We Have No Choice?
by Simon
The House of Assembly debated a resolution on the Baha Mar deal recently. Unfortunately for the Perry Christie-led PLP, it has already lost the broader national debate on the proposed mega project.
This includes a haemorrhaging of goodwill from the PLP by many professionals and even many within the party who are flabbergasted and frustrated by Mr. Christie’s dissembling and series of incoherent statements on Baha Mar since its inception. Curiously, part of the story concerns – the BlackBerry.
Some weeks ago, Mr. Christie attempted to mock the Prime Minister for regularly checking his BlackBerry at a dinner attended by both leaders. Mr. Ingraham was monitoring any news of a settlement between Baha Mar and Scotiabank on an outstanding loan between the two entities.
The story reveals the essential differences between Messrs. Ingraham and Christie. Hubert Ingraham is a part of the Smartphone generation while his former law partner is a throwback to a bygone era, wedded to a model of economic development that is being assigned to the proverbial ash heap of history.
Mr. Ingraham’s use of the BlackBerry represents a forward-looking, tech-savvy style of leadership marked by a hands-on approach, timeliness and engagement. This is in marked contrast to Mr. Christie’s cavalier, late-again and disengaged style. The device that perhaps best represents his decision-making style is the telegraph, which in today’s world would be slow-moving, clunky and out-of-date.
But, the more defining difference between the men was revealed in one of the more shocking statements ever made by a Bahamian leader on a project as large and as involved as Baha Mar.
WE HAVE NO CHOICE?
On the eve of Mr. Ingraham’s departure for China, the Leader of the Opposition counselled the Prime Minister to take the Baha Mar deal as it was. His reckless advice: We have no choice! We have no choice?
One would have expected this to be the view of officials at Baha Mar, not of a former Prime Minister. Life is filled with choices, even in the most difficult circumstances.
It is clear that Mr. Christie would have headed to China on bended knee, as an agent for Baha Mar, representing narrow special interests rather than the broader Bahamian national interest.
Mr. Christie’s view that the country had no choice but to accept the Baha Mar deal as is, is the clearest insight yet into why he essentially gave away Bahamian treasure and land at Cable Beach which no Bahamian leader from the UBP, PLP or FNM ever did.
It explains the Great Mayaguana Land Give-Away in which beachfront property equivalent of the distance from the eastern end of New Providence to Lyford Cay was alienated to foreign interests.
It reveals why his party’s land policy has been disastrous for The Bahamas and why his talk of Bahamianization is mostly talk. It further demonstrates why Mr. Christie and the PLP are content to sell cheaply our national ambitions and dreams to foreign interests, often to the cheapest bidder, rather than genuinely empower Bahamians.
Thankfully, Mr. Ingraham disregarded Mr. Christie’s monstrously bad advice in his negotiations with the Chinese. He did so because he knows that The Bahamas indeed has a choice, indeed a number of choices, as we slowly recover from a global economic crisis.
HEAD-TO-HEAD
Rather than bended-knee, Mr. Ingraham went head-to-head with Chinese officials. Whereas Mr. Christie felt there was no choice than to accept $200 million dollars worth of contracts for Bahamians, Mr. Ingraham got that number doubled to $400 million. Those contracts will now include work on the Core Project which was not in the original deal.
In his Sunday press conference Mr. Ingraham noted that contracts will be awarded to large, medium, small scale and individual contractors. This is broad economic empowerment in fact, rather than just in talk.
Mr. Ingraham insisted on and got a sizable expansion of training opportunities for Bahamian workers and professionals. This dovetails with his administration’s revamping of the Bahamas Technical and Vocational Institute under revised legislation passed this year. It may also build on the National Retraining initiative launched last year.
The Prime Minister also suggested that there may have been some movement on phasing in the number of rooms at Baha Mar over a designated period of time.
Whatever the final outcome on this matter, it is clear that Mr. Ingraham went to China to negotiate a better deal for the country, as opposed to Mr. Christie who it appears may have gone simply for a signing ceremony and pomp in circumstances that would not have been as advantageous to The Bahamas.
WATERSHED
As noted previously in this column, the Baha Mar deal has been a watershed in terms of the vision and quality of governance demonstrated by Mr. Ingraham and the FNM in stark contrast to that of Mr. Christie and the PLP.
It must be a source of considerable angst for the latter, that the project they initiated has been re-negotiated on better terms and will be launched by an Ingraham-led FNM Government. History eclipses those who are irresolute, procrastinating and dithering when decisiveness is required.
The Bahamas deserves better than political, business or civic leaders telling us that we have no choice in charting our national destiny, despite the rough seas we are facing. This is the talk of those who are dragged along hopelessly by the stream events, rather than tacking and turning to navigate those events to one’s better advantage.
On Baha Mar and other foreign investment projects, Mr. Christie has shown that he is mastered and sidelined by events. Through painstaking negotiations Mr. Ingraham has shown that he knows how to shape events, even when presented with as problematic a deal as the initial one placed on the table by Baha Mar.
Mr. Christie’s declaration that the country had no choice on Baha Mar proved stunningly incorrect. It will prove to be one of the more disastrous pronouncements he has made in his long political career. It is a mistake the Bahamian people will clearly take into account as they make their choice at the next general election.
bahamapundit
A political blog about Bahamian politics in The Bahamas, Bahamian Politicans - and the entire Bahamas political lot. Bahamian Blogger Dennis Dames keeps you updated on the political news and views throughout the islands of The Bahamas without fear or favor. Bahamian Politicians and the Bahamian Political Arena: Updates one Post at a time on Bahamas Politics and Bahamas Politicans; and their local, regional and international policies and perspectives.
Showing posts with label Baha Mar deal. Show all posts
Showing posts with label Baha Mar deal. Show all posts
Monday, December 6, 2010
Sunday, November 28, 2010
The history of the Baha Mar project
The history of the 1,000 acre Baha Mar project
BY LARRY SMITH
AFTER years of manoeuvering over the 1,000-acre Baha Mar project on Cable Beach, the Ingraham government (in its own words) has finally made sweet lemonade from the sour fruit left on the table by the Christie administration.
In April 2005 the newly formed Baha Mar Development Company (owned by a Lyford Cay-based property developer named Sarkis Izmirlian) bought three aging hotels on the Cable Beach strip with a $200 million loan from the Bank of Nova Scotia. The venerable Nassau Beach was subsequently closed, while the Crystal Palace and Cable Beach Hotels were renovated and re-branded.
That same year Baha Mar concluded an agreement with the Christie administration for a $1 billion-plus development, including several hotels, a casino, retail village, convention centre, expanded golf course, and beach and pool amenities. Ironically, had the project got underway when it was supposed to, it would have opened in the midst of the Great Recession - with potentially devastating consequences.
Side agreements to the 2005 agreement included deferred taxes that could later be paid in instalments, a $20 million marketing contribution from the Ministry of Tourism, and a commitment to upgrade the airport and other infrastructure.
There was also an agreement to transfer to the developer hundreds of acres of both Crown and government land on Cable Beach worth an estimated $150 million.
However, Baha Mar proved unable to raise $400 million in capital, show evidence of further financing, produce detailed plans, or attract world class partners by the agreement's stated deadline of October 2006.
With an election approaching, the Christie government scrambled to revive the project. And by early 2007 it had been reorganised as a joint venture with Harrah's Entertainment. The planned capital spent more than doubled to $2.6 billion (along with more than a quarter billion dollars in government concessions) and promoters were hailing the project as unprecedented in scope and character.
The revised project included a larger casino, double the meeting room space, and 1200 more hotel rooms.
But despite "vigorous negotiations" a deal could not be finalised before May 2007. And when the electoral dust had settled, Perry Christie was replaced as prime minister by Hubert Ingraham, who immediately launched a review of the project.
Although the new government eventually decided it would abide by the 2005 terms, Baha Mar insisted on further negotiations, according to the prime minister. And by February 2008 he unveiled a supplemental Heads of Agreement that trimmed some of the concessions given three years earlier.
"There is high expectation by the Bahamian public about the Baha Mar project," Ingraham acknowledged in March, 2008 during passage of a parliamentary resolution to authorise the transfer of public lands to the developer. "We will do all we can to facilitate it, but I do not want to oversell it."
March 2009 was the new deadline set for the government's conditions to be met so that the deal could be finalised. But long before that could happen, Harrah's got cold feet due to the economic downturn and pulled out of the partnership, putting the whole project in jeopardy. Unable to obtain regular financing in the capital markets, Baha Mar turned to the cash-rich Chinese government to save the development.
Earlier this year, China's Export-Import Bank agreed to arrange $2.5 billion in financing, and Beijing's state-owned construction corporation signed on to build the project, which will feature six hotels and add 3,500 hotel rooms and condos to the country's current inventory of 15,000 - more than half of which in Nassau.
Following the prime minister's recent trip to China to firm up the details of the construction arrangements, the House of Assembly unanimously passed a government-sponsored resolution to approve the project, including the unprecedented issuance of up to 8,150 work permits for non-Bahamian construction workers.
After talks with the Chinese, Ingraham was able to announce that he had doubled the share of business for Bahamian subcontractors, with more than construction 4,000 jobs now on offer, and that some $8 million would be spent on training programmes for Bahamian workers.
"We put down some benchmarks, like the $400 million in Bahamian contracts, and said if they accepted our terms we would approve the project by the end of November," the prime minister told me.
"We always disclose the terms of deals - not like the PLP when they signed the 2005 Baha Mar Heads of Agreement with a confidentiality clause, and contemporaneously issued side letters containing larger exemptions from taxes and committing even more public money in violation of the (phase three) deal they had agreed with Kerzner two years earlier."
In fact, this last point has proven to be the only remaining fly in the Cable Beach lemonade.
The prime minister does not accept that the current Baha Mar deal violates the guarantees to Atlantis developer Sol Kerzner that no subsequent investor would get more favourable terms. Kerzner's complaint focused on the ratio of Bahamian to non-Bahamian construction workers, presumably because Baha Mar will benefit from a cheaper, more skilled, and more productive labour force.
"Among the many requirements that the government imposed (on us) was a strict rule that at least 70 per cent of the total construction labour force would be Bahamian. However, this new (Baha Mar) deal will constitute a complete reversal of (that) standard," Kerzner said angrily.
The prime minister's response is that "the government will review Kerzner's claim and seek to resolve all issues."
The question of whether the Bahamas can accommodate thousands of new hotel rooms opening at the same time is another issue for Atlantis.
"The reason is that the tourism infrastructure needs to catch up to additional demand.
"Airlift is not going to grow and develop in one day just because another 3,000 luxury rooms are opened. And I think that is very critical...and not easily done," Managing Director George Markantonis told The Tribune recently.
The Baha Mar project will get underway before the end of this year, with contracts awarded to Bahamian firms. The China State Construction & Engineering Company should begin work by the spring, and the project could be substantially completed by 2014.
In response to market concerns, Baha Mar has agreed to stagger the opening of the new hotels over a five-month period stretching into 2015, and close the Crystal Palace Hotel during renovations.
According to the Chinese, the project relies on being developed, marketed and operated as a single phase "to induce demand that would not otherwise exist for a series of standalone hotels."
They point out that the Hyatt, Morgan's and Rosewood hotel companies are investing $62 million of their own money into the project, and note that the airport will be redeveloped by the time Baha Mar opens. Expectations are that the tourism market will have rebounded by then.
Another issue that has received somewhat less attention in the media is the provision of water and power for such a massive project being built and brought on stream at one time. As we all know, these commodities are relatively scarce on New Providence these days, and there are fears that our infrastructure will be further strained in the short-term.
In fact, BEC will need to generate an additional 25 megawatts of electricity to accommodate the projected power demand for Baha Mar.
And the developer is supposed to cover the cost of a new BEC substation, as well as build a central sewerage system, and a reverse osmosis plant for potable water.
Although there was understandable shock and dismay when Baha Mar's requirement for such a large foreign labour component first became known, public opinion seems to have quickly moved to accept the inevitable - no doubt fully motivated by the recession.
For example, in June of this year the PLP said it would not involve itself in the decision to allow thousands of Chinese workers into the country and seemed determined to let the government twist in the wind. But only two months later they were singing a different tune, based on the state of the economy.
And from the sense of jubilation conveyed by the government since the Baha Mar deal was approved, it seems that the studied scepticism of the past few years was aimed not only at getting the best deal possible in a difficult environment, but also at drawing the opposition into a full embrace of the project's current framework in order to minimize the obvious political risks.
As one well-connected insider told me: "I'm sure there was some political thinking involved, but for the most part it was to get a doable deal."
What do you think?
Send comments to
larry@tribunemedia.net
Or visit www.bahamapundit.com
November 24, 2010
tribune242
BY LARRY SMITH
AFTER years of manoeuvering over the 1,000-acre Baha Mar project on Cable Beach, the Ingraham government (in its own words) has finally made sweet lemonade from the sour fruit left on the table by the Christie administration.
In April 2005 the newly formed Baha Mar Development Company (owned by a Lyford Cay-based property developer named Sarkis Izmirlian) bought three aging hotels on the Cable Beach strip with a $200 million loan from the Bank of Nova Scotia. The venerable Nassau Beach was subsequently closed, while the Crystal Palace and Cable Beach Hotels were renovated and re-branded.
That same year Baha Mar concluded an agreement with the Christie administration for a $1 billion-plus development, including several hotels, a casino, retail village, convention centre, expanded golf course, and beach and pool amenities. Ironically, had the project got underway when it was supposed to, it would have opened in the midst of the Great Recession - with potentially devastating consequences.
Side agreements to the 2005 agreement included deferred taxes that could later be paid in instalments, a $20 million marketing contribution from the Ministry of Tourism, and a commitment to upgrade the airport and other infrastructure.
There was also an agreement to transfer to the developer hundreds of acres of both Crown and government land on Cable Beach worth an estimated $150 million.
However, Baha Mar proved unable to raise $400 million in capital, show evidence of further financing, produce detailed plans, or attract world class partners by the agreement's stated deadline of October 2006.
With an election approaching, the Christie government scrambled to revive the project. And by early 2007 it had been reorganised as a joint venture with Harrah's Entertainment. The planned capital spent more than doubled to $2.6 billion (along with more than a quarter billion dollars in government concessions) and promoters were hailing the project as unprecedented in scope and character.
The revised project included a larger casino, double the meeting room space, and 1200 more hotel rooms.
But despite "vigorous negotiations" a deal could not be finalised before May 2007. And when the electoral dust had settled, Perry Christie was replaced as prime minister by Hubert Ingraham, who immediately launched a review of the project.
Although the new government eventually decided it would abide by the 2005 terms, Baha Mar insisted on further negotiations, according to the prime minister. And by February 2008 he unveiled a supplemental Heads of Agreement that trimmed some of the concessions given three years earlier.
"There is high expectation by the Bahamian public about the Baha Mar project," Ingraham acknowledged in March, 2008 during passage of a parliamentary resolution to authorise the transfer of public lands to the developer. "We will do all we can to facilitate it, but I do not want to oversell it."
March 2009 was the new deadline set for the government's conditions to be met so that the deal could be finalised. But long before that could happen, Harrah's got cold feet due to the economic downturn and pulled out of the partnership, putting the whole project in jeopardy. Unable to obtain regular financing in the capital markets, Baha Mar turned to the cash-rich Chinese government to save the development.
Earlier this year, China's Export-Import Bank agreed to arrange $2.5 billion in financing, and Beijing's state-owned construction corporation signed on to build the project, which will feature six hotels and add 3,500 hotel rooms and condos to the country's current inventory of 15,000 - more than half of which in Nassau.
Following the prime minister's recent trip to China to firm up the details of the construction arrangements, the House of Assembly unanimously passed a government-sponsored resolution to approve the project, including the unprecedented issuance of up to 8,150 work permits for non-Bahamian construction workers.
After talks with the Chinese, Ingraham was able to announce that he had doubled the share of business for Bahamian subcontractors, with more than construction 4,000 jobs now on offer, and that some $8 million would be spent on training programmes for Bahamian workers.
"We put down some benchmarks, like the $400 million in Bahamian contracts, and said if they accepted our terms we would approve the project by the end of November," the prime minister told me.
"We always disclose the terms of deals - not like the PLP when they signed the 2005 Baha Mar Heads of Agreement with a confidentiality clause, and contemporaneously issued side letters containing larger exemptions from taxes and committing even more public money in violation of the (phase three) deal they had agreed with Kerzner two years earlier."
In fact, this last point has proven to be the only remaining fly in the Cable Beach lemonade.
The prime minister does not accept that the current Baha Mar deal violates the guarantees to Atlantis developer Sol Kerzner that no subsequent investor would get more favourable terms. Kerzner's complaint focused on the ratio of Bahamian to non-Bahamian construction workers, presumably because Baha Mar will benefit from a cheaper, more skilled, and more productive labour force.
"Among the many requirements that the government imposed (on us) was a strict rule that at least 70 per cent of the total construction labour force would be Bahamian. However, this new (Baha Mar) deal will constitute a complete reversal of (that) standard," Kerzner said angrily.
The prime minister's response is that "the government will review Kerzner's claim and seek to resolve all issues."
The question of whether the Bahamas can accommodate thousands of new hotel rooms opening at the same time is another issue for Atlantis.
"The reason is that the tourism infrastructure needs to catch up to additional demand.
"Airlift is not going to grow and develop in one day just because another 3,000 luxury rooms are opened. And I think that is very critical...and not easily done," Managing Director George Markantonis told The Tribune recently.
The Baha Mar project will get underway before the end of this year, with contracts awarded to Bahamian firms. The China State Construction & Engineering Company should begin work by the spring, and the project could be substantially completed by 2014.
In response to market concerns, Baha Mar has agreed to stagger the opening of the new hotels over a five-month period stretching into 2015, and close the Crystal Palace Hotel during renovations.
According to the Chinese, the project relies on being developed, marketed and operated as a single phase "to induce demand that would not otherwise exist for a series of standalone hotels."
They point out that the Hyatt, Morgan's and Rosewood hotel companies are investing $62 million of their own money into the project, and note that the airport will be redeveloped by the time Baha Mar opens. Expectations are that the tourism market will have rebounded by then.
Another issue that has received somewhat less attention in the media is the provision of water and power for such a massive project being built and brought on stream at one time. As we all know, these commodities are relatively scarce on New Providence these days, and there are fears that our infrastructure will be further strained in the short-term.
In fact, BEC will need to generate an additional 25 megawatts of electricity to accommodate the projected power demand for Baha Mar.
And the developer is supposed to cover the cost of a new BEC substation, as well as build a central sewerage system, and a reverse osmosis plant for potable water.
Although there was understandable shock and dismay when Baha Mar's requirement for such a large foreign labour component first became known, public opinion seems to have quickly moved to accept the inevitable - no doubt fully motivated by the recession.
For example, in June of this year the PLP said it would not involve itself in the decision to allow thousands of Chinese workers into the country and seemed determined to let the government twist in the wind. But only two months later they were singing a different tune, based on the state of the economy.
And from the sense of jubilation conveyed by the government since the Baha Mar deal was approved, it seems that the studied scepticism of the past few years was aimed not only at getting the best deal possible in a difficult environment, but also at drawing the opposition into a full embrace of the project's current framework in order to minimize the obvious political risks.
As one well-connected insider told me: "I'm sure there was some political thinking involved, but for the most part it was to get a doable deal."
What do you think?
Send comments to
larry@tribunemedia.net
Or visit www.bahamapundit.com
November 24, 2010
tribune242
Monday, November 22, 2010
Sir Sol Kerzner and the Baha Mar deal
Kerzner's concerns on Baha Mar project
By PAUL G TURNQUEST
Tribune Staff Reporter
pturnquest@tribunemedia.net
A NEW day is dawning in the Bahamas. An entity that was once only talked about will soon become a reality on Cable Beach - Baha Mar.
At an estimated value of over $2.6 billion, it is considered by all estimates to be a monolithic project. To some it is considered a monstrosity that will consume all that was here before it. To others it is a golden egg.
To the chairman and CEO of Kerzner International, Sir Sol Kerzner, it is something else altogether.
Last week, Sir Sol made a rare appearance in the local press by issuing a statement to the media on the impending approval of Bah Mar.
In his statement, Sir Sol said that while they welcomed any project that would enhance and improve the tourism sector in The Bahamas, "the proposed terms of the Baha Mar project violates the Kerzner Heads of Agreement with The Bahamas." He promised that Kerzner International would discuss with the Government how to address this "breach" in their "most favoured nation" clause.
Principle
Since this statement there has been much talk in the press about what exactly a most favoured nation clause is. According to the Minister of State for Finance, Zhivargo Laing, a MFN classification is an internationally established economic principle, centrally recognized by the World Trade Organization (WTO), which seeks to establish a level playing field between mutual parties.
"The term is counter intuitive," Minister Laing explained.
"The name suggests that you treat the entity with MFN status more favourably than others, but what it really means is that you treat everyone alike; you don't treat anyone more favourably," he said.
Based on the MFN principle, if one MFN entity is granted special Customs rates, for example, then all MFN entities should be granted special Customs rates. The specific rates would be established by government policy or law.
In the case of the Bahamas, the Hotels Encouragement Act addresses the issue of concessions, while allowances for labour are specified in government policy, he said.
In order to establish whether a breach of MFN privilege exists, Mr Laing suggested one would have to assess a competing agreement "in its totality" and not compare a single line item. He said the question of a breach is "not so simple from the government's point of view."
In fact during the Prime Minister's wrap up on the Baha Mar debate he said, "I do not concede that we would be in breach of the deal with Kerzner. The relationship between the Bahamas and Kerzner has been mutually beneficial," Prime Minister Ingraham said.
Sir Sol, however, has taken the conversation to another level when he revealed during a teleconference with the press last week that if Baha Mar were to be approved in its current state the jobs of over 8,000 employees at Atlantis could be put at risk.
"It seems to me pretty ridiculous in this current environment, even if the economic environment were a lot better to look to come in and double the current number of rooms overnight. It seems to me pretty irresponsible. I also believe that one should take into account that we have 8,000 people working with us, and if this were to move forward the likelihood is that people's jobs would have to be threatened. It is just impossible, practically impossible to double the size of the market.
Pressure
"As we said in our statement, last year was a tough year and occupancy was under pressure. Well guess what, this year is even tougher. So it seems pretty ridiculous to me that these folks are wanting to move forward," he said.
And move forward they have. The Baha Mar labour resolution was passed unanimously before the House of Assembly (36 voting for, with four absent), which allows for 8,150 foreign workers, but no more than 5,000 at one time to be employed on the Baha Mar Cable Beach project.
Following this unanimous vote in the House of Assembly last week, Baha Mar's senior vice-president of external affairs, Robert "Sandy" Sands said that construction for the single-phase $2.6 billion Baha Mar development project could break ground as early as January, pending the close of the Export Import (EXIM) Bank of China loan.
Contractors have already been chosen for the first six construction packages, totaling $60 million, which will include the new Commercial Village contracts and the new West Bay Street.
According to Mr Sands, the initial payout will cover construction contracts and also includes numerous Bahamian architects, engineers, quantity surveyors, suppliers and many other related parties who will participate in these first six contract packages.
Prior to the approval of this massive project, Sir Sol said that he did not want to speculate on what he would do if Baha Mar was approved without at least the development being "phased" in as his Atlantis properties were. Now that the project has been pushed through the proverbial pipeline, the question remains: What will Atlantis do in response?
Addressing these concerns, Prime Minister Hubert Ingraham informed the nation that he was confident that Sir Sol's concerns about Baha Mar could be resolved satisfactorily.
He also publicly proclaimed his respect and gratitude for Sir Sol's contributions to the country, adding that he will do anything in his power to ensure the Atlantis product remains successful on Paradise Island. However this commitment, he said, does not mean he will not be fair to other developers.
"We were always concerned, when we came to office that there was nothing in the Baha Mar deal that would have given them a better deal than Kerzner. I think I can say that the thing that ticked Kerzner (off) more than anything else is a statement by Perry Christie to the effect that Baha Mar only wants to get what Kerzner got," said Mr Ingraham on the radio show Issues of the Day.
"There is no question in my mind of my high regard for Sol Kerzner and what he has done for the Bahamas. I was berated by many when he came in 1994 and what he has done for the Bahamas has transformed our tourism industry.
"He has provided us with 2,000 more jobs than he committed to, he has a very successful project on Paradise Island and I will do all I can, for as long as I can, to ensure that his project is successful."
"That has nothing to do with whether I will be fair to anybody else. (But) I will not knowingly give anybody else a better deal than Kerzner got," stated the nation's chief.
During his live radio interview, Mr Ingraham also accused the former Christie administration of engaging in secret deals with Baha Mar by promising them concessions not included in their contract.
He said these secret concessions are part of what government is trying to renegotiate.
"The PLP government gave Baha Mar a deal over and above what they signed in the contract. So on the same day that they signed the contract they issued what was called side letters offering Baha Mar more.
"We tried to pull those things back. We are now doing an analysis to see the extent to which we have been successful, we think we have been somewhat successful in ensuring that there is equity and balance between the two."
Hopefully this "equity" and "balance" between the two resorts will eventually allow the two properties to complement each other, without there being any cannibalism in the marketplace, he said.
However, this appears highly unlikely if both hotels will be aiming for the same dwindling number of "high-end" visitors.
At this stage it is not easy to dismiss Atlantis' concerns as a mere fear of competition when one considers that our air arrivals have not actually been booming over the past few years. With a global recession still wreaking havoc on our tourism industry, no "expert" is willing to guess on when things are expected to turn around in that sector.
Maybe, like the haunting voice in the Hollywood film "A Field of Dreams," if Baha Mar builds it, the tourists will come.
November 22, 2010
Tribune242 Insight
By PAUL G TURNQUEST
Tribune Staff Reporter
pturnquest@tribunemedia.net
A NEW day is dawning in the Bahamas. An entity that was once only talked about will soon become a reality on Cable Beach - Baha Mar.
At an estimated value of over $2.6 billion, it is considered by all estimates to be a monolithic project. To some it is considered a monstrosity that will consume all that was here before it. To others it is a golden egg.
To the chairman and CEO of Kerzner International, Sir Sol Kerzner, it is something else altogether.
Last week, Sir Sol made a rare appearance in the local press by issuing a statement to the media on the impending approval of Bah Mar.
In his statement, Sir Sol said that while they welcomed any project that would enhance and improve the tourism sector in The Bahamas, "the proposed terms of the Baha Mar project violates the Kerzner Heads of Agreement with The Bahamas." He promised that Kerzner International would discuss with the Government how to address this "breach" in their "most favoured nation" clause.
Principle
Since this statement there has been much talk in the press about what exactly a most favoured nation clause is. According to the Minister of State for Finance, Zhivargo Laing, a MFN classification is an internationally established economic principle, centrally recognized by the World Trade Organization (WTO), which seeks to establish a level playing field between mutual parties.
"The term is counter intuitive," Minister Laing explained.
"The name suggests that you treat the entity with MFN status more favourably than others, but what it really means is that you treat everyone alike; you don't treat anyone more favourably," he said.
Based on the MFN principle, if one MFN entity is granted special Customs rates, for example, then all MFN entities should be granted special Customs rates. The specific rates would be established by government policy or law.
In the case of the Bahamas, the Hotels Encouragement Act addresses the issue of concessions, while allowances for labour are specified in government policy, he said.
In order to establish whether a breach of MFN privilege exists, Mr Laing suggested one would have to assess a competing agreement "in its totality" and not compare a single line item. He said the question of a breach is "not so simple from the government's point of view."
In fact during the Prime Minister's wrap up on the Baha Mar debate he said, "I do not concede that we would be in breach of the deal with Kerzner. The relationship between the Bahamas and Kerzner has been mutually beneficial," Prime Minister Ingraham said.
Sir Sol, however, has taken the conversation to another level when he revealed during a teleconference with the press last week that if Baha Mar were to be approved in its current state the jobs of over 8,000 employees at Atlantis could be put at risk.
"It seems to me pretty ridiculous in this current environment, even if the economic environment were a lot better to look to come in and double the current number of rooms overnight. It seems to me pretty irresponsible. I also believe that one should take into account that we have 8,000 people working with us, and if this were to move forward the likelihood is that people's jobs would have to be threatened. It is just impossible, practically impossible to double the size of the market.
Pressure
"As we said in our statement, last year was a tough year and occupancy was under pressure. Well guess what, this year is even tougher. So it seems pretty ridiculous to me that these folks are wanting to move forward," he said.
And move forward they have. The Baha Mar labour resolution was passed unanimously before the House of Assembly (36 voting for, with four absent), which allows for 8,150 foreign workers, but no more than 5,000 at one time to be employed on the Baha Mar Cable Beach project.
Following this unanimous vote in the House of Assembly last week, Baha Mar's senior vice-president of external affairs, Robert "Sandy" Sands said that construction for the single-phase $2.6 billion Baha Mar development project could break ground as early as January, pending the close of the Export Import (EXIM) Bank of China loan.
Contractors have already been chosen for the first six construction packages, totaling $60 million, which will include the new Commercial Village contracts and the new West Bay Street.
According to Mr Sands, the initial payout will cover construction contracts and also includes numerous Bahamian architects, engineers, quantity surveyors, suppliers and many other related parties who will participate in these first six contract packages.
Prior to the approval of this massive project, Sir Sol said that he did not want to speculate on what he would do if Baha Mar was approved without at least the development being "phased" in as his Atlantis properties were. Now that the project has been pushed through the proverbial pipeline, the question remains: What will Atlantis do in response?
Addressing these concerns, Prime Minister Hubert Ingraham informed the nation that he was confident that Sir Sol's concerns about Baha Mar could be resolved satisfactorily.
He also publicly proclaimed his respect and gratitude for Sir Sol's contributions to the country, adding that he will do anything in his power to ensure the Atlantis product remains successful on Paradise Island. However this commitment, he said, does not mean he will not be fair to other developers.
"We were always concerned, when we came to office that there was nothing in the Baha Mar deal that would have given them a better deal than Kerzner. I think I can say that the thing that ticked Kerzner (off) more than anything else is a statement by Perry Christie to the effect that Baha Mar only wants to get what Kerzner got," said Mr Ingraham on the radio show Issues of the Day.
"There is no question in my mind of my high regard for Sol Kerzner and what he has done for the Bahamas. I was berated by many when he came in 1994 and what he has done for the Bahamas has transformed our tourism industry.
"He has provided us with 2,000 more jobs than he committed to, he has a very successful project on Paradise Island and I will do all I can, for as long as I can, to ensure that his project is successful."
"That has nothing to do with whether I will be fair to anybody else. (But) I will not knowingly give anybody else a better deal than Kerzner got," stated the nation's chief.
During his live radio interview, Mr Ingraham also accused the former Christie administration of engaging in secret deals with Baha Mar by promising them concessions not included in their contract.
He said these secret concessions are part of what government is trying to renegotiate.
"The PLP government gave Baha Mar a deal over and above what they signed in the contract. So on the same day that they signed the contract they issued what was called side letters offering Baha Mar more.
"We tried to pull those things back. We are now doing an analysis to see the extent to which we have been successful, we think we have been somewhat successful in ensuring that there is equity and balance between the two."
Hopefully this "equity" and "balance" between the two resorts will eventually allow the two properties to complement each other, without there being any cannibalism in the marketplace, he said.
However, this appears highly unlikely if both hotels will be aiming for the same dwindling number of "high-end" visitors.
At this stage it is not easy to dismiss Atlantis' concerns as a mere fear of competition when one considers that our air arrivals have not actually been booming over the past few years. With a global recession still wreaking havoc on our tourism industry, no "expert" is willing to guess on when things are expected to turn around in that sector.
Maybe, like the haunting voice in the Hollywood film "A Field of Dreams," if Baha Mar builds it, the tourists will come.
November 22, 2010
Tribune242 Insight
Prime Minister Hubert Ingraham: I will not knowingly give anybody else a better deal than Kerzner got...
PM responds to Kerzner’s claims
By KRYSTEL ROLLE
Guardian Staff Reporter
krystel@nasguard.com
Prime Minister Hubert Ingraham said yesterday that he is not concerned with the statements made by Kerzner International’s Chairman and CEO Sol Kerzner that thousands of jobs may be at risk as a result of the Baha Mar project.
Kerzner told reporters on Thursday that the 8,000 jobs at the Atlantis Resort on Paradise Island would be placed in jeopardy if the government approves the Baha Mar project in its current form.
“It’s a deal that makes no sense,” Kerzner said. “It’s a deal that could be harmful to the people of The Bahamas and certainly to future investors and indeed ourselves.”
Kerzner has also argued that the deal between the government and Baha Mar violates the most favored nation status clause his company agreed to with the government in successive agreements.
Under these agreements, no investor should receive more favorable terms with the government than Kerzner’s company.
Ingraham said he thinks the issue with Kerzner will come to a satisfactory conclusion.
“I have many discussions with Mr. Kerzner,” said Prime Minister Ingraham, who was a guest on Love 97’s radio talk show Issues of the Day. “I think that we will resolve this issue satisfactorily. I think so.”
Despite the public criticisms of the Baha Mar deal by Kerzner, the House of Assembly unanimously approved the Baha Mar resolution on Thursday.
The company is seeking 8,150 work permits for non-Bahamian construction workers. The government brought the resolution to the House in order to get the ‘blessing’ of members before it finally approves the project, likely by the end of the month.
“We were always concerned that when we came to office that there was nothing in the Baha Mar deal that would give them a better deal than Kerzner, ”?Ingraham said yesterday. “I think I can say that the thing that ticked Kerzner more than anything else is a statement made by (Progressive Liberal Party Leader) Perry Christie to the effect that Baha Mar only wanted to get what Kerzner got. And he (Kerzner) was of the view that Baha Mar was getting more than him. And he was very hurt that Christie would make such a statement.”
Ingraham said Kerzner is concerned about Baha Mar’s lower construction labor costs, as compared to his company’s construction labor costs. Baha Mar will be mostly using Chinese labor to build its resort. Kerzner used more Bahamian labor at his property, increasing costs.
According to Ingraham, Kerzner is also concerned about the sum Baha Mar paid for the land the development is located on.
Ingraham said one of the reasons why they insisted there had to be a substantial increase to the contract value for Bahamian contractors was to help to offset any question about Kerzner’s concerns.
As a result of negotiations between 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.
Ingraham said he wants to be sure that the government is not giving Baha Mar a better deal than Kerzner.
He added that when the Free National Movement (FNM) government negotiated a deal with Baha Mar in 2008, it did not give Baha Mar some of the concessions the Christie administration had agreed to.
“They issued side letters offering Baha Mar more. We tried to pull those things back. We think we have been somewhat successful ensuring that there is equity and balance between the two,” Ingraham said.
In response to criticism that he treats Kerzner with more regard than he does other developers, Ingraham didn’t shy away from the relationship he shares with the hotel developer. However, he added that all developers are treated fairly.
“There’s no question of my high regard for Sol Kerzner for what he has done for The Bahamas,” Ingraham said adding that Kerzner provided The Bahamas with 2,000 more jobs than he committed to.
“I will do all I can for as long as I can to ensure that his project is successful, but that has nothing to do with whether I will be fair to anyone else. But I will not knowingly give anybody else a better deal than Kerzner got,” he said.
Ingraham added that the Baha Mar project is only going forward because of his government.
He said there was no means by which Baha Mar’s CEO Sarkis Izmirlian could get the funding from the Chinese unless the government gave the Chinese the go ahead.
China Export-Import Bank (China Eximbank) is extending a $2.45 billion loan to Baha Mar.
11/21/2010
thenassauguardian
By KRYSTEL ROLLE
Guardian Staff Reporter
krystel@nasguard.com
Prime Minister Hubert Ingraham said yesterday that he is not concerned with the statements made by Kerzner International’s Chairman and CEO Sol Kerzner that thousands of jobs may be at risk as a result of the Baha Mar project.
Kerzner told reporters on Thursday that the 8,000 jobs at the Atlantis Resort on Paradise Island would be placed in jeopardy if the government approves the Baha Mar project in its current form.
“It’s a deal that makes no sense,” Kerzner said. “It’s a deal that could be harmful to the people of The Bahamas and certainly to future investors and indeed ourselves.”
Kerzner has also argued that the deal between the government and Baha Mar violates the most favored nation status clause his company agreed to with the government in successive agreements.
Under these agreements, no investor should receive more favorable terms with the government than Kerzner’s company.
Ingraham said he thinks the issue with Kerzner will come to a satisfactory conclusion.
“I have many discussions with Mr. Kerzner,” said Prime Minister Ingraham, who was a guest on Love 97’s radio talk show Issues of the Day. “I think that we will resolve this issue satisfactorily. I think so.”
Despite the public criticisms of the Baha Mar deal by Kerzner, the House of Assembly unanimously approved the Baha Mar resolution on Thursday.
The company is seeking 8,150 work permits for non-Bahamian construction workers. The government brought the resolution to the House in order to get the ‘blessing’ of members before it finally approves the project, likely by the end of the month.
“We were always concerned that when we came to office that there was nothing in the Baha Mar deal that would give them a better deal than Kerzner, ”?Ingraham said yesterday. “I think I can say that the thing that ticked Kerzner more than anything else is a statement made by (Progressive Liberal Party Leader) Perry Christie to the effect that Baha Mar only wanted to get what Kerzner got. And he (Kerzner) was of the view that Baha Mar was getting more than him. And he was very hurt that Christie would make such a statement.”
Ingraham said Kerzner is concerned about Baha Mar’s lower construction labor costs, as compared to his company’s construction labor costs. Baha Mar will be mostly using Chinese labor to build its resort. Kerzner used more Bahamian labor at his property, increasing costs.
According to Ingraham, Kerzner is also concerned about the sum Baha Mar paid for the land the development is located on.
Ingraham said one of the reasons why they insisted there had to be a substantial increase to the contract value for Bahamian contractors was to help to offset any question about Kerzner’s concerns.
As a result of negotiations between 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.
Ingraham said he wants to be sure that the government is not giving Baha Mar a better deal than Kerzner.
He added that when the Free National Movement (FNM) government negotiated a deal with Baha Mar in 2008, it did not give Baha Mar some of the concessions the Christie administration had agreed to.
“They issued side letters offering Baha Mar more. We tried to pull those things back. We think we have been somewhat successful ensuring that there is equity and balance between the two,” Ingraham said.
In response to criticism that he treats Kerzner with more regard than he does other developers, Ingraham didn’t shy away from the relationship he shares with the hotel developer. However, he added that all developers are treated fairly.
“There’s no question of my high regard for Sol Kerzner for what he has done for The Bahamas,” Ingraham said adding that Kerzner provided The Bahamas with 2,000 more jobs than he committed to.
“I will do all I can for as long as I can to ensure that his project is successful, but that has nothing to do with whether I will be fair to anyone else. But I will not knowingly give anybody else a better deal than Kerzner got,” he said.
Ingraham added that the Baha Mar project is only going forward because of his government.
He said there was no means by which Baha Mar’s CEO Sarkis Izmirlian could get the funding from the Chinese unless the government gave the Chinese the go ahead.
China Export-Import Bank (China Eximbank) is extending a $2.45 billion loan to Baha Mar.
11/21/2010
thenassauguardian
Saturday, November 20, 2010
Perry Christie - Opposition Leader says: ... if the government considers itself a partner in the deal with Baha Mar, it should have dealt with the alleged breach with Kerzner outside of the House of Assembly
Christie: Issues with Kerzner should have been resolved first
By CHESTER ROBARDS
Guardian Staff Reporter
chester@nasguard.com
Leader of the Opposition Perry Christie admonished the government during his contribution to debate in the House of Assembly yesterday, for not moving to resolve their apparent breach of a ‘Most Favored Nation’ (MFN) clause with Kerzner International, before bringing the Baha Mar resolution to Parliament for a vote.
Christie said if the government considers itself a partner in the deal with Baha Mar, it should have dealt with the alleged breach with Kerzner outside of the House of Assembly.
According to him, when the government was made aware that Kerzner considered the allowance of 8,000 Chinese workers for the Baha Mar project a violation of MFN, the prime minister should have met with them to resolve the issue before yesterday.
“It looks like there is antagonism in the product, serious difficulties in the product, where the government is making a decision to breach an agreement,” said Christie.
“Because, if we are saying that we are going to approve it (Baha Mar) and he (Sol Kerzner) is saying we are in breach of it (MFN), Parliament should suspend itself, since we have been asked to come to this point to have a determination made as to whether or not we are in breach.”
According to him, the matter of a breach of contract is “a matter to do with partners” and “not to do with public relations of a government”.
He said he was taken aback when Member of Parliament for Marco City, Zhivargo Laing read the press statement in the House of Assembly that was issued by Kerzner International outlining what it considered to be a breach of MFN.
“I was shocked yesterday,” he said. “This (MFN breach) is essentially a major legal matter that has exercised the minds of lawyers here in the attorney general’s office and the Queens Counsel of England.”
Christie also used much of the beginning of his alloted time in the House to respond to the government’s accusations that his party was not an effective government when they were in power and with regard to the Baha Mar agreement.
He got extremely testy with his colleagues across the floor yesterday, reminding them to act like parliamentarians while addressing the House and each other, as Bahamians look to them as a good example.
“We are coming to a time in the country where we have to be careful that we do not begin applying in our country retribution and reaction,” he said.
“That is not good for this country and our leadership in this country must exercise the greatest care as we move forward, dealing with people's reputations.
“Recognize that as best we can, we will try to avoid the snaring remarks and try to focus on the issues at hand.”
11/19/2010
thenassauguardian
By CHESTER ROBARDS
Guardian Staff Reporter
chester@nasguard.com
Leader of the Opposition Perry Christie admonished the government during his contribution to debate in the House of Assembly yesterday, for not moving to resolve their apparent breach of a ‘Most Favored Nation’ (MFN) clause with Kerzner International, before bringing the Baha Mar resolution to Parliament for a vote.
Christie said if the government considers itself a partner in the deal with Baha Mar, it should have dealt with the alleged breach with Kerzner outside of the House of Assembly.
According to him, when the government was made aware that Kerzner considered the allowance of 8,000 Chinese workers for the Baha Mar project a violation of MFN, the prime minister should have met with them to resolve the issue before yesterday.
“It looks like there is antagonism in the product, serious difficulties in the product, where the government is making a decision to breach an agreement,” said Christie.
“Because, if we are saying that we are going to approve it (Baha Mar) and he (Sol Kerzner) is saying we are in breach of it (MFN), Parliament should suspend itself, since we have been asked to come to this point to have a determination made as to whether or not we are in breach.”
According to him, the matter of a breach of contract is “a matter to do with partners” and “not to do with public relations of a government”.
He said he was taken aback when Member of Parliament for Marco City, Zhivargo Laing read the press statement in the House of Assembly that was issued by Kerzner International outlining what it considered to be a breach of MFN.
“I was shocked yesterday,” he said. “This (MFN breach) is essentially a major legal matter that has exercised the minds of lawyers here in the attorney general’s office and the Queens Counsel of England.”
Christie also used much of the beginning of his alloted time in the House to respond to the government’s accusations that his party was not an effective government when they were in power and with regard to the Baha Mar agreement.
He got extremely testy with his colleagues across the floor yesterday, reminding them to act like parliamentarians while addressing the House and each other, as Bahamians look to them as a good example.
“We are coming to a time in the country where we have to be careful that we do not begin applying in our country retribution and reaction,” he said.
“That is not good for this country and our leadership in this country must exercise the greatest care as we move forward, dealing with people's reputations.
“Recognize that as best we can, we will try to avoid the snaring remarks and try to focus on the issues at hand.”
11/19/2010
thenassauguardian
Friday, November 19, 2010
Sir Sol Kerzner says: The proposed deal between the Government of The Bahamas and Baha Mar violates previous agreements between the government and Kerzner International
Sol Kerzner hits out on Baha Mar
By BRENT DEAN
The Nassau Guardian
Deputy News Editor
brentldean@nasguard.com
Says Baha Mar deal violates agreements made with his company
The proposed deal between the Government of The Bahamas and Baha Mar violates previous agreements between the government and Kerzner International, charged Sir Sol Kerzner yesterday.
“Baha Mar proposes employing thousands of foreign Chinese workers, which would represent far more than 30 percent of the total labor force.
Approval of this arrangement by government would be a clear breach of an investment agreement with a developer that has become its largest private employer, and an investor who took a risk on The Bahamas when its economy was struggling far more than it is today,” said Sir Sol Kerzner, chairman and chief executive officer of Kerzner International in a statement.
The House of Assembly is scheduled to conclude debate on the Baha Mar resolution today. The company is seeking 8,150 work permits for Chinese workers to help construct the $2.6 billion resort. The government is seeking the blessing of the House as it grants the work permits. The opposition has said it supports the deal.
In previous heads of agreements between Kerzner and the government, it pledged to grant Kerzner most favored nation status, meaning no investor would be granted concessions greater than Kerzner.
However, in a rare public statement, Kerzner, who is the largest private sector employer in the country, said Baha Mar is being granted much more than his company received.
“When we made our largest single investment of approximately $1 billion for Phase III, we did so based on a heads of agreement signed with the PLP government in 2003. Among the many requirements that government imposed on Kerzner under this and prior agreements was a strict rule that at least 70 percent of the total construction labor force would be Bahamian,” said Kerzner.
“As was the case with the two previous agreements with government, our 2003 agreement included a most favored nation provision that assured Kerzner that our investments would be protected from subsequent investors receiving more favorable terms. These agreements represented a solemn promise by The Bahamas to us that any subsequent investor would only compete against us on a level playing field.”
Prime Minister Hubert Ingraham said on Sunday that the Baha Mar deal would be approved by the end of the month. It is unclear if Kerzner’s intervention will have any effect on that pronouncement.
Yesterday Baha Mar was not pleased with Kerzner’s public intervention.
“We are not going to comment on Mr. Kerzner’s public relations statement. The Baha Mar project has been well vetted with the public, the government and its investors. We are happy the Baha Mar resolution is being debated in Parliament today,” said the company in response to Kerzner.
Kerzner International said it intends to discuss with the government how to address its concerns. As a result of the deal, Baha Mar is to receive on the labor and land components of the proposed deal, Kerzner can argue it is entitled to the same.
The government is transfering 265 acres of public land at Cable Beach to Baha Mar as a part of the deal.
Kerzner International emphasized that the heads of agreement for each of the three phases of development on Paradise Island required that at least 70 percent of the total construction labor force had to be Bahamian.
Bahamian labor is more expensive than labor from countries such as China and Mexico.
The company and its chairman argued that the deal Baha Mar is to receive “would represent a material breach” of its agreement with the government.
“When Kerzner first invested in The Bahamas by acquiring what is now the Coral and Beach Towers out of bankruptcy in May 1994, we made our investment on the basis of agreements with the government that gave us contractual assurances regarding our investment. Although we were confident in our abilities to re-establish the Bahamian tourism industry at that time, we did so in the face of truly dire economic conditions,” said Kerzner in his remarks.
“Accordingly, we insisted upon most favored nation treatment, which would ensure that no subsequent investor would be given advantages that we never enjoyed. Since our first investment, we have always found government – irrespective of the party in office – to be a faithful partner who has justified our initial and subsequent confidence in The Bahamas as an investor. We have invested more than $2.3 billion over the course of our build-out of the three phases of Atlantis, increasing our room count from approximately 1,100 in 1994 to over 4,000 today.
“We have grown the Bahamian workforce from approximately 1,200 employees when we commenced operations in 1994 to nearly 8,000 full-time employees today, not to mention the indirect employment that our investment has generated in the community. Furthermore, we have spent millions on training programs to develop and improve the skills and professionalism of our work force, which has allowed Atlantis to be rated among the top resorts in the world.”
Both the governing Free National Movement and opposition Progressive Liberal Party support the Baha Mar deal.
11/18/2010
thenassauguardian
By BRENT DEAN
The Nassau Guardian
Deputy News Editor
brentldean@nasguard.com
Says Baha Mar deal violates agreements made with his company
The proposed deal between the Government of The Bahamas and Baha Mar violates previous agreements between the government and Kerzner International, charged Sir Sol Kerzner yesterday.
“Baha Mar proposes employing thousands of foreign Chinese workers, which would represent far more than 30 percent of the total labor force.
Approval of this arrangement by government would be a clear breach of an investment agreement with a developer that has become its largest private employer, and an investor who took a risk on The Bahamas when its economy was struggling far more than it is today,” said Sir Sol Kerzner, chairman and chief executive officer of Kerzner International in a statement.
The House of Assembly is scheduled to conclude debate on the Baha Mar resolution today. The company is seeking 8,150 work permits for Chinese workers to help construct the $2.6 billion resort. The government is seeking the blessing of the House as it grants the work permits. The opposition has said it supports the deal.
In previous heads of agreements between Kerzner and the government, it pledged to grant Kerzner most favored nation status, meaning no investor would be granted concessions greater than Kerzner.
However, in a rare public statement, Kerzner, who is the largest private sector employer in the country, said Baha Mar is being granted much more than his company received.
“When we made our largest single investment of approximately $1 billion for Phase III, we did so based on a heads of agreement signed with the PLP government in 2003. Among the many requirements that government imposed on Kerzner under this and prior agreements was a strict rule that at least 70 percent of the total construction labor force would be Bahamian,” said Kerzner.
“As was the case with the two previous agreements with government, our 2003 agreement included a most favored nation provision that assured Kerzner that our investments would be protected from subsequent investors receiving more favorable terms. These agreements represented a solemn promise by The Bahamas to us that any subsequent investor would only compete against us on a level playing field.”
Prime Minister Hubert Ingraham said on Sunday that the Baha Mar deal would be approved by the end of the month. It is unclear if Kerzner’s intervention will have any effect on that pronouncement.
Yesterday Baha Mar was not pleased with Kerzner’s public intervention.
“We are not going to comment on Mr. Kerzner’s public relations statement. The Baha Mar project has been well vetted with the public, the government and its investors. We are happy the Baha Mar resolution is being debated in Parliament today,” said the company in response to Kerzner.
Kerzner International said it intends to discuss with the government how to address its concerns. As a result of the deal, Baha Mar is to receive on the labor and land components of the proposed deal, Kerzner can argue it is entitled to the same.
The government is transfering 265 acres of public land at Cable Beach to Baha Mar as a part of the deal.
Kerzner International emphasized that the heads of agreement for each of the three phases of development on Paradise Island required that at least 70 percent of the total construction labor force had to be Bahamian.
Bahamian labor is more expensive than labor from countries such as China and Mexico.
The company and its chairman argued that the deal Baha Mar is to receive “would represent a material breach” of its agreement with the government.
“When Kerzner first invested in The Bahamas by acquiring what is now the Coral and Beach Towers out of bankruptcy in May 1994, we made our investment on the basis of agreements with the government that gave us contractual assurances regarding our investment. Although we were confident in our abilities to re-establish the Bahamian tourism industry at that time, we did so in the face of truly dire economic conditions,” said Kerzner in his remarks.
“Accordingly, we insisted upon most favored nation treatment, which would ensure that no subsequent investor would be given advantages that we never enjoyed. Since our first investment, we have always found government – irrespective of the party in office – to be a faithful partner who has justified our initial and subsequent confidence in The Bahamas as an investor. We have invested more than $2.3 billion over the course of our build-out of the three phases of Atlantis, increasing our room count from approximately 1,100 in 1994 to over 4,000 today.
“We have grown the Bahamian workforce from approximately 1,200 employees when we commenced operations in 1994 to nearly 8,000 full-time employees today, not to mention the indirect employment that our investment has generated in the community. Furthermore, we have spent millions on training programs to develop and improve the skills and professionalism of our work force, which has allowed Atlantis to be rated among the top resorts in the world.”
Both the governing Free National Movement and opposition Progressive Liberal Party support the Baha Mar deal.
11/18/2010
thenassauguardian
Monday, November 15, 2010
Sir Sol Kerzner - Kerzner International Chairman and CEO - has concerns about the terms of the Baha Mar deal
Kerzner concerned about terms of Baha Mar deal
By CANDIA DAMES
Guardian News Editor
candia@nasguard.com
Kerzner International Chairman and CEO Sir Sol Kerzner has concerns about some of the terms of the $2.6 billion Baha Mar deal, Prime Minister Hubert Ingraham said yesterday.
Ingraham told reporters at a meet the press event that he met with Kerzner yesterday morning to discuss those concerns.
“There are some concerns on the part of Kerzner as to the extent to which Baha Mar is getting a deal from The Bahamas that is more favorable to them than Kerzner got,” Ingraham said.
“In 2003 when the government of the day signed an agreement for Kerzner to do its phase three, it agreed that nobody would get a better deal in The Bahamas for any development than Kerzner got.”
He added, “They are concerned about the extent to which they themselves had to pay huge sums of money for property to do their development and Baha Mar was given property at [concessionary] prices. Secondly, they were required to hire 70 percent (Bahamian) workers on their job, and only 30 percent foreigners and we are considering giving Baha Mar these 5,000 to 8,000 Chinese workers.”
Ingraham said Kerzner International officials will get back to the government on the extent to which they have justifiable reasons for their concerns.
“And we will review their concerns and make determinations, but in the meantime it will not interfere with our intention to approve the Baha Mar project by the end of this month,” he said.
Asked whether Kerzner International plans to pursue a phase four of its development, Ingraham said, “The reality is even if they had the money and even if they had the will, the desire, nobody would do a phase four at Atlantis if you’re going to put down on Cable Beach another 2,600 hotel rooms and all the facilities.
“The reality is that there is only one market. Nassau is only just one place and airlift and business and profitability and room rates and the whole host of things (come into play). So it isn’t likely that they are going to do another phase at the moment. That’s not likely.”
Ingraham said Kerzner told him yesterday that there is no truth to rumors that he is considering selling the Atlantis Resort on Paradise Island.
“He said absolutely not,” Ingraham said. “I believe him.”
11/15/2010
thenassauguardian
By CANDIA DAMES
Guardian News Editor
candia@nasguard.com
Kerzner International Chairman and CEO Sir Sol Kerzner has concerns about some of the terms of the $2.6 billion Baha Mar deal, Prime Minister Hubert Ingraham said yesterday.
Ingraham told reporters at a meet the press event that he met with Kerzner yesterday morning to discuss those concerns.
“There are some concerns on the part of Kerzner as to the extent to which Baha Mar is getting a deal from The Bahamas that is more favorable to them than Kerzner got,” Ingraham said.
“In 2003 when the government of the day signed an agreement for Kerzner to do its phase three, it agreed that nobody would get a better deal in The Bahamas for any development than Kerzner got.”
He added, “They are concerned about the extent to which they themselves had to pay huge sums of money for property to do their development and Baha Mar was given property at [concessionary] prices. Secondly, they were required to hire 70 percent (Bahamian) workers on their job, and only 30 percent foreigners and we are considering giving Baha Mar these 5,000 to 8,000 Chinese workers.”
Ingraham said Kerzner International officials will get back to the government on the extent to which they have justifiable reasons for their concerns.
“And we will review their concerns and make determinations, but in the meantime it will not interfere with our intention to approve the Baha Mar project by the end of this month,” he said.
Asked whether Kerzner International plans to pursue a phase four of its development, Ingraham said, “The reality is even if they had the money and even if they had the will, the desire, nobody would do a phase four at Atlantis if you’re going to put down on Cable Beach another 2,600 hotel rooms and all the facilities.
“The reality is that there is only one market. Nassau is only just one place and airlift and business and profitability and room rates and the whole host of things (come into play). So it isn’t likely that they are going to do another phase at the moment. That’s not likely.”
Ingraham said Kerzner told him yesterday that there is no truth to rumors that he is considering selling the Atlantis Resort on Paradise Island.
“He said absolutely not,” Ingraham said. “I believe him.”
11/15/2010
thenassauguardian
Monday, October 25, 2010
Opposition Leader Perry Christie called on Prime Minister Hubert Ingraham to treat Baha Mar developer Sarkis Ismirlian as well as he treats Atlantis Boss Sol Kerzner
Christie: Baha Mar developer should get same treatment as Atlantis boss
tribune242
OPPOSITION LEADER Perry Christie called on Hubert Ingraham to treat Baha Mar developer Sarkis Ismirlian as well as he treats Atlantis Boss Sol Kerzner.
Speaking at the presentation of the PLP's position-paper on Baha Mar, Mr Christie said the two men are deserving of the same level of respect.
He said: "I do not know what Sarkis Ismirlian ever did to the prime minister to deserve the kind of humiliating treatment that has been meted out to him in public, time and time again, by Prime Minister Ingraham. It is wrong.
"Mr Ismirlian is deserving of respect, even when we have to disagree with him. It is high time, then, that the prime minister starts talking to Sarkis Ismirlian the same way he always talks to Sol Kerzner."
Mr Christie went on to say that the Bahamas doesn't have "a hope in hell" of being taken seriously by investors, especially in very difficult times, if Mr Ingraham continues to change the "rules of engagement" with investors and continues to believes in "negotiation-by-press-conference".
He said: "You cannot be calling press conferences to tell investors what they must do in order to win your favour. You cannot be telling them one thing in private and then call a press conference to lay down a whole new set of conditions they have to meet, and then when they meet those conditions, you then call yet another press conference to lay down a whole new set of pre-conditions yet again. That is harmful our country's reputation. It is not a wise way to conduct diplomacy. Besides it is a fundamentally unfair way to treat those who are attempting in good faith to make a major investment in our country."
Mr Christie added that there is no use in Prime Minister Ingraham, who left for China on Friday, trying to negotiate a new deal with the Chinese government, which through the China Export-Import Bank is funding the Baha Mar deal, unless Mr Ismirlian and his group are at the same negotiating table.
"There needs to be a tripartite approach to this. Simple logic and plain, good sense demand it. Suppose the PM negotiates a new deal that the Ismirlians cannot or will not live with. What then? What would he have accomplished then? In that case, one foot forward would have been taken followed by two steps backward. That makes no kind of sense.
"I therefore call upon the PM to invite representatives of the Baha Mar Group to join his meeting with the Chinese in China. It is, after all, Baha Mar's project. It seems only sensible and logical and appropriate to have the project owners at the table too so that everything can be settled all at the same time.
Mr Christie went on to say that the Baha Mar project cannot be evaluated in isolation from the "extremely difficult economic circumstances" in which the country finds itself at the moment.
"This is the worst it has been in decades. The level of human suffering is intolerable and threatens the social stability of our country. Unemployment, in particular, is at a painfully high level. Capital inflows have been extremely sparse and spare in recent times, especially in the tourism sector.
"As a result, new employment opportunities for displaced workers, recent secondary school-leavers and college graduates are few and far between. These conditions of acute distress in our country oblige us to embrace the Baha Mar Project. It is, in a very real sense, the only new substantial ray of sunshine that has presented itself."
October 23, 2010
tribune242
tribune242
OPPOSITION LEADER Perry Christie called on Hubert Ingraham to treat Baha Mar developer Sarkis Ismirlian as well as he treats Atlantis Boss Sol Kerzner.
Speaking at the presentation of the PLP's position-paper on Baha Mar, Mr Christie said the two men are deserving of the same level of respect.
He said: "I do not know what Sarkis Ismirlian ever did to the prime minister to deserve the kind of humiliating treatment that has been meted out to him in public, time and time again, by Prime Minister Ingraham. It is wrong.
"Mr Ismirlian is deserving of respect, even when we have to disagree with him. It is high time, then, that the prime minister starts talking to Sarkis Ismirlian the same way he always talks to Sol Kerzner."
Mr Christie went on to say that the Bahamas doesn't have "a hope in hell" of being taken seriously by investors, especially in very difficult times, if Mr Ingraham continues to change the "rules of engagement" with investors and continues to believes in "negotiation-by-press-conference".
He said: "You cannot be calling press conferences to tell investors what they must do in order to win your favour. You cannot be telling them one thing in private and then call a press conference to lay down a whole new set of conditions they have to meet, and then when they meet those conditions, you then call yet another press conference to lay down a whole new set of pre-conditions yet again. That is harmful our country's reputation. It is not a wise way to conduct diplomacy. Besides it is a fundamentally unfair way to treat those who are attempting in good faith to make a major investment in our country."
Mr Christie added that there is no use in Prime Minister Ingraham, who left for China on Friday, trying to negotiate a new deal with the Chinese government, which through the China Export-Import Bank is funding the Baha Mar deal, unless Mr Ismirlian and his group are at the same negotiating table.
"There needs to be a tripartite approach to this. Simple logic and plain, good sense demand it. Suppose the PM negotiates a new deal that the Ismirlians cannot or will not live with. What then? What would he have accomplished then? In that case, one foot forward would have been taken followed by two steps backward. That makes no kind of sense.
"I therefore call upon the PM to invite representatives of the Baha Mar Group to join his meeting with the Chinese in China. It is, after all, Baha Mar's project. It seems only sensible and logical and appropriate to have the project owners at the table too so that everything can be settled all at the same time.
Mr Christie went on to say that the Baha Mar project cannot be evaluated in isolation from the "extremely difficult economic circumstances" in which the country finds itself at the moment.
"This is the worst it has been in decades. The level of human suffering is intolerable and threatens the social stability of our country. Unemployment, in particular, is at a painfully high level. Capital inflows have been extremely sparse and spare in recent times, especially in the tourism sector.
"As a result, new employment opportunities for displaced workers, recent secondary school-leavers and college graduates are few and far between. These conditions of acute distress in our country oblige us to embrace the Baha Mar Project. It is, in a very real sense, the only new substantial ray of sunshine that has presented itself."
October 23, 2010
tribune242
Tuesday, October 19, 2010
Prime Minister Hubert Ingraham not satisfied with the hotel brand arrangements that Baha Mar has made to date
PM CONCERNED ABOUT BAHA MAR BRANDING FOCUS
By KRYSTEL ROLLE
Guardian Staff Reporter
krystel@nasguard.com
Prime Minister Hubert Ingraham said yesterday that he is not satisfied with the hotel brand arrangements that Baha Mar has made to date.
Last month Ingraham expressed concerns about how Baha Mar would be branded and how it will fill so many new rooms, when for a second year it has had to temporarily close one of its hotels because of low demand.
Since then Baha Mar announced partnerships with three hotel brands.
Asked if those announcements appeased his concerns, Ingraham said,"It does not at all."
"If you recall when the Baha Mar deal was announced there was supposed to be a partnership with Harrah's, a major casino hotel company,"Ingraham told reporters yesterday during a tour of the Albany project."Harrah's was going to put in over $200 million in cash as its equity... All that I've read in the newspaper so far talks about who is going to manage the hotels[for Baha Mar]. It is critical for there to be equity partners-owners who are in the hotel business and who are major players, not managers.
"Managers come dime a dozen. You see them all the time. They are the easiest thing to pick up in the world-managers-because they have nothing in it other than collecting their money at the top,"Ingraham continued.
Baha Mar announced yesterday that it signed a letter of intent with Hyatt Hotels Corporation to operate and manage the planned 700-room Grand Hyatt. Baha Mar Ltd. also selected Hyatt as its timeshare partner in the project, which will initially include 50 units as part of the first phase, with plans for expansion in subsequent phases, the company said in a statement.
Earlier it announced that Rosewood Hotels and Resorts will operate and manage the 200-room luxury hotel that Baha Mar will construct and Morgans Hotel Group will operate and manage the planned 300-room luxury lifestyle hotel.
In addition to concerns surrounding the hotels'branding, Ingraham said the government remains concerned about the project's controversial labor component.
Baha Mar has requested 8,150 work permits for the project. The current deal requires that the core of the project be built exclusively by foreign labor.
The government intends to the take the labor issue directly to the source when Ingraham travels to China later this moth.
Ingraham said he is meeting with China State Construction Engineering Corporation and the China Export-Import Bank to discuss the project.
"We told the China State Construction Engineering Corporation from the first time we saw them more than a year ago that it was not possible to have that number of foreign workers on a job site with the Bahamian content being so low. Nothing has changed. We've been telling them that for more than a year.
"It appears that some people either don't take us seriously or they apparently think that we are so desperate that we will do whatever we are asked to do. But our strength is not weakened,"Ingraham said.
Asked what the government would do if the company refuses to amend the deal, Ingraham said the government will"figure that out"if it comes to that.
Notwithstanding the government's concerns, Ingraham said the project would be good for The Bahamas.
"We are obviously very pleased that the bank is willing to invest more than$2 billion in The Bahamas. That will be a tremendous boost for our economy. We are concerned about making sure the maximum benefit could be derived for Bahamians and for the economy of The Bahamas,"he said.
But Ingraham said the project has to be done in"such a way that it can be sustainable in the long run and have occupancy levels that are not going to threaten what we have."
"We wouldn't want(to be)a dog with the bone in his mouth and see a shadow in the water and let[the bone]go in order to pick that shadow up. We want to make sure that the next bone is capable of being developed and operated in a way whereby they can both be successful in th context of The Bahamas. That's our interest in these projects."
In a statement yesterday Baha Mar said It is anticipated that the development will make "The Bahamas one of the premier tourist locations in the world, drawing millions of vacationers and business travelers each year to the resort's six hotels."
"With almost 3,500 rooms and condos, the largest casino in the Caribbean, the largest convention center in The Bahamas, a world-class golf course, retail village and much more, Baha Mar Resort represents the Caribbean's largest single-phase destination resort. Baha Mar will employ approximately 4,000 Bahamians over the life of the construction period, which is expected to last nearly four years. Once the resort is complete, approximately 98 percent of the staff will be Bahamian nationals, representing some 7,000 jobs for Bahamians."
10/19/2010
thenassauguardian
By KRYSTEL ROLLE
Guardian Staff Reporter
krystel@nasguard.com
Prime Minister Hubert Ingraham said yesterday that he is not satisfied with the hotel brand arrangements that Baha Mar has made to date.
Last month Ingraham expressed concerns about how Baha Mar would be branded and how it will fill so many new rooms, when for a second year it has had to temporarily close one of its hotels because of low demand.
Since then Baha Mar announced partnerships with three hotel brands.
Asked if those announcements appeased his concerns, Ingraham said,"It does not at all."
"If you recall when the Baha Mar deal was announced there was supposed to be a partnership with Harrah's, a major casino hotel company,"Ingraham told reporters yesterday during a tour of the Albany project."Harrah's was going to put in over $200 million in cash as its equity... All that I've read in the newspaper so far talks about who is going to manage the hotels[for Baha Mar]. It is critical for there to be equity partners-owners who are in the hotel business and who are major players, not managers.
"Managers come dime a dozen. You see them all the time. They are the easiest thing to pick up in the world-managers-because they have nothing in it other than collecting their money at the top,"Ingraham continued.
Baha Mar announced yesterday that it signed a letter of intent with Hyatt Hotels Corporation to operate and manage the planned 700-room Grand Hyatt. Baha Mar Ltd. also selected Hyatt as its timeshare partner in the project, which will initially include 50 units as part of the first phase, with plans for expansion in subsequent phases, the company said in a statement.
Earlier it announced that Rosewood Hotels and Resorts will operate and manage the 200-room luxury hotel that Baha Mar will construct and Morgans Hotel Group will operate and manage the planned 300-room luxury lifestyle hotel.
In addition to concerns surrounding the hotels'branding, Ingraham said the government remains concerned about the project's controversial labor component.
Baha Mar has requested 8,150 work permits for the project. The current deal requires that the core of the project be built exclusively by foreign labor.
The government intends to the take the labor issue directly to the source when Ingraham travels to China later this moth.
Ingraham said he is meeting with China State Construction Engineering Corporation and the China Export-Import Bank to discuss the project.
"We told the China State Construction Engineering Corporation from the first time we saw them more than a year ago that it was not possible to have that number of foreign workers on a job site with the Bahamian content being so low. Nothing has changed. We've been telling them that for more than a year.
"It appears that some people either don't take us seriously or they apparently think that we are so desperate that we will do whatever we are asked to do. But our strength is not weakened,"Ingraham said.
Asked what the government would do if the company refuses to amend the deal, Ingraham said the government will"figure that out"if it comes to that.
Notwithstanding the government's concerns, Ingraham said the project would be good for The Bahamas.
"We are obviously very pleased that the bank is willing to invest more than$2 billion in The Bahamas. That will be a tremendous boost for our economy. We are concerned about making sure the maximum benefit could be derived for Bahamians and for the economy of The Bahamas,"he said.
But Ingraham said the project has to be done in"such a way that it can be sustainable in the long run and have occupancy levels that are not going to threaten what we have."
"We wouldn't want(to be)a dog with the bone in his mouth and see a shadow in the water and let[the bone]go in order to pick that shadow up. We want to make sure that the next bone is capable of being developed and operated in a way whereby they can both be successful in th context of The Bahamas. That's our interest in these projects."
In a statement yesterday Baha Mar said It is anticipated that the development will make "The Bahamas one of the premier tourist locations in the world, drawing millions of vacationers and business travelers each year to the resort's six hotels."
"With almost 3,500 rooms and condos, the largest casino in the Caribbean, the largest convention center in The Bahamas, a world-class golf course, retail village and much more, Baha Mar Resort represents the Caribbean's largest single-phase destination resort. Baha Mar will employ approximately 4,000 Bahamians over the life of the construction period, which is expected to last nearly four years. Once the resort is complete, approximately 98 percent of the staff will be Bahamian nationals, representing some 7,000 jobs for Bahamians."
10/19/2010
thenassauguardian
Friday, October 15, 2010
Baha Mar Drama – (Part 2)
by Simon
To understand the potentially colossal mistake the PLP made in handing over the redevelopment of Cable Beach to Baha Mar, some historical background is necessary.
Before Baha Mar there was Cable Beach. The area derived its name after a telegraph cable line connecting The Bahamas with the rest of the world came ashore at Goodman’s Bay in 1892. One of the first people to receive a cable was the proprietor of the Royal Victoria Hotel.
Fast-forward some half a century and the area with its miles of pristine beach would surpass downtown Nassau as a major site for the expansion of the hotel sector. There was the Balmoral and the Bahamas Country Club.
In 1954, the Emerald Beach became the first fully air-conditioned hotel. Boasting 300 rooms and New Providence’s first convention centre, the ultramodern hotel came in at a price tag of $3.5 million. With the opening of the Nassau Beach Hotel on the strip in 1959 -- along with a Howard Johnson restaurant -- Cable Beach was helping to set the pace for the tourism industry and hotel sector.
In many ways, Cable Beach became the gold standard, even receiving the moniker, “the Bahamian Riviera”. Then, through the 1970s to the 1990s, the PLP made a series of fateful decisions that would prove disastrous for Cable Beach and end up costing the Pubic Treasury hundreds of millions if not more.
UNAPPEALING
This included construction of the monstrously unappealing, aesthetic nightmare that became the Crystal Palace Hotel, as well as the environmental damage that may have been caused through the erection of one of the hotel’s towers.
Re-elected in 2002, a new PLP Government would make another fateful and potentially disastrous decision about Cable Beach, reinforcing its record of economic incompetence and mismanagement. Much of the same PLP culture which proved disastrous for Cable Beach under Sir Lynden has resurfaced under Perry Christie.
But back to the 1970s. The then PLP Government purchased three major hotels on Cable Beach: the Sonesta Beach Hotel, the Balmoral and the Hyatt Emerald Beach. The Pindling administration also set up the Hotel Corporation, with Sir Lynden predicting that once the Corporation was doing well financially, shares would be offered to Bahamians.
His prediction was way off the mark. Indeed, the Hotel Corporation would come to have a checkered history, with Sir Lynden serving as Chairman at various junctures. In 1991, Carnival Cruise Lines, the owner-operator of the Crystal Palace Resort experienced considerable losses and threatened to either pull out of the development or declare bankruptcy.
In volume two of her major history of The Bahamas, Dr. Gail Saunders details how the Hotel Corporation responded to this threat:
“The Hotel Corporation, already accused of making an initial ‘sweetheart deal’ with Carnival and using the Crystal Palace to ‘featherbed’ PLP supporters, agreed to yet another bailout. Adding to massive debts, incurred through an unbusinesslike combination of takeovers and extravagant new building, the Hotel Corporation took a 40 percent stake in the Crystal Palace for $70 million.
“Though the government cited the drastic decline in tourist stopovers resulting from the worldwide recession as the cause of the Hotel Corporation’s woes, the opposition charged the corporation with gross irresponsibility as well as corruption and accused the government of virtually printing money to disguise its failures.”
UNTENABLE
State ownership of a large chunk of the hotel sector was rife with internal contradictions, with the Government being in the untenable position of having to act as the regulator and the regulated. In “Pindling: The Life and Times of the First Prime Minister of The Bahamas”, Michael Craton captures how irreconcilable were the contradictions:
“The Hotel Corporation had to weigh and juggle the cost to the Treasury against the benefits of import duty concessions, the advantages against the disadvantages of levying a government tax on rooms, the problem of keeping the owners and managers happy with the level of the wages bill while keeping the workers contented with pay and working conditions, the acceptable balance between Bahamian expatriate employment.”
This defied even the political skills and charm of Sir Lynden. It was akin to asking Moses to keep both the Egyptians and the Israelites happy at the same time. Shockingly, despite this failed history, one of their own making, the PLP condemned the Bahamas to repeating some of this history in the deal with the I-Group in Mayaguana.
By taking a 50 per cent stake in the Mayaguana Development Company, the Government once again placed itself in the role of the regulator and the regulated, an inherent conflict of interest.
But this is indicative of a PLP that refuses to learn the lessons of history, including its own massive failures and endless conflicts of interest. The “All for me baby” mentality in the PLP is alive and well, waiting for the next opportunity for nepotism and deal-making in a hidebound culture of self-entitlement.
After coming to office in 1992, the FNM privatized a number of hotels owned by the Hotel Corporation, including Cable Beach properties now owned by the successful Sandals and Breezes chains. This helped to revive an ailing and ageing Cable Beach.
With its return to office, the Christie administration had an opportunity to demonstrate that it was a new PLP with new ideas for tourism in general and for Cable Beach in particular. Sadly, the re-elected PLP was as clueless about market economics as when it was turned out of office a decade earlier.
This included Mr. Christie, a former Minister of Tourism whose understanding of tourism seems not to have evolved since he held that office. It also includes the former Minister of Financial Services and Investments, who was also involved in the Baha Mar deal.
Senator Allyson Gibson Maynard’s breathless defence of the ill-conceived Mayaguana Project -- with its near give-away of many miles of pristine coastal property to a single foreign developer -- is suggestive of a disturbing mindset in the PLP in terms of national development. It is an essentially neo-colonial mindset for a party still pretending to be progressive and liberal.
RHETORIC
Absent any real ideas to realize its rhetoric of empowerment and Bahamianization, the PLP seized upon all manner of schemes proposed by all manner of developers. Many of those developers had more ideas -- not necessarily good ones -- than they had dollars or good sense.
But no matter, a desperate PLP was prepared to essentially give away Bahamian treasure in the form of land, excessive concessions and cash to lure many of these developers. This was a part of an unreconstructed mindset in the PLP which talks Bahamianization while trashing the best interests of Bahamians in the service of narrower interests.
Cable Beach was in need of redevelopment, but not just by any developer at just about any cost. One of the PLP Government’s lead negotiators on this project, a consummate uber-consultant, continues to defend the original Baha Mar deal in both the print and broadcast media.
The uber-consultant is defending The Bahamas alienating some of our more valuable Crown and government land so that the developer could secure a loan. If this level of extraordinary state beneficence was necessary in order for the developer to receive the loan, we chose the wrong developer, especially for one of our premier touristic sites.
That the developer has laboured to pay back and renegotiate the terms of its major loan is suggestive of many things. All of which should have been taken into consideration before the Christie administration handed over the vision and patrimony of Cable Beach to selective interests.
As egregious, the developer was a middleman with no real track record in such a megaproject. And, the original deal that is being defended was rife with concessions the country never should have granted, a number of which have been clawed back by the Ingraham administration.
To see some of the blunders made at Baha Mar - readers may wish to read Baha Mar: Anatomy of a Big Blunder.
While Baha Mar may bring some short- and medium-term gains, its longer term prospects may be problematic on numerous fronts. The country continues to pay for the mistakes an earlier PLP made at Cable Beach. It may now have to endure the problems of a potentially colossal error that the Christie administration made with Baha Mar.
Baha Mar Drama – (Part 1)
bahamapundit
To understand the potentially colossal mistake the PLP made in handing over the redevelopment of Cable Beach to Baha Mar, some historical background is necessary.
Before Baha Mar there was Cable Beach. The area derived its name after a telegraph cable line connecting The Bahamas with the rest of the world came ashore at Goodman’s Bay in 1892. One of the first people to receive a cable was the proprietor of the Royal Victoria Hotel.
Fast-forward some half a century and the area with its miles of pristine beach would surpass downtown Nassau as a major site for the expansion of the hotel sector. There was the Balmoral and the Bahamas Country Club.
In 1954, the Emerald Beach became the first fully air-conditioned hotel. Boasting 300 rooms and New Providence’s first convention centre, the ultramodern hotel came in at a price tag of $3.5 million. With the opening of the Nassau Beach Hotel on the strip in 1959 -- along with a Howard Johnson restaurant -- Cable Beach was helping to set the pace for the tourism industry and hotel sector.
In many ways, Cable Beach became the gold standard, even receiving the moniker, “the Bahamian Riviera”. Then, through the 1970s to the 1990s, the PLP made a series of fateful decisions that would prove disastrous for Cable Beach and end up costing the Pubic Treasury hundreds of millions if not more.
UNAPPEALING
This included construction of the monstrously unappealing, aesthetic nightmare that became the Crystal Palace Hotel, as well as the environmental damage that may have been caused through the erection of one of the hotel’s towers.
Re-elected in 2002, a new PLP Government would make another fateful and potentially disastrous decision about Cable Beach, reinforcing its record of economic incompetence and mismanagement. Much of the same PLP culture which proved disastrous for Cable Beach under Sir Lynden has resurfaced under Perry Christie.
But back to the 1970s. The then PLP Government purchased three major hotels on Cable Beach: the Sonesta Beach Hotel, the Balmoral and the Hyatt Emerald Beach. The Pindling administration also set up the Hotel Corporation, with Sir Lynden predicting that once the Corporation was doing well financially, shares would be offered to Bahamians.
His prediction was way off the mark. Indeed, the Hotel Corporation would come to have a checkered history, with Sir Lynden serving as Chairman at various junctures. In 1991, Carnival Cruise Lines, the owner-operator of the Crystal Palace Resort experienced considerable losses and threatened to either pull out of the development or declare bankruptcy.
In volume two of her major history of The Bahamas, Dr. Gail Saunders details how the Hotel Corporation responded to this threat:
“The Hotel Corporation, already accused of making an initial ‘sweetheart deal’ with Carnival and using the Crystal Palace to ‘featherbed’ PLP supporters, agreed to yet another bailout. Adding to massive debts, incurred through an unbusinesslike combination of takeovers and extravagant new building, the Hotel Corporation took a 40 percent stake in the Crystal Palace for $70 million.
“Though the government cited the drastic decline in tourist stopovers resulting from the worldwide recession as the cause of the Hotel Corporation’s woes, the opposition charged the corporation with gross irresponsibility as well as corruption and accused the government of virtually printing money to disguise its failures.”
UNTENABLE
State ownership of a large chunk of the hotel sector was rife with internal contradictions, with the Government being in the untenable position of having to act as the regulator and the regulated. In “Pindling: The Life and Times of the First Prime Minister of The Bahamas”, Michael Craton captures how irreconcilable were the contradictions:
“The Hotel Corporation had to weigh and juggle the cost to the Treasury against the benefits of import duty concessions, the advantages against the disadvantages of levying a government tax on rooms, the problem of keeping the owners and managers happy with the level of the wages bill while keeping the workers contented with pay and working conditions, the acceptable balance between Bahamian expatriate employment.”
This defied even the political skills and charm of Sir Lynden. It was akin to asking Moses to keep both the Egyptians and the Israelites happy at the same time. Shockingly, despite this failed history, one of their own making, the PLP condemned the Bahamas to repeating some of this history in the deal with the I-Group in Mayaguana.
By taking a 50 per cent stake in the Mayaguana Development Company, the Government once again placed itself in the role of the regulator and the regulated, an inherent conflict of interest.
But this is indicative of a PLP that refuses to learn the lessons of history, including its own massive failures and endless conflicts of interest. The “All for me baby” mentality in the PLP is alive and well, waiting for the next opportunity for nepotism and deal-making in a hidebound culture of self-entitlement.
After coming to office in 1992, the FNM privatized a number of hotels owned by the Hotel Corporation, including Cable Beach properties now owned by the successful Sandals and Breezes chains. This helped to revive an ailing and ageing Cable Beach.
With its return to office, the Christie administration had an opportunity to demonstrate that it was a new PLP with new ideas for tourism in general and for Cable Beach in particular. Sadly, the re-elected PLP was as clueless about market economics as when it was turned out of office a decade earlier.
This included Mr. Christie, a former Minister of Tourism whose understanding of tourism seems not to have evolved since he held that office. It also includes the former Minister of Financial Services and Investments, who was also involved in the Baha Mar deal.
Senator Allyson Gibson Maynard’s breathless defence of the ill-conceived Mayaguana Project -- with its near give-away of many miles of pristine coastal property to a single foreign developer -- is suggestive of a disturbing mindset in the PLP in terms of national development. It is an essentially neo-colonial mindset for a party still pretending to be progressive and liberal.
RHETORIC
Absent any real ideas to realize its rhetoric of empowerment and Bahamianization, the PLP seized upon all manner of schemes proposed by all manner of developers. Many of those developers had more ideas -- not necessarily good ones -- than they had dollars or good sense.
But no matter, a desperate PLP was prepared to essentially give away Bahamian treasure in the form of land, excessive concessions and cash to lure many of these developers. This was a part of an unreconstructed mindset in the PLP which talks Bahamianization while trashing the best interests of Bahamians in the service of narrower interests.
Cable Beach was in need of redevelopment, but not just by any developer at just about any cost. One of the PLP Government’s lead negotiators on this project, a consummate uber-consultant, continues to defend the original Baha Mar deal in both the print and broadcast media.
The uber-consultant is defending The Bahamas alienating some of our more valuable Crown and government land so that the developer could secure a loan. If this level of extraordinary state beneficence was necessary in order for the developer to receive the loan, we chose the wrong developer, especially for one of our premier touristic sites.
That the developer has laboured to pay back and renegotiate the terms of its major loan is suggestive of many things. All of which should have been taken into consideration before the Christie administration handed over the vision and patrimony of Cable Beach to selective interests.
As egregious, the developer was a middleman with no real track record in such a megaproject. And, the original deal that is being defended was rife with concessions the country never should have granted, a number of which have been clawed back by the Ingraham administration.
To see some of the blunders made at Baha Mar - readers may wish to read Baha Mar: Anatomy of a Big Blunder.
While Baha Mar may bring some short- and medium-term gains, its longer term prospects may be problematic on numerous fronts. The country continues to pay for the mistakes an earlier PLP made at Cable Beach. It may now have to endure the problems of a potentially colossal error that the Christie administration made with Baha Mar.
Baha Mar Drama – (Part 1)
bahamapundit
Thursday, October 14, 2010
Baha Mar Drama - (Part 1)
The Drama at Baha Mar – Part 1
by Simon
Lights, camera, action! At least, that was the theory. With giddy fanfare the Christie administration broke into the ZNS evening news to broadcast live from Cable Beach a deal hyping an agreement with Baha Mar. The made-for-television reality show was obviously and deliberately timed to coincide with the beginning of the evening news, commandeering most of that night’s broadcast.
But after the lights and cameras trekked back to Third Terrace Centreville, nothing happened. Well, quite a bit happened. Except, of course, the construction of the promised mega complex. The original deal, the world economy and the Christie administration all collapsed, though not necessarily in that order.
The impressive architectural models and glittering high-tech videos of the touted development glossed over the realities on the ground. The public relations bonanza also obscured the nature and details surrounding the proposed plans to re-develop the historic Cable Beach.
We have seen this reality show before. It involves the same mindset, plot and cast of PLP cabinet ministers and their associated dealmakers that brought us the Great Mayaguana Land Give-away. The initial arrangements for the Baha Mar deal and the I-Group deal in Mayaguana involved more than rank hypocrisy by the party whose progressive and liberal brand name are whispery echoes of a by-gone era.
More fundamentally, the deals betrayed the PLP’s own nationalist rhetoric and chest-thumping patriotism. At the core of the Cable Beach and Mayaguana deals were stunning betrayals of the very idea of Bahamianization. This included making Bahamians subordinate in the deals, while alienating prime Crown Land and Government real estate to foreigners in perpetuity.
GALLING
Equally galling, was the PLP’s attempt to market these schemes to Bahamians as if we were idiots who could not see the big picture or read the fine print. There was also the smugness and arrogance by PLP hucksters. They pretended that these deals were more for the benefit of ordinary Bahamians than for the self-satisfied oligarchs who brokered them with gleeful abandon.
As recently as the 2010/11 budget debate, the Opposition’s Leader in the Senate, Senator Allyson Maynard Gibson, boasted that the Mayaguana Development Company, the group responsible for a proposed development at our most easterly island, was owned 50/50 by the I-Group and the Bahamas Government.
As noted in Front Porch in July: “This 50/50 arrangement would have eventually sold off nearly 100 per cent of Mayaguana’s coastal area and nearly 10,000 acres to non-Bahamians.
“As Mayaguana, by comparison, is somewhat larger than New Providence, the deal the PLP continues to brag about was the equivalent of turning over to a single developer a stretch of coastal land from the eastern end of New Providence to Lyford Cay. Again, the vast majority of this land would have ended up in foreign hands.”
Back to the drama at Baha Mar. Perry Gladstone Christie and his new PLP sold off at bargain basement prices prime beachfront and other public land at Cable Beach that Sir Stafford Sands and the UBP, Sir Lynden Pindling and an earlier version of the PLP, and Hubert Ingraham and the FNM never did over the course of more than half a century. Mr. Christie now has his place in the history books!
The original Baha Mar deal was a disaster on so many levels. Despite the rhetoric, the supposedly new PLP under Mr. Christie never updated their philosophy and policy ideas. The party simply wanted to be back in power. Upon returning to office they scrambled, cobbling together various slogans, clichés and talking points to justify their old habits of wheeling and dealing.
Perhaps realizing the controversial nature of significant elements of the original Baha Mar deal, Mr. Christie -- who purports to be the man of great consultation -- kept details of the deal secret. It was left to the Ingraham administration to table the Heads of Agreements on the initial deal.
INSULT
This was an insult added to the many injuries inflicted on our national interest in the initial deal, including public land sold at discounted prices and the proposed grant of extraordinarily generous concessions and cash payments. There were initial hints that Goodman’s Bay may have been alienated from the Bahamian people, though somebody appeared to backtrack quickly on this affront.
With Baha Mar and various anchor projects, the PLP failed to embrace newer ideas in terms of our tourism product and economic development. The idea of Baha Mar as essentially another Atlantis may have been a critical mistake. Such a vision stoked the egos of the proponents of the deal and Mr. Christie.
Still, a different type of project or variety of projects at Cable Beach, aimed at a different tourism demographic, would have been the wiser course of action. Moreover, rather than alienating invaluable public land, other arrangements could have been made to secure most of this land for generations of Bahamians.
In the Mayaguana deal the PLP at least pretended to be concerned about the national interest. The deal with Baha Mar was a give-away of monumental proportions.
There could have also been arrangements to enable Bahamians to have various levels of ownership and equity in a development which was to be built on mostly public land. Instead, the Christie administration turned its back on the core ideal of Bahamianization which was at the heart of the movement for Majority Rule.
Sadly, with the conclusion of the original deal with Baha Mar, there was no turning back, one of the slogans beloved by the PLP’s marketers. That other favourite PLP slogan, “Forward Ever, Backward Never”, also crashed and burned in light of the initial deal negotiated by Mr. Christie.
Having set in motion and made unavoidable many of the features of the current deal with Baha Mar, Mr. Christie in his typical political style, has left it up to Prime Minister Ingraham to do the heavy lifting on a final deal which he himself failed to conclude.
TONE!
Now Mr. Christie is commenting on the Prime Minister’s tone – tone! -- on a final deal. This is in keeping with his usual course of inaction in which style and tone are more important than substance. After all, who can forget his gushing and ingratiating tone when the Baha Mar deal was announced live on television? For all of Mr. Christie’s sweet melodies and tone, nothing happened.
Moreover, despite his lovely tone about the initial deal, he brokered an agreement which was wrong for The Bahamas on many levels. Mr. Ingraham has replaced Mr. Christie’s amateur tone with that of a seasoned leader. Whereas Mr. Christie was impetuous and cavalier, Mr. Ingraham has been measured and has driven a harder bargain.
Unlike Sir Lynden and the PLP’s unilateral abrogation of elements of the Hawksbill Creek Agreement, Mr. Ingraham negotiated the best deal he could for the Bahamas with Baha Mar. He has struck the right tone in negotiating with others who simply rolled over the hapless Mr. Christie, who was panicked about getting a deal at just about any cost to secure his re-election and legacy.
Short-term, the Prime Minister has sometimes been criticized about his manner and timing in negotiating elements of a final deal. In the longer term the wisdom of his negotiating strategy may prove more beneficial for the country.
In addition to tabling all heads of agreements related to Baha Mar, the Prime Minister is correct in bringing a resolution to the House of Assembly so that the Bahamian people’s elected representatives can express their will.
This will be time for Mr. Christie to do something which he has been reluctant to do from the inception of Baha Mar: To go on record clearly and unambiguously about his party’s stance on many of the controversial issues involved in an agreement whose initial seeds he helped to plant and water.
Baha Mar Drama - (Part 2)
bahamapundit
by Simon
Lights, camera, action! At least, that was the theory. With giddy fanfare the Christie administration broke into the ZNS evening news to broadcast live from Cable Beach a deal hyping an agreement with Baha Mar. The made-for-television reality show was obviously and deliberately timed to coincide with the beginning of the evening news, commandeering most of that night’s broadcast.
But after the lights and cameras trekked back to Third Terrace Centreville, nothing happened. Well, quite a bit happened. Except, of course, the construction of the promised mega complex. The original deal, the world economy and the Christie administration all collapsed, though not necessarily in that order.
The impressive architectural models and glittering high-tech videos of the touted development glossed over the realities on the ground. The public relations bonanza also obscured the nature and details surrounding the proposed plans to re-develop the historic Cable Beach.
We have seen this reality show before. It involves the same mindset, plot and cast of PLP cabinet ministers and their associated dealmakers that brought us the Great Mayaguana Land Give-away. The initial arrangements for the Baha Mar deal and the I-Group deal in Mayaguana involved more than rank hypocrisy by the party whose progressive and liberal brand name are whispery echoes of a by-gone era.
More fundamentally, the deals betrayed the PLP’s own nationalist rhetoric and chest-thumping patriotism. At the core of the Cable Beach and Mayaguana deals were stunning betrayals of the very idea of Bahamianization. This included making Bahamians subordinate in the deals, while alienating prime Crown Land and Government real estate to foreigners in perpetuity.
GALLING
Equally galling, was the PLP’s attempt to market these schemes to Bahamians as if we were idiots who could not see the big picture or read the fine print. There was also the smugness and arrogance by PLP hucksters. They pretended that these deals were more for the benefit of ordinary Bahamians than for the self-satisfied oligarchs who brokered them with gleeful abandon.
As recently as the 2010/11 budget debate, the Opposition’s Leader in the Senate, Senator Allyson Maynard Gibson, boasted that the Mayaguana Development Company, the group responsible for a proposed development at our most easterly island, was owned 50/50 by the I-Group and the Bahamas Government.
As noted in Front Porch in July: “This 50/50 arrangement would have eventually sold off nearly 100 per cent of Mayaguana’s coastal area and nearly 10,000 acres to non-Bahamians.
“As Mayaguana, by comparison, is somewhat larger than New Providence, the deal the PLP continues to brag about was the equivalent of turning over to a single developer a stretch of coastal land from the eastern end of New Providence to Lyford Cay. Again, the vast majority of this land would have ended up in foreign hands.”
Back to the drama at Baha Mar. Perry Gladstone Christie and his new PLP sold off at bargain basement prices prime beachfront and other public land at Cable Beach that Sir Stafford Sands and the UBP, Sir Lynden Pindling and an earlier version of the PLP, and Hubert Ingraham and the FNM never did over the course of more than half a century. Mr. Christie now has his place in the history books!
The original Baha Mar deal was a disaster on so many levels. Despite the rhetoric, the supposedly new PLP under Mr. Christie never updated their philosophy and policy ideas. The party simply wanted to be back in power. Upon returning to office they scrambled, cobbling together various slogans, clichés and talking points to justify their old habits of wheeling and dealing.
Perhaps realizing the controversial nature of significant elements of the original Baha Mar deal, Mr. Christie -- who purports to be the man of great consultation -- kept details of the deal secret. It was left to the Ingraham administration to table the Heads of Agreements on the initial deal.
INSULT
This was an insult added to the many injuries inflicted on our national interest in the initial deal, including public land sold at discounted prices and the proposed grant of extraordinarily generous concessions and cash payments. There were initial hints that Goodman’s Bay may have been alienated from the Bahamian people, though somebody appeared to backtrack quickly on this affront.
With Baha Mar and various anchor projects, the PLP failed to embrace newer ideas in terms of our tourism product and economic development. The idea of Baha Mar as essentially another Atlantis may have been a critical mistake. Such a vision stoked the egos of the proponents of the deal and Mr. Christie.
Still, a different type of project or variety of projects at Cable Beach, aimed at a different tourism demographic, would have been the wiser course of action. Moreover, rather than alienating invaluable public land, other arrangements could have been made to secure most of this land for generations of Bahamians.
In the Mayaguana deal the PLP at least pretended to be concerned about the national interest. The deal with Baha Mar was a give-away of monumental proportions.
There could have also been arrangements to enable Bahamians to have various levels of ownership and equity in a development which was to be built on mostly public land. Instead, the Christie administration turned its back on the core ideal of Bahamianization which was at the heart of the movement for Majority Rule.
Sadly, with the conclusion of the original deal with Baha Mar, there was no turning back, one of the slogans beloved by the PLP’s marketers. That other favourite PLP slogan, “Forward Ever, Backward Never”, also crashed and burned in light of the initial deal negotiated by Mr. Christie.
Having set in motion and made unavoidable many of the features of the current deal with Baha Mar, Mr. Christie in his typical political style, has left it up to Prime Minister Ingraham to do the heavy lifting on a final deal which he himself failed to conclude.
TONE!
Now Mr. Christie is commenting on the Prime Minister’s tone – tone! -- on a final deal. This is in keeping with his usual course of inaction in which style and tone are more important than substance. After all, who can forget his gushing and ingratiating tone when the Baha Mar deal was announced live on television? For all of Mr. Christie’s sweet melodies and tone, nothing happened.
Moreover, despite his lovely tone about the initial deal, he brokered an agreement which was wrong for The Bahamas on many levels. Mr. Ingraham has replaced Mr. Christie’s amateur tone with that of a seasoned leader. Whereas Mr. Christie was impetuous and cavalier, Mr. Ingraham has been measured and has driven a harder bargain.
Unlike Sir Lynden and the PLP’s unilateral abrogation of elements of the Hawksbill Creek Agreement, Mr. Ingraham negotiated the best deal he could for the Bahamas with Baha Mar. He has struck the right tone in negotiating with others who simply rolled over the hapless Mr. Christie, who was panicked about getting a deal at just about any cost to secure his re-election and legacy.
Short-term, the Prime Minister has sometimes been criticized about his manner and timing in negotiating elements of a final deal. In the longer term the wisdom of his negotiating strategy may prove more beneficial for the country.
In addition to tabling all heads of agreements related to Baha Mar, the Prime Minister is correct in bringing a resolution to the House of Assembly so that the Bahamian people’s elected representatives can express their will.
This will be time for Mr. Christie to do something which he has been reluctant to do from the inception of Baha Mar: To go on record clearly and unambiguously about his party’s stance on many of the controversial issues involved in an agreement whose initial seeds he helped to plant and water.
Baha Mar Drama - (Part 2)
bahamapundit
Wednesday, October 13, 2010
Prime Minister Hubert Ingraham will personally discuss aspects of the proposed Baha Mar project which continue to be of "concern" to his Government - during his upcoming trip to China
Baha Mar on PM's China trip agenda
By TANEKA THOMPSON
Tribune Staff Reporter
tthompson@tribunemedia.net
PRIME Minister Hubert Ingraham, in an interview with The Tribune, said he intends to personally discuss aspects of the proposed Baha Mar project, which continues to be of "concern" to his Government, when he meets with the leaders of the China State Construction Company and the China Export Import Bank during his trip to China next week.
Mr Ingraham gave details of this considerably important visit and the issues he hopes to discuss with several companies and the government of the People's Republic of China.
The Prime Minister will also meet with high level officials from Hutchison Whampoa and the Chinese Government to discuss, among other things, the future of Hutchison's hotel properties in Grand Bahama, the National Stadium and the Gateway Road Corridor.
Mr Ingraham's hectic schedule begins when he leaves the country on October 22. His proposed itinerary reads like a list of some of the most economically vital and controversial issues facing the country today.
It seems almost fitting that it is Mr Ingraham who is sitting at the helm of the nation's business while the government has to deal with the eminent completion of the National Stadium, the construction of the Gateway Road Corridor and the proposed multi-billion dollar Baha Mar project, as it was under his leadership that the Bahamas established diplomatic relations with Beijing in 1997.
The prime minister has publicly expressed concern over what he considers some of the more vexatious aspects of the Baha Mar deal.
He proposes to take advantage of his visit to China to meet with the leadership of the China State Construction Company and the China Export Import Bank to discuss "aspects of the proposed Baha Mar project construction terms which continue to be of concern" to his government.
Mr Ingraham will also meet with the leaders of Hutchison Whampoa - Deputy Chairman of Hutchison Whampoa Vincent Li and Raymond Chow, head of Hutchison's Hotel Division. While all of Hutchison's operations in The Bahamas will be discussed, uppermost on his agenda will be the future of Hutchison's hotel properties in Grand Bahama.
Hotels
"As you are aware those hotels continue to operate at a loss and to be supported by direct funding from Hong Kong," the prime minister said.
When Mr Ingraham visits Beijing, he is expected to call on a number of senior officials in the Government of the People's Republic of China to discuss matters of mutual interest and concern.
These will include the National Stadium, the Gateway Road Corridor, the Bahamas' interest in training and transfer of skills connected to the engagement of significant numbers of Chinese construction experts on projects in The Bahamas; cooperation on matters arising from climate change and disaster relief initiatives, agriculture, clean energy (solar and wind) and IT, increased tourism flow and other general bilateral relations, including China-CARICOM relations. The prime minister is travelling to China this year at the invitation of the Government of China. It is an invitation that he has had to delay on at least two occasions due to pressing national matters and other scheduling conflicts.
"Originally I had proposed to visit China during the last Olympiad. Subsequently, I signalled my intention to attend the opening ceremonies of the Shanghai Expo earlier this year. As it turns out, it will be the closing ceremony of the Expo that I will attend," Mr Ingraham said.
He is also expected to meet with Chinese officials, including Chairman Wu Bangguo and Vice-Premier Hui Liangyu both of whom have visited The Bahamas recently.
On his way to China, Mr Ingraham will spend a full day in Hong Kong where he will participate in the official opening of a new Bahamas Maritime Authority office and attend a reception, hosted by the BMA for a cross section of potential investors in The Bahamas - maritime, financial services and tourism in particular.
"I believe that we have excellent relations with the People's Republic of China. The importance that my Government places on this relationship is demonstrated by our appointment of a former non-portfolio Cabinet Minister to head our Diplomatic Mission in Beijing. Ambassador (Elma) Campbell is the first resident Bahamian Ambassador appointed to Beijing.
Diplomatic
"It was under my party's leadership that The Bahamas ended diplomatic relations with the Republic of China (Taiwan) and in recognition of our support for the One China policy, established diplomatic relations with Beijing in 1997," Mr Ingraham said.
Mr Ingraham acknowledged that China has been a generous friend to The Bahamas whether in response to hurricanes, in offering technical and language training scholarships to Bahamian nationals, in gifting the National Stadium, or in supporting the Bahamas' recent efforts to overcome the challenges from the OECD regarding the country's financial services sector and the conclusion of TIEAs with OECD and G20 countries.
China has set aside the sum of $1 billion for soft loans to Caricom countries. Of that sum, some 15 per cent, i.e. $150 million, has been earmarked for lending to The Bahamas.
Mr Ingraham said that the extent to which the Bahamas might identify other suitable projects that fall within the quota set for The Bahamas, will be determined at a later date. The House of Assembly recently approved a resolution for the government to borrow nearly $58 million from the China Export-Import Bank to construct a four-lane airport highway. The project will mean the grant of 200 work permits for Chinese labourers, but also a very low interest rate for the loan. "The Bahamas very much appreciates that in an international environment where soft or concessional loans for infrastructure development is increasingly scarce for middle income countries like the Bahamas, the willingness of the Chinese Government to extend such low interest loans to us," the prime minister said.
This will be Mr Ingraham's second visit to the People's Republic of China. Mr Ingraham first visited China in 2000.
October 12, 2010
tribune242
By TANEKA THOMPSON
Tribune Staff Reporter
tthompson@tribunemedia.net
PRIME Minister Hubert Ingraham, in an interview with The Tribune, said he intends to personally discuss aspects of the proposed Baha Mar project, which continues to be of "concern" to his Government, when he meets with the leaders of the China State Construction Company and the China Export Import Bank during his trip to China next week.
Mr Ingraham gave details of this considerably important visit and the issues he hopes to discuss with several companies and the government of the People's Republic of China.
The Prime Minister will also meet with high level officials from Hutchison Whampoa and the Chinese Government to discuss, among other things, the future of Hutchison's hotel properties in Grand Bahama, the National Stadium and the Gateway Road Corridor.
Mr Ingraham's hectic schedule begins when he leaves the country on October 22. His proposed itinerary reads like a list of some of the most economically vital and controversial issues facing the country today.
It seems almost fitting that it is Mr Ingraham who is sitting at the helm of the nation's business while the government has to deal with the eminent completion of the National Stadium, the construction of the Gateway Road Corridor and the proposed multi-billion dollar Baha Mar project, as it was under his leadership that the Bahamas established diplomatic relations with Beijing in 1997.
The prime minister has publicly expressed concern over what he considers some of the more vexatious aspects of the Baha Mar deal.
He proposes to take advantage of his visit to China to meet with the leadership of the China State Construction Company and the China Export Import Bank to discuss "aspects of the proposed Baha Mar project construction terms which continue to be of concern" to his government.
Mr Ingraham will also meet with the leaders of Hutchison Whampoa - Deputy Chairman of Hutchison Whampoa Vincent Li and Raymond Chow, head of Hutchison's Hotel Division. While all of Hutchison's operations in The Bahamas will be discussed, uppermost on his agenda will be the future of Hutchison's hotel properties in Grand Bahama.
Hotels
"As you are aware those hotels continue to operate at a loss and to be supported by direct funding from Hong Kong," the prime minister said.
When Mr Ingraham visits Beijing, he is expected to call on a number of senior officials in the Government of the People's Republic of China to discuss matters of mutual interest and concern.
These will include the National Stadium, the Gateway Road Corridor, the Bahamas' interest in training and transfer of skills connected to the engagement of significant numbers of Chinese construction experts on projects in The Bahamas; cooperation on matters arising from climate change and disaster relief initiatives, agriculture, clean energy (solar and wind) and IT, increased tourism flow and other general bilateral relations, including China-CARICOM relations. The prime minister is travelling to China this year at the invitation of the Government of China. It is an invitation that he has had to delay on at least two occasions due to pressing national matters and other scheduling conflicts.
"Originally I had proposed to visit China during the last Olympiad. Subsequently, I signalled my intention to attend the opening ceremonies of the Shanghai Expo earlier this year. As it turns out, it will be the closing ceremony of the Expo that I will attend," Mr Ingraham said.
He is also expected to meet with Chinese officials, including Chairman Wu Bangguo and Vice-Premier Hui Liangyu both of whom have visited The Bahamas recently.
On his way to China, Mr Ingraham will spend a full day in Hong Kong where he will participate in the official opening of a new Bahamas Maritime Authority office and attend a reception, hosted by the BMA for a cross section of potential investors in The Bahamas - maritime, financial services and tourism in particular.
"I believe that we have excellent relations with the People's Republic of China. The importance that my Government places on this relationship is demonstrated by our appointment of a former non-portfolio Cabinet Minister to head our Diplomatic Mission in Beijing. Ambassador (Elma) Campbell is the first resident Bahamian Ambassador appointed to Beijing.
Diplomatic
"It was under my party's leadership that The Bahamas ended diplomatic relations with the Republic of China (Taiwan) and in recognition of our support for the One China policy, established diplomatic relations with Beijing in 1997," Mr Ingraham said.
Mr Ingraham acknowledged that China has been a generous friend to The Bahamas whether in response to hurricanes, in offering technical and language training scholarships to Bahamian nationals, in gifting the National Stadium, or in supporting the Bahamas' recent efforts to overcome the challenges from the OECD regarding the country's financial services sector and the conclusion of TIEAs with OECD and G20 countries.
China has set aside the sum of $1 billion for soft loans to Caricom countries. Of that sum, some 15 per cent, i.e. $150 million, has been earmarked for lending to The Bahamas.
Mr Ingraham said that the extent to which the Bahamas might identify other suitable projects that fall within the quota set for The Bahamas, will be determined at a later date. The House of Assembly recently approved a resolution for the government to borrow nearly $58 million from the China Export-Import Bank to construct a four-lane airport highway. The project will mean the grant of 200 work permits for Chinese labourers, but also a very low interest rate for the loan. "The Bahamas very much appreciates that in an international environment where soft or concessional loans for infrastructure development is increasingly scarce for middle income countries like the Bahamas, the willingness of the Chinese Government to extend such low interest loans to us," the prime minister said.
This will be Mr Ingraham's second visit to the People's Republic of China. Mr Ingraham first visited China in 2000.
October 12, 2010
tribune242
Tuesday, October 12, 2010
Prime Minister Hubert Ingraham lashes out at the Progressive Liberal Party's (PLP's) 'absolute nonsense' on the Baha Mar deal
PM lashes out at PLP's 'absolute nonsense' on Baha Mar deal
tribune242
PRIME MINISTER Hubert Ingraham has called the PLP's latest jab over his stance on the Baha Mar deal "absolute nonsense".
The PLP accused Mr Ingraham of making a mockery of the foreign investment process after he declared that the government was still not satisfied with the terms of the deal, particularly with regard to the foreign labour element and the fact that the entire project is to be completed in one phase.
The PLP accused the government and Mr Ingraham of having policies that "come off as shifting sands, sinking ground".
But in a dismissive two line statement issued yesterday, the prime minister said the PLP's problem is they "simply cannot take a stand".
"Having negotiated a deal giving away our land, they shamelessly continue to defend the indefensible," he said.
The debate over the proposed $2.6 billion resort development intensified this week after Baha Mar announced it had concluded an agreement with SoctiaBank over outstanding loan payments, this being considered one of the final hurdles to the project getting off the ground.
Mr Ingraham responded shortly after, saying the government still has concerns about the deal.
This prompted the PLP, on whose watch the Baha Mar heads of agreement were signed, to accuse the government of not sticking to its word. The party issued a statement which read: "What does someone think of a prime minister who comes to parliament asking parliament to approve a project, having negotiated a new agreement with Baha Mar and then unceremoniously abrogates that agreement by changing the rules in the middle of the game?
Warned
"We warned him that there was a problem with the high foreign labour content. He was dismissive saying a deal was a deal.
"We warned him of the consequences of default of the project falling into the hands of a foreign state. He was dismissive and said a deal was a deal.
"Now it turns out that a deal is not a deal and he is prepared to flip and flop at every turn to save his political skin."The opposition said the Baha Mar project is the only major investment game in town and there is no other project on the horizon that offers the same level of capital injection, job creation, economic stimulation, and public revenue generation - all of which "the weakened and challenged economy of the Bahamas so desperately needs."
October 09, 2010
tribune242
tribune242
PRIME MINISTER Hubert Ingraham has called the PLP's latest jab over his stance on the Baha Mar deal "absolute nonsense".
The PLP accused Mr Ingraham of making a mockery of the foreign investment process after he declared that the government was still not satisfied with the terms of the deal, particularly with regard to the foreign labour element and the fact that the entire project is to be completed in one phase.
The PLP accused the government and Mr Ingraham of having policies that "come off as shifting sands, sinking ground".
But in a dismissive two line statement issued yesterday, the prime minister said the PLP's problem is they "simply cannot take a stand".
"Having negotiated a deal giving away our land, they shamelessly continue to defend the indefensible," he said.
The debate over the proposed $2.6 billion resort development intensified this week after Baha Mar announced it had concluded an agreement with SoctiaBank over outstanding loan payments, this being considered one of the final hurdles to the project getting off the ground.
Mr Ingraham responded shortly after, saying the government still has concerns about the deal.
This prompted the PLP, on whose watch the Baha Mar heads of agreement were signed, to accuse the government of not sticking to its word. The party issued a statement which read: "What does someone think of a prime minister who comes to parliament asking parliament to approve a project, having negotiated a new agreement with Baha Mar and then unceremoniously abrogates that agreement by changing the rules in the middle of the game?
Warned
"We warned him that there was a problem with the high foreign labour content. He was dismissive saying a deal was a deal.
"We warned him of the consequences of default of the project falling into the hands of a foreign state. He was dismissive and said a deal was a deal.
"Now it turns out that a deal is not a deal and he is prepared to flip and flop at every turn to save his political skin."The opposition said the Baha Mar project is the only major investment game in town and there is no other project on the horizon that offers the same level of capital injection, job creation, economic stimulation, and public revenue generation - all of which "the weakened and challenged economy of the Bahamas so desperately needs."
October 09, 2010
tribune242
Friday, October 8, 2010
Prime Minister Hubert Ingraham: It's not in our interest to have a Baha Mar - four years single-phased development
PM: BAHA MAR DEAL MUST CHANGE
By CANDIA DAMES
Guardian News Editor
candia@nasguard.com
The government is unwilling to back down from its position that the plans for the $2.6 billion Baha Mar project at Cable Beach be adjusted in major ways, Prime Minister Hubert Ingraham said yesterday.
His strongest public comments to date on the controversial project came during a sitdown interview at the House of Assembly late yesterday afternoon.
Speaking of the financing being provided by the China Export-Import Bank, Ingraham said,"Attached to their funding are conditions that are onerous, burdensome and unacceptable insofar as the labor content is concerned and the government is therefore asking that some adjustment be made with respect to the labor content of the deal.
"...There are two things that stick in our claw and we want to be able to digest the project and it is difficult to digest it with these things sticking across here."
Apart from the labor issue, Ingraham referred to Baha Mar's plan to build the massive project at Cable Beach in one phase with a planned 2014 completion.
He said those are "major issues, like a big bone". The prime minister added,"It has to be fixed."
"To do the project in a one, single-phased development is not in our interest, and it's in our interest to have the development but not as a single-phased development. Regrettably, that is the position,"he said.
The prime minister was repetitive in many respects as he sought to stress the government's position on this matter.
"What is going to happen to the hundreds of people who are working in those towers that are going to be demolished(at the Wyndham)while it's going to take four years for the project to be completed?" he questioned.
"They are going to be twiddling their thumbs while foreign workers are constructing the place."
Baha Mar has requested 8,150 work permits for the project.
Ingraham said yesterday,"There is more than enough land between the Nassau Beach(Hotel)and the land owned by Baha Mar east of the Nassau Beach for them to construct their 1,000 room hotel, their casino and whatever else they want to construct and open it.
"And nothing prevents them from building the others at the same time. There's no need whatsoever for all to be built and opened at the same time. That is not in our interest. That may well be in the interest of the financiers, the construction company and the owners of the project, but what about our interest? It is not in our interest."
Ingraham said that given persistent criticisms in the media he has faced over the government's handling of the Baha Mar deal he thought it was important for him to "put his anchor down".
"And it is now down," he said.
The prime minister also said there are a number of conditions that Baha Mar must meet, noting that even if the government said yes to the project, it would not necessarily mean it would start tomorrow.
"I have told the Chinese State Construction Company on two occasions, the most recent of which was when we signed the loan for the Airport Gateway(last week), that it is next to impossible for The Bahamas to approve 8,000 or so Chinese workers constructing a resort in The Bahamas with no Bahamian workers on the site at the same time and no transfer of skills to Bahamians at the same time.
"And I've asked them to go back and review their proposition so that the Government of The Bahamas can take a decision, but it is not possible for a resort to be built in The Bahamas with exclusive foreign labor. That's not possible."
He added,"They are in America. They are building lots of things in the United States of America. They're not using all Chinese labor on those projects. I don't expect all Chinese labor to be used on a project in The Bahamas, period.
"This is my country and this is yours."
Ingraham said,"I'm not now putting to them a percentum. We told Kerzner 70 percent of the workers had to be Bahamian. At the airport where the Canadian company is building the new US Departure Terminal, 75 percent or so percent of the workers are Bahamians.
"We understand the nature and complexity of this project. We understand the finances being provided by the Chinese Export-Import Bank. So we accept that the percentum of labor is going to be higher on such a project than it would be on other projects, but we cannot accept a 100 percent foreign labor content on the project, that's not possible."
Regarding the timing of the approval process, he said,"I don't want to be pressured by anybody."
Ingraham then emphasized that he was "sick and tired"of certain stories related to Baha Mar that were "being peddled every day, putting in people's heads things that are not true."
"This was a deal structured by Baha Mar and the Chinese. That's fine. They have come to us. We're not rubber stamps. We have to have our input, our say, before we make a determination. I think the Bahamian people expect no less of me and the Government of The Bahamas,"he said.
"I spoke, I believe very clearly in the House the other day when I said that firstly we would not consider the resolution on the agenda of the House until we get written confirmation that Baha Mar has settled its loan with Scotia[bank], and that two, we would not deal with the matter of the resolution in the House before I go away(to China)on October 22.
"Nothing has transpired to change those two."
He added"I tried to deal with this before. I scheduled my time to deal with it on two occasions. I don't now want to be pressured by anybody as to when I would do so. When I was ready others were not. In due time I will and it will be announced. So there will be no surprise as to when it is going to be dealt with.
"...We have been more than willing to facilitate and accommodate Baha Mar. It is not our fault that it took all this time for them to come to terms about the loan. It is not our fault. We had two separate meetings of the House of Assembly scheduled for that purpose. They were not in a position to do so."
Asked whether he thought the decision by the Chinese partners to invest in Baha Mar was a vote of confidence in The Bahamas, Ingraham said,"If the Chinese didn't have confidence in The Bahamas they wouldn't even talk to Baha Mar. I wouldn't talk about invest, so the investment's in The Bahamas.
"And we are deeply appreciative for the Chinese willingness to invest that kind of money in The Bahamas. We are deeply appreciative and would wish for the project to go ahead.
"We know what the Chinese interest is in terms of what benefits they get out of the deal...There must be some interest on the part of The Bahamas and The Bahamas'interest is to maximize the benefits which may be derived for The Bahamas from this investment and to ensure that when the project is complete, that the project advances us, enhances our tourism and does not drag us down."
10/6/2010
thenassauguardian
By CANDIA DAMES
Guardian News Editor
candia@nasguard.com
The government is unwilling to back down from its position that the plans for the $2.6 billion Baha Mar project at Cable Beach be adjusted in major ways, Prime Minister Hubert Ingraham said yesterday.
His strongest public comments to date on the controversial project came during a sitdown interview at the House of Assembly late yesterday afternoon.
Speaking of the financing being provided by the China Export-Import Bank, Ingraham said,"Attached to their funding are conditions that are onerous, burdensome and unacceptable insofar as the labor content is concerned and the government is therefore asking that some adjustment be made with respect to the labor content of the deal.
"...There are two things that stick in our claw and we want to be able to digest the project and it is difficult to digest it with these things sticking across here."
Apart from the labor issue, Ingraham referred to Baha Mar's plan to build the massive project at Cable Beach in one phase with a planned 2014 completion.
He said those are "major issues, like a big bone". The prime minister added,"It has to be fixed."
"To do the project in a one, single-phased development is not in our interest, and it's in our interest to have the development but not as a single-phased development. Regrettably, that is the position,"he said.
The prime minister was repetitive in many respects as he sought to stress the government's position on this matter.
"What is going to happen to the hundreds of people who are working in those towers that are going to be demolished(at the Wyndham)while it's going to take four years for the project to be completed?" he questioned.
"They are going to be twiddling their thumbs while foreign workers are constructing the place."
Baha Mar has requested 8,150 work permits for the project.
Ingraham said yesterday,"There is more than enough land between the Nassau Beach(Hotel)and the land owned by Baha Mar east of the Nassau Beach for them to construct their 1,000 room hotel, their casino and whatever else they want to construct and open it.
"And nothing prevents them from building the others at the same time. There's no need whatsoever for all to be built and opened at the same time. That is not in our interest. That may well be in the interest of the financiers, the construction company and the owners of the project, but what about our interest? It is not in our interest."
Ingraham said that given persistent criticisms in the media he has faced over the government's handling of the Baha Mar deal he thought it was important for him to "put his anchor down".
"And it is now down," he said.
The prime minister also said there are a number of conditions that Baha Mar must meet, noting that even if the government said yes to the project, it would not necessarily mean it would start tomorrow.
"I have told the Chinese State Construction Company on two occasions, the most recent of which was when we signed the loan for the Airport Gateway(last week), that it is next to impossible for The Bahamas to approve 8,000 or so Chinese workers constructing a resort in The Bahamas with no Bahamian workers on the site at the same time and no transfer of skills to Bahamians at the same time.
"And I've asked them to go back and review their proposition so that the Government of The Bahamas can take a decision, but it is not possible for a resort to be built in The Bahamas with exclusive foreign labor. That's not possible."
He added,"They are in America. They are building lots of things in the United States of America. They're not using all Chinese labor on those projects. I don't expect all Chinese labor to be used on a project in The Bahamas, period.
"This is my country and this is yours."
Ingraham said,"I'm not now putting to them a percentum. We told Kerzner 70 percent of the workers had to be Bahamian. At the airport where the Canadian company is building the new US Departure Terminal, 75 percent or so percent of the workers are Bahamians.
"We understand the nature and complexity of this project. We understand the finances being provided by the Chinese Export-Import Bank. So we accept that the percentum of labor is going to be higher on such a project than it would be on other projects, but we cannot accept a 100 percent foreign labor content on the project, that's not possible."
Regarding the timing of the approval process, he said,"I don't want to be pressured by anybody."
Ingraham then emphasized that he was "sick and tired"of certain stories related to Baha Mar that were "being peddled every day, putting in people's heads things that are not true."
"This was a deal structured by Baha Mar and the Chinese. That's fine. They have come to us. We're not rubber stamps. We have to have our input, our say, before we make a determination. I think the Bahamian people expect no less of me and the Government of The Bahamas,"he said.
"I spoke, I believe very clearly in the House the other day when I said that firstly we would not consider the resolution on the agenda of the House until we get written confirmation that Baha Mar has settled its loan with Scotia[bank], and that two, we would not deal with the matter of the resolution in the House before I go away(to China)on October 22.
"Nothing has transpired to change those two."
He added"I tried to deal with this before. I scheduled my time to deal with it on two occasions. I don't now want to be pressured by anybody as to when I would do so. When I was ready others were not. In due time I will and it will be announced. So there will be no surprise as to when it is going to be dealt with.
"...We have been more than willing to facilitate and accommodate Baha Mar. It is not our fault that it took all this time for them to come to terms about the loan. It is not our fault. We had two separate meetings of the House of Assembly scheduled for that purpose. They were not in a position to do so."
Asked whether he thought the decision by the Chinese partners to invest in Baha Mar was a vote of confidence in The Bahamas, Ingraham said,"If the Chinese didn't have confidence in The Bahamas they wouldn't even talk to Baha Mar. I wouldn't talk about invest, so the investment's in The Bahamas.
"And we are deeply appreciative for the Chinese willingness to invest that kind of money in The Bahamas. We are deeply appreciative and would wish for the project to go ahead.
"We know what the Chinese interest is in terms of what benefits they get out of the deal...There must be some interest on the part of The Bahamas and The Bahamas'interest is to maximize the benefits which may be derived for The Bahamas from this investment and to ensure that when the project is complete, that the project advances us, enhances our tourism and does not drag us down."
10/6/2010
thenassauguardian
Sunday, September 26, 2010
The National Development Party (NDP) says the controversial $2.6 billion Baha Mar project is "not in the best interest" of the Bahamian people
Gov’t Told To Scrap Baha Mar
BY KARISSMA ROBINSON
The National Development Party (NDP) wants the government to scrap the controversial $2.6 billion Baha Mar project because in its current state it is "not in the best interest" of the Bahamian people.
"The deal is not good for Bahamians and that is the bottom line," said NDP member Renward Wells.
"The NDP calls on the Free National Movement (FNM) Government, which touts itself as being a party of accountability and transparency, to immediately table the entire Baha Mar deal. The Bahamian public should be able to see and have an open and honest discussion on this agreement."
Mr. Wells and prominent attorney Paul Moss were guests on the Love 97 talk show, On Point Monday night with host Rogan Smith, where they made it quite clear that the government is about to make a huge mistake.
"Looking at it in totality I am not sure that the financial benefits that the government is projecting is going to happen," said Mr. Wells.
Mr. Wells also objected to 265 acres of prime land being transferred before any construction begins on the project.
"We don’t believe in the sale of Bahamian land. The prime Minister stated that the land will be transferred in Fee simple and Baha Mar says they are paying for the land. I want to know who is right," he said.
Mr. Wells said that there are still a lot of questions that are left unanswered.
"Who will the government have review Baha Mar’s construction drawings for building code violations and design flaws? Who will the government have on-site to inspect and ensure that the design on the blueprint is adhered to?" he asked
Furthermore, Mr. Wells said there are a number of Bahamian mechanical and electrical engineers who are capable of designing such a project.
Mr. Moss said due to the poor state of the economy it seems as if the government would do almost anything to provide jobs.
"They will sell their souls to the devil to try to create jobs. They are not going to get it done that way. What is going to happen is an invasion of this country, strangers will take over your land and future generations will not know The Bahamas as we know it today," said Mr. Moss.
Prime Minister Hubert Ingraham has already gone on record saying that if he was prime minister at the time, he would not have approved the Baha Mar deal.
"It is incredible that even after he said it was a bad deal; he is still going to go ahead with it," said Mr. Moss, who said the country cannot afford to go ahead with this project as it is.
"This deal, given what we know, must be renegotiated. We call on the FNM Government to re-negotiate this deal to ensure that the maximum benefits of this project accrue to Bahamians," he said.
As previously reported, House members will not debate the Baha Mar resolution today that deals with the foreign labour component of the agreement.
Baha Mar wants the government to approve more than 8,000 work permits for Chinese workers to work on the Cable Beach project.
Baha Mar officials have to first deal with their financial issues with Scotiabank.
Baha Mar has an outstanding $200 million loan with the bank.
September 22nd, 2010
jonesbahamas
BY KARISSMA ROBINSON
The National Development Party (NDP) wants the government to scrap the controversial $2.6 billion Baha Mar project because in its current state it is "not in the best interest" of the Bahamian people.
"The deal is not good for Bahamians and that is the bottom line," said NDP member Renward Wells.
"The NDP calls on the Free National Movement (FNM) Government, which touts itself as being a party of accountability and transparency, to immediately table the entire Baha Mar deal. The Bahamian public should be able to see and have an open and honest discussion on this agreement."
Mr. Wells and prominent attorney Paul Moss were guests on the Love 97 talk show, On Point Monday night with host Rogan Smith, where they made it quite clear that the government is about to make a huge mistake.
"Looking at it in totality I am not sure that the financial benefits that the government is projecting is going to happen," said Mr. Wells.
Mr. Wells also objected to 265 acres of prime land being transferred before any construction begins on the project.
"We don’t believe in the sale of Bahamian land. The prime Minister stated that the land will be transferred in Fee simple and Baha Mar says they are paying for the land. I want to know who is right," he said.
Mr. Wells said that there are still a lot of questions that are left unanswered.
"Who will the government have review Baha Mar’s construction drawings for building code violations and design flaws? Who will the government have on-site to inspect and ensure that the design on the blueprint is adhered to?" he asked
Furthermore, Mr. Wells said there are a number of Bahamian mechanical and electrical engineers who are capable of designing such a project.
Mr. Moss said due to the poor state of the economy it seems as if the government would do almost anything to provide jobs.
"They will sell their souls to the devil to try to create jobs. They are not going to get it done that way. What is going to happen is an invasion of this country, strangers will take over your land and future generations will not know The Bahamas as we know it today," said Mr. Moss.
Prime Minister Hubert Ingraham has already gone on record saying that if he was prime minister at the time, he would not have approved the Baha Mar deal.
"It is incredible that even after he said it was a bad deal; he is still going to go ahead with it," said Mr. Moss, who said the country cannot afford to go ahead with this project as it is.
"This deal, given what we know, must be renegotiated. We call on the FNM Government to re-negotiate this deal to ensure that the maximum benefits of this project accrue to Bahamians," he said.
As previously reported, House members will not debate the Baha Mar resolution today that deals with the foreign labour component of the agreement.
Baha Mar wants the government to approve more than 8,000 work permits for Chinese workers to work on the Cable Beach project.
Baha Mar officials have to first deal with their financial issues with Scotiabank.
Baha Mar has an outstanding $200 million loan with the bank.
September 22nd, 2010
jonesbahamas
Sunday, September 12, 2010
Sir Baltron Bethel: The Baha Mar project is one of the pillars for the continued expansion and development of the tourism industry
SIR BALTRON BIG ON BAH MAR
By CANDIA DAMES
Guardian News Editor
candia@nasguard.com:
The planned transfer of more than 264 acres of publicly-owned land to the Baha Mar developers would be justified given the tremendous benefits the project would provide for the country, according to Sir Baltron Bethel, who was the chief negotiator for the deal under the Christie government.
"I think that both the original agreement and the supplemental agreement were fair agreements, having been involved with those,"said Sir Baltron, who spoke after he was approached by The Nassau Guardian for an interview yesterday.
"I say that because of what the project is all about. The project is one of the pillars for the continued expansion and development of the tourism industry.
"The Cable Beach resort area is tired and in order to put it right it needed a vision, a plan. Now it could be argued that this project could have been approached in phases, however, the developers'concept was to do the project all one time."
Sir Baltron served as managing director of the Hotel Corporation and also investments and tourism development consultant for the government. He spent many hours helping to arrive at a deal that former Prime Minister Perry Christie had repeatedly said would be transformational.
Unlike Kerzner International's Atlantis Resort on Paradise Island, the Baha Mar project would not be developed in separate phases, Sir Baltron pointed out yesterday.
He noted that the thinking was that Baha Mar would complement Atlantis, and would occur simultaneously with the redevelopment of Lynden Pindling International Airport.
Sir Baltron indicated that when the original deal was being negotiated government negotiators looked closely at all issues surrounding the Cable Beach deal, including the controversial land issue.
"For purposes of finance the developer was unable to obtain financing without there being some provision for the freehold transfer(of publicly-owned land)so that has been the long and short of it and the current arrangement with the Chinese, as I understand it, is contingent upon the freehold being conveyed to the developer."
When he brought a resolution to the House of Assembly on the Baha Mar project on Wednesday, Prime Minister Hubert Ingraham, who is also the minister responsible for lands, said approval for the Baha Mar project requires the transfer of 264.965 acres of publicly-owned land.
Among other properties, this would include the land on which the Wyndham Resort and casino sit; the Nassau Beach Resort; the Hobby Horse Hall parcel; Fidelity Bank; the Cecil Wallace-Whifield Centre; the Cable Beach Police Station and 50 acres on Gladstone Road.
Because of the conditions precedent set by Baha Mar's financiers--The Export-Import Bank of China and the China State Construction Engineering Corporation--these lands are required to be transfered in advance of the start of construction of the project.
"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,"said Ingraham, who inherited the Baha Mar deal from the previous administration.
He has termed Baha Mar" a PLP baby "and on Wednesday outlined the requirements, consequences and benefits related to the deal.
Sir Baltron said the Baha Mar agreement must be looked at in the context of today's economic environment.
"The developer has secured the financing. There are very few projects anywhere in the world where financing to the tune of$2.5 billion is available for a tourism project in a developing country," he said.
"I think we have to weigh all of these things; your outlook with regard to how public lands should be transfered and the other demands which are being made in light of prevailing circumstances.
"So the arrangements that are now being proposed represent the best possible arrangements that the developers could secure and certainly it's a feather in the cap of the developer to have obtained such a gigantic amount of funding at the present time."
The Central Bank reported last week in its latest economic report that the outlook for 2011 is less favorable than originally forecast.
"However, upside benefits could accrue to the economy, if the proposed large-scale hotel investment projects gain traction in the coming months,"the Central Bank said.
There is a great deal riding on Baha Mar because of its promise of job creation--even with the 8,150 work permits factored in--and economic spinoffs.
Sir Baltron said given the current depressed climate, Baha Mar would provide"the push that we need".
"If the project gets off the ground it would not only be good for the Baha Mar project and for the economy of New Providence, but it can also be that which could jumpstart other smaller projects," said Sir Baltron, who currently serves as president of the Bahamas Baptist Community College.
These days he is an independent observer as it relates to Baha Mar, he noted.
Speaking of the project, he added,"It would be a good thing from where I sit as president of the Community College in terms of providing jobs and also of being able to continue to provide the kind of services that a growing college like this needs to provide, and we can only do that if the economy is growing."
When Sir Baltron helped negotiate the deal, the Chinese element was not yet a factor.
Asked yesterday what his thoughts are on the extraordinary work permit request, he said,"We all know with Chinese funding there comes the demand for use of a significant amount of Chinese labor, more than would be the norm, but the Chinese have also financed a project for more than the norm. It would be the largest touristic project ever financed in one shot in The Bahamas."
He added,"It's very important to see this project go forward. The government has invested a huge amount of money in the airport. We're going to have the finest airport in all of the Caribbean and the return on that depends upon its utilization which included the Baha Mar project coming to fruition."
9/10/2010
thenassauguardian
By CANDIA DAMES
Guardian News Editor
candia@nasguard.com:
The planned transfer of more than 264 acres of publicly-owned land to the Baha Mar developers would be justified given the tremendous benefits the project would provide for the country, according to Sir Baltron Bethel, who was the chief negotiator for the deal under the Christie government.
"I think that both the original agreement and the supplemental agreement were fair agreements, having been involved with those,"said Sir Baltron, who spoke after he was approached by The Nassau Guardian for an interview yesterday.
"I say that because of what the project is all about. The project is one of the pillars for the continued expansion and development of the tourism industry.
"The Cable Beach resort area is tired and in order to put it right it needed a vision, a plan. Now it could be argued that this project could have been approached in phases, however, the developers'concept was to do the project all one time."
Sir Baltron served as managing director of the Hotel Corporation and also investments and tourism development consultant for the government. He spent many hours helping to arrive at a deal that former Prime Minister Perry Christie had repeatedly said would be transformational.
Unlike Kerzner International's Atlantis Resort on Paradise Island, the Baha Mar project would not be developed in separate phases, Sir Baltron pointed out yesterday.
He noted that the thinking was that Baha Mar would complement Atlantis, and would occur simultaneously with the redevelopment of Lynden Pindling International Airport.
Sir Baltron indicated that when the original deal was being negotiated government negotiators looked closely at all issues surrounding the Cable Beach deal, including the controversial land issue.
"For purposes of finance the developer was unable to obtain financing without there being some provision for the freehold transfer(of publicly-owned land)so that has been the long and short of it and the current arrangement with the Chinese, as I understand it, is contingent upon the freehold being conveyed to the developer."
When he brought a resolution to the House of Assembly on the Baha Mar project on Wednesday, Prime Minister Hubert Ingraham, who is also the minister responsible for lands, said approval for the Baha Mar project requires the transfer of 264.965 acres of publicly-owned land.
Among other properties, this would include the land on which the Wyndham Resort and casino sit; the Nassau Beach Resort; the Hobby Horse Hall parcel; Fidelity Bank; the Cecil Wallace-Whifield Centre; the Cable Beach Police Station and 50 acres on Gladstone Road.
Because of the conditions precedent set by Baha Mar's financiers--The Export-Import Bank of China and the China State Construction Engineering Corporation--these lands are required to be transfered in advance of the start of construction of the project.
"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,"said Ingraham, who inherited the Baha Mar deal from the previous administration.
He has termed Baha Mar" a PLP baby "and on Wednesday outlined the requirements, consequences and benefits related to the deal.
Sir Baltron said the Baha Mar agreement must be looked at in the context of today's economic environment.
"The developer has secured the financing. There are very few projects anywhere in the world where financing to the tune of$2.5 billion is available for a tourism project in a developing country," he said.
"I think we have to weigh all of these things; your outlook with regard to how public lands should be transfered and the other demands which are being made in light of prevailing circumstances.
"So the arrangements that are now being proposed represent the best possible arrangements that the developers could secure and certainly it's a feather in the cap of the developer to have obtained such a gigantic amount of funding at the present time."
The Central Bank reported last week in its latest economic report that the outlook for 2011 is less favorable than originally forecast.
"However, upside benefits could accrue to the economy, if the proposed large-scale hotel investment projects gain traction in the coming months,"the Central Bank said.
There is a great deal riding on Baha Mar because of its promise of job creation--even with the 8,150 work permits factored in--and economic spinoffs.
Sir Baltron said given the current depressed climate, Baha Mar would provide"the push that we need".
"If the project gets off the ground it would not only be good for the Baha Mar project and for the economy of New Providence, but it can also be that which could jumpstart other smaller projects," said Sir Baltron, who currently serves as president of the Bahamas Baptist Community College.
These days he is an independent observer as it relates to Baha Mar, he noted.
Speaking of the project, he added,"It would be a good thing from where I sit as president of the Community College in terms of providing jobs and also of being able to continue to provide the kind of services that a growing college like this needs to provide, and we can only do that if the economy is growing."
When Sir Baltron helped negotiate the deal, the Chinese element was not yet a factor.
Asked yesterday what his thoughts are on the extraordinary work permit request, he said,"We all know with Chinese funding there comes the demand for use of a significant amount of Chinese labor, more than would be the norm, but the Chinese have also financed a project for more than the norm. It would be the largest touristic project ever financed in one shot in The Bahamas."
He added,"It's very important to see this project go forward. The government has invested a huge amount of money in the airport. We're going to have the finest airport in all of the Caribbean and the return on that depends upon its utilization which included the Baha Mar project coming to fruition."
9/10/2010
thenassauguardian
Saturday, September 11, 2010
Baha Mar resolution before Parliament calls for more than 8,000 work permits for foreign workers
BAHA MAR WANTS WORK PERMITS FOR 8,150 NON-BAHAMIANS
By KRYSTEL ROLLE
Guardian Staff Reporter
krystel@nasguard.com:
Prime Minister Hubert Ingraham yesterday tabled a resolution in Parliament for the multi-billion dollar Baha Mar project, laying out some of the details of the proposed deal which would require the government to transfer more than 260 acres of land to the developers before any work even begins, and grant more than 8,000 work permits to foreigners.
"The resolution results from the fact that the foreign labor component intended during the construction of the resort exceeds levels ever experienced in The Bahamas and is beyond anything ever contemplated by my government,"Ingraham said.
Ingraham indicated that debate of the resolution would not begin until Baha Mar resolves the outstanding loan matter that it has with Scotiabank.
Baha Mar CEO Sarkis Izmirlian will travel to Toronto, Canada, next week to meet with bank officials on the issue.
The progress on the Baha Mar deal is being held up by the payment of an outstanding loan the company has with Scotiabank, reportedly worth around $160 million. The Cable Beach properties are being held as security.
While debate on the resolution is not expected to begin until near the end of September, the prime minister yesterday laid out some of the aspects of the deal to ensure that the Bahamian people are fully informed on the requirements, consequences and benefits that are projected to result for The Bahamas if the development proceeds as currently proposed.
The total value of the project is estimated at $2.6 billion. Ingraham revealed yesterday that a contract for the amount of $1,918,965,693 has been negotiated with the China State Construction Company as primary contractors for the project.
Ingraham said 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."
Baha Mar officials have stated that at no time will more than 5,000 foreigners be working on the site.
"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,"Ingraham added.
Using the construction phase of the Atlantis Resort as a comparison, Ingraham noted that before that was constructed his government established that the ratio of Bahamians to non-Bahamians on the site would not exceed 30 percent foreign to 70 percent Bahamian.
Ingraham said that was done despite the need at that time for large numbers of expatriate experts and labor for the efficient completion of the project.
He added that the established ratio was obtained during two phases of construction of the Kerzner International resorts under FNM administrations and was continued during the PLP government during the third phase expansion of the project.
Ingraham said based on Baha Mar's numbers, it is proposed that 71 percent of the workforce be foreign and 29 percent Bahamian.
"This represents a complete reversal of conditions imposed upon Kerzner, for example,"he said.
"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."
As previously reported, 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 20-acre beach and pool experience, an 18-hole golf course and a 60,000 square-foot retail village and additional residential products.
To achieve this, Ingraham explained that a large amount of government and crown land must be transferred to the developers.
The Radisson, now the Sheraton, was transferred to Baha Mar in 2005. The Wyndham Crystal Palace and the Nassau Beach Hotel are currently on leased crown land, the prime minister noted.
But Ingraham said the approval for the Baha Mar project requires the transfer of the land occupied by both hotel properties, the Hobby Horse Hall parcel, Fidelity Bank, Cecil Wallace-Whitfield Centre(which houses the Ministry of Finance and the Office of the Prime Minister), the Cable Beach Police Station and the old West Bay Street, new corridor number seven, 50 acres of Gladstone Road, the Prospect Ridge parcel, Water and Sewerage Corporation parcel, BEC Parcel, BECâ substation, plus an additional parcel of .783 acre for a total of 264.965 acres.
Ingraham said because of the conditions set by Baha Mar's financiers China Import Export Bank and the China State Construction Company these lands are required to be transferred in advance of the start of construction of the project.
"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,"he said.
Baha Mar has said 8,00 permanent jobs are also projected once the resort is completed.
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.
It is expected that all outstanding matters relating to the Scotiabank loan will be resolved within the next two-week period.
Debate is expected to start on September 23 or 24.
9/9/2010
thenassauguardian
By KRYSTEL ROLLE
Guardian Staff Reporter
krystel@nasguard.com:
Prime Minister Hubert Ingraham yesterday tabled a resolution in Parliament for the multi-billion dollar Baha Mar project, laying out some of the details of the proposed deal which would require the government to transfer more than 260 acres of land to the developers before any work even begins, and grant more than 8,000 work permits to foreigners.
"The resolution results from the fact that the foreign labor component intended during the construction of the resort exceeds levels ever experienced in The Bahamas and is beyond anything ever contemplated by my government,"Ingraham said.
Ingraham indicated that debate of the resolution would not begin until Baha Mar resolves the outstanding loan matter that it has with Scotiabank.
Baha Mar CEO Sarkis Izmirlian will travel to Toronto, Canada, next week to meet with bank officials on the issue.
The progress on the Baha Mar deal is being held up by the payment of an outstanding loan the company has with Scotiabank, reportedly worth around $160 million. The Cable Beach properties are being held as security.
While debate on the resolution is not expected to begin until near the end of September, the prime minister yesterday laid out some of the aspects of the deal to ensure that the Bahamian people are fully informed on the requirements, consequences and benefits that are projected to result for The Bahamas if the development proceeds as currently proposed.
The total value of the project is estimated at $2.6 billion. Ingraham revealed yesterday that a contract for the amount of $1,918,965,693 has been negotiated with the China State Construction Company as primary contractors for the project.
Ingraham said 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."
Baha Mar officials have stated that at no time will more than 5,000 foreigners be working on the site.
"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,"Ingraham added.
Using the construction phase of the Atlantis Resort as a comparison, Ingraham noted that before that was constructed his government established that the ratio of Bahamians to non-Bahamians on the site would not exceed 30 percent foreign to 70 percent Bahamian.
Ingraham said that was done despite the need at that time for large numbers of expatriate experts and labor for the efficient completion of the project.
He added that the established ratio was obtained during two phases of construction of the Kerzner International resorts under FNM administrations and was continued during the PLP government during the third phase expansion of the project.
Ingraham said based on Baha Mar's numbers, it is proposed that 71 percent of the workforce be foreign and 29 percent Bahamian.
"This represents a complete reversal of conditions imposed upon Kerzner, for example,"he said.
"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."
As previously reported, 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 20-acre beach and pool experience, an 18-hole golf course and a 60,000 square-foot retail village and additional residential products.
To achieve this, Ingraham explained that a large amount of government and crown land must be transferred to the developers.
The Radisson, now the Sheraton, was transferred to Baha Mar in 2005. The Wyndham Crystal Palace and the Nassau Beach Hotel are currently on leased crown land, the prime minister noted.
But Ingraham said the approval for the Baha Mar project requires the transfer of the land occupied by both hotel properties, the Hobby Horse Hall parcel, Fidelity Bank, Cecil Wallace-Whitfield Centre(which houses the Ministry of Finance and the Office of the Prime Minister), the Cable Beach Police Station and the old West Bay Street, new corridor number seven, 50 acres of Gladstone Road, the Prospect Ridge parcel, Water and Sewerage Corporation parcel, BEC Parcel, BECâ substation, plus an additional parcel of .783 acre for a total of 264.965 acres.
Ingraham said because of the conditions set by Baha Mar's financiers China Import Export Bank and the China State Construction Company these lands are required to be transferred in advance of the start of construction of the project.
"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,"he said.
Baha Mar has said 8,00 permanent jobs are also projected once the resort is completed.
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.
It is expected that all outstanding matters relating to the Scotiabank loan will be resolved within the next two-week period.
Debate is expected to start on September 23 or 24.
9/9/2010
thenassauguardian
Subscribe to:
Posts (Atom)