Decision to approve Chinese work permits troubling
BY LYNDEN NAIRN
At the risk of prejudicing my views on this matter, let me remind your readers that “a bird in the hand is better than two in the bush”.
The Parliament’s decision to unanimously approve Baha Mar’s request for 8,100 work permits is troubling because it appears that all of the relevant factors were not considered or even known.
At the outset, I want to make it clear that Baha Mar has the right to invest whatever amount it wishes, wherever it wishes and whenever it wishes within the confines of our laws.
I also believe that consistent with the tenets of our capitalistic economy, Baha Mar has the right to make good and bad business decisions. It is not right, for instance, to deny approval of a Bahamian project on the basis that it would create a glut of room inventories in the marketplace, even though one would expect investors and their financiers to have regard for that possibility.
The labor issue is a significant problem not only because it robs Bahamians of maximizing their benefits from the project, and not only because on its face it puts Atlantis at a disadvantage, but because it represents a business deal that apparently could not be financed if the financier were not afforded certain privileges.
During Atlantis’ multiple phases, the government thought that it was in the best interest of the Bahamian people to require Atlantis’ labor component to be at a certain level. Undoubtedly, that imposition caused Atlantis to engage labor at a higher cost than it would if that condition did not exist.
A few years later, in order to ensure that financing is secured for a project, the government has decided to allow Baha Mar to engage almost three times the number of foreign workers as Atlantis. That circumstance means that Baha Mar is able to construct its facility at a lower cost than Atlantis.
That places Atlantis at a significant competitive disadvantage since the cost of construction drives capital requirements, financing costs, room rates and ultimately profitability. Whatever one’s opinion with respect to Atlantis and Baha Mar, one has to at the very least appreciate that this is a legitimate concern for Atlantis.
Indeed, it really ought to concern all of us since this state of affairs creates uncertainty in the minds of current local and international investors as to whether the government might change the playing field and render their business models not feasible.
This is a very dangerous matter and should not be brushed over in our effort to cause Baha Mar to happen. Atlantis’ investment is already in the ground — it is what it is. A decision by the government should not be the event that renders it less competitive — not in a capitalistic environment.
Some persons have criticized the agreement between Atlantis and the government. However, it needs to be remembered that businesspersons must seek to guard against the kind of risk that Atlantis faces today. Perhaps one is saying that such a deal is not in the country’s interest. The fact is though that no reasonable government should be afraid to execute such a deal since no reasonable government would wish to jeopardize a major investment project.
That said, I believe that the government has a moral responsibility to not grant a better deal to Baha Mar. Foreign and local investors must be able to trust that the government will ensure that the playing field is level at the time of their investment and after as well.
No investor, local or foreign, would wish to invest in an environment of uncertainty. This situation could jeopardize future investments in The Bahamas.
Indeed, Sir Sol Kerzner has already said that Atlantis phase four is unlikely. Already, therefore, the cost of granting Baha Mar 8,100 permits to construct a $2.6 billion hotel is $1 billion in future investments. The question is how many other projects will be deterred?
Moreover, if Atlantis’ phase four project were to reflect the Bahamian labor component that was imposed on it several years ago, they are likely to have engaged 3,500 Bahamians, the same number that Baha Mar will hire.
I also found it rather revealing that the labor cost allocated to the 3,500 Bahamians that Baha Mar intends to engage is $200 million over four years. That equates to $275 per week inclusive of national insurance and other benefits.
What is equally striking is that having increased the Bahamian component by $200 million, the Chinese labor component remains unchanged. Assuming that information is complete, and frankly there is no reason to believe that the Prime Minister was complete, then it simply means that Bahamians will be given contracts to procure materials. Assuming such materials are required to be sourced in China, then this amendment constitutes nothing.
What is more, if it is true that as the Prime Minister suggests, the additional $200 million is intended to move Baha Mar’s cost closer to Atlantis’, then what is the incremental cost of the Baha Mar development?
Now let’s say that Baha Mar makes the argument that its total development cost was not lowered as a result of the favorable labor allocation. That is quite possibly true, but does that make the government’s situation any better? Perhaps not.
Here is why: It is indisputable that the Chinese government’s decision to provide the financing is based on the excessive work permits and the sale of materials for that project. Therefore, the inducement takes place broadly at the level of financing, not at the level of project development cost.
That makes Atlantis’ argument even more compelling since in that instance the issue is not merely the competitive disadvantage that is driven by development cost, but the entire project. In other words, if in the absence the incremental incentives the Chinese would refuse to finance the project, the government has unwittingly given Baha Mar a financing advantage. Atlantis can therefore argue that the entire project represents an abandonment of the agreement, not just the additional labor and land cost that they incurred. Even commercial banks can argue that this deal places a competitive bar on them that they cannot reach.
I do not seek to carry water for Atlantis, much less commercial banks. I simply believe that it is essential for us to consider the consequences of the decisions we make.
The fact is that this arrangement has far reaching consequences. I only wish that the Christie administration and the Ingraham administration had not messed up Baha Mar’s original plans so badly. They owe Izmirlian, Atlantis and the Bahamian people an apology and even their resignations.
I now wish to consider a related but slightly different matter. Bahamians will recall that during the various construction phases of Atlantis, many persons argued that it was inappropriate to grant Atlantis all the incentives that were given. Undoubtedly, there were smaller investors, Bahamians and others, who felt that their business models were being threatened by the Atlantis subsidies or perhaps they felt that they should have received similar incentives, for whatever reason.
I believe a strong argument can be made by those who were aggrieved. That points to the fact that we need to have clearly defined concessions/incentives in order to create a level playing field and remove uncertainty and arbitrariness from the process. The latter leaves too much room for abuse and under the table dealings. Furthermore, deals should not be made in secret and persons who benefit in any way as lawyers, developers, etc., should not vote in our Parliament on these specific matters.
• Lynden Nairn is a Chartered Accountant, and president of Colina General Insurance.
11/24/2010
thenassauguardian
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 development. Show all posts
Showing posts with label Baha Mar development. Show all posts
Thursday, November 25, 2010
Saturday, November 20, 2010
Prime Minister Hubert Ingraham insists that the Government of The Bahamas will not concede a breach of contract that Kerzner International is alleging will be made - if the Baha Mar project is approved
PM: Govt will not concede breach of Kerzner contract
By CHESTER ROBARDS
Guardian Staff Reporter
chester@nasguard.com
The Government of The Bahamas will not concede a breach of contract that Kerzner International is alleging will be made if the Baha Mar project is approved, Prime Minister Hubert Ingraham insisted last night during his contribution to debate in the House of Assembly. The House unanimously passed the resolution to move forward with the Baha Mar project late last night.
Ingraham urged that Kerzner International, owners of the Atlantis Resort on Paradise Island, should outline why it thinks The Bahamas has breached the ‘Most Favored Nation’ (MFN) clause in its agreement with Kerzner, and put it to his government.
“On behalf of the government, I do not concede that we have breached our agreements with Kerzner,” said Ingraham.
“I await receipt of the particulars of Kerzner’s claim which we will review and determine.
“We always honor our deals. And the arrangement with Kerzner is no exception.”
Kerzner charged in a press release issued Wednesday that the government of The Bahamas has given the Baha Mar developers more favorable labor terms than they received during the development of Atlantis, which violates the MFN clause.
However, Ingraham insisted last night that Baha Mar has not been offered certain concession given Kerzner during their development phases.
He argued that The Bahamas over the years has been just as good to Kerzner as Kerzner has been to the Bahamian people and economy.
“The entry of Kerzner in The Bahamas has been good, indeed very good for The Bahamas,” said Ingraham.
“Kerzner has created as many as 2,000 more new and additional jobs to that required under the terms of the various agreements concluded with the government.
“Kerzner’s impact on training – whether of workers involved in the construction of its various resort properties, or for workers engaged in the operation and maintenance of Kerzner’s properties is clearly evident. The impact of Kerzner International – of Atlantis, the Ocean Club and the Cove, with their themed park, marina, etc, is also evident.
“Yes, Kerzner is good for The Bahamas. It is also true that The Bahamas has been good to Mr. Kerzner.
“It has not been a one way street. The relationship has been mutually beneficial.”
The prime minister also lamented the fact that it took more than six years for Kerzner to bring its concerns to the table, which he insisted cannot stop Baha Mar’s development now.
“I note that Kerzner International is late in expressing its concern with the Baha Mar project; having not voiced those concerns in 2005 when the dimensions of this project would have been very widely covered in the Bahamian press, nor in 2007 when my government made the details of the various agreements concluded with Baha Mar public in this place,” he said.
“I believe, Mr. Speaker, that the horse has left the barn. I am fully confident that this honorable House will signal its approval for this project to proceed.”
Ingraham also took his alloted time in Parliament to reaffirm Baha Mar and China State Construction’s (CSC) commitment to increasing the amount of subcontracted work for Bahamians from $200 to $400 million, and creating an $8 million training program for construction workers, $1 million of which is to be a cash injection at the approval of the project.
Baha Mar and its Chinese partners have also agreed to develop a permanent training and service academy that will prepare Bahamians for the resort properties’ opening and beyond, Ingraham said.
He tabled e-mails and a letter from CSC and Baha Mar bolstering their support for these services.
According to him, the net benefit of this deal for Bahamians and the Bahamian economy far outweigh the counter-arguments to such a large development.
Baha Mar released a statement last night, following the government’s passage of the resolution, thanking it for its support and ensuring that, following their receipt of the final government approvals, they will commence the project by awarding contracts immediately to Bahamian contractors.
The development’s Chairman and CEO Sarkis Izmirlian said his company is dedicated to the project and the economic benefits it promises to The Bahamas.
“The Baha Mar team is delighted with today’s unanimous vote by Parliament,” he said.
“We are dedicated to delivering to The Bahamas this world class destination resort and the immediate and long term economic benefits, both from its construction and operation.
“The government and the Bahamian people are placing their trust in us, not just to have Baha Mar succeed as a business enterprise, but as importantly for Baha Mar to be a productive and exemplary member of the Bahamian community.
“Succeeding for The Bahamas is the key to Baha Mar’s success. This is what Baha Mar is about, and this is the guiding principle with respect to how we will run our business.
“We look forward to the tremendous positive benefits that Baha Mar will bring to The Bahamas.”
11/19/2010
thenassauguardian
By CHESTER ROBARDS
Guardian Staff Reporter
chester@nasguard.com
The Government of The Bahamas will not concede a breach of contract that Kerzner International is alleging will be made if the Baha Mar project is approved, Prime Minister Hubert Ingraham insisted last night during his contribution to debate in the House of Assembly. The House unanimously passed the resolution to move forward with the Baha Mar project late last night.
Ingraham urged that Kerzner International, owners of the Atlantis Resort on Paradise Island, should outline why it thinks The Bahamas has breached the ‘Most Favored Nation’ (MFN) clause in its agreement with Kerzner, and put it to his government.
“On behalf of the government, I do not concede that we have breached our agreements with Kerzner,” said Ingraham.
“I await receipt of the particulars of Kerzner’s claim which we will review and determine.
“We always honor our deals. And the arrangement with Kerzner is no exception.”
Kerzner charged in a press release issued Wednesday that the government of The Bahamas has given the Baha Mar developers more favorable labor terms than they received during the development of Atlantis, which violates the MFN clause.
However, Ingraham insisted last night that Baha Mar has not been offered certain concession given Kerzner during their development phases.
He argued that The Bahamas over the years has been just as good to Kerzner as Kerzner has been to the Bahamian people and economy.
“The entry of Kerzner in The Bahamas has been good, indeed very good for The Bahamas,” said Ingraham.
“Kerzner has created as many as 2,000 more new and additional jobs to that required under the terms of the various agreements concluded with the government.
“Kerzner’s impact on training – whether of workers involved in the construction of its various resort properties, or for workers engaged in the operation and maintenance of Kerzner’s properties is clearly evident. The impact of Kerzner International – of Atlantis, the Ocean Club and the Cove, with their themed park, marina, etc, is also evident.
“Yes, Kerzner is good for The Bahamas. It is also true that The Bahamas has been good to Mr. Kerzner.
“It has not been a one way street. The relationship has been mutually beneficial.”
The prime minister also lamented the fact that it took more than six years for Kerzner to bring its concerns to the table, which he insisted cannot stop Baha Mar’s development now.
“I note that Kerzner International is late in expressing its concern with the Baha Mar project; having not voiced those concerns in 2005 when the dimensions of this project would have been very widely covered in the Bahamian press, nor in 2007 when my government made the details of the various agreements concluded with Baha Mar public in this place,” he said.
“I believe, Mr. Speaker, that the horse has left the barn. I am fully confident that this honorable House will signal its approval for this project to proceed.”
Ingraham also took his alloted time in Parliament to reaffirm Baha Mar and China State Construction’s (CSC) commitment to increasing the amount of subcontracted work for Bahamians from $200 to $400 million, and creating an $8 million training program for construction workers, $1 million of which is to be a cash injection at the approval of the project.
Baha Mar and its Chinese partners have also agreed to develop a permanent training and service academy that will prepare Bahamians for the resort properties’ opening and beyond, Ingraham said.
He tabled e-mails and a letter from CSC and Baha Mar bolstering their support for these services.
According to him, the net benefit of this deal for Bahamians and the Bahamian economy far outweigh the counter-arguments to such a large development.
Baha Mar released a statement last night, following the government’s passage of the resolution, thanking it for its support and ensuring that, following their receipt of the final government approvals, they will commence the project by awarding contracts immediately to Bahamian contractors.
The development’s Chairman and CEO Sarkis Izmirlian said his company is dedicated to the project and the economic benefits it promises to The Bahamas.
“The Baha Mar team is delighted with today’s unanimous vote by Parliament,” he said.
“We are dedicated to delivering to The Bahamas this world class destination resort and the immediate and long term economic benefits, both from its construction and operation.
“The government and the Bahamian people are placing their trust in us, not just to have Baha Mar succeed as a business enterprise, but as importantly for Baha Mar to be a productive and exemplary member of the Bahamian community.
“Succeeding for The Bahamas is the key to Baha Mar’s success. This is what Baha Mar is about, and this is the guiding principle with respect to how we will run our business.
“We look forward to the tremendous positive benefits that Baha Mar will bring to The Bahamas.”
11/19/2010
thenassauguardian
Tuesday, November 9, 2010
PLP leader Perry Christie is at odds with Prime Minister Hubert Ingraham over Baha Mar Resort construction phases
Christie at odds with PM over six planned Baha Mar hotels
tribune242
PLP leader Perry Christie is at odds with Prime Minister Hubert Ingraham over his belief that the six hotels which are to be built as part of the Baha Mar Resort should be built or opened in phases.
Mr Christie said it would only increase the cost of the project to break down the construction into phases, and would make little sense for the resort developers not to open all of the hotels at the same time if they were all constructed simultaneously.
Information reaching The Tribune is that Prime Minister Hubert Ingraham may have asked the Chinese if the hotels could be built in phases rather than all at once or that if this could not be accommodated, that they would open in a phased manner.
But Mr Christie said that considering the fact that so much money was being borrowed to fund the hotels' construction it would "not make sense to have hotels sitting there that they couldn't sell", referring to the ability to sell rooms within the hotels once they are completed.
And he added that the size of the Baha Mar development was one of the reasons for the re-development of the Lynden Pindling International Airport.
Studies
"Don't forget, Baha Mar engaged a company to do studies which concluded that both the Baha Mar development and Atlantis can co-exist/be developed at the same time," said Mr Christie.
Meanwhile, Mr Christie also told The Tribune that he understands that coming out of the Prime Minister's meetings with Baha Mar financiers, China Export Import Bank and the China State Construction Company, its general contractor, an arrangement may have been reached whereby the Bahamian labour component on the construction project would be increased by ten per cent, with 40 per cent Bahamian and 60 per cent Chinese labour.
Some sources had suggested Mr Ingraham had sought to negotiate a $200million increase in the amount of funding that will go to Bahamian contractors in connection with the project.
"The Prime Minister, I presume upon his return, will advise the country as to whether or not he was able to succeed in these discussions," said Mr Christie last week.
Stephen Wrinkle, President of the Bahamas Contractors Association, said yesterday that prior to Mr Ingraham leaving for China he told the BCA in a meeting that he would seek to increase the Bahamian content of the labour force and get more work for Bahamian contractors as part of the Baha Mar project.
"We have to ensure we've got the quantity of the workers and the dollar value comes to the contractors and not just payrolls," said Mr Wrinkle yesterday.
The contractor added that as the industry awaits an announcement on what was the outcome of any efforts on behalf of Mr Ingraham to achieve this end, the BCA continues to dialogue with Baha Mar and BTVI on training workers so they are prepared "at such time as when the facts and figures emerge".
"We know there will be a Bahamian content in the labour force and the project and we are continuing to focus our efforts on preparing our workers and contractors so if the work the Prime Minister is doing comes to fruition we will be able to presentable work force for project," said Mr Wrinkle.
November 08, 2010
tribune242
tribune242
PLP leader Perry Christie is at odds with Prime Minister Hubert Ingraham over his belief that the six hotels which are to be built as part of the Baha Mar Resort should be built or opened in phases.
Mr Christie said it would only increase the cost of the project to break down the construction into phases, and would make little sense for the resort developers not to open all of the hotels at the same time if they were all constructed simultaneously.
Information reaching The Tribune is that Prime Minister Hubert Ingraham may have asked the Chinese if the hotels could be built in phases rather than all at once or that if this could not be accommodated, that they would open in a phased manner.
But Mr Christie said that considering the fact that so much money was being borrowed to fund the hotels' construction it would "not make sense to have hotels sitting there that they couldn't sell", referring to the ability to sell rooms within the hotels once they are completed.
And he added that the size of the Baha Mar development was one of the reasons for the re-development of the Lynden Pindling International Airport.
Studies
"Don't forget, Baha Mar engaged a company to do studies which concluded that both the Baha Mar development and Atlantis can co-exist/be developed at the same time," said Mr Christie.
Meanwhile, Mr Christie also told The Tribune that he understands that coming out of the Prime Minister's meetings with Baha Mar financiers, China Export Import Bank and the China State Construction Company, its general contractor, an arrangement may have been reached whereby the Bahamian labour component on the construction project would be increased by ten per cent, with 40 per cent Bahamian and 60 per cent Chinese labour.
Some sources had suggested Mr Ingraham had sought to negotiate a $200million increase in the amount of funding that will go to Bahamian contractors in connection with the project.
"The Prime Minister, I presume upon his return, will advise the country as to whether or not he was able to succeed in these discussions," said Mr Christie last week.
Stephen Wrinkle, President of the Bahamas Contractors Association, said yesterday that prior to Mr Ingraham leaving for China he told the BCA in a meeting that he would seek to increase the Bahamian content of the labour force and get more work for Bahamian contractors as part of the Baha Mar project.
"We have to ensure we've got the quantity of the workers and the dollar value comes to the contractors and not just payrolls," said Mr Wrinkle yesterday.
The contractor added that as the industry awaits an announcement on what was the outcome of any efforts on behalf of Mr Ingraham to achieve this end, the BCA continues to dialogue with Baha Mar and BTVI on training workers so they are prepared "at such time as when the facts and figures emerge".
"We know there will be a Bahamian content in the labour force and the project and we are continuing to focus our efforts on preparing our workers and contractors so if the work the Prime Minister is doing comes to fruition we will be able to presentable work force for project," said Mr Wrinkle.
November 08, 2010
tribune242
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
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
Thursday, September 23, 2010
Baha Mar Development... Debate
Debate on the Baha Mar development
By LARRY SMITH
DEBATE on the government's resolution to approve the Baha Mar development was scheduled to begin today in Parliament - five years after the initial deal was concluded in 2005. But the debate was postponed until the project's principals can come to terms with the Bank of Nova Scotia on outstanding debt.
It's been a long road - although not quite as long as the 13-year BTC sell-off - and conditions in 2005 were vastly different from what they are today. Back then, the credit boom underway in the US had a marked spillover effect on the Bahamas, with major developments planned around the country.
But most of these projects collapsed in the wake of the Great Recession that swept the world in 2008. The Baha Mar project was kept ticking over, even when the original joint venture partners withdrew. It was the brainchild of a Lyford Cay resident named Sarkis Izmirlian, whose grandfather left Armenia in the final years of the Ottoman Empire.
Sarkis' father, Dikran, made his fortune by cornering the world peanut trade. And the family became property developers in Britain, where one of their companies owns the 13-acre site on which London's City Hall is located. While Dikran lives in Switzerland, Sarkis manages the family's assets from the Bahamas.
He is said to be an astute developer who conceived the grandiose Baha Mar project partly to make a name for himself. But the project has been able to survive only because the Chinese are investing their huge currency reserves in support of their strategic interests. According to China's Commerce Ministry, some 800,000 Chinese are now working on energy, infrastructure and housing projects around the world.
Without clear evidence, we should discount the allegations that have been made about the use of Chinese convicts as workers on these projects. But we do think it makes sense for our government to seek a broad political consensus for the project in view of the large foreign labour component.
The 1,000-acre Baha Mar project is owned by the Izmirlian family, with the Chinese Export-Import Bank providing $2.5 billion in financing over 20 years and the China State Construction & Engineering Co as principal contractor.
Challenges
It was unclear at this writing whether the Bank of Nova Scotia, which financed the Izmirlian's earlier acquisition of Cable Beach hotels, would become an equity investor. But it is fair to ask how Baha Mar expects to repay a $2.5 billion loan from China when it has already encountered challenges servicing the current $200 million loan to Scotiabank.
Still, it is the view of most observers that Cable Beach needs to be redeveloped for the country's tourism industry to remain competitive, and whether the land used for collateral is conveyed on a long-term lease or as freehold is beside the point.
The optimum use for that land is resort development and nobody else in the current environment can finance such a project.
And even though a large portion of the $2.5 billion will return to China in the form of interest, wages and materials purchases, this is still a major foreign investment for the Bahamas that will help to stimulate the economy in the short term and drive tourism growth in the longer term.
Conflict of Interest
According to the Institute of Auditors, conflict of interest is when someone in a position of trust has a competing professional or personal interest that makes it difficult to fulfil his or her duties impartially, or that creates an appearance of impropriety.
But exactly what does that mean in the Bahamas? Well, the short answer is...very little.
The Bahamas is a small place, which makes it difficult for any of us to avoid apparent conflicts. And they happen all the time, at every level, in both the public and private sectors. There are very few explicit rules, and even where rules exist, there are no real sanctions.
In the political realm, the old United Bahamian Party oligarchs have been described as "the poster boys for conflict of interest and corruption." Back before the days when cabinet ministers earned official salaries, UBP politicos routinely represented companies doing business with the government and awarded themselves contracts as a matter of right.
Things were so bad that prior to the 1967 general election the UBP itself had issued a code of ethics requiring ministers to withdraw from any case in which they had a private interest.
But that didn't stop politicians like Sir Stafford Sands from acting as paid agents for Freeport gambling interests, as documented by the 1967 Commission of Inquiry.
Sands (who was finance and tourism minister at the time) received over $1.8 million in consultancy fees from the Grand Bahama Port Authority between 1962 and 1966. The Port also gave hundreds of thousands of dollars in political contributions to the UBP.
When the Progressive Liberal Party came to power in 1967 it promised to change all that.
The Pindling administration issued a new code of ethics that prohibited ministers from accepting substantial gifts from persons doing business with the government.
Fast forward 15 years and the Bahamas was in the throes of a criminal takeover by South American drug cartels.
The Colombian flag was raised over Norman's Cay in George Smith's Exuma constituency by the notorious gangster Carlos Lehder, who drove ordinary visitors away at gunpoint and orchestrated hourly cocaine flights to the US.
The 1984 Commission of Inquiry found that Smith had accepted gifts and hospitality from Lehder, who is now serving a long sentence in an American jail. In fact, one parliamentarian said at the time that "Pindling and his crew make the Bay Street Boys look like schoolchildren."
The 1993 inquiries into Bahamasair and the Hotel Corporation were initiated by the first Free National Movement government. They documented decades of gross mismanagement, conflict of interest, and official corruption under the PLP. In response, the FNM promised a government in the sunshine that would be fully accountable to the people.
In the years since there have been many accusations of conflict of interest featuring politicians of both major parties, but none of them have matched the scale and sheer brazenness of those earlier controversies.
For example, during the second FNM administration Brent Symonette resigned as chairman of the Airport Authority after it became known that a company in which he had a minor interest had been contracted to do paving work at the airport. Charges were made against Tommy Turnquest for allowing an air conditioning contractor to pay for his leader-elect victory party. And Dion Foulkes was accused of awarding contracts for school repairs without a public tender.
When the PLP was re-elected in 2002, Perry Christie made a lot of noise about integrity in public life, and issued another code of ethics for ministers that basically re-stated existing guidelines. But his promised law codifying rules on conflict of interest never came before parliament.
Controversies
And so the controversies continued. Leslie Miller and other PLP officials were accused of renting buildings to the government they served, a common practice.
Minister of Local Government V. Alfred Gray was accused of remaining active in his law firm, which was representing one party in a local government dispute. Neville Wisdom faced charges of impropriety in awarding contracts for Junkanoo bleachers.
PLP Minister Bradley Roberts and then chairman of the Water & Sewerage Corporation Don Demeritte were accused of leading a conspiracy that would have bilked Bahamians of millions of dollars. According to testimony in an industrial tribunal, the chairman instructed the corporation's general manager to call off the bidding process for a reverse osmosis plant at Arawak Cay, and start negotiations with a firm whose principal was Jerome Fitzgerald, a PLP senator. This matter is still before the court.
The most sensational case of conflict of interest during the PLP's last term involved Shane Gibson's relationship with expired American sex symbol Anna Nicole Smith.
Gibson resigned from the cabinet in February 2007 after The Tribune published embarrassing photos of him on a bed with Smith at her Eastern Road home, although both were fully clothed.
Gibson insisted he did not have a sexual relationship with Smith and denied doing her any favours.
At the time, the "attack" on Shane was characterised by a fellow PLP minister as "the successful manipulation of misinformation by people whose stock in trade is nastiness and sleaze."
Well, now we have something that trumps all of that potted history.
A minister who takes advantage of a private helicopter flight in order to attend two official meetings on two different islands over two consecutive days - the evening premiere of a conservation film on Abaco, and a meeting with visiting American experts in the Exuma Cays the next morning.
"I would not have been able to do either with regular flights, or even make the previously agreed times by boat," Environment Minister Earl Deveaux told me. "It is difficult, if not impossible, to discharge this job, with the required oversight, if we are not able to use the facilities of the principals."
For George Smith's information, the Aga Khan is not a criminal - unlike Carlos Lehder. He is as desirable an investor as Sarkis Izmirlian. His Swiss-registered Development Network runs a variety of multi-billion-dollar humanitarian programmes in 25 countries around the world. And the Aga Khan Health Services is one of the most comprehensive, private, not-for-profit healthcare systems in the developing world.
Before we jump to conclusions, perhaps we should ask what are the actual regulations that apply to official conflict of interest in the Bahamas these days.
The answer to that question is contained in the manual of cabinet procedure, which states that a minister "must not, except as may be permitted under the rules applicable to his office, accept any gift, hospitality or concessional travel offered in connection with the discharge of his duties."
On my reading, accepting a trip for a personal benefit rather than for a public duty would likely be considered a breach of this rule.
Yet incumbents of both major parties have accepted personal hospitality from big investors or foreign governments fairly routinely over the years, and usually without any controversy.
The real elephant in the room in this context is the financing of political parties by big investors and corporate interests.
There are no rules at all in this regard, and everything is done behind closed doors.
I have it on good authority that each of the 82 main party candidates in the 2007 general election received an average of $30,000 in campaign funds. Added to that are general party expenses for advertising, printing, logistics, travel, and give-aways.
Clearly, Bahamian elections cost millions of dollars. Where do you think that money comes from?
So should we be concerned about a free helicopter ride to a business meeting? You be the judge.
What do you think?
Send comments to
larry@tribunemedia.net
Or visit www.bahamapundit.com
September 22, 2010
tribune242
By LARRY SMITH
DEBATE on the government's resolution to approve the Baha Mar development was scheduled to begin today in Parliament - five years after the initial deal was concluded in 2005. But the debate was postponed until the project's principals can come to terms with the Bank of Nova Scotia on outstanding debt.
It's been a long road - although not quite as long as the 13-year BTC sell-off - and conditions in 2005 were vastly different from what they are today. Back then, the credit boom underway in the US had a marked spillover effect on the Bahamas, with major developments planned around the country.
But most of these projects collapsed in the wake of the Great Recession that swept the world in 2008. The Baha Mar project was kept ticking over, even when the original joint venture partners withdrew. It was the brainchild of a Lyford Cay resident named Sarkis Izmirlian, whose grandfather left Armenia in the final years of the Ottoman Empire.
Sarkis' father, Dikran, made his fortune by cornering the world peanut trade. And the family became property developers in Britain, where one of their companies owns the 13-acre site on which London's City Hall is located. While Dikran lives in Switzerland, Sarkis manages the family's assets from the Bahamas.
He is said to be an astute developer who conceived the grandiose Baha Mar project partly to make a name for himself. But the project has been able to survive only because the Chinese are investing their huge currency reserves in support of their strategic interests. According to China's Commerce Ministry, some 800,000 Chinese are now working on energy, infrastructure and housing projects around the world.
Without clear evidence, we should discount the allegations that have been made about the use of Chinese convicts as workers on these projects. But we do think it makes sense for our government to seek a broad political consensus for the project in view of the large foreign labour component.
The 1,000-acre Baha Mar project is owned by the Izmirlian family, with the Chinese Export-Import Bank providing $2.5 billion in financing over 20 years and the China State Construction & Engineering Co as principal contractor.
Challenges
It was unclear at this writing whether the Bank of Nova Scotia, which financed the Izmirlian's earlier acquisition of Cable Beach hotels, would become an equity investor. But it is fair to ask how Baha Mar expects to repay a $2.5 billion loan from China when it has already encountered challenges servicing the current $200 million loan to Scotiabank.
Still, it is the view of most observers that Cable Beach needs to be redeveloped for the country's tourism industry to remain competitive, and whether the land used for collateral is conveyed on a long-term lease or as freehold is beside the point.
The optimum use for that land is resort development and nobody else in the current environment can finance such a project.
And even though a large portion of the $2.5 billion will return to China in the form of interest, wages and materials purchases, this is still a major foreign investment for the Bahamas that will help to stimulate the economy in the short term and drive tourism growth in the longer term.
Conflict of Interest
According to the Institute of Auditors, conflict of interest is when someone in a position of trust has a competing professional or personal interest that makes it difficult to fulfil his or her duties impartially, or that creates an appearance of impropriety.
But exactly what does that mean in the Bahamas? Well, the short answer is...very little.
The Bahamas is a small place, which makes it difficult for any of us to avoid apparent conflicts. And they happen all the time, at every level, in both the public and private sectors. There are very few explicit rules, and even where rules exist, there are no real sanctions.
In the political realm, the old United Bahamian Party oligarchs have been described as "the poster boys for conflict of interest and corruption." Back before the days when cabinet ministers earned official salaries, UBP politicos routinely represented companies doing business with the government and awarded themselves contracts as a matter of right.
Things were so bad that prior to the 1967 general election the UBP itself had issued a code of ethics requiring ministers to withdraw from any case in which they had a private interest.
But that didn't stop politicians like Sir Stafford Sands from acting as paid agents for Freeport gambling interests, as documented by the 1967 Commission of Inquiry.
Sands (who was finance and tourism minister at the time) received over $1.8 million in consultancy fees from the Grand Bahama Port Authority between 1962 and 1966. The Port also gave hundreds of thousands of dollars in political contributions to the UBP.
When the Progressive Liberal Party came to power in 1967 it promised to change all that.
The Pindling administration issued a new code of ethics that prohibited ministers from accepting substantial gifts from persons doing business with the government.
Fast forward 15 years and the Bahamas was in the throes of a criminal takeover by South American drug cartels.
The Colombian flag was raised over Norman's Cay in George Smith's Exuma constituency by the notorious gangster Carlos Lehder, who drove ordinary visitors away at gunpoint and orchestrated hourly cocaine flights to the US.
The 1984 Commission of Inquiry found that Smith had accepted gifts and hospitality from Lehder, who is now serving a long sentence in an American jail. In fact, one parliamentarian said at the time that "Pindling and his crew make the Bay Street Boys look like schoolchildren."
The 1993 inquiries into Bahamasair and the Hotel Corporation were initiated by the first Free National Movement government. They documented decades of gross mismanagement, conflict of interest, and official corruption under the PLP. In response, the FNM promised a government in the sunshine that would be fully accountable to the people.
In the years since there have been many accusations of conflict of interest featuring politicians of both major parties, but none of them have matched the scale and sheer brazenness of those earlier controversies.
For example, during the second FNM administration Brent Symonette resigned as chairman of the Airport Authority after it became known that a company in which he had a minor interest had been contracted to do paving work at the airport. Charges were made against Tommy Turnquest for allowing an air conditioning contractor to pay for his leader-elect victory party. And Dion Foulkes was accused of awarding contracts for school repairs without a public tender.
When the PLP was re-elected in 2002, Perry Christie made a lot of noise about integrity in public life, and issued another code of ethics for ministers that basically re-stated existing guidelines. But his promised law codifying rules on conflict of interest never came before parliament.
Controversies
And so the controversies continued. Leslie Miller and other PLP officials were accused of renting buildings to the government they served, a common practice.
Minister of Local Government V. Alfred Gray was accused of remaining active in his law firm, which was representing one party in a local government dispute. Neville Wisdom faced charges of impropriety in awarding contracts for Junkanoo bleachers.
PLP Minister Bradley Roberts and then chairman of the Water & Sewerage Corporation Don Demeritte were accused of leading a conspiracy that would have bilked Bahamians of millions of dollars. According to testimony in an industrial tribunal, the chairman instructed the corporation's general manager to call off the bidding process for a reverse osmosis plant at Arawak Cay, and start negotiations with a firm whose principal was Jerome Fitzgerald, a PLP senator. This matter is still before the court.
The most sensational case of conflict of interest during the PLP's last term involved Shane Gibson's relationship with expired American sex symbol Anna Nicole Smith.
Gibson resigned from the cabinet in February 2007 after The Tribune published embarrassing photos of him on a bed with Smith at her Eastern Road home, although both were fully clothed.
Gibson insisted he did not have a sexual relationship with Smith and denied doing her any favours.
At the time, the "attack" on Shane was characterised by a fellow PLP minister as "the successful manipulation of misinformation by people whose stock in trade is nastiness and sleaze."
Well, now we have something that trumps all of that potted history.
A minister who takes advantage of a private helicopter flight in order to attend two official meetings on two different islands over two consecutive days - the evening premiere of a conservation film on Abaco, and a meeting with visiting American experts in the Exuma Cays the next morning.
"I would not have been able to do either with regular flights, or even make the previously agreed times by boat," Environment Minister Earl Deveaux told me. "It is difficult, if not impossible, to discharge this job, with the required oversight, if we are not able to use the facilities of the principals."
For George Smith's information, the Aga Khan is not a criminal - unlike Carlos Lehder. He is as desirable an investor as Sarkis Izmirlian. His Swiss-registered Development Network runs a variety of multi-billion-dollar humanitarian programmes in 25 countries around the world. And the Aga Khan Health Services is one of the most comprehensive, private, not-for-profit healthcare systems in the developing world.
Before we jump to conclusions, perhaps we should ask what are the actual regulations that apply to official conflict of interest in the Bahamas these days.
The answer to that question is contained in the manual of cabinet procedure, which states that a minister "must not, except as may be permitted under the rules applicable to his office, accept any gift, hospitality or concessional travel offered in connection with the discharge of his duties."
On my reading, accepting a trip for a personal benefit rather than for a public duty would likely be considered a breach of this rule.
Yet incumbents of both major parties have accepted personal hospitality from big investors or foreign governments fairly routinely over the years, and usually without any controversy.
The real elephant in the room in this context is the financing of political parties by big investors and corporate interests.
There are no rules at all in this regard, and everything is done behind closed doors.
I have it on good authority that each of the 82 main party candidates in the 2007 general election received an average of $30,000 in campaign funds. Added to that are general party expenses for advertising, printing, logistics, travel, and give-aways.
Clearly, Bahamian elections cost millions of dollars. Where do you think that money comes from?
So should we be concerned about a free helicopter ride to a business meeting? You be the judge.
What do you think?
Send comments to
larry@tribunemedia.net
Or visit www.bahamapundit.com
September 22, 2010
tribune242
Wednesday, September 8, 2010
Baha Mar Resolution Tabled In Parliament
Statement to Parliament on the Baha Mar Development by Prime Minister the Rt. Hon. Hubert Ingraham:
THE PRIME MINISTER: Mr. Speaker,
I rise to Table a Resolution meant to garner the position and sense of the representatives of the people on the proposed Resort development by Baha Mar at Cable Beach, New Providence and to ensure that the Bahamian people are fully informed on the requirements, consequences and benefits which are projected to result for The Bahamas if the development proceeds as now proposed by the principals.
The Baha Mar project is to comprise six hotels with approximately 3,500 rooms and condominiums, an approximately 100,000 square foot casino, 200,000 square feet of convention facilities, a twenty acre beach and pool experience, an 18-hole golf course and a 60,000 square-foot retail village and additional residential products.
The total value of the project is estimated at $2.5 billion. A contract for the amount of $1.918,965,693 billion has been negotiated with the China Construction Company as primary contractors for the project.
The Resolution results from the fact that the foreign labour component intended during the construction of the Resort exceeds levels ever experienced in The Bahamas and is beyond anything ever contemplated by my Government.
In the earliest of times in the development of the tourism sector in our country in the 1950s the law and the Government permitted as much as 25% of the labour force in construction and or operation of a tourism development resort to be foreign. The Hotels Encouragement Act 1954 permitted “for the admission into The Bahamas of key personnel and special workmen both during the construction period and operation of the new hotel, subject to the proviso that at all times seventy-five per centum of the total number of persons employed in the construction or operation of the new hotel shall be natives of The Bahamas if such natives of The Bahamas are available to perform the several and respective services required.”
While that provision remained in the law, following Majority Rule a move toward Bahamianization of the work force brought change.
Beginning in the 1980s the practice evolved where large foreign components were engaged in the construction of hotels, and a smaller number of foreigners were allowed to work in the hotel upon completion.
Honourable Members will recall the substantial foreign work force engaged to construct the Crystal Palace Resort and casino, today the Wyndham Crystal Palace Resort and the US Departure Terminal at the then Nassau International Airport. At those two projects Indian, Brazilian and other foreign nationals far out-numbered Bahamian nationals on the work force.
When my Government first came to office in 1992 we determined not to continue this practice of the former Government. When, in 1993 we agreed terms for the commencement of a Five Phase redevelopment and Expansion of Resort Properties on Paradise Island by Sun International (now Kerzner International) we established that notwithstanding the demonstrable need for the engagement of large numbers of expatriate experts and labour for the timely completion of the project, the ratio of Bahamians to non-Bahamians on the construction site would not exceed 30% foreign to 70% Bahamian, increasing on the required Bahamian component above the 1954 statutory base of 25%.
It is noteworthy that this ratio obtained during Two Phases of construction of the Kerzner International resorts under FNM administrations and was continued when Members Opposite most recently formed the Government during the Third Phase expansion of Kerzner International on Paradise Island. (70% Bahamian : 30% Foreign)
Members Opposite at the same time however, did not require an adherence to this accepted ratio of Bahamian to foreign workers in the construction of the Bimini Bay Resort at North Bimini. As a result foreign workers, principally from Mexico, far exceeded the number of Bahamian nationals engaged on that construction site in the middle of the last decade.
The Bahamas Government now has for consideration the construction of the Baha Mar Resort in Cable Beach. The terms of the funding obtained by the developers of the Resort include a requirement that the overwhelming majority, if not virtually all of the workers to be engaged on the “Core Project”, over the life of the project, be foreign workers - some 8,150 persons.
It is projected that some 1,200 Bahamians will be engaged in the construction of the non-Core project that is, the new West Bay Street, the new Commercial Village and the initial site preparation for the Core Project. More specifically these projects include:
• Construction of a new West Bay Street/Corridor including utilities with a value of $75 million
• Construction of a new Commercial Village at Cable Beach and related “back of house” on Gladstone Road with a value of $30 million
• Construction of free standing buildings including the golf clubhouse and buildings around the beach and pool area and retail village with a value of $20 million
• Major earthwork, irrigation and landscaping related to the construction of the new Golf Course with a value of $10 million.
I have been advised that the principals of Baha Mar are in discussion with their Chinese partners and financiers with a view to additionally, engaging Bahamian contractors in a number of “trade packages” related to the Core Project to include general site clearing and preparatory work, masonry, dry wall, ceilings, painting, electrical, mechanical, site security, fencing, beach restoration, remediation, and landscaping having a total estimated value of $40 million.
It is further expected that many of these jobs will carry over to continued employment in the “trade packages” for the Core Project I mentioned. This we are informed is expected to result in the engagement of 3,300 Bahamians at the height of construction of the Core Project.
Honourable Members are aware that the basic justification for permitting the engagement of foreign workers in The Bahamas has been the transfer of technology and of skills. This occurred, very measurably, during each phase of the Kerzner International developments on Paradise Island and is occurring now, at the first phase in the expansion of the Lynden Pindling International Airport.
Based on the numbers, in the case of the Baha Mar Project it is proposed that 71% of the work force will be foreign and 29% Bahamian. This represents a complete reversal of conditions imposed upon Kerzner, for example.
What must be determined is whether this invaluable benefit of skills transfer and improved exposure to new technologies can or will occur in a project where contact between Bahamians and foreign experts is likely to be limited.
I also believe that the Government has an obligation to explain to the Bahamian people other requirements of The Bahamas unrelated to labour issues which arise from this project. Principally this will involve the transfer of Government-owned and Crown Lands to the developers. Because of the conditions precedent set by Baha Mar’s financiers – China Import Export Bank and the China Construction Company – these lands are required to be transferred in advance of the start of construction of the project.
As you are aware, the Cable Beach Hotel, now the Sheraton was transferred to Baha Mar in 2005.
The Crystal Palace Resort and Casino, now the Wyndham Crystal palace, was acquired on leased land by Baha Mar in 2005. That hotel, like the Nassau Beach Hotel, is constructed on leased Crown Land.
Approval for the Baha Mar Project requires the transfer of the following publicly-owned land:
Wyndham Hotel & Casino Land - 13.450 acres
Nassau Beach Land - 7.546 acres
Hobby Horse Hall parcel - 70.964 acres
Fidelity Bank - .866 acre
Cecil Wallace-Whitfield Centre - 2.259 acres
Cable Beach Police Station - 1.377 acres
Old West Bay Street - 11.228 acres
New Corridor #7 - 1.610 acres Plus an additional parcel of .783 acre
Gladstone Road back of House - 50.00 acres
Prospect Ridge Parcel - 2.365 acres
Water and Sewerage Corporation - 99.782 acres Parcel
BEC Parcel - 2.570 acres
BEC Substation - .165 acres
TOTAL - 264.965 acres
It is the position of my Government that these lands will only be transferred for the expressed purpose of facilitating the development and that should the development not proceed the land must return to the Government.
Mr. Speaker,
I should also advise that a number of unresolved matters between Baha Mar and Scotia Bank relating to outstanding loans attached to the Baha Mar Project are being negotiated even now. It is expected that all outstanding matters will be resolved within the next two week period. Hence, it is proposed that we reserve our debate of the matter until these matters have been completed.
It would appear that the Wednesday 22nd or Thursday 23rd September may be an appropriate time for the debate.
THE RESOLUTION:
Mr. Speaker,
To be very explicit, so that the noise in the print and broadcast media to the effect that somebody is holding up this project can be put to rest – BahaMar cannot do the deal with the Chinese bank until it satisfies the ScotiaBank loan.
They are in discussions with ScotiaBank. The next meetings take place next week in Toronto. But there will be no deal unless Scotia’s loan is satisfied.
Secondly, there will be no deal unless the Government of The Bahamas and the Chinese Government exchange letters saying “we approve in The Bahamas’’, and we get from the Chinese Government at the same time in the next hand, “we approve here [China].”
They will go ‘hand go, hand come’ – at the same time and the same place.
WHEREAS the Government of the Commonwealth of The Bahamas (hereinafter called ‘the Government’) and Baha Mar Development Company Ltd., a company incorporated under the laws of the said Commonwealth (hereinafter called ‘BDC’), entered into a Heads of Agreement, dated the 6th day of April 2005, to develop a major resort in the Cable Beach area of the Western District of New Providence, one of the Islands of the said Commonwealth (hereinafter called ‘the Agreement’);
AND WHEREAS the Government, BDC and Baha Mar Joint Venture Holdings Ltd., an international business company incorporated under the laws of the said Commonwealth, entered into a Supplemental Heads of Agreement dated the 31st day of January 2008 (hereinafter called ‘the Supplemental Agreement’);
AND WHEREAS neither project contemplated under either the Agreement or Supplemental Agreement has materialised;
AND WHEREAS Baha Mar Ltd. (hereinafter called ‘Baha Mar’) now proposes to undertake a project comprising six hotels with approximately 3,500 rooms and condominiums, an approximately 100,000 square foot casino, 200,000 square feet of convention facilities, a twenty acre beach and pool experience, an 18-hole golf course and a 60,000 square-foot retail village and additional residential products (together hereinafter called ‘the Project’);
AND WHEREAS one of the conditions precedent to the Government performing its obligations under the Agreement and Supplemental Agreement is that Baha Mar shall provide the Government with satisfactory evidence of funding;
AND WHEREAS Baha Mar’s primary source of funding for the project will be obtained from The Export-Import Bank of China, and the primary contractor in respect of the Project will be CCA (Bahamas), Ltd., a subsidiary of China State Construction Engineering Corporation Limited;
AND WHEREAS The Export-Import Bank of China has agreed to make available to Baha Mar and or its subsidiaries a term loan facility in respect of the Project in an amount up to $2.45 billion;
AND WHEREAS a condition precedent for the disbursement of the loan facility by The Export-Import Bank of China is that Baha Mar must provide evidence to The Export-Import Bank of China of release of all Scotiabank existing security and financial indebtedness incurred by Baha Mar under or in relation to the Scotiabank existing facility;
AND WHEREAS completion of the Project on a highly accelerated schedule will necessitate substantial employment of non-Bahamian workers during construction;
AND WHEREAS Baha Mar has specified that the aggregate number of non-Bahamians required over the course of the construction phase is 8,150 with the peak number at any given time being 5,000 non-Bahamians as shown in Annex I;
AND WHEREAS CCA (Bahamas), Ltd., Baha Mar and its subcontractors will be required to cause all of the non-Bahamian workers on the Project to be repatriated from the Bahamas immediately following the completion of their respective work periods;
AND WHEREAS Baha Mar has indicated the job categories required for workers in the initial project phase and core project phase as shown in Annex II;
AND WHEREAS the Project, if undertaken as proposed, will have immense impact on the economy of The Bahamas creating approximately 3,000 construction jobs in addition to 7,000 new permanent jobs for Bahamians;
NOW THEREFORE BE IT RESOLVED that this House supports the Project and the issuance of work permits for up to 8,150 non-Bahamian construction workers with the number at any given time being not more than 5,000.
Bahamas Blog International
THE PRIME MINISTER: Mr. Speaker,
I rise to Table a Resolution meant to garner the position and sense of the representatives of the people on the proposed Resort development by Baha Mar at Cable Beach, New Providence and to ensure that the Bahamian people are fully informed on the requirements, consequences and benefits which are projected to result for The Bahamas if the development proceeds as now proposed by the principals.
The Baha Mar project is to comprise six hotels with approximately 3,500 rooms and condominiums, an approximately 100,000 square foot casino, 200,000 square feet of convention facilities, a twenty acre beach and pool experience, an 18-hole golf course and a 60,000 square-foot retail village and additional residential products.
The total value of the project is estimated at $2.5 billion. A contract for the amount of $1.918,965,693 billion has been negotiated with the China Construction Company as primary contractors for the project.
The Resolution results from the fact that the foreign labour component intended during the construction of the Resort exceeds levels ever experienced in The Bahamas and is beyond anything ever contemplated by my Government.
In the earliest of times in the development of the tourism sector in our country in the 1950s the law and the Government permitted as much as 25% of the labour force in construction and or operation of a tourism development resort to be foreign. The Hotels Encouragement Act 1954 permitted “for the admission into The Bahamas of key personnel and special workmen both during the construction period and operation of the new hotel, subject to the proviso that at all times seventy-five per centum of the total number of persons employed in the construction or operation of the new hotel shall be natives of The Bahamas if such natives of The Bahamas are available to perform the several and respective services required.”
While that provision remained in the law, following Majority Rule a move toward Bahamianization of the work force brought change.
Beginning in the 1980s the practice evolved where large foreign components were engaged in the construction of hotels, and a smaller number of foreigners were allowed to work in the hotel upon completion.
Honourable Members will recall the substantial foreign work force engaged to construct the Crystal Palace Resort and casino, today the Wyndham Crystal Palace Resort and the US Departure Terminal at the then Nassau International Airport. At those two projects Indian, Brazilian and other foreign nationals far out-numbered Bahamian nationals on the work force.
When my Government first came to office in 1992 we determined not to continue this practice of the former Government. When, in 1993 we agreed terms for the commencement of a Five Phase redevelopment and Expansion of Resort Properties on Paradise Island by Sun International (now Kerzner International) we established that notwithstanding the demonstrable need for the engagement of large numbers of expatriate experts and labour for the timely completion of the project, the ratio of Bahamians to non-Bahamians on the construction site would not exceed 30% foreign to 70% Bahamian, increasing on the required Bahamian component above the 1954 statutory base of 25%.
It is noteworthy that this ratio obtained during Two Phases of construction of the Kerzner International resorts under FNM administrations and was continued when Members Opposite most recently formed the Government during the Third Phase expansion of Kerzner International on Paradise Island. (70% Bahamian : 30% Foreign)
Members Opposite at the same time however, did not require an adherence to this accepted ratio of Bahamian to foreign workers in the construction of the Bimini Bay Resort at North Bimini. As a result foreign workers, principally from Mexico, far exceeded the number of Bahamian nationals engaged on that construction site in the middle of the last decade.
The Bahamas Government now has for consideration the construction of the Baha Mar Resort in Cable Beach. The terms of the funding obtained by the developers of the Resort include a requirement that the overwhelming majority, if not virtually all of the workers to be engaged on the “Core Project”, over the life of the project, be foreign workers - some 8,150 persons.
It is projected that some 1,200 Bahamians will be engaged in the construction of the non-Core project that is, the new West Bay Street, the new Commercial Village and the initial site preparation for the Core Project. More specifically these projects include:
• Construction of a new West Bay Street/Corridor including utilities with a value of $75 million
• Construction of a new Commercial Village at Cable Beach and related “back of house” on Gladstone Road with a value of $30 million
• Construction of free standing buildings including the golf clubhouse and buildings around the beach and pool area and retail village with a value of $20 million
• Major earthwork, irrigation and landscaping related to the construction of the new Golf Course with a value of $10 million.
I have been advised that the principals of Baha Mar are in discussion with their Chinese partners and financiers with a view to additionally, engaging Bahamian contractors in a number of “trade packages” related to the Core Project to include general site clearing and preparatory work, masonry, dry wall, ceilings, painting, electrical, mechanical, site security, fencing, beach restoration, remediation, and landscaping having a total estimated value of $40 million.
It is further expected that many of these jobs will carry over to continued employment in the “trade packages” for the Core Project I mentioned. This we are informed is expected to result in the engagement of 3,300 Bahamians at the height of construction of the Core Project.
Honourable Members are aware that the basic justification for permitting the engagement of foreign workers in The Bahamas has been the transfer of technology and of skills. This occurred, very measurably, during each phase of the Kerzner International developments on Paradise Island and is occurring now, at the first phase in the expansion of the Lynden Pindling International Airport.
Based on the numbers, in the case of the Baha Mar Project it is proposed that 71% of the work force will be foreign and 29% Bahamian. This represents a complete reversal of conditions imposed upon Kerzner, for example.
What must be determined is whether this invaluable benefit of skills transfer and improved exposure to new technologies can or will occur in a project where contact between Bahamians and foreign experts is likely to be limited.
I also believe that the Government has an obligation to explain to the Bahamian people other requirements of The Bahamas unrelated to labour issues which arise from this project. Principally this will involve the transfer of Government-owned and Crown Lands to the developers. Because of the conditions precedent set by Baha Mar’s financiers – China Import Export Bank and the China Construction Company – these lands are required to be transferred in advance of the start of construction of the project.
As you are aware, the Cable Beach Hotel, now the Sheraton was transferred to Baha Mar in 2005.
The Crystal Palace Resort and Casino, now the Wyndham Crystal palace, was acquired on leased land by Baha Mar in 2005. That hotel, like the Nassau Beach Hotel, is constructed on leased Crown Land.
Approval for the Baha Mar Project requires the transfer of the following publicly-owned land:
Wyndham Hotel & Casino Land - 13.450 acres
Nassau Beach Land - 7.546 acres
Hobby Horse Hall parcel - 70.964 acres
Fidelity Bank - .866 acre
Cecil Wallace-Whitfield Centre - 2.259 acres
Cable Beach Police Station - 1.377 acres
Old West Bay Street - 11.228 acres
New Corridor #7 - 1.610 acres Plus an additional parcel of .783 acre
Gladstone Road back of House - 50.00 acres
Prospect Ridge Parcel - 2.365 acres
Water and Sewerage Corporation - 99.782 acres Parcel
BEC Parcel - 2.570 acres
BEC Substation - .165 acres
TOTAL - 264.965 acres
It is the position of my Government that these lands will only be transferred for the expressed purpose of facilitating the development and that should the development not proceed the land must return to the Government.
Mr. Speaker,
I should also advise that a number of unresolved matters between Baha Mar and Scotia Bank relating to outstanding loans attached to the Baha Mar Project are being negotiated even now. It is expected that all outstanding matters will be resolved within the next two week period. Hence, it is proposed that we reserve our debate of the matter until these matters have been completed.
It would appear that the Wednesday 22nd or Thursday 23rd September may be an appropriate time for the debate.
THE RESOLUTION:
Mr. Speaker,
To be very explicit, so that the noise in the print and broadcast media to the effect that somebody is holding up this project can be put to rest – BahaMar cannot do the deal with the Chinese bank until it satisfies the ScotiaBank loan.
They are in discussions with ScotiaBank. The next meetings take place next week in Toronto. But there will be no deal unless Scotia’s loan is satisfied.
Secondly, there will be no deal unless the Government of The Bahamas and the Chinese Government exchange letters saying “we approve in The Bahamas’’, and we get from the Chinese Government at the same time in the next hand, “we approve here [China].”
They will go ‘hand go, hand come’ – at the same time and the same place.
RESOLUTION
WHEREAS the Government of the Commonwealth of The Bahamas (hereinafter called ‘the Government’) and Baha Mar Development Company Ltd., a company incorporated under the laws of the said Commonwealth (hereinafter called ‘BDC’), entered into a Heads of Agreement, dated the 6th day of April 2005, to develop a major resort in the Cable Beach area of the Western District of New Providence, one of the Islands of the said Commonwealth (hereinafter called ‘the Agreement’);
AND WHEREAS the Government, BDC and Baha Mar Joint Venture Holdings Ltd., an international business company incorporated under the laws of the said Commonwealth, entered into a Supplemental Heads of Agreement dated the 31st day of January 2008 (hereinafter called ‘the Supplemental Agreement’);
AND WHEREAS neither project contemplated under either the Agreement or Supplemental Agreement has materialised;
AND WHEREAS Baha Mar Ltd. (hereinafter called ‘Baha Mar’) now proposes to undertake a project comprising six hotels with approximately 3,500 rooms and condominiums, an approximately 100,000 square foot casino, 200,000 square feet of convention facilities, a twenty acre beach and pool experience, an 18-hole golf course and a 60,000 square-foot retail village and additional residential products (together hereinafter called ‘the Project’);
AND WHEREAS one of the conditions precedent to the Government performing its obligations under the Agreement and Supplemental Agreement is that Baha Mar shall provide the Government with satisfactory evidence of funding;
AND WHEREAS Baha Mar’s primary source of funding for the project will be obtained from The Export-Import Bank of China, and the primary contractor in respect of the Project will be CCA (Bahamas), Ltd., a subsidiary of China State Construction Engineering Corporation Limited;
AND WHEREAS The Export-Import Bank of China has agreed to make available to Baha Mar and or its subsidiaries a term loan facility in respect of the Project in an amount up to $2.45 billion;
AND WHEREAS a condition precedent for the disbursement of the loan facility by The Export-Import Bank of China is that Baha Mar must provide evidence to The Export-Import Bank of China of release of all Scotiabank existing security and financial indebtedness incurred by Baha Mar under or in relation to the Scotiabank existing facility;
AND WHEREAS completion of the Project on a highly accelerated schedule will necessitate substantial employment of non-Bahamian workers during construction;
AND WHEREAS Baha Mar has specified that the aggregate number of non-Bahamians required over the course of the construction phase is 8,150 with the peak number at any given time being 5,000 non-Bahamians as shown in Annex I;
AND WHEREAS CCA (Bahamas), Ltd., Baha Mar and its subcontractors will be required to cause all of the non-Bahamian workers on the Project to be repatriated from the Bahamas immediately following the completion of their respective work periods;
AND WHEREAS Baha Mar has indicated the job categories required for workers in the initial project phase and core project phase as shown in Annex II;
AND WHEREAS the Project, if undertaken as proposed, will have immense impact on the economy of The Bahamas creating approximately 3,000 construction jobs in addition to 7,000 new permanent jobs for Bahamians;
NOW THEREFORE BE IT RESOLVED that this House supports the Project and the issuance of work permits for up to 8,150 non-Bahamian construction workers with the number at any given time being not more than 5,000.
Bahamas Blog International
Tuesday, September 7, 2010
The $2.6 billion Baha Mar development set to get approval
Baha Mar set to get approval
By ERICA WELLS
NG Managing Editor
ewells@nasguard.com:
The billion-dollar Baha Mar development looks set to get the approval of the Bahamian government.
As reported over the weekend inThe Nassau Guardian, Leader of Government Business in the House of Assembly Tommy Turnquest said it is a given that the governing side intends to support its Baha Mar labor resolution that will be debated in Parliament.
Opposition House Leader Obie Wilchcombe has also said that the PLP supports the deal, with several caveats.
The $2.6 billion Baha Mar deal, which is projected to pump millions and millions of dollars into the local economy, is sorely needed at this time of economic turmoil.
In fact, the most recent Central Bank of The Bahamas report said as much. In its monthly report for July, the bank indicated that "large-scale hotel investment projects" - such as Baha Mar and Atlantis'$100 million investment - could be key to The Bahamas not continuing in recession.
"Domestic economic conditions are expected to remain mild over the remaining months of 2010, although the outlook for 2011 is less certain than in prior months, due to mounting evidence of increased fragility in the U.S. growth momentum. This could dampen the short-to medium-term performance of the tourism sector, and the timing for a turnaround in domestic demand and an improvement in employment conditions,"said the report.
"However, upside benefits could accrue to the economy if the proposed large-scale hotel investment projects gain traction in the coming months."
While there is a general consensus that the $2 billion deal will provide the Bahamian economy with a much-needed infusion, it is the labor issue that has put a damper on the prospect of the project, and in some respects has become a political hot potato.
Baha Mar developers want to bring in 5,000-7,000 Chinese workers to help build the mega resort.
This proposal has been met with much skepticism and in some cases high emotion.
The Bahamian Contractors Association supports the project, but wants the government to make provision for the training of contractors and tradesmen to participate on the project, and the inclusion of the BCA as a focal point for training recruitment.
"If the assurances that the training and maximum utilization of Bahamian contractors are not put into place, we will undermine the industry as well as the Bahamian consumers and developers who have existing or proposed projects,"said the association in a position paper on the proposed project.
"The BCA feels that in conjunction with our association initiatives, government has the opportunity and authority to address this situation. With funding and technical expertise we can maximize significant Bahamian contractor participation through our training and certification programs and through discussion with stakeholders we can reach workable relationships."
The Progressive Liberal Party has laid out a similar case, at least when it comes to training.
Wilchcombe told The Guardian on Friday that the PLP supports the project, but several objectives must be met in order to maximize its benefits to the Bahamian people.
He said that Bahamians must be given opportunities; there must be job training to ensure locals can be employed in skilled areas; current workers at the company should be looked after; there should be a role for the national airline to assist with airlift; there should be consideration of the position of the taxi union; and it is essential that there be an investigation about the energy requirement to power such a large scale development.
The agreement on the Baha Mar development was announced in March. The project will be financed by the Export-Import Bank of China, while construction will be performed by China State Construction Engineering Corporation. At one point the project had been virtually given up on when Harrah's Entertainment, one of the original joint venture partners of the project pulled out in 2008.
It is being billed as an unprecedented resort development in The Bahamas that captures the true spirit of the island and the region.
The 1,000-acre Baha Mar project may start construction before the end of the year if given approval by the Bahamian government. The project has already received approval from the Chinese government. It is scheduled for completion in early 2014.
The project, according to developers, represents the largest single-phase hospitality investment in the Caribbean and a one-of-a-kind destination resort experience in its operation, range of top-shelf accommodations, services and amenities, and"true-to-The Bahamas setting and design".
The development definitely lives up to its description as"mega".
Plans for Baha Mar's first phase include approximately 3,000 rooms; a 100,000 square foot casino; two signature spas and a third world-class destination spa; and an 18-hole championship Jack Nicklaus Signature Golf Course; 200,000 square feet of meeting space; 3,000 feet of continuous beachfront; a 20-acre beach and pool experience; and a 35,000-square-foot retail village with upscale shopping, chef-branded restaurants, and entertainment venues.
A report by the Oxford Economics company set out some of the key economic benefits of Baha Mar, including, 6,500 Bahamians directly employed by Baha Mar by 2014; a further 2,000 jobs indirectly created by the project, totalling 8,500; $5.5 billion in direct wages going straight into the pockets of Bahamian families; a further $1.5 billion in salaries for those indirectly employed; a $14.8 billion contribution to The Bahamas'GDP; $24.5 billion extra in visitor spending over a 20-year period, and; an extra $6.2 billion in government revenues over 25 years.
If approved, this project represents a massive boost to the country's struggling economy. It also represents a delicate balancing act.
According to the Baha Mar project management team, Phase one involves the construction of the commercial village and road re-alignment, which is slated to be awarded to Bahamian contractors and is valued at around $60 million.
Beyond the first phase of construction, the BCA in its position paper accepts that there is a limited pool of skilled construction worker resources in the country, and at any given time the majority of these workers or tradesmen are normally employed by practicing Bahamian contractors.
The BCA says it is primarily concerned with three issues: That the country does not have 4,000 skilled and non-skilled workers ready to participate on the Baha Mar or any project in The Bahamas; the standards which are being used to validate the number of skilled Bahamian workers; and if the requisite number of workers can be trained in time to meet the requirements of the project.
"No one definitively knows how many skilled construction workers are currently in the field. One critical component of this scenario is that if Baha Mar is permitted to hire workers from the existing pool, they will in effect be depleting the pool of skilled workers that Bahamian contractors have paid to train and have kept employed all year round,"says the association.
"Obviously, with a project the size of Baha Mar, in a very short time the skilled and non-skilled workforce will be depleted from the local sector leaving small, medium and large contractors alike with little to no labor resources for the duration of the Baha Mar project."
The BCA fears that this dynamic will have a particularly dramatic and negative impact on the small contractor who may employ only a few workers."When he(or she)loses those workers to Baha Mar, it will possibly cripple this important segment of our industry."
"Since we are pinning our economic recovery hopes not eh turnaround that will be created, it is imperative that we protect and nurture the independent small business growth potential,"says the association.
The BCA is also asking about the possibility of importing other nationalities for labor requirements to the project. According to the BCA, indications are that European, Indian and Mexican contractors, sub-contractors and tradesmen may supplement the Chinese component, particularly in some of the specialty trades.
It is unclear exactly when the Baha Mar resolution will be debated in Parliament and when the project will receive final approval from the Bahamian government.
The Guardian understands that there is a major hurdle preventing that approval from being handed down. It's the debate over the payment of an outstanding loan the company has with Scotiabank, worth around $160 million. It is unclear how long it will take the bank and developers to come to an agreement.
It is understood that Baha Mar has offered the bank, and its partners, a combination of cash and equity in the Cable Beach project, but so far Scotiabank has not accepted.
Bahamians eagerly await the outcome of the proposal that some have said always seemed almost too good to be true.
9/4/2010
thenassauguardian
By ERICA WELLS
NG Managing Editor
ewells@nasguard.com:
The billion-dollar Baha Mar development looks set to get the approval of the Bahamian government.
As reported over the weekend inThe Nassau Guardian, Leader of Government Business in the House of Assembly Tommy Turnquest said it is a given that the governing side intends to support its Baha Mar labor resolution that will be debated in Parliament.
Opposition House Leader Obie Wilchcombe has also said that the PLP supports the deal, with several caveats.
The $2.6 billion Baha Mar deal, which is projected to pump millions and millions of dollars into the local economy, is sorely needed at this time of economic turmoil.
In fact, the most recent Central Bank of The Bahamas report said as much. In its monthly report for July, the bank indicated that "large-scale hotel investment projects" - such as Baha Mar and Atlantis'$100 million investment - could be key to The Bahamas not continuing in recession.
"Domestic economic conditions are expected to remain mild over the remaining months of 2010, although the outlook for 2011 is less certain than in prior months, due to mounting evidence of increased fragility in the U.S. growth momentum. This could dampen the short-to medium-term performance of the tourism sector, and the timing for a turnaround in domestic demand and an improvement in employment conditions,"said the report.
"However, upside benefits could accrue to the economy if the proposed large-scale hotel investment projects gain traction in the coming months."
While there is a general consensus that the $2 billion deal will provide the Bahamian economy with a much-needed infusion, it is the labor issue that has put a damper on the prospect of the project, and in some respects has become a political hot potato.
Baha Mar developers want to bring in 5,000-7,000 Chinese workers to help build the mega resort.
This proposal has been met with much skepticism and in some cases high emotion.
The Bahamian Contractors Association supports the project, but wants the government to make provision for the training of contractors and tradesmen to participate on the project, and the inclusion of the BCA as a focal point for training recruitment.
"If the assurances that the training and maximum utilization of Bahamian contractors are not put into place, we will undermine the industry as well as the Bahamian consumers and developers who have existing or proposed projects,"said the association in a position paper on the proposed project.
"The BCA feels that in conjunction with our association initiatives, government has the opportunity and authority to address this situation. With funding and technical expertise we can maximize significant Bahamian contractor participation through our training and certification programs and through discussion with stakeholders we can reach workable relationships."
The Progressive Liberal Party has laid out a similar case, at least when it comes to training.
Wilchcombe told The Guardian on Friday that the PLP supports the project, but several objectives must be met in order to maximize its benefits to the Bahamian people.
He said that Bahamians must be given opportunities; there must be job training to ensure locals can be employed in skilled areas; current workers at the company should be looked after; there should be a role for the national airline to assist with airlift; there should be consideration of the position of the taxi union; and it is essential that there be an investigation about the energy requirement to power such a large scale development.
The agreement on the Baha Mar development was announced in March. The project will be financed by the Export-Import Bank of China, while construction will be performed by China State Construction Engineering Corporation. At one point the project had been virtually given up on when Harrah's Entertainment, one of the original joint venture partners of the project pulled out in 2008.
It is being billed as an unprecedented resort development in The Bahamas that captures the true spirit of the island and the region.
The 1,000-acre Baha Mar project may start construction before the end of the year if given approval by the Bahamian government. The project has already received approval from the Chinese government. It is scheduled for completion in early 2014.
The project, according to developers, represents the largest single-phase hospitality investment in the Caribbean and a one-of-a-kind destination resort experience in its operation, range of top-shelf accommodations, services and amenities, and"true-to-The Bahamas setting and design".
The development definitely lives up to its description as"mega".
Plans for Baha Mar's first phase include approximately 3,000 rooms; a 100,000 square foot casino; two signature spas and a third world-class destination spa; and an 18-hole championship Jack Nicklaus Signature Golf Course; 200,000 square feet of meeting space; 3,000 feet of continuous beachfront; a 20-acre beach and pool experience; and a 35,000-square-foot retail village with upscale shopping, chef-branded restaurants, and entertainment venues.
A report by the Oxford Economics company set out some of the key economic benefits of Baha Mar, including, 6,500 Bahamians directly employed by Baha Mar by 2014; a further 2,000 jobs indirectly created by the project, totalling 8,500; $5.5 billion in direct wages going straight into the pockets of Bahamian families; a further $1.5 billion in salaries for those indirectly employed; a $14.8 billion contribution to The Bahamas'GDP; $24.5 billion extra in visitor spending over a 20-year period, and; an extra $6.2 billion in government revenues over 25 years.
If approved, this project represents a massive boost to the country's struggling economy. It also represents a delicate balancing act.
According to the Baha Mar project management team, Phase one involves the construction of the commercial village and road re-alignment, which is slated to be awarded to Bahamian contractors and is valued at around $60 million.
Beyond the first phase of construction, the BCA in its position paper accepts that there is a limited pool of skilled construction worker resources in the country, and at any given time the majority of these workers or tradesmen are normally employed by practicing Bahamian contractors.
The BCA says it is primarily concerned with three issues: That the country does not have 4,000 skilled and non-skilled workers ready to participate on the Baha Mar or any project in The Bahamas; the standards which are being used to validate the number of skilled Bahamian workers; and if the requisite number of workers can be trained in time to meet the requirements of the project.
"No one definitively knows how many skilled construction workers are currently in the field. One critical component of this scenario is that if Baha Mar is permitted to hire workers from the existing pool, they will in effect be depleting the pool of skilled workers that Bahamian contractors have paid to train and have kept employed all year round,"says the association.
"Obviously, with a project the size of Baha Mar, in a very short time the skilled and non-skilled workforce will be depleted from the local sector leaving small, medium and large contractors alike with little to no labor resources for the duration of the Baha Mar project."
The BCA fears that this dynamic will have a particularly dramatic and negative impact on the small contractor who may employ only a few workers."When he(or she)loses those workers to Baha Mar, it will possibly cripple this important segment of our industry."
"Since we are pinning our economic recovery hopes not eh turnaround that will be created, it is imperative that we protect and nurture the independent small business growth potential,"says the association.
The BCA is also asking about the possibility of importing other nationalities for labor requirements to the project. According to the BCA, indications are that European, Indian and Mexican contractors, sub-contractors and tradesmen may supplement the Chinese component, particularly in some of the specialty trades.
It is unclear exactly when the Baha Mar resolution will be debated in Parliament and when the project will receive final approval from the Bahamian government.
The Guardian understands that there is a major hurdle preventing that approval from being handed down. It's the debate over the payment of an outstanding loan the company has with Scotiabank, worth around $160 million. It is unclear how long it will take the bank and developers to come to an agreement.
It is understood that Baha Mar has offered the bank, and its partners, a combination of cash and equity in the Cable Beach project, but so far Scotiabank has not accepted.
Bahamians eagerly await the outcome of the proposal that some have said always seemed almost too good to be true.
9/4/2010
thenassauguardian
Sunday, September 5, 2010
Bahamian Contractors' Association fears inadequate funding for a national training programme to certify Bahamian construction workers for jobs on the Baha Mar project
Funding fears over Baha Mar construction training
By TANEKA THOMPSON
Tribune Staff Reporter
tthompson@tribunemedia.net:
THE Bahamian Contractors' Association fears that a national training programme needed to certify construction workers for employment on the Baha Mar development will be impeded by inadequate funding.
The organisation is calling for a tangible commitment from the developers before work begins on the $2.6 billion Cable Beach redevelopment to fund the training programme - a joint venture of the association and trade school BTVI.
"While they (Baha Mar) appear to be genuinely interested in both the short and long term success of the project and the country, they have informed us that presently there is no funding allocated for any training of construction personnel," according to the BCA's position paper on the project, which was recently given to government and the developers.
"We find the fact that a $2.6 billion project is proceeding with no training programme, or responsibility for one, incomprehensible. They have assured us that under their Heads of Agreement (with the government) there is apparently no stipulation for this critical and necessary component," said the BCA, in part.
As a non-profit organisation that operates primarily on membership dues, the BCA cannot fund the initiative at BTVI, an institution that relies on government subsidies. So far, nearly 500 tradesmen and contractors have registered for enrolment at BTVI's training programme.
"One of the possibilities we have discussed with Baha Mar is collecting a percentage of every contract awarded to be allocated for the training of Bahamian workers."
The Baha Mar project has yet to be formally approved by government. A labour resolution on the thousands of work permits the developers are seeking in Chinese labour will be brought to Parliament next week.
The peak period for Baha Mar's construction is between month 24 and month 36 of the project, and at that time there also will be more than 2,500 Bahamian construction workers employed.
Total employment at the peak of the project will be close to 7,500 foreign and Bahamian workers. The China Export-Import Bank and China State Construction are Baha Mar's financing and equity/project manager partners.
September 04, 2010
tribune242
By TANEKA THOMPSON
Tribune Staff Reporter
tthompson@tribunemedia.net:
THE Bahamian Contractors' Association fears that a national training programme needed to certify construction workers for employment on the Baha Mar development will be impeded by inadequate funding.
The organisation is calling for a tangible commitment from the developers before work begins on the $2.6 billion Cable Beach redevelopment to fund the training programme - a joint venture of the association and trade school BTVI.
"While they (Baha Mar) appear to be genuinely interested in both the short and long term success of the project and the country, they have informed us that presently there is no funding allocated for any training of construction personnel," according to the BCA's position paper on the project, which was recently given to government and the developers.
"We find the fact that a $2.6 billion project is proceeding with no training programme, or responsibility for one, incomprehensible. They have assured us that under their Heads of Agreement (with the government) there is apparently no stipulation for this critical and necessary component," said the BCA, in part.
As a non-profit organisation that operates primarily on membership dues, the BCA cannot fund the initiative at BTVI, an institution that relies on government subsidies. So far, nearly 500 tradesmen and contractors have registered for enrolment at BTVI's training programme.
"One of the possibilities we have discussed with Baha Mar is collecting a percentage of every contract awarded to be allocated for the training of Bahamian workers."
The Baha Mar project has yet to be formally approved by government. A labour resolution on the thousands of work permits the developers are seeking in Chinese labour will be brought to Parliament next week.
The peak period for Baha Mar's construction is between month 24 and month 36 of the project, and at that time there also will be more than 2,500 Bahamian construction workers employed.
Total employment at the peak of the project will be close to 7,500 foreign and Bahamian workers. The China Export-Import Bank and China State Construction are Baha Mar's financing and equity/project manager partners.
September 04, 2010
tribune242
Wednesday, August 25, 2010
Debate and division on 4,920 work permits for Chinese labour for the $2.6 billion Baha Mar Cable Beach resort complex heat up
PLP should be prepared for September 8
tribune242 editorial
SEPTEMBER 8th is D-Day for Baha Mar when parliamentarians will debate and vote on whether to approve 4,920 work permits for Chinese labour to build the $2.6 billion Cable Beach resort complex. The investment is backed by a loan from the Export-Import Bank of China. The resort will be constructed by China State Construction Engineering Corporation and the request for the permits comes from the People's Republic of China.
Legislators are caught on a cleft stick with this one -- a case of be damned if you do, or damned if you don't.
Bahamians have always been against foreign labour to the point that even the unskilled believe that as long as they are Bahamians - regardless of their lack of ability - they should get all jobs. However, today the economic situation is different. The construction business is down, Bahamians are desperate for work.
The question is are they desperate enough to suppress their grumbles and agree to these permits in order to stimulate the economy and find employment for themselves, or are they going to dig their heels in and say: "No."
According to Baha Mar if this project goes ahead it will create 3,300 temporary jobs for Bahamians during construction and 7,000 permanent jobs on completion.
We have always understood that wherever in the world Chinese investors build, they do it with their own labour. Looking at it from the Chinese point of view, their country also has to provide employment for their own people. It is their money which they invest in their citizens to create a project in a foreign land. On completion that project will then benefit the country in which it is located.
Mr Christie believes that the Chinese government -- with better negotiating skills on the part of Mr Ingraham -- could have been talked out of such an unusual request. Little does Mr Christie know. When these permits were first talked of the figures being tossed about were between 5,000 and 6,000 workers. If this is so to get the Chinese -- who we understand are adamant about their Chinese labour policy -- to drop down to 4,920 is a miracle in itself. However, if these permits are eventually agreed, with the exception of a handful of their top executives, everyone of them must return to China on the completion of the contract. This should be non-negotiable.
Mr Christie is agitated because - after many complaints of not being consulted by the Ingraham government -- he is now being asked to join that government in deciding whether these permits should be granted. For once he would rather Mr Ingraham let that bitter cup pass from him. He believes it is a cabinet decision, not his. However, what he must never forget is that if he had been more decisive in dealing with the Baha Mar development before he lost the government in 2007, there would have been no need for this debate. So not only is it incumbent upon Mr Christie and his colleagues to step up to the plate and vote on behalf of their constituents, but the PLP should recognise that what is being requested is unprecedented in Bahamian history. Therefore, voices from all segments of this country must be represented, and the only way to hear from the people is through their "representers."
We hope that Fox Hill MP Fred Mitchell is not going to waste the time of the House by blaming Prime Minister Ingraham for losing the Harrah's Entertainment deal because of a statement he made in the House.
He must remember that the new owners of Harrah's -- as disclosed in a case before the Supreme Court of New York -- had decided to abandon the Baha Mar-Harrah's agreement before Mr Ingraham even spoke in the House.
Mr Mitchell must also be reminded of the January 25, 2006 letter of Sarkis Izmilian, CEO of Baha Mar, to Mr Christie, in which he stated that despite his (Izmilian's) "best efforts these past three odd years the Government of the Commonwealth of the Bahamas (the Christie government) has failed me." Mr Izmilian added that he was at that time considering whether "investing billions of dollars in this country is the right decision."
It must also be remembered that the Christie government was still negotiating with Baha Mar up to two days before the 2007 election, which the PLP lost. Mr Mitchell must also recall that, because of the many rumours spinning around at the time, there was no way that the Ingraham government could sign the Christie government's unfinished agreement without much investigation. He must especially remember the "secret" agreements in the contract about the land deals that the Christie government knew would explode in its face if it came to the floor of the House and the knowledge of the Bahamian people. Therefore, a scheme was devised so that the controversial land transfers would not have to be approved by the House -- certainly not before the 2007 election.
"The country is desperately in need of relief in respect to this dire unemployment situation," Mr Christie told the press after a party meeting over the weekend to decide the position they would take in the September 8th debate. "The question for us is examining in detail what the implications are, the impact on Bahamian labour, and the length of time of the work permits."
This is the issue. When September 8th comes we hope that both sides stay focused. Regardless of whether the Christie Opposition tries to muddy the waters with red herrings, sits mute, or stays away, the position they take will be judged on that momentous day.
August 24, 2010
tribune242 editorial
tribune242 editorial
SEPTEMBER 8th is D-Day for Baha Mar when parliamentarians will debate and vote on whether to approve 4,920 work permits for Chinese labour to build the $2.6 billion Cable Beach resort complex. The investment is backed by a loan from the Export-Import Bank of China. The resort will be constructed by China State Construction Engineering Corporation and the request for the permits comes from the People's Republic of China.
Legislators are caught on a cleft stick with this one -- a case of be damned if you do, or damned if you don't.
Bahamians have always been against foreign labour to the point that even the unskilled believe that as long as they are Bahamians - regardless of their lack of ability - they should get all jobs. However, today the economic situation is different. The construction business is down, Bahamians are desperate for work.
The question is are they desperate enough to suppress their grumbles and agree to these permits in order to stimulate the economy and find employment for themselves, or are they going to dig their heels in and say: "No."
According to Baha Mar if this project goes ahead it will create 3,300 temporary jobs for Bahamians during construction and 7,000 permanent jobs on completion.
We have always understood that wherever in the world Chinese investors build, they do it with their own labour. Looking at it from the Chinese point of view, their country also has to provide employment for their own people. It is their money which they invest in their citizens to create a project in a foreign land. On completion that project will then benefit the country in which it is located.
Mr Christie believes that the Chinese government -- with better negotiating skills on the part of Mr Ingraham -- could have been talked out of such an unusual request. Little does Mr Christie know. When these permits were first talked of the figures being tossed about were between 5,000 and 6,000 workers. If this is so to get the Chinese -- who we understand are adamant about their Chinese labour policy -- to drop down to 4,920 is a miracle in itself. However, if these permits are eventually agreed, with the exception of a handful of their top executives, everyone of them must return to China on the completion of the contract. This should be non-negotiable.
Mr Christie is agitated because - after many complaints of not being consulted by the Ingraham government -- he is now being asked to join that government in deciding whether these permits should be granted. For once he would rather Mr Ingraham let that bitter cup pass from him. He believes it is a cabinet decision, not his. However, what he must never forget is that if he had been more decisive in dealing with the Baha Mar development before he lost the government in 2007, there would have been no need for this debate. So not only is it incumbent upon Mr Christie and his colleagues to step up to the plate and vote on behalf of their constituents, but the PLP should recognise that what is being requested is unprecedented in Bahamian history. Therefore, voices from all segments of this country must be represented, and the only way to hear from the people is through their "representers."
We hope that Fox Hill MP Fred Mitchell is not going to waste the time of the House by blaming Prime Minister Ingraham for losing the Harrah's Entertainment deal because of a statement he made in the House.
He must remember that the new owners of Harrah's -- as disclosed in a case before the Supreme Court of New York -- had decided to abandon the Baha Mar-Harrah's agreement before Mr Ingraham even spoke in the House.
Mr Mitchell must also be reminded of the January 25, 2006 letter of Sarkis Izmilian, CEO of Baha Mar, to Mr Christie, in which he stated that despite his (Izmilian's) "best efforts these past three odd years the Government of the Commonwealth of the Bahamas (the Christie government) has failed me." Mr Izmilian added that he was at that time considering whether "investing billions of dollars in this country is the right decision."
It must also be remembered that the Christie government was still negotiating with Baha Mar up to two days before the 2007 election, which the PLP lost. Mr Mitchell must also recall that, because of the many rumours spinning around at the time, there was no way that the Ingraham government could sign the Christie government's unfinished agreement without much investigation. He must especially remember the "secret" agreements in the contract about the land deals that the Christie government knew would explode in its face if it came to the floor of the House and the knowledge of the Bahamian people. Therefore, a scheme was devised so that the controversial land transfers would not have to be approved by the House -- certainly not before the 2007 election.
"The country is desperately in need of relief in respect to this dire unemployment situation," Mr Christie told the press after a party meeting over the weekend to decide the position they would take in the September 8th debate. "The question for us is examining in detail what the implications are, the impact on Bahamian labour, and the length of time of the work permits."
This is the issue. When September 8th comes we hope that both sides stay focused. Regardless of whether the Christie Opposition tries to muddy the waters with red herrings, sits mute, or stays away, the position they take will be judged on that momentous day.
August 24, 2010
tribune242 editorial
Friday, July 30, 2010
Concerns over Bahamian participation in the proposed $2.6 billion Baha Mar development
Concerns over Bahamian participation in Baha Mar raised at BCA meeting
By TANEKA THOMPSON
Tribune Staff Reporter
tthompson@tribunemedia.net:
CONSTRUCTION industry stakeholders yesterday questioned how the Bahamas Contractors' Association would ensure that small operators get a fair share of work on the proposed $2.6 billion Baha Mar development and similar projects.
These concerns were raised yesterday at a luncheon held by the BCA at the Wyndham Crystal Palace Resort and Casino in Cable Beach to inform the industry of impending changes the local construction sector must adopt to qualify for work on massive foreign investment projects such as Baha Mar.
Baha Mar's developers will introduce $60 million worth of contracts to begin the first phase of the project, which will only be awarded to Bahamian contractors, in the coming weeks.
BCA President Stephen Wrinkle assured the crowd of construction workers, contractors and tradesmen that his organisation would find ways to help create the "maximum Bahamian participation" in the development.
"The reason we're here today is to try to get the little man onboard with these projects. Let's face it – the big fellas, they fight their battles too but they're going to be here whether Baha Mar goes (forward) or not but the little man needs a lil' leg up right now to get along with this project and that's all we're trying to do," he said in a response to a question from the crowd.
The changes, which will allow the local construction sector to meet the expectations of the international market are separated into three parts: Creating a jobs skills bank for the sector; adopting an internationally recognised system of identifying classifications for division contractors; and launching a construction seminar series to help contractors meet the pre-qualification, tendering and administrative requirements of large scale developers.
Courses will then be held at the Bahamas Technical and Vocational Institute (BTVI) to certify these workers, and allow them to received advanced certification.
The skills bank will be of use to contractors and sub-contractors, allowing them to draw from a pool of qualified workers. It also will establish, for the first time according to Mr Wrinkle, national standards for those in the industry, "So that when a carpenter comes looking for work and he shows the certificate you will have some assurance that they have attained the basic, minimum skills required for each level.”
The crowd was also briefed on the most recent developments in the progress of Baha Mar's proposed transformation of the Cable Beach strip, which got a boost this week after the government of the People's Republic of China formally approved the joint venture.
The first phase requires the removal of government and other buildings adjacent to the Sheraton Nassau Beach and Wyndham Crystal Palace hotels, as well as the rerouting of West Bay Street for one and a half miles to skirt Baha Mar’s build site.
Vice president of construction for the project, Tom Dunlap, said the first phase could take 9-18 months.
The development is expected to create 11,000 jobs for Bahamians and add $1 billion to the local economy in the first year after completion. However the future of the project faces another hurdle – final approval from the Bahamas government.
July 29, 2010
tribune242
By TANEKA THOMPSON
Tribune Staff Reporter
tthompson@tribunemedia.net:
CONSTRUCTION industry stakeholders yesterday questioned how the Bahamas Contractors' Association would ensure that small operators get a fair share of work on the proposed $2.6 billion Baha Mar development and similar projects.
These concerns were raised yesterday at a luncheon held by the BCA at the Wyndham Crystal Palace Resort and Casino in Cable Beach to inform the industry of impending changes the local construction sector must adopt to qualify for work on massive foreign investment projects such as Baha Mar.
Baha Mar's developers will introduce $60 million worth of contracts to begin the first phase of the project, which will only be awarded to Bahamian contractors, in the coming weeks.
BCA President Stephen Wrinkle assured the crowd of construction workers, contractors and tradesmen that his organisation would find ways to help create the "maximum Bahamian participation" in the development.
"The reason we're here today is to try to get the little man onboard with these projects. Let's face it – the big fellas, they fight their battles too but they're going to be here whether Baha Mar goes (forward) or not but the little man needs a lil' leg up right now to get along with this project and that's all we're trying to do," he said in a response to a question from the crowd.
The changes, which will allow the local construction sector to meet the expectations of the international market are separated into three parts: Creating a jobs skills bank for the sector; adopting an internationally recognised system of identifying classifications for division contractors; and launching a construction seminar series to help contractors meet the pre-qualification, tendering and administrative requirements of large scale developers.
Courses will then be held at the Bahamas Technical and Vocational Institute (BTVI) to certify these workers, and allow them to received advanced certification.
The skills bank will be of use to contractors and sub-contractors, allowing them to draw from a pool of qualified workers. It also will establish, for the first time according to Mr Wrinkle, national standards for those in the industry, "So that when a carpenter comes looking for work and he shows the certificate you will have some assurance that they have attained the basic, minimum skills required for each level.”
The crowd was also briefed on the most recent developments in the progress of Baha Mar's proposed transformation of the Cable Beach strip, which got a boost this week after the government of the People's Republic of China formally approved the joint venture.
The first phase requires the removal of government and other buildings adjacent to the Sheraton Nassau Beach and Wyndham Crystal Palace hotels, as well as the rerouting of West Bay Street for one and a half miles to skirt Baha Mar’s build site.
Vice president of construction for the project, Tom Dunlap, said the first phase could take 9-18 months.
The development is expected to create 11,000 jobs for Bahamians and add $1 billion to the local economy in the first year after completion. However the future of the project faces another hurdle – final approval from the Bahamas government.
July 29, 2010
tribune242
Monday, June 14, 2010
Prime Minister Hubert Ingraham: I would not have approved the Baha Mar development
PM: I would not have approved Baha Mar
By MEGAN REYNOLDS
Tribune Staff Reporter
mreynolds@tribunemedia.net:
PRIME Minister Hubert Ingraham announced he would not have approved the Baha Mar development under his administration as he hit back at allegations made by Opposition leader Perry Christie.
Speaking at a press conference called at the FNM headquarters in Mackey Street yesterday, Mr Ingraham denied holding any negotiations with developers of the $2.6 billion project agreed to under the PLP administration as he called for the PLP's full support in following it through.
"Had we been involved we would never have agreed to a deal like that for the Bahamas," Mr Ingraham said.
"We didn't cancel it, we didn't stop it, we didn't review it, we told Baha Mar when we came into office we don't like it, but if you are willing to live with what you signed with the PLP government we will accept it. They came forward with changes they wanted and we negotiated changes we wanted. Had we been involved we would never have agreed to a deal like that for the Bahamas."
Once funding from the China Export-Import Bank and employment of the China State Construction Company as general contractor has been approved by the Chinese government Mr Ingraham said major decisions on the employment of nearly 5,000 Chinese workers for the project will be taken to Parliament for a cross-party decision.
He said the work permits for 4,920 Chinese workers to develop the West Bay Street corridor and Baha Mar's commercial village would have to find agreement from the Opposition.
"The government of the Bahamas is committed to ensuring that foreign direct investment in our economy benefits Bahamians," said Mr Ingraham.
"It would be unconscionable for large numbers of foreign workers to be engaged in the Bahamas if large numbers of similarly skilled Bahamians are available to take up those jobs.
"Mr Christie, while certain to seek credit as the 'father' of the Baha Mar Project is already seeking to find shelter from becoming a part of a tough decision on the labour component for the construction of that project.
"I make abundantly clear that my government will not approve any extraordinary foreign labour component for the Baha Mar Project without the support of the Official Opposition.
"We are not going to born this PLP baby by ourselves.
"After all this is a baby conceived by them."
The high number of Chinese workers could translate to as many as two foreign workers for every Bahamian, which Mr Ingraham compared to Kerzner International's Atlantis worksite on Paradise Island where seven out of every ten labourers were Bahamian.
Mr Ingraham also took the opportunity to refute claims Baha Mar's negotiations were stalled under the FNM as he said it was the PLP that delayed progress by not following through with their obligations under the 2005 Heads of Agreement as government-owned lands in West Bay Street were not transferred to Baha Mar under the PLP as they should have been, and the Supplementary Heads of Agreement sought by the PLP government in May 2007 were not concluded before the FNM came to power.
And he said his government "cannot wait forever" for negotiations to conclude as protracted negotiations have stalled plans to divert Gladstone Road as Baha Mar interferes with the New Providence Road Improvement Project.
"Mr Christie has suggested that my government is seeking to keep secret, its negotiations with Baha Mar," Mr Ingraham said.
"No negotiations are taking place between the Bahamas Government and Baha Mar.
"Obviously we cannot be in a state of uncertainty forever so at some stage some decisions have to be made."
Baha Mar spokesman Robert Sands issued a statement following Mr Ingraham's press conference yesterday.
He said: "The size and scope of the Baha Mar project is unprecedented in the Bahamas.
"We are pleased with the consensus in the Bahamas on the desirability of the enormous economic, employment and social benefits it represents.
"We are making excellent progress, and we expect final approval from the Government of the People's Republic of China very shortly.
"Additionally we have already begun the process of bidding out the contraction work with the commercial village and the re-routing of West Bay Street which in itself will create hundreds of jobs for Bahamians.
"It is the first step in the project's creation of approximately 10,000 jobs for Bahamians over the next five years.
"We will continue to work closely with the Bahamian government and look forward to receiving the necessary approvals so we can begin work as quickly as possible."
Mr Ingraham agreed the Bahamas needs a major project and clarified the country currently only has the manpower and infrastructure to carry out one major project at a time, be it Baha Mar or Atlantis phase four.
"At the same time we can't have both; not simultaneously," he said.
June 14, 2010
tribune242
By MEGAN REYNOLDS
Tribune Staff Reporter
mreynolds@tribunemedia.net:
PRIME Minister Hubert Ingraham announced he would not have approved the Baha Mar development under his administration as he hit back at allegations made by Opposition leader Perry Christie.
Speaking at a press conference called at the FNM headquarters in Mackey Street yesterday, Mr Ingraham denied holding any negotiations with developers of the $2.6 billion project agreed to under the PLP administration as he called for the PLP's full support in following it through.
"Had we been involved we would never have agreed to a deal like that for the Bahamas," Mr Ingraham said.
"We didn't cancel it, we didn't stop it, we didn't review it, we told Baha Mar when we came into office we don't like it, but if you are willing to live with what you signed with the PLP government we will accept it. They came forward with changes they wanted and we negotiated changes we wanted. Had we been involved we would never have agreed to a deal like that for the Bahamas."
Once funding from the China Export-Import Bank and employment of the China State Construction Company as general contractor has been approved by the Chinese government Mr Ingraham said major decisions on the employment of nearly 5,000 Chinese workers for the project will be taken to Parliament for a cross-party decision.
He said the work permits for 4,920 Chinese workers to develop the West Bay Street corridor and Baha Mar's commercial village would have to find agreement from the Opposition.
"The government of the Bahamas is committed to ensuring that foreign direct investment in our economy benefits Bahamians," said Mr Ingraham.
"It would be unconscionable for large numbers of foreign workers to be engaged in the Bahamas if large numbers of similarly skilled Bahamians are available to take up those jobs.
"Mr Christie, while certain to seek credit as the 'father' of the Baha Mar Project is already seeking to find shelter from becoming a part of a tough decision on the labour component for the construction of that project.
"I make abundantly clear that my government will not approve any extraordinary foreign labour component for the Baha Mar Project without the support of the Official Opposition.
"We are not going to born this PLP baby by ourselves.
"After all this is a baby conceived by them."
The high number of Chinese workers could translate to as many as two foreign workers for every Bahamian, which Mr Ingraham compared to Kerzner International's Atlantis worksite on Paradise Island where seven out of every ten labourers were Bahamian.
Mr Ingraham also took the opportunity to refute claims Baha Mar's negotiations were stalled under the FNM as he said it was the PLP that delayed progress by not following through with their obligations under the 2005 Heads of Agreement as government-owned lands in West Bay Street were not transferred to Baha Mar under the PLP as they should have been, and the Supplementary Heads of Agreement sought by the PLP government in May 2007 were not concluded before the FNM came to power.
And he said his government "cannot wait forever" for negotiations to conclude as protracted negotiations have stalled plans to divert Gladstone Road as Baha Mar interferes with the New Providence Road Improvement Project.
"Mr Christie has suggested that my government is seeking to keep secret, its negotiations with Baha Mar," Mr Ingraham said.
"No negotiations are taking place between the Bahamas Government and Baha Mar.
"Obviously we cannot be in a state of uncertainty forever so at some stage some decisions have to be made."
Baha Mar spokesman Robert Sands issued a statement following Mr Ingraham's press conference yesterday.
He said: "The size and scope of the Baha Mar project is unprecedented in the Bahamas.
"We are pleased with the consensus in the Bahamas on the desirability of the enormous economic, employment and social benefits it represents.
"We are making excellent progress, and we expect final approval from the Government of the People's Republic of China very shortly.
"Additionally we have already begun the process of bidding out the contraction work with the commercial village and the re-routing of West Bay Street which in itself will create hundreds of jobs for Bahamians.
"It is the first step in the project's creation of approximately 10,000 jobs for Bahamians over the next five years.
"We will continue to work closely with the Bahamian government and look forward to receiving the necessary approvals so we can begin work as quickly as possible."
Mr Ingraham agreed the Bahamas needs a major project and clarified the country currently only has the manpower and infrastructure to carry out one major project at a time, be it Baha Mar or Atlantis phase four.
"At the same time we can't have both; not simultaneously," he said.
June 14, 2010
tribune242
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