerage Corporation - 99.782 acres Parcel

BEC Parcel - 2.570 acres

BEC Substation - .165 acres

TOTAL - 264.965 acres

It is the position of my Government that these lands will only be transferred for the expressed purpose of facilitating the development and that should the development not proceed the land must return to the Government.

Mr. Speaker,

I should also advise that a number of unresolved matters between Baha Mar and Scotia Bank relating to outstanding loans attached to the Baha Mar Project are being negotiated even now. It is expected that all outstanding matters will be resolved within the next two week period. Hence, it is proposed that we reserve our debate of the matter until these matters have been completed.

It would appear that the Wednesday 22nd or Thursday 23rd September may be an appropriate time for the debate.


THE RESOLUTION:

Mr. Speaker,

To be very explicit, so that the noise in the print and broadcast media to the effect that somebody is holding up this project can be put to rest – BahaMar cannot do the deal with the Chinese bank until it satisfies the ScotiaBank loan.

They are in discussions with ScotiaBank. The next meetings take place next week in Toronto. But there will be no deal unless Scotia’s loan is satisfied.

Secondly, there will be no deal unless the Government of The Bahamas and the Chinese Government exchange letters saying “we approve in The Bahamas’’, and we get from the Chinese Government at the same time in the next hand, “we approve here [China].”

They will go ‘hand go, hand come’ – at the same time and the same place.

RESOLUTION

WHEREAS the Government of the Commonwealth of The Bahamas (hereinafter called ‘the Government’) and Baha Mar Development Company Ltd., a company incorporated under the laws of the said Commonwealth (hereinafter called ‘BDC’), entered into a Heads of Agreement, dated the 6th day of April 2005, to develop a major resort in the Cable Beach area of the Western District of New Providence, one of the Islands of the said Commonwealth (hereinafter called ‘the Agreement’);

AND WHEREAS the Government, BDC and Baha Mar Joint Venture Holdings Ltd., an international business company incorporated under the laws of the said Commonwealth, entered into a Supplemental Heads of Agreement dated the 31st day of January 2008 (hereinafter called ‘the Supplemental Agreement’);

AND WHEREAS neither project contemplated under either the Agreement or Supplemental Agreement has materialised;

AND WHEREAS Baha Mar Ltd. (hereinafter called ‘Baha Mar’) now proposes to undertake a project comprising six hotels with approximately 3,500 rooms and condominiums, an approximately 100,000 square foot casino, 200,000 square feet of convention facilities, a twenty acre beach and pool experience, an 18-hole golf course and a 60,000 square-foot retail village and additional residential products (together hereinafter called ‘the Project’);

AND WHEREAS one of the conditions precedent to the Government performing its obligations under the Agreement and Supplemental Agreement is that Baha Mar shall provide the Government with satisfactory evidence of funding;

AND WHEREAS Baha Mar’s primary source of funding for the project will be obtained from The Export-Import Bank of China, and the primary contractor in respect of the Project will be CCA (Bahamas), Ltd., a subsidiary of China State Construction Engineering Corporation Limited;

AND WHEREAS The Export-Import Bank of China has agreed to make available to Baha Mar and or its subsidiaries a term loan facility in respect of the Project in an amount up to $2.45 billion;

AND WHEREAS a condition precedent for the disbursement of the loan facility by The Export-Import Bank of China is that Baha Mar must provide evidence to The Export-Import Bank of China of release of all Scotiabank existing security and financial indebtedness incurred by Baha Mar under or in relation to the Scotiabank existing facility;

AND WHEREAS completion of the Project on a highly accelerated schedule will necessitate substantial employment of non-Bahamian workers during construction;

AND WHEREAS Baha Mar has specified that the aggregate number of non-Bahamians required over the course of the construction phase is 8,150 with the peak number at any given time being 5,000 non-Bahamians as shown in Annex I;

AND WHEREAS CCA (Bahamas), Ltd., Baha Mar and its subcontractors will be required to cause all of the non-Bahamian workers on the Project to be repatriated from the Bahamas immediately following the completion of their respective work periods;

AND WHEREAS Baha Mar has indicated the job categories required for workers in the initial project phase and core project phase as shown in Annex II;

AND WHEREAS the Project, if undertaken as proposed, will have immense impact on the economy of The Bahamas creating approximately 3,000 construction jobs in addition to 7,000 new permanent jobs for Bahamians;

NOW THEREFORE BE IT RESOLVED that this House supports the Project and the issuance of work permits for up to 8,150 non-Bahamian construction workers with the number at any given time being not more than 5,000.


Bahamas Blog International

The Progressive Liberal Party (PLP) should do a memory check

The PLP should do a memory check
tribune242 editorial


WELL FOR Pete's sake look whose talking!

In yesterday's Tribune the PLP criticised the "inept" FNM government for allowing crime to spiral out of control.

The PLP also condemned the FNM for failing to conduct a salary review for judges as is required by the Judges Remuneration and Pensions Act. Have they forgotten the furore created during their administration in 2006 when Justice John Lyons accused the PLP government of causing a constitutional crisis and showing a "manifest disregard for the rule of law" by failing to conduct a review of justices' salaries -- the very same Judges Remuneration and Pensions Act of which they now complain?

At the time of the Lyons' accusation the country could have afforded such a review of salaries. However, in today's economic climate, such a salary review for judges or anyone else in the civil service would put too great a strain on the Public Treasury.

In a controversial ruling in that year, Justice Lyons claimed that the PLP government had deliberately ignored a law designed to protect the constitutional independence of "that body of persons whose task is to protect all persons in the Bahamas against abuses of their constitutional right.

"If this was a deliberate act by the Cabinet (the Christie Cabinet) then -- and there is no dull edge to this -- this must be considered a deliberate attack on the independence of the judiciary. And that, in turn, is an attack on the fundamental constitutional right enjoyed by all persons in this country," said Justice Lyons.

Some angry words were exchanged with Justice Lyons accusing then Attorney General Allyson Maynard Gibson of using her "swift justice" system as a "self-promoting" piece of headline hunting and Mrs Gibson counter attacking from the security of the House of Assembly to pour equal scorn on the judge in denouncing his assertions as "misleading."

The Bahamas Bar Association agreed with the judge that if judges had to rely on the discretion of politicians for salary increases, the impartiality of their judgments could be compromised.

"You are losing half of your judiciary in 12 months," Justice Lyons said in a speech to a financial group. He talked of the backlog of cases, of the length of time accused persons on remand had to wait in prison for a court date, of one judge having to do the work of five -- all the same complaints now facing Attorney General John Delaney, who was appointed to his post on November 25, 2009.

At the time even Court of Appeal President Dame Joan Sawyer sided with Justice Lyons, admitting that she had had "personal experience of the executive trying to manipulate the judiciary."

"When you destroy the public's faith in the independence of the judiciary, to which court do you take your case?" she wanted to know.

And in the Senate, Senator Delaney, criticised then Attorney General Maynard Gibson for using the House to launch her attack on Justice Lyons' integrity.

"While the current crisis may have started with the government failing (twice) in its legal obligations under the Judges Remuneration and Pensions Act, the assailing of the character of a sitting judge is a separate and most egregious act by our Attorney General," said Senator Delaney.

Surely, the PLP who made the statement to the press yesterday are not so ignorant of their own history that they would make themselves look so foolish in pubic print. Or maybe their arrogance is such that they believe that Bahamians, like themselves, also have weak mental recall.

They also criticised the FNM government for allowing crime to spiral out of control, forgetting that crime has no nationality, nor has it any politics. Crime started to spiral out of control in the eighties when drugs took control of this country. And everyone knows under whose administration that occurred when Bahamians were made to believe that wealth, however obtained, was the sign of success, and it was nobody's business "whether I make it or I 'tief it!"

They also complain about not bringing offenders to justice and allowing persons who intimidate witnesses to continue to roam our streets -- the very criticism that we have of our judiciary's generosity with bail.

They talk of the serious criminal cases pending. This accumulation of a backlog didn't start under the FNM. We are particularly concerned about the murder of one of our staff during that administration, a case that could have been brought to a quick conclusion because of the number of eyewitnesses. However, the accused in this case is one of those walking the streets on bail.

As for our assessment of the Bahamian judiciary as a colossal failure, we make no apologies. Nor should anyone assume that this conclusion was aimed solely at our judges. Our lawyers are the largest part of this judicial body. The examination of conscience should start within "the honourable profession."

Attorney General Delaney knows the problems -- an accumulation of years of mismanagement. He has pinpointed the areas in need of reform and started the process. Not only should he be given time, but he should be given the resources and personnel to do the job.

September 07, 2010

tribune242 editorial

Bahamas Blog International

The $2.6 billion Baha Mar development set to get approval

Baha Mar set to get approval
By ERICA WELLS
NG Managing Editor
ewells@nasguard.com:


The billion-dollar Baha Mar development looks set to get the approval of the Bahamian government.

As reported over the weekend inThe Nassau Guardian, Leader of Government Business in the House of Assembly Tommy Turnquest said it is a given that the governing side intends to support its Baha Mar labor resolution that will be debated in Parliament.

Opposition House Leader Obie Wilchcombe has also said that the PLP supports the deal, with several caveats.

The $2.6 billion Baha Mar deal, which is projected to pump millions and millions of dollars into the local economy, is sorely needed at this time of economic turmoil.

In fact, the most recent Central Bank of The Bahamas report said as much. In its monthly report for July, the bank indicated that "large-scale hotel investment projects" - such as Baha Mar and Atlantis'$100 million investment - could be key to The Bahamas not continuing in recession.

"Domestic economic conditions are expected to remain mild over the remaining months of 2010, although the outlook for 2011 is less certain than in prior months, due to mounting evidence of increased fragility in the U.S. growth momentum. This could dampen the short-to medium-term performance of the tourism sector, and the timing for a turnaround in domestic demand and an improvement in employment conditions,"said the report.

"However, upside benefits could accrue to the economy if the proposed large-scale hotel investment projects gain traction in the coming months."

While there is a general consensus that the $2 billion deal will provide the Bahamian economy with a much-needed infusion, it is the labor issue that has put a damper on the prospect of the project, and in some respects has become a political hot potato.

Baha Mar developers want to bring in 5,000-7,000 Chinese workers to help build the mega resort.

This proposal has been met with much skepticism and in some cases high emotion.

The Bahamian Contractors Association supports the project, but wants the government to make provision for the training of contractors and tradesmen to participate on the project, and the inclusion of the BCA as a focal point for training recruitment.

"If the assurances that the training and maximum utilization of Bahamian contractors are not put into place, we will undermine the industry as well as the Bahamian consumers and developers who have existing or proposed projects,"said the association in a position paper on the proposed project.

"The BCA feels that in conjunction with our association initiatives, government has the opportunity and authority to address this situation. With funding and technical expertise we can maximize significant Bahamian contractor participation through our training and certification programs and through discussion with stakeholders we can reach workable relationships."

The Progressive Liberal Party has laid out a similar case, at least when it comes to training.

Wilchcombe told The Guardian on Friday that the PLP supports the project, but several objectives must be met in order to maximize its benefits to the Bahamian people.

He said that Bahamians must be given opportunities; there must be job training to ensure locals can be employed in skilled areas; current workers at the company should be looked after; there should be a role for the national airline to assist with airlift; there should be consideration of the position of the taxi union; and it is essential that there be an investigation about the energy requirement to power such a large scale development.

The agreement on the Baha Mar development was announced in March. The project will be financed by the Export-Import Bank of China, while construction will be performed by China State Construction Engineering Corporation. At one point the project had been virtually given up on when Harrah's Entertainment, one of the original joint venture partners of the project pulled out in 2008.

It is being billed as an unprecedented resort development in The Bahamas that captures the true spirit of the island and the region.

The 1,000-acre Baha Mar project may start construction before the end of the year if given approval by the Bahamian government. The project has already received approval from the Chinese government. It is scheduled for completion in early 2014.

The project, according to developers, represents the largest single-phase hospitality investment in the Caribbean and a one-of-a-kind destination resort experience in its operation, range of top-shelf accommodations, services and amenities, and"true-to-The Bahamas setting and design".

The development definitely lives up to its description as"mega".

Plans for Baha Mar's first phase include approximately 3,000 rooms; a 100,000 square foot casino; two signature spas and a third world-class destination spa; and an 18-hole championship Jack Nicklaus Signature Golf Course; 200,000 square feet of meeting space; 3,000 feet of continuous beachfront; a 20-acre beach and pool experience; and a 35,000-square-foot retail village with upscale shopping, chef-branded restaurants, and entertainment venues.

A report by the Oxford Economics company set out some of the key economic benefits of Baha Mar, including, 6,500 Bahamians directly employed by Baha Mar by 2014; a further 2,000 jobs indirectly created by the project, totalling 8,500; $5.5 billion in direct wages going straight into the pockets of Bahamian families; a further $1.5 billion in salaries for those indirectly employed; a $14.8 billion contribution to The Bahamas'GDP; $24.5 billion extra in visitor spending over a 20-year period, and; an extra $6.2 billion in government revenues over 25 years.

If approved, this project represents a massive boost to the country's struggling economy. It also represents a delicate balancing act.

According to the Baha Mar project management team, Phase one involves the construction of the commercial village and road re-alignment, which is slated to be awarded to Bahamian contractors and is valued at around $60 million.

Beyond the first phase of construction, the BCA in its position paper accepts that there is a limited pool of skilled construction worker resources in the country, and at any given time the majority of these workers or tradesmen are normally employed by practicing Bahamian contractors.

The BCA says it is primarily concerned with three issues: That the country does not have 4,000 skilled and non-skilled workers ready to participate on the Baha Mar or any project in The Bahamas; the standards which are being used to validate the number of skilled Bahamian workers; and if the requisite number of workers can be trained in time to meet the requirements of the project.

"No one definitively knows how many skilled construction workers are currently in the field. One critical component of this scenario is that if Baha Mar is permitted to hire workers from the existing pool, they will in effect be depleting the pool of skilled workers that Bahamian contractors have paid to train and have kept employed all year round,"says the association.

"Obviously, with a project the size of Baha Mar, in a very short time the skilled and non-skilled workforce will be depleted from the local sector leaving small, medium and large contractors alike with little to no labor resources for the duration of the Baha Mar project."

The BCA fears that this dynamic will have a particularly dramatic and negative impact on the small contractor who may employ only a few workers."When he(or she)loses those workers to Baha Mar, it will possibly cripple this important segment of our industry."

"Since we are pinning our economic recovery hopes not eh turnaround that will be created, it is imperative that we protect and nurture the independent small business growth potential,"says the association.

The BCA is also asking about the possibility of importing other nationalities for labor requirements to the project. According to the BCA, indications are that European, Indian and Mexican contractors, sub-contractors and tradesmen may supplement the Chinese component, particularly in some of the specialty trades.

It is unclear exactly when the Baha Mar resolution will be debated in Parliament and when the project will receive final approval from the Bahamian government.

The Guardian understands that there is a major hurdle preventing that approval from being handed down. It's the debate over the payment of an outstanding loan the company has with Scotiabank, worth around $160 million. It is unclear how long it will take the bank and developers to come to an agreement.

It is understood that Baha Mar has offered the bank, and its partners, a combination of cash and equity in the Cable Beach project, but so far Scotiabank has not accepted.

Bahamians eagerly await the outcome of the proposal that some have said always seemed almost too good to be true.

9/4/2010

thenassauguardian

Bahamas Blog International

Bahamian Contractors' Association fears inadequate funding for a national training programme to certify Bahamian construction workers for jobs on the Baha Mar project

Funding fears over Baha Mar construction training
By TANEKA THOMPSON
Tribune Staff Reporter
tthompson@tribunemedia.net:



THE Bahamian Contractors' Association fears that a national training programme needed to certify construction workers for employment on the Baha Mar development will be impeded by inadequate funding.

The organisation is calling for a tangible commitment from the developers before work begins on the $2.6 billion Cable Beach redevelopment to fund the training programme - a joint venture of the association and trade school BTVI.

"While they (Baha Mar) appear to be genuinely interested in both the short and long term success of the project and the country, they have informed us that presently there is no funding allocated for any training of construction personnel," according to the BCA's position paper on the project, which was recently given to government and the developers.

"We find the fact that a $2.6 billion project is proceeding with no training programme, or responsibility for one, incomprehensible. They have assured us that under their Heads of Agreement (with the government) there is apparently no stipulation for this critical and necessary component," said the BCA, in part.

As a non-profit organisation that operates primarily on membership dues, the BCA cannot fund the initiative at BTVI, an institution that relies on government subsidies. So far, nearly 500 tradesmen and contractors have registered for enrolment at BTVI's training programme.

"One of the possibilities we have discussed with Baha Mar is collecting a percentage of every contract awarded to be allocated for the training of Bahamian workers."

The Baha Mar project has yet to be formally approved by government. A labour resolution on the thousands of work permits the developers are seeking in Chinese labour will be brought to Parliament next week.

The peak period for Baha Mar's construction is between month 24 and month 36 of the project, and at that time there also will be more than 2,500 Bahamian construction workers employed.

Total employment at the peak of the project will be close to 7,500 foreign and Bahamian workers. The China Export-Import Bank and China State Construction are Baha Mar's financing and equity/project manager partners.

September 04, 2010

tribune242

Bahamas Blog International

Bahamas' recession woes are 'not close to being over by any stretch of imagination' - due to the nation's dependence on external forces that are themselves struggling

Recovery prospects 'nil' over short-term
By NEIL HARTNELL
Tribune Business Editor



The Bahamian economy's short-term recovery prospects are "nil", the Bahamas Chamber of Commerce's president warned yesterday, warning that the recession was "not close to being over by any stretch of the imagination" due to this nation's dependence on external forces that are themselves struggling.

Khaalis Rolle said the Bahamas' economic model made it almost totally dependent on foreign direct investment (FDI) inflows and US tourist visitor/spending levels to drive recovery, and both were under increasing threat from the possibility of a 'double dip' recession in North America and elsewhere, with the next three-six months being key.

"The prospects for recovery in the short-term are nil," Mr Rolle told Tribune Business. "Mr prediction has always been for stability over the next 24-36 months, and then we will see an improved level of confidence come back."

Adding that economic recovery "isn't automatic", the Chamber president said: "If follows the typical economic model, and under that model, when we're totally reliant on the consumer from the US to come here as a tourist and spend money, you're not going to recover."

A rebound would only be possible, Mr Rolle said, if there was an immediate upsurge in US business and consumer confidence, and a reduction in that country's employment numbers, something that was unlikely given the seeming possibility of a 'double dip' US recession.

Foreign

"Secondly, the Bahamian model of economic activity is completely and utterly built on foreign direct investment, and if foreign direct investment is at a standstill, everything else is at a standstill," he told Tribune Business.

"We have a ways to go. It's not, by any stretch of the imagination, close to being over. We have some challenges." US economic policy over the next three to six months, Mr Rolle said, was likely to determine whether it, and by extension the Bahamas, went "deeper into recession".

He was backed yesterday by his predecessor as Chamber of Commerce chairman, Dionisio D'Aguilar, who told Tribune Business that while many Bahamian businesses had "bottomed out" and settled into their "new normal", there was little for the private sector and consumers to get excited about in terms of recovery prospects.

"I think most businesses have settled where they are going to settle," Mr D'Aguilar said. "Most businesses have completed their decline and have bottomed out, and I think this is the new normal.

"Businesses are going to have to fight to get any substantial double digit growth in revenue.

"Indeed, if there's any growth at all it will be in the 1-3 per cent range. I don't see anything on the horizon to get us terribly excited.

"Ray Winder summed it up wonderfully [in yesterday's Tribune Business] in that the only item that will cause an uptick is foreign direct investment. There is nothing else out there."

Both current and former Chamber presidents thus agreed with Mr Winder and the Central Bank of the Bahamas, as each expressed growing concern yesterday over the prospects for a Bahamian economic recovery occurring in 2011. Mr Winder even suggested that without a major foreign direct investment rebound, a recovery in this nation may not be seen until 2012 at earliest.

The private sector's weakness was highlighted by the Central Bank's report on monthly economic and financial developments in July, as some 27 per cent of all commercial loans to Bahamian businesses and firms were said to be in arrears.

The Bahamian commercial banking system has an estimated $1 billion in outstanding credit to Bahamian companies, and the Central Bank reported that commercial delinquencies increased by $2.1 million to $270.6 million in July, as a $1.4 million decrease in short-term arrears was outweighed by a $3.5 million increase in non-performing loans.

Mr Rolle acknowledged that some companies with overdue loans were likely to go out of business, although those with greater strength might have the ability to refinance at more favourable rates and obtain some "breathing space".

Describing the private sector's health, Mr Rolle told Tribune Business: "I think the current state is tenuous at best, especially small and medium-sized businesses and businesses that rely on services. I know a lot of service businesses are being impacted. Companies in property management, facilities management, janitorial services, who are cutting back. We've got some challenges."

September 03, 2010

tribune242

Bahamas Blog International

The National Congress of Trade Unions of The Bahamas (NCTUB) endorses the multi-billion dollar Baha Mar project

UNIONS ENDORSE BAHA MAR
By KRYSTEL ROLLE
Guardian Staff Reporter
krystel@nasguard.com:



Reversing its stance on the controversial Chinese labor issue surrounding the multi-billion dollar Baha Mar project, the National Congress of Trade Unions of The Bahamas(NCTUB)yesterday endorsed the project, saying the benefits outweigh any difficulties the union had.

Initially NCTUB threatened to hold massive demonstrations if the government approved Baha Mar's bid to bring in approximately 5,000 Chinese workers the mega resort says it needs during the project's construction phase.

However, during a news conference yesterday, NCTUB President John Pinder acknowledged that The Bahamas does not have the capacity nor the skill set to construct the project without the help of foreign aid.

"After further consultations with Baha Mar officials we got all of the concerns we had addressed and we're satisfied that this project is in the best interest of this country,"he said during the news conference which was held at the Bahamas Public Service Union headquarters on Wulff Road."We are further satisfied that we do not have the skill set to do this project all on our own."

Pinder said the issue with work permits can be a serious revenue generator for the government.

"It's proposed that Baha mar may ask for as much as 5,000 work permits, but at no time will there be 5,000 Chinese workers,"Pinder said."We are told that they will maximize the use of Bahamian workers qualified to work on this project and the semi-skilled persons. We have asked that these positions be made known to us so persons could apply for various positions."

"Work permits will cost Baha Mar an average of$5,000 per work permit... we believe this is a golden opportunity for the government to raise some revenue to be able to ensure that unions are able to get some sort of increase for our membership,"he continued.

The union also hopes that the government would consider using a percentage of the $5 million it stands to bring in from work permit fees to expand and redevelop the Bahamas Technical and Vocational Institute(BTVI).

Pinder said the key to the union's endorsement was the assurance by Baha Mar officials that Bahamian workers will receive first preference during and after the construction, and that Baha Mar will train Bahamians in some of the more modern techniques that are currently not widely used in the country.

NCTUB Assistant General Secretary Jennifer Isaacs-Dotson said the union in conjunction with the Ministry of Education, BTVI and The College of The Bahamas would ensure that workers receive on-the-job-training.

She said the union would be working closely with Baha Mar personnel to hack out the details of the training exercise.

"Our main job is to ensure that workers receive cross training. This is a good opportunity to train our workers,"Dotson said."Every time a large project comes, we say we don't have the skilled workers. I think it's now time to put our money where our mouth is."

Dotson added that the union's initial concerns also had to do with the lack of consultation both the previous Christie administration and the current Ingraham administration had with the union on the project.

"We need to be involved more at the ground level,"she said, adding that the union will be present on the day the government brings the issue to Parliament.

Leader of Government Business in the House of Assembly Tommy Turnquest confirmed that the Ingraham administration intends to bring the labor resolution to Parliament on September 8. Turnquest said the MPs would be allowed to express their views on the labor issue before the government makes a final determination.

If a majority of MPs take issue with that component, he said the government would have to take that into consideration prior to making its decision.

Pinder said the union is hoping that the government and the official opposition will give the necessary approval for the project.

Turnquest said publicly that at the height of construction Baha Mar could have up to 8,000 foreign workers on the project.

Dotson said it would also be the union's job to protect the rights of the Chinese workers. Yesterday the union pledged to make every effort to do that if the work permits are granted.

Baha Mar has said that out of the 10,000 proposed construction jobs the project will create, at least 3,300 will be set aside for Bahamians. Eight thousand permanent jobs are also projected once the resort is completed.

The proposed Cable Beach development would be financed by the Export-Import Bank of China and constructed by the China State Construction Engineering Corporation.

If the project receives Bahamas government approval, Baha Mar's first course of action would be to award nearly$60 million of construction contracts to six Bahamian contractors, representing early infrastructure works needed to prepare the site, Baha Mar's Chairman and Chief Executive Officer Sarkis Izmirlian said in a press statement last month.

9/2/2010

thenassauguardian

Bahamas Blog International

BPC Shares tumbled after the surprise announcement that the government was suspending consideration of exploration licences in The Bahamas

Govt's "no to oil" shock hits BPC shares
By SCOTT ARMSTRONG
Guardian Business Editor
scott@nasguard.com
twitter.com/guardianbiz:



Shares in the company dedicated to drilling for oil in The Bahamas have tumbled after the surprise announcement that the government was suspending consideration of exploration licences.

BPC was due tomorrow to change its name to Bahamas Petroleum Company, and had expressed its desire to be listed on the BISX so that shares in the company could be sold domestically. BPC believes there could be as much as$12 billion in oil revenue underneath Bahamian waters waiting to be brought up, specifically in the area called Cay Sal Bank.

The company estimates that an oil industry could create around 15,000 jobs for The Bahamas, and to that end teamed up with Norwegian oil giant Statoil, insisting their partner had created the highest safety standard in the world for drilling, one which every other exploration would soon be forced to follow in the wake of the Gulf of Mexico spill.

But despite the assurance that The Bahamas had the'safest'company on board, the Minister for the Environment Dr. Earl Deveaux yesterday put on hold the exploration licence process, saying the government wanted to make sure it had a stringent set of environmental rules in place before it considered applications, and added it would also review all existing licences.

In the wake of that announcement shares in BPC, which owns five exploration licences in Bahamian waters to the east of Florida and Cuba, fell by 27 percent from 4.08 pence to 2.98 pence on the London Stock Exchange's Alternative Investment Market(AIM).

That took the estimated value of the company from$45 million to$39.4 million.

The move by The Bahamas follows the U.S. issue of a six-month ban on deepwater drilling in the Gulf of Mexico in July, after the explosion of a BP well caused the world's worst offshore oil accident.

BPC is reported to have said it would continue to analyse seismic data on its existing licences as it has not yet established a definitive drilling program.

A report on Reuters quoted the company as saying that drilling on BPC's Bahamian acreage did not face the same geological risks as those found in the Gulf of Mexico.

A spokesperson for Statoil told Reuters said the company was viewing the suspension as a"postponement".

BPC believes there could be multiple 500 million barrel fields in the 2.5 million acres it wants to explore.

Deveaux said yesterday: "The Ministry of the Environment has suspended consideration of all applications for oil exploration and drilling in the waters of The Bahamas. The ministry seeks, by this decision, to maintain and safeguard an unpolluted marine environment for The Bahamas notwithstanding the potential financial benefits of oil exploration.

"We are not seeking to interfere with any existing licenses and the people who have licenses know of the policy. The recent events showed us that(a)oil if it is to be found, will likely be in the marine environment and(b)we want to maintain an unpolluted environment.

"And so before we explore for oil we want to have the most stringent environmental protocols in place."

9/1/2010

thenassauguardian

Bahamas Blog International