We Have No Choice?
by Simon
The House of Assembly debated a resolution on the Baha Mar deal recently. Unfortunately for the Perry Christie-led PLP, it has already lost the broader national debate on the proposed mega project.
This includes a haemorrhaging of goodwill from the PLP by many professionals and even many within the party who are flabbergasted and frustrated by Mr. Christie’s dissembling and series of incoherent statements on Baha Mar since its inception. Curiously, part of the story concerns – the BlackBerry.
Some weeks ago, Mr. Christie attempted to mock the Prime Minister for regularly checking his BlackBerry at a dinner attended by both leaders. Mr. Ingraham was monitoring any news of a settlement between Baha Mar and Scotiabank on an outstanding loan between the two entities.
The story reveals the essential differences between Messrs. Ingraham and Christie. Hubert Ingraham is a part of the Smartphone generation while his former law partner is a throwback to a bygone era, wedded to a model of economic development that is being assigned to the proverbial ash heap of history.
Mr. Ingraham’s use of the BlackBerry represents a forward-looking, tech-savvy style of leadership marked by a hands-on approach, timeliness and engagement. This is in marked contrast to Mr. Christie’s cavalier, late-again and disengaged style. The device that perhaps best represents his decision-making style is the telegraph, which in today’s world would be slow-moving, clunky and out-of-date.
But, the more defining difference between the men was revealed in one of the more shocking statements ever made by a Bahamian leader on a project as large and as involved as Baha Mar.
WE HAVE NO CHOICE?
On the eve of Mr. Ingraham’s departure for China, the Leader of the Opposition counselled the Prime Minister to take the Baha Mar deal as it was. His reckless advice: We have no choice! We have no choice?
One would have expected this to be the view of officials at Baha Mar, not of a former Prime Minister. Life is filled with choices, even in the most difficult circumstances.
It is clear that Mr. Christie would have headed to China on bended knee, as an agent for Baha Mar, representing narrow special interests rather than the broader Bahamian national interest.
Mr. Christie’s view that the country had no choice but to accept the Baha Mar deal as is, is the clearest insight yet into why he essentially gave away Bahamian treasure and land at Cable Beach which no Bahamian leader from the UBP, PLP or FNM ever did.
It explains the Great Mayaguana Land Give-Away in which beachfront property equivalent of the distance from the eastern end of New Providence to Lyford Cay was alienated to foreign interests.
It reveals why his party’s land policy has been disastrous for The Bahamas and why his talk of Bahamianization is mostly talk. It further demonstrates why Mr. Christie and the PLP are content to sell cheaply our national ambitions and dreams to foreign interests, often to the cheapest bidder, rather than genuinely empower Bahamians.
Thankfully, Mr. Ingraham disregarded Mr. Christie’s monstrously bad advice in his negotiations with the Chinese. He did so because he knows that The Bahamas indeed has a choice, indeed a number of choices, as we slowly recover from a global economic crisis.
HEAD-TO-HEAD
Rather than bended-knee, Mr. Ingraham went head-to-head with Chinese officials. Whereas Mr. Christie felt there was no choice than to accept $200 million dollars worth of contracts for Bahamians, Mr. Ingraham got that number doubled to $400 million. Those contracts will now include work on the Core Project which was not in the original deal.
In his Sunday press conference Mr. Ingraham noted that contracts will be awarded to large, medium, small scale and individual contractors. This is broad economic empowerment in fact, rather than just in talk.
Mr. Ingraham insisted on and got a sizable expansion of training opportunities for Bahamian workers and professionals. This dovetails with his administration’s revamping of the Bahamas Technical and Vocational Institute under revised legislation passed this year. It may also build on the National Retraining initiative launched last year.
The Prime Minister also suggested that there may have been some movement on phasing in the number of rooms at Baha Mar over a designated period of time.
Whatever the final outcome on this matter, it is clear that Mr. Ingraham went to China to negotiate a better deal for the country, as opposed to Mr. Christie who it appears may have gone simply for a signing ceremony and pomp in circumstances that would not have been as advantageous to The Bahamas.
WATERSHED
As noted previously in this column, the Baha Mar deal has been a watershed in terms of the vision and quality of governance demonstrated by Mr. Ingraham and the FNM in stark contrast to that of Mr. Christie and the PLP.
It must be a source of considerable angst for the latter, that the project they initiated has been re-negotiated on better terms and will be launched by an Ingraham-led FNM Government. History eclipses those who are irresolute, procrastinating and dithering when decisiveness is required.
The Bahamas deserves better than political, business or civic leaders telling us that we have no choice in charting our national destiny, despite the rough seas we are facing. This is the talk of those who are dragged along hopelessly by the stream events, rather than tacking and turning to navigate those events to one’s better advantage.
On Baha Mar and other foreign investment projects, Mr. Christie has shown that he is mastered and sidelined by events. Through painstaking negotiations Mr. Ingraham has shown that he knows how to shape events, even when presented with as problematic a deal as the initial one placed on the table by Baha Mar.
Mr. Christie’s declaration that the country had no choice on Baha Mar proved stunningly incorrect. It will prove to be one of the more disastrous pronouncements he has made in his long political career. It is a mistake the Bahamian people will clearly take into account as they make their choice at the next general election.
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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 resolution. Show all posts
Showing posts with label Baha Mar resolution. Show all posts
Monday, December 6, 2010
Monday, November 22, 2010
Prime Minister Hubert Ingraham: I will not knowingly give anybody else a better deal than Kerzner got...
PM responds to Kerzner’s claims
By KRYSTEL ROLLE
Guardian Staff Reporter
krystel@nasguard.com
Prime Minister Hubert Ingraham said yesterday that he is not concerned with the statements made by Kerzner International’s Chairman and CEO Sol Kerzner that thousands of jobs may be at risk as a result of the Baha Mar project.
Kerzner told reporters on Thursday that the 8,000 jobs at the Atlantis Resort on Paradise Island would be placed in jeopardy if the government approves the Baha Mar project in its current form.
“It’s a deal that makes no sense,” Kerzner said. “It’s a deal that could be harmful to the people of The Bahamas and certainly to future investors and indeed ourselves.”
Kerzner has also argued that the deal between the government and Baha Mar violates the most favored nation status clause his company agreed to with the government in successive agreements.
Under these agreements, no investor should receive more favorable terms with the government than Kerzner’s company.
Ingraham said he thinks the issue with Kerzner will come to a satisfactory conclusion.
“I have many discussions with Mr. Kerzner,” said Prime Minister Ingraham, who was a guest on Love 97’s radio talk show Issues of the Day. “I think that we will resolve this issue satisfactorily. I think so.”
Despite the public criticisms of the Baha Mar deal by Kerzner, the House of Assembly unanimously approved the Baha Mar resolution on Thursday.
The company is seeking 8,150 work permits for non-Bahamian construction workers. The government brought the resolution to the House in order to get the ‘blessing’ of members before it finally approves the project, likely by the end of the month.
“We were always concerned that when we came to office that there was nothing in the Baha Mar deal that would give them a better deal than Kerzner, ”?Ingraham said yesterday. “I think I can say that the thing that ticked Kerzner more than anything else is a statement made by (Progressive Liberal Party Leader) Perry Christie to the effect that Baha Mar only wanted to get what Kerzner got. And he (Kerzner) was of the view that Baha Mar was getting more than him. And he was very hurt that Christie would make such a statement.”
Ingraham said Kerzner is concerned about Baha Mar’s lower construction labor costs, as compared to his company’s construction labor costs. Baha Mar will be mostly using Chinese labor to build its resort. Kerzner used more Bahamian labor at his property, increasing costs.
According to Ingraham, Kerzner is also concerned about the sum Baha Mar paid for the land the development is located on.
Ingraham said one of the reasons why they insisted there had to be a substantial increase to the contract value for Bahamian contractors was to help to offset any question about Kerzner’s concerns.
As a result of negotiations between Ingraham and the Chinese, and subsequent negotiations between the Chinese and Baha Mar, subcontracts to Bahamians in connection with the Baha Mar project will increase from $200 million to $400 million.
Ingraham said he wants to be sure that the government is not giving Baha Mar a better deal than Kerzner.
He added that when the Free National Movement (FNM) government negotiated a deal with Baha Mar in 2008, it did not give Baha Mar some of the concessions the Christie administration had agreed to.
“They issued side letters offering Baha Mar more. We tried to pull those things back. We think we have been somewhat successful ensuring that there is equity and balance between the two,” Ingraham said.
In response to criticism that he treats Kerzner with more regard than he does other developers, Ingraham didn’t shy away from the relationship he shares with the hotel developer. However, he added that all developers are treated fairly.
“There’s no question of my high regard for Sol Kerzner for what he has done for The Bahamas,” Ingraham said adding that Kerzner provided The Bahamas with 2,000 more jobs than he committed to.
“I will do all I can for as long as I can to ensure that his project is successful, but that has nothing to do with whether I will be fair to anyone else. But I will not knowingly give anybody else a better deal than Kerzner got,” he said.
Ingraham added that the Baha Mar project is only going forward because of his government.
He said there was no means by which Baha Mar’s CEO Sarkis Izmirlian could get the funding from the Chinese unless the government gave the Chinese the go ahead.
China Export-Import Bank (China Eximbank) is extending a $2.45 billion loan to Baha Mar.
11/21/2010
thenassauguardian
By KRYSTEL ROLLE
Guardian Staff Reporter
krystel@nasguard.com
Prime Minister Hubert Ingraham said yesterday that he is not concerned with the statements made by Kerzner International’s Chairman and CEO Sol Kerzner that thousands of jobs may be at risk as a result of the Baha Mar project.
Kerzner told reporters on Thursday that the 8,000 jobs at the Atlantis Resort on Paradise Island would be placed in jeopardy if the government approves the Baha Mar project in its current form.
“It’s a deal that makes no sense,” Kerzner said. “It’s a deal that could be harmful to the people of The Bahamas and certainly to future investors and indeed ourselves.”
Kerzner has also argued that the deal between the government and Baha Mar violates the most favored nation status clause his company agreed to with the government in successive agreements.
Under these agreements, no investor should receive more favorable terms with the government than Kerzner’s company.
Ingraham said he thinks the issue with Kerzner will come to a satisfactory conclusion.
“I have many discussions with Mr. Kerzner,” said Prime Minister Ingraham, who was a guest on Love 97’s radio talk show Issues of the Day. “I think that we will resolve this issue satisfactorily. I think so.”
Despite the public criticisms of the Baha Mar deal by Kerzner, the House of Assembly unanimously approved the Baha Mar resolution on Thursday.
The company is seeking 8,150 work permits for non-Bahamian construction workers. The government brought the resolution to the House in order to get the ‘blessing’ of members before it finally approves the project, likely by the end of the month.
“We were always concerned that when we came to office that there was nothing in the Baha Mar deal that would give them a better deal than Kerzner, ”?Ingraham said yesterday. “I think I can say that the thing that ticked Kerzner more than anything else is a statement made by (Progressive Liberal Party Leader) Perry Christie to the effect that Baha Mar only wanted to get what Kerzner got. And he (Kerzner) was of the view that Baha Mar was getting more than him. And he was very hurt that Christie would make such a statement.”
Ingraham said Kerzner is concerned about Baha Mar’s lower construction labor costs, as compared to his company’s construction labor costs. Baha Mar will be mostly using Chinese labor to build its resort. Kerzner used more Bahamian labor at his property, increasing costs.
According to Ingraham, Kerzner is also concerned about the sum Baha Mar paid for the land the development is located on.
Ingraham said one of the reasons why they insisted there had to be a substantial increase to the contract value for Bahamian contractors was to help to offset any question about Kerzner’s concerns.
As a result of negotiations between Ingraham and the Chinese, and subsequent negotiations between the Chinese and Baha Mar, subcontracts to Bahamians in connection with the Baha Mar project will increase from $200 million to $400 million.
Ingraham said he wants to be sure that the government is not giving Baha Mar a better deal than Kerzner.
He added that when the Free National Movement (FNM) government negotiated a deal with Baha Mar in 2008, it did not give Baha Mar some of the concessions the Christie administration had agreed to.
“They issued side letters offering Baha Mar more. We tried to pull those things back. We think we have been somewhat successful ensuring that there is equity and balance between the two,” Ingraham said.
In response to criticism that he treats Kerzner with more regard than he does other developers, Ingraham didn’t shy away from the relationship he shares with the hotel developer. However, he added that all developers are treated fairly.
“There’s no question of my high regard for Sol Kerzner for what he has done for The Bahamas,” Ingraham said adding that Kerzner provided The Bahamas with 2,000 more jobs than he committed to.
“I will do all I can for as long as I can to ensure that his project is successful, but that has nothing to do with whether I will be fair to anyone else. But I will not knowingly give anybody else a better deal than Kerzner got,” he said.
Ingraham added that the Baha Mar project is only going forward because of his government.
He said there was no means by which Baha Mar’s CEO Sarkis Izmirlian could get the funding from the Chinese unless the government gave the Chinese the go ahead.
China Export-Import Bank (China Eximbank) is extending a $2.45 billion loan to Baha Mar.
11/21/2010
thenassauguardian
Saturday, November 20, 2010
Perry Christie - Opposition Leader says: ... if the government considers itself a partner in the deal with Baha Mar, it should have dealt with the alleged breach with Kerzner outside of the House of Assembly
Christie: Issues with Kerzner should have been resolved first
By CHESTER ROBARDS
Guardian Staff Reporter
chester@nasguard.com
Leader of the Opposition Perry Christie admonished the government during his contribution to debate in the House of Assembly yesterday, for not moving to resolve their apparent breach of a ‘Most Favored Nation’ (MFN) clause with Kerzner International, before bringing the Baha Mar resolution to Parliament for a vote.
Christie said if the government considers itself a partner in the deal with Baha Mar, it should have dealt with the alleged breach with Kerzner outside of the House of Assembly.
According to him, when the government was made aware that Kerzner considered the allowance of 8,000 Chinese workers for the Baha Mar project a violation of MFN, the prime minister should have met with them to resolve the issue before yesterday.
“It looks like there is antagonism in the product, serious difficulties in the product, where the government is making a decision to breach an agreement,” said Christie.
“Because, if we are saying that we are going to approve it (Baha Mar) and he (Sol Kerzner) is saying we are in breach of it (MFN), Parliament should suspend itself, since we have been asked to come to this point to have a determination made as to whether or not we are in breach.”
According to him, the matter of a breach of contract is “a matter to do with partners” and “not to do with public relations of a government”.
He said he was taken aback when Member of Parliament for Marco City, Zhivargo Laing read the press statement in the House of Assembly that was issued by Kerzner International outlining what it considered to be a breach of MFN.
“I was shocked yesterday,” he said. “This (MFN breach) is essentially a major legal matter that has exercised the minds of lawyers here in the attorney general’s office and the Queens Counsel of England.”
Christie also used much of the beginning of his alloted time in the House to respond to the government’s accusations that his party was not an effective government when they were in power and with regard to the Baha Mar agreement.
He got extremely testy with his colleagues across the floor yesterday, reminding them to act like parliamentarians while addressing the House and each other, as Bahamians look to them as a good example.
“We are coming to a time in the country where we have to be careful that we do not begin applying in our country retribution and reaction,” he said.
“That is not good for this country and our leadership in this country must exercise the greatest care as we move forward, dealing with people's reputations.
“Recognize that as best we can, we will try to avoid the snaring remarks and try to focus on the issues at hand.”
11/19/2010
thenassauguardian
By CHESTER ROBARDS
Guardian Staff Reporter
chester@nasguard.com
Leader of the Opposition Perry Christie admonished the government during his contribution to debate in the House of Assembly yesterday, for not moving to resolve their apparent breach of a ‘Most Favored Nation’ (MFN) clause with Kerzner International, before bringing the Baha Mar resolution to Parliament for a vote.
Christie said if the government considers itself a partner in the deal with Baha Mar, it should have dealt with the alleged breach with Kerzner outside of the House of Assembly.
According to him, when the government was made aware that Kerzner considered the allowance of 8,000 Chinese workers for the Baha Mar project a violation of MFN, the prime minister should have met with them to resolve the issue before yesterday.
“It looks like there is antagonism in the product, serious difficulties in the product, where the government is making a decision to breach an agreement,” said Christie.
“Because, if we are saying that we are going to approve it (Baha Mar) and he (Sol Kerzner) is saying we are in breach of it (MFN), Parliament should suspend itself, since we have been asked to come to this point to have a determination made as to whether or not we are in breach.”
According to him, the matter of a breach of contract is “a matter to do with partners” and “not to do with public relations of a government”.
He said he was taken aback when Member of Parliament for Marco City, Zhivargo Laing read the press statement in the House of Assembly that was issued by Kerzner International outlining what it considered to be a breach of MFN.
“I was shocked yesterday,” he said. “This (MFN breach) is essentially a major legal matter that has exercised the minds of lawyers here in the attorney general’s office and the Queens Counsel of England.”
Christie also used much of the beginning of his alloted time in the House to respond to the government’s accusations that his party was not an effective government when they were in power and with regard to the Baha Mar agreement.
He got extremely testy with his colleagues across the floor yesterday, reminding them to act like parliamentarians while addressing the House and each other, as Bahamians look to them as a good example.
“We are coming to a time in the country where we have to be careful that we do not begin applying in our country retribution and reaction,” he said.
“That is not good for this country and our leadership in this country must exercise the greatest care as we move forward, dealing with people's reputations.
“Recognize that as best we can, we will try to avoid the snaring remarks and try to focus on the issues at hand.”
11/19/2010
thenassauguardian
Friday, November 19, 2010
Sir Sol Kerzner says: The proposed deal between the Government of The Bahamas and Baha Mar violates previous agreements between the government and Kerzner International
Sol Kerzner hits out on Baha Mar
By BRENT DEAN
The Nassau Guardian
Deputy News Editor
brentldean@nasguard.com
Says Baha Mar deal violates agreements made with his company
The proposed deal between the Government of The Bahamas and Baha Mar violates previous agreements between the government and Kerzner International, charged Sir Sol Kerzner yesterday.
“Baha Mar proposes employing thousands of foreign Chinese workers, which would represent far more than 30 percent of the total labor force.
Approval of this arrangement by government would be a clear breach of an investment agreement with a developer that has become its largest private employer, and an investor who took a risk on The Bahamas when its economy was struggling far more than it is today,” said Sir Sol Kerzner, chairman and chief executive officer of Kerzner International in a statement.
The House of Assembly is scheduled to conclude debate on the Baha Mar resolution today. The company is seeking 8,150 work permits for Chinese workers to help construct the $2.6 billion resort. The government is seeking the blessing of the House as it grants the work permits. The opposition has said it supports the deal.
In previous heads of agreements between Kerzner and the government, it pledged to grant Kerzner most favored nation status, meaning no investor would be granted concessions greater than Kerzner.
However, in a rare public statement, Kerzner, who is the largest private sector employer in the country, said Baha Mar is being granted much more than his company received.
“When we made our largest single investment of approximately $1 billion for Phase III, we did so based on a heads of agreement signed with the PLP government in 2003. Among the many requirements that government imposed on Kerzner under this and prior agreements was a strict rule that at least 70 percent of the total construction labor force would be Bahamian,” said Kerzner.
“As was the case with the two previous agreements with government, our 2003 agreement included a most favored nation provision that assured Kerzner that our investments would be protected from subsequent investors receiving more favorable terms. These agreements represented a solemn promise by The Bahamas to us that any subsequent investor would only compete against us on a level playing field.”
Prime Minister Hubert Ingraham said on Sunday that the Baha Mar deal would be approved by the end of the month. It is unclear if Kerzner’s intervention will have any effect on that pronouncement.
Yesterday Baha Mar was not pleased with Kerzner’s public intervention.
“We are not going to comment on Mr. Kerzner’s public relations statement. The Baha Mar project has been well vetted with the public, the government and its investors. We are happy the Baha Mar resolution is being debated in Parliament today,” said the company in response to Kerzner.
Kerzner International said it intends to discuss with the government how to address its concerns. As a result of the deal, Baha Mar is to receive on the labor and land components of the proposed deal, Kerzner can argue it is entitled to the same.
The government is transfering 265 acres of public land at Cable Beach to Baha Mar as a part of the deal.
Kerzner International emphasized that the heads of agreement for each of the three phases of development on Paradise Island required that at least 70 percent of the total construction labor force had to be Bahamian.
Bahamian labor is more expensive than labor from countries such as China and Mexico.
The company and its chairman argued that the deal Baha Mar is to receive “would represent a material breach” of its agreement with the government.
“When Kerzner first invested in The Bahamas by acquiring what is now the Coral and Beach Towers out of bankruptcy in May 1994, we made our investment on the basis of agreements with the government that gave us contractual assurances regarding our investment. Although we were confident in our abilities to re-establish the Bahamian tourism industry at that time, we did so in the face of truly dire economic conditions,” said Kerzner in his remarks.
“Accordingly, we insisted upon most favored nation treatment, which would ensure that no subsequent investor would be given advantages that we never enjoyed. Since our first investment, we have always found government – irrespective of the party in office – to be a faithful partner who has justified our initial and subsequent confidence in The Bahamas as an investor. We have invested more than $2.3 billion over the course of our build-out of the three phases of Atlantis, increasing our room count from approximately 1,100 in 1994 to over 4,000 today.
“We have grown the Bahamian workforce from approximately 1,200 employees when we commenced operations in 1994 to nearly 8,000 full-time employees today, not to mention the indirect employment that our investment has generated in the community. Furthermore, we have spent millions on training programs to develop and improve the skills and professionalism of our work force, which has allowed Atlantis to be rated among the top resorts in the world.”
Both the governing Free National Movement and opposition Progressive Liberal Party support the Baha Mar deal.
11/18/2010
thenassauguardian
By BRENT DEAN
The Nassau Guardian
Deputy News Editor
brentldean@nasguard.com
Says Baha Mar deal violates agreements made with his company
The proposed deal between the Government of The Bahamas and Baha Mar violates previous agreements between the government and Kerzner International, charged Sir Sol Kerzner yesterday.
“Baha Mar proposes employing thousands of foreign Chinese workers, which would represent far more than 30 percent of the total labor force.
Approval of this arrangement by government would be a clear breach of an investment agreement with a developer that has become its largest private employer, and an investor who took a risk on The Bahamas when its economy was struggling far more than it is today,” said Sir Sol Kerzner, chairman and chief executive officer of Kerzner International in a statement.
The House of Assembly is scheduled to conclude debate on the Baha Mar resolution today. The company is seeking 8,150 work permits for Chinese workers to help construct the $2.6 billion resort. The government is seeking the blessing of the House as it grants the work permits. The opposition has said it supports the deal.
In previous heads of agreements between Kerzner and the government, it pledged to grant Kerzner most favored nation status, meaning no investor would be granted concessions greater than Kerzner.
However, in a rare public statement, Kerzner, who is the largest private sector employer in the country, said Baha Mar is being granted much more than his company received.
“When we made our largest single investment of approximately $1 billion for Phase III, we did so based on a heads of agreement signed with the PLP government in 2003. Among the many requirements that government imposed on Kerzner under this and prior agreements was a strict rule that at least 70 percent of the total construction labor force would be Bahamian,” said Kerzner.
“As was the case with the two previous agreements with government, our 2003 agreement included a most favored nation provision that assured Kerzner that our investments would be protected from subsequent investors receiving more favorable terms. These agreements represented a solemn promise by The Bahamas to us that any subsequent investor would only compete against us on a level playing field.”
Prime Minister Hubert Ingraham said on Sunday that the Baha Mar deal would be approved by the end of the month. It is unclear if Kerzner’s intervention will have any effect on that pronouncement.
Yesterday Baha Mar was not pleased with Kerzner’s public intervention.
“We are not going to comment on Mr. Kerzner’s public relations statement. The Baha Mar project has been well vetted with the public, the government and its investors. We are happy the Baha Mar resolution is being debated in Parliament today,” said the company in response to Kerzner.
Kerzner International said it intends to discuss with the government how to address its concerns. As a result of the deal, Baha Mar is to receive on the labor and land components of the proposed deal, Kerzner can argue it is entitled to the same.
The government is transfering 265 acres of public land at Cable Beach to Baha Mar as a part of the deal.
Kerzner International emphasized that the heads of agreement for each of the three phases of development on Paradise Island required that at least 70 percent of the total construction labor force had to be Bahamian.
Bahamian labor is more expensive than labor from countries such as China and Mexico.
The company and its chairman argued that the deal Baha Mar is to receive “would represent a material breach” of its agreement with the government.
“When Kerzner first invested in The Bahamas by acquiring what is now the Coral and Beach Towers out of bankruptcy in May 1994, we made our investment on the basis of agreements with the government that gave us contractual assurances regarding our investment. Although we were confident in our abilities to re-establish the Bahamian tourism industry at that time, we did so in the face of truly dire economic conditions,” said Kerzner in his remarks.
“Accordingly, we insisted upon most favored nation treatment, which would ensure that no subsequent investor would be given advantages that we never enjoyed. Since our first investment, we have always found government – irrespective of the party in office – to be a faithful partner who has justified our initial and subsequent confidence in The Bahamas as an investor. We have invested more than $2.3 billion over the course of our build-out of the three phases of Atlantis, increasing our room count from approximately 1,100 in 1994 to over 4,000 today.
“We have grown the Bahamian workforce from approximately 1,200 employees when we commenced operations in 1994 to nearly 8,000 full-time employees today, not to mention the indirect employment that our investment has generated in the community. Furthermore, we have spent millions on training programs to develop and improve the skills and professionalism of our work force, which has allowed Atlantis to be rated among the top resorts in the world.”
Both the governing Free National Movement and opposition Progressive Liberal Party support the Baha Mar deal.
11/18/2010
thenassauguardian
Monday, November 15, 2010
Prime Minister Hubert Ingraham confirmed that the Baha Mar project would likely be approved by the government ...
Govt to approve Baha Mar
By BRENT DEAN
Deputy News Editor - The Nassau Guardian
brentldean@nasguard.com
As a result of negotiations between Prime Minister Hubert Ingraham and the Chinese, and subsequent negotiations between the Chinese and Baha Mar, subcontracts to Bahamians in connection with the Baha Mar project will increase from $200 million to $400 million.
“This will be the largest award of contracts to Bahamian contractors on a single project. Contracts will be awarded to large, medium, small-scale and individual contractors. This is in keeping with my government’s commitment to deepening and broadening economic opportunities for all Bahamians,” said Ingraham yesterday at a news conference at the British Colonial Hilton.
Ingraham used the news conference to update the country on his recent visit to China. During the trip, he met with Baha Mar’s partners – China Export-Import Bank (China Eximbank) and China State Construction Engineering Corporation (CSCEC) – about potential changes to the $2.6 billion Cable Beach development.
Before those meetings, Ingraham had expressed concern about several components of the project. These concerns included the resort being built in one phase; Baha Mar needing equity partners; and that under the plan, Bahamians would not work on the hotel core.
Ingraham was not able to win concessions based on all of his concerns. He said there has been no final agreement on the phased entry of rooms at the resort into the marketplace.
However, along with the increase in subcontracted work to local firms, Bahamians will now work on the hotel core, according to Ingraham.
The prime minister also confirmed that he has been advised by Baha Mar and the China Eximbank that Hyatt will invest $40 million into the development. Rosewood Hotels and Resorts and Morgans Hotel Group will invest $10 million each, he added.
CSCEC will invest $150 million into Baha Mar.
One of the early hurdles to approval of the project by the government was the resolution of Baha Mar’s loan payment to Scotiabank. The bank and developer recently settled.
Yesterday Ingraham revealed Scotiabank’s equity stake in the project.
“The Bank of Nova Scotia is leaving in its unpaid balance of its loan to the extent of 12 percent of the project,” he said.
China Eximbank is extending a $2.45 billion loan to the developers.
Baha Mar and its Chinese partners have also agreed to significant training opportunities for Bahamians, Ingraham said.
This will include the establishment of a training and service academy.
“The academy will be permanent, offering ongoing training opportunities for employees and prospective employees,” Ingraham explained.
According to the prime minister, Baha Mar has confirmed that in the 12 to 24 months before the resort’s opening, which is projected for early 2014, high performance individuals would be selected by the hotel operators and placed within their hotel systems throughout the world.
“These individuals will be placed in job shadowing programs, on the job training programs, and hotel specific systems training programs. Baha Mar will also be hiring executive staff and training individuals who will staff the anticipated job fairs and will be conducting employment interviews,” Ingraham said.
During the 12 months before the resort opens, it is projected that the hiring and job fairs would begin at Baha Mar.
“Baha Mar anticipates hiring and training approximately 7,000 employees during this period,” Ingraham said. “It is also expected that a number of the Bahamian construction workers in a variety of trades will be interested in filling ongoing maintenance positions since they will be very familiar with the project’s mechanical, electrical and plumbing infrastructure.”
The training initiative is expected to continue after the resort opens.
The Baha Mar resolution is scheduled to be debated in the House of Assembly on Wednesday and Thursday of this week.
The prime minister confirmed that the project would likely be approved by the government by the end of November. Contracts for Bahamian firms could be issued as early as December, with work beginning in January 2011, Ingraham confirmed.
He added that it is likely to take CSCEC three months to mobilize. Construction on the hotel core could start by the second quarter of 2011, according to the prime minister.
Ingraham did not specify a number, but he said that as a result of the changes to the development, the number of Bahamians employed would increase by thousands.
The Progressive Liberal Party (PLP) issued a response last night to Ingraham’s statements on Baha Mar.
“If the PM's apparent big accomplishment from his trip to China was increasing Bahamian participation in the Baha Mar project from $200 million to $400 million, then he in essence admitted that his recent trip to China was futile, a failure and a waste of public funds,” said the PLP.
Though the $400 million allocation of work to subcontractors is a new component of the deal, the PLP said Bahamian participation “was always substantially greater than $200 million, so the PM broke no new ground on this.”
The opposition party also criticized Ingraham for not having reached agreement to reduce the number of foreign workers helping to build the resort.
“Notwithstanding the PM’s public pronouncement that he did not agree with the large number of work permits required for this project, the numbers he affirmed today remain at a maximum of 8,150 permits over the scope of the project,” said the PLP.
11/15/2010
thenassauguardian
By BRENT DEAN
Deputy News Editor - The Nassau Guardian
brentldean@nasguard.com
As a result of negotiations between Prime Minister Hubert Ingraham and the Chinese, and subsequent negotiations between the Chinese and Baha Mar, subcontracts to Bahamians in connection with the Baha Mar project will increase from $200 million to $400 million.
“This will be the largest award of contracts to Bahamian contractors on a single project. Contracts will be awarded to large, medium, small-scale and individual contractors. This is in keeping with my government’s commitment to deepening and broadening economic opportunities for all Bahamians,” said Ingraham yesterday at a news conference at the British Colonial Hilton.
Ingraham used the news conference to update the country on his recent visit to China. During the trip, he met with Baha Mar’s partners – China Export-Import Bank (China Eximbank) and China State Construction Engineering Corporation (CSCEC) – about potential changes to the $2.6 billion Cable Beach development.
Before those meetings, Ingraham had expressed concern about several components of the project. These concerns included the resort being built in one phase; Baha Mar needing equity partners; and that under the plan, Bahamians would not work on the hotel core.
Ingraham was not able to win concessions based on all of his concerns. He said there has been no final agreement on the phased entry of rooms at the resort into the marketplace.
However, along with the increase in subcontracted work to local firms, Bahamians will now work on the hotel core, according to Ingraham.
The prime minister also confirmed that he has been advised by Baha Mar and the China Eximbank that Hyatt will invest $40 million into the development. Rosewood Hotels and Resorts and Morgans Hotel Group will invest $10 million each, he added.
CSCEC will invest $150 million into Baha Mar.
One of the early hurdles to approval of the project by the government was the resolution of Baha Mar’s loan payment to Scotiabank. The bank and developer recently settled.
Yesterday Ingraham revealed Scotiabank’s equity stake in the project.
“The Bank of Nova Scotia is leaving in its unpaid balance of its loan to the extent of 12 percent of the project,” he said.
China Eximbank is extending a $2.45 billion loan to the developers.
Baha Mar and its Chinese partners have also agreed to significant training opportunities for Bahamians, Ingraham said.
This will include the establishment of a training and service academy.
“The academy will be permanent, offering ongoing training opportunities for employees and prospective employees,” Ingraham explained.
According to the prime minister, Baha Mar has confirmed that in the 12 to 24 months before the resort’s opening, which is projected for early 2014, high performance individuals would be selected by the hotel operators and placed within their hotel systems throughout the world.
“These individuals will be placed in job shadowing programs, on the job training programs, and hotel specific systems training programs. Baha Mar will also be hiring executive staff and training individuals who will staff the anticipated job fairs and will be conducting employment interviews,” Ingraham said.
During the 12 months before the resort opens, it is projected that the hiring and job fairs would begin at Baha Mar.
“Baha Mar anticipates hiring and training approximately 7,000 employees during this period,” Ingraham said. “It is also expected that a number of the Bahamian construction workers in a variety of trades will be interested in filling ongoing maintenance positions since they will be very familiar with the project’s mechanical, electrical and plumbing infrastructure.”
The training initiative is expected to continue after the resort opens.
The Baha Mar resolution is scheduled to be debated in the House of Assembly on Wednesday and Thursday of this week.
The prime minister confirmed that the project would likely be approved by the government by the end of November. Contracts for Bahamian firms could be issued as early as December, with work beginning in January 2011, Ingraham confirmed.
He added that it is likely to take CSCEC three months to mobilize. Construction on the hotel core could start by the second quarter of 2011, according to the prime minister.
Ingraham did not specify a number, but he said that as a result of the changes to the development, the number of Bahamians employed would increase by thousands.
The Progressive Liberal Party (PLP) issued a response last night to Ingraham’s statements on Baha Mar.
“If the PM's apparent big accomplishment from his trip to China was increasing Bahamian participation in the Baha Mar project from $200 million to $400 million, then he in essence admitted that his recent trip to China was futile, a failure and a waste of public funds,” said the PLP.
Though the $400 million allocation of work to subcontractors is a new component of the deal, the PLP said Bahamian participation “was always substantially greater than $200 million, so the PM broke no new ground on this.”
The opposition party also criticized Ingraham for not having reached agreement to reduce the number of foreign workers helping to build the resort.
“Notwithstanding the PM’s public pronouncement that he did not agree with the large number of work permits required for this project, the numbers he affirmed today remain at a maximum of 8,150 permits over the scope of the project,” said the PLP.
11/15/2010
thenassauguardian
Wednesday, November 10, 2010
The Baha Mar project hangs in the balance
Chinese consider Baha Mar changes
By CANDIA DAMES Guardian News Editor
candia@nasguard.com
Gov’t presses for $500 million in work for subcontractors
The much-touted $2.6 billion Baha Mar project planned for Cable Beach is hanging in the balance as the government awaits word from the company’s Chinese partners on whether they will make fundamental changes to the deal.
The Nassau Guardian can confirm that the government is waiting on the Chinese to say whether they would agree to Bahamian subcontractors getting up to $500 million of the work, as opposed to the $200 million in work currently envisioned in the deal.
It would mean a stronger involvement of Bahamians on the project, something Prime Minister Hubert Ingraham has been insisting on.
It is understood that Ingraham has also asked the Chinese to agree to a phased development as opposed to a one phase project.
The Guardian has learnt that the government expects an answer from the Chinese on these issues by the end of November. Baha Mar officials had hoped to break ground on their development by then, but that appears unlikely.
Until such time, the Baha Mar resolution — which the government had intended to debate many weeks back — will remain on the shelf in Parliament.
Ingraham told The Nassau Guardian in Beijing late last month that the government expects to have an answer for Baha Mar by the end of 2010.
The prime minister, who returned to Nassau late last week from his travels, has been quiet on his discussions with officials of the China State Construction Engineering Corporation and the China Export-Import Bank.
It remains unclear whether Baha Mar’s request for more than 8,000 work permits will be adjusted.
Not long before he travelled to China, Ingraham stressed that there were certain points the government was not prepared to budge on as it related to the project.
“There are two things that stick in our craw and we want to be able to digest the project and it is difficult to digest it with these things sticking across here,” he said, pointing to his throat.
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.
But Baha Mar CEO Sarkis Izmirlian told The Nassau Gaurdian recently that the one-phased approach was a condition of the financing.
Ingraham said prior to the China trip, “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 while in Beijing, just prior to his meetings, that he expected the Chinese would be receptive to the government’s position.
The prime minister is expected to announce adjustments to Baha Mar’s plans in Parliament after the government hears from the Chinese partners.
11/10/2010
thenassauguardian
By CANDIA DAMES Guardian News Editor
candia@nasguard.com
Gov’t presses for $500 million in work for subcontractors
The much-touted $2.6 billion Baha Mar project planned for Cable Beach is hanging in the balance as the government awaits word from the company’s Chinese partners on whether they will make fundamental changes to the deal.
The Nassau Guardian can confirm that the government is waiting on the Chinese to say whether they would agree to Bahamian subcontractors getting up to $500 million of the work, as opposed to the $200 million in work currently envisioned in the deal.
It would mean a stronger involvement of Bahamians on the project, something Prime Minister Hubert Ingraham has been insisting on.
It is understood that Ingraham has also asked the Chinese to agree to a phased development as opposed to a one phase project.
The Guardian has learnt that the government expects an answer from the Chinese on these issues by the end of November. Baha Mar officials had hoped to break ground on their development by then, but that appears unlikely.
Until such time, the Baha Mar resolution — which the government had intended to debate many weeks back — will remain on the shelf in Parliament.
Ingraham told The Nassau Guardian in Beijing late last month that the government expects to have an answer for Baha Mar by the end of 2010.
The prime minister, who returned to Nassau late last week from his travels, has been quiet on his discussions with officials of the China State Construction Engineering Corporation and the China Export-Import Bank.
It remains unclear whether Baha Mar’s request for more than 8,000 work permits will be adjusted.
Not long before he travelled to China, Ingraham stressed that there were certain points the government was not prepared to budge on as it related to the project.
“There are two things that stick in our craw and we want to be able to digest the project and it is difficult to digest it with these things sticking across here,” he said, pointing to his throat.
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.
But Baha Mar CEO Sarkis Izmirlian told The Nassau Gaurdian recently that the one-phased approach was a condition of the financing.
Ingraham said prior to the China trip, “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 while in Beijing, just prior to his meetings, that he expected the Chinese would be receptive to the government’s position.
The prime minister is expected to announce adjustments to Baha Mar’s plans in Parliament after the government hears from the Chinese partners.
11/10/2010
thenassauguardian
Sunday, September 26, 2010
The National Development Party (NDP) says the controversial $2.6 billion Baha Mar project is "not in the best interest" of the Bahamian people
Gov’t Told To Scrap Baha Mar
BY KARISSMA ROBINSON
The National Development Party (NDP) wants the government to scrap the controversial $2.6 billion Baha Mar project because in its current state it is "not in the best interest" of the Bahamian people.
"The deal is not good for Bahamians and that is the bottom line," said NDP member Renward Wells.
"The NDP calls on the Free National Movement (FNM) Government, which touts itself as being a party of accountability and transparency, to immediately table the entire Baha Mar deal. The Bahamian public should be able to see and have an open and honest discussion on this agreement."
Mr. Wells and prominent attorney Paul Moss were guests on the Love 97 talk show, On Point Monday night with host Rogan Smith, where they made it quite clear that the government is about to make a huge mistake.
"Looking at it in totality I am not sure that the financial benefits that the government is projecting is going to happen," said Mr. Wells.
Mr. Wells also objected to 265 acres of prime land being transferred before any construction begins on the project.
"We don’t believe in the sale of Bahamian land. The prime Minister stated that the land will be transferred in Fee simple and Baha Mar says they are paying for the land. I want to know who is right," he said.
Mr. Wells said that there are still a lot of questions that are left unanswered.
"Who will the government have review Baha Mar’s construction drawings for building code violations and design flaws? Who will the government have on-site to inspect and ensure that the design on the blueprint is adhered to?" he asked
Furthermore, Mr. Wells said there are a number of Bahamian mechanical and electrical engineers who are capable of designing such a project.
Mr. Moss said due to the poor state of the economy it seems as if the government would do almost anything to provide jobs.
"They will sell their souls to the devil to try to create jobs. They are not going to get it done that way. What is going to happen is an invasion of this country, strangers will take over your land and future generations will not know The Bahamas as we know it today," said Mr. Moss.
Prime Minister Hubert Ingraham has already gone on record saying that if he was prime minister at the time, he would not have approved the Baha Mar deal.
"It is incredible that even after he said it was a bad deal; he is still going to go ahead with it," said Mr. Moss, who said the country cannot afford to go ahead with this project as it is.
"This deal, given what we know, must be renegotiated. We call on the FNM Government to re-negotiate this deal to ensure that the maximum benefits of this project accrue to Bahamians," he said.
As previously reported, House members will not debate the Baha Mar resolution today that deals with the foreign labour component of the agreement.
Baha Mar wants the government to approve more than 8,000 work permits for Chinese workers to work on the Cable Beach project.
Baha Mar officials have to first deal with their financial issues with Scotiabank.
Baha Mar has an outstanding $200 million loan with the bank.
September 22nd, 2010
jonesbahamas
BY KARISSMA ROBINSON
The National Development Party (NDP) wants the government to scrap the controversial $2.6 billion Baha Mar project because in its current state it is "not in the best interest" of the Bahamian people.
"The deal is not good for Bahamians and that is the bottom line," said NDP member Renward Wells.
"The NDP calls on the Free National Movement (FNM) Government, which touts itself as being a party of accountability and transparency, to immediately table the entire Baha Mar deal. The Bahamian public should be able to see and have an open and honest discussion on this agreement."
Mr. Wells and prominent attorney Paul Moss were guests on the Love 97 talk show, On Point Monday night with host Rogan Smith, where they made it quite clear that the government is about to make a huge mistake.
"Looking at it in totality I am not sure that the financial benefits that the government is projecting is going to happen," said Mr. Wells.
Mr. Wells also objected to 265 acres of prime land being transferred before any construction begins on the project.
"We don’t believe in the sale of Bahamian land. The prime Minister stated that the land will be transferred in Fee simple and Baha Mar says they are paying for the land. I want to know who is right," he said.
Mr. Wells said that there are still a lot of questions that are left unanswered.
"Who will the government have review Baha Mar’s construction drawings for building code violations and design flaws? Who will the government have on-site to inspect and ensure that the design on the blueprint is adhered to?" he asked
Furthermore, Mr. Wells said there are a number of Bahamian mechanical and electrical engineers who are capable of designing such a project.
Mr. Moss said due to the poor state of the economy it seems as if the government would do almost anything to provide jobs.
"They will sell their souls to the devil to try to create jobs. They are not going to get it done that way. What is going to happen is an invasion of this country, strangers will take over your land and future generations will not know The Bahamas as we know it today," said Mr. Moss.
Prime Minister Hubert Ingraham has already gone on record saying that if he was prime minister at the time, he would not have approved the Baha Mar deal.
"It is incredible that even after he said it was a bad deal; he is still going to go ahead with it," said Mr. Moss, who said the country cannot afford to go ahead with this project as it is.
"This deal, given what we know, must be renegotiated. We call on the FNM Government to re-negotiate this deal to ensure that the maximum benefits of this project accrue to Bahamians," he said.
As previously reported, House members will not debate the Baha Mar resolution today that deals with the foreign labour component of the agreement.
Baha Mar wants the government to approve more than 8,000 work permits for Chinese workers to work on the Cable Beach project.
Baha Mar officials have to first deal with their financial issues with Scotiabank.
Baha Mar has an outstanding $200 million loan with the bank.
September 22nd, 2010
jonesbahamas
Monday, September 20, 2010
Baha Mar Resolution Iced
BAHA MAR RESOLUTION FACING DELAY
By CANDIA DAMES
Guardian News Editor
candia@nasguard.com:
The government has shelved plans to debate a resolution on the controversial $2.6 billion Baha Mar project on Wednesday, The Nassau Guardian understands.
Instead, it will bring a resolution to approve the borrowing of $68 million to construct a four-lane highway between Lynden Pindling International Airport and the new six-legged roundabout on John. F. Kennedy Drive.
Leader of Government Business in the House Tommy Turnquest said yesterday that there was a change in plans given that the government had not yet received any confirmation that Baha Mar executives have settled a critical loan issue with the Bank of Nova Scotia(Scotiabank).
Baha Mar Chairman and CEO Sarkis Izmirlian was in Toronto last week meeting with top bank officials on the matter. Prime Minister Hubert Ingraham previously said the expectation was for this matter to be resolved by this week.
However, last night it appeared that a resolution had not yet been reached.
The Scotiabank loan issue is considered a final hurdle before the government decides on whether to give final approval for the project. Baha Mar is requesting 8,150 work permits for the mega development. The foreign labor component has shaped up to be the most controversial aspect of the deal.
The government had planned to debate the Baha Mar resolution on Wednesday and Thursday, but plans to do so after the banking issue is cleared up.
Instead, the focus will be on the airport highway resolution.
Last year, the government signed an agreement with China to finance that road project.
The 20-year concessionary loan will be made through the Chinese Export-Import Bank.
The agreement was signed during an official visit of Wu Bangguo, the chairman of the standing committee of China's National People's Congress, to The Bahamas.
During the visit, China and The Bahamas signed several other agreements, including a US $7.32m grant to help fund the construction of the national stadium.
9/17/2010
thenassauguardian
By CANDIA DAMES
Guardian News Editor
candia@nasguard.com:
The government has shelved plans to debate a resolution on the controversial $2.6 billion Baha Mar project on Wednesday, The Nassau Guardian understands.
Instead, it will bring a resolution to approve the borrowing of $68 million to construct a four-lane highway between Lynden Pindling International Airport and the new six-legged roundabout on John. F. Kennedy Drive.
Leader of Government Business in the House Tommy Turnquest said yesterday that there was a change in plans given that the government had not yet received any confirmation that Baha Mar executives have settled a critical loan issue with the Bank of Nova Scotia(Scotiabank).
Baha Mar Chairman and CEO Sarkis Izmirlian was in Toronto last week meeting with top bank officials on the matter. Prime Minister Hubert Ingraham previously said the expectation was for this matter to be resolved by this week.
However, last night it appeared that a resolution had not yet been reached.
The Scotiabank loan issue is considered a final hurdle before the government decides on whether to give final approval for the project. Baha Mar is requesting 8,150 work permits for the mega development. The foreign labor component has shaped up to be the most controversial aspect of the deal.
The government had planned to debate the Baha Mar resolution on Wednesday and Thursday, but plans to do so after the banking issue is cleared up.
Instead, the focus will be on the airport highway resolution.
Last year, the government signed an agreement with China to finance that road project.
The 20-year concessionary loan will be made through the Chinese Export-Import Bank.
The agreement was signed during an official visit of Wu Bangguo, the chairman of the standing committee of China's National People's Congress, to The Bahamas.
During the visit, China and The Bahamas signed several other agreements, including a US $7.32m grant to help fund the construction of the national stadium.
9/17/2010
thenassauguardian
Wednesday, September 15, 2010
Conflicting statements on when hundreds of acres of publicly-owned land would be transfered to Baha Mar
CONFLICT IN BAHA MAR STATEMENTS
By CANDIA DAMES
Guardian News Editor
candia@nasguard.com:
Prime Minister Hubert Ingraham and Baha Mar have both made statements in recent days about the planned $2.6 billion deal at Cable Beach, but there appears to be conflicting statements related to when hundreds of acres of publicly-owned land would be transfered to Baha Mar.
In bringing the Baha Mar resolution to Parliament last week, Ingraham laid out, among other matters, issues related to how the land deal would be structured.
"Because of the conditions precedent set by Baha Mar's financiers the Export-Import Bank of China and the China Construction Engineering Company these lands are required to be transferred in advance of the start of construction of the project,"the prime minister said.
However, Baha Mar claimed two days later that,"The government lands will only be transferred after construction starts and the financing is formally in place."
In total, Baha Mar will receive 264.965 acres of government-owned and Crown lands for the development.
As reported earlier, Ingraham has said these lands will only be transferred for the expressed purpose of facilitating the development and should the development not proceed the land must return to the government.
According to Baha Mar,it will pay $62.6 million to acquire the government land on which the Wyndham Resort and the Nassau Beach Hotel sit, and the parcels occupied by the nearby Fidelity Bank and old Hobby Horse Hall.
Under the deal the Cecil Wallace-Whitfield Centre which currently houses the Office of the Prime Minister will be transferred to Baha Mar, in return for a cash payment to the government of$18 million and 2.259 acres of land.
Baha Mar has said the project is completedly owned by the Izmirlian family.
The Chinese will only finance and construct the project, according to the company.
9/14/2010
thenassauguardian
By CANDIA DAMES
Guardian News Editor
candia@nasguard.com:
Prime Minister Hubert Ingraham and Baha Mar have both made statements in recent days about the planned $2.6 billion deal at Cable Beach, but there appears to be conflicting statements related to when hundreds of acres of publicly-owned land would be transfered to Baha Mar.
In bringing the Baha Mar resolution to Parliament last week, Ingraham laid out, among other matters, issues related to how the land deal would be structured.
"Because of the conditions precedent set by Baha Mar's financiers the Export-Import Bank of China and the China Construction Engineering Company these lands are required to be transferred in advance of the start of construction of the project,"the prime minister said.
However, Baha Mar claimed two days later that,"The government lands will only be transferred after construction starts and the financing is formally in place."
In total, Baha Mar will receive 264.965 acres of government-owned and Crown lands for the development.
As reported earlier, Ingraham has said these lands will only be transferred for the expressed purpose of facilitating the development and should the development not proceed the land must return to the government.
According to Baha Mar,it will pay $62.6 million to acquire the government land on which the Wyndham Resort and the Nassau Beach Hotel sit, and the parcels occupied by the nearby Fidelity Bank and old Hobby Horse Hall.
Under the deal the Cecil Wallace-Whitfield Centre which currently houses the Office of the Prime Minister will be transferred to Baha Mar, in return for a cash payment to the government of$18 million and 2.259 acres of land.
Baha Mar has said the project is completedly owned by the Izmirlian family.
The Chinese will only finance and construct the project, according to the company.
9/14/2010
thenassauguardian
Saturday, September 11, 2010
Baha Mar resolution before Parliament calls for more than 8,000 work permits for foreign workers
BAHA MAR WANTS WORK PERMITS FOR 8,150 NON-BAHAMIANS
By KRYSTEL ROLLE
Guardian Staff Reporter
krystel@nasguard.com:
Prime Minister Hubert Ingraham yesterday tabled a resolution in Parliament for the multi-billion dollar Baha Mar project, laying out some of the details of the proposed deal which would require the government to transfer more than 260 acres of land to the developers before any work even begins, and grant more than 8,000 work permits to foreigners.
"The resolution results from the fact that the foreign labor component intended during the construction of the resort exceeds levels ever experienced in The Bahamas and is beyond anything ever contemplated by my government,"Ingraham said.
Ingraham indicated that debate of the resolution would not begin until Baha Mar resolves the outstanding loan matter that it has with Scotiabank.
Baha Mar CEO Sarkis Izmirlian will travel to Toronto, Canada, next week to meet with bank officials on the issue.
The progress on the Baha Mar deal is being held up by the payment of an outstanding loan the company has with Scotiabank, reportedly worth around $160 million. The Cable Beach properties are being held as security.
While debate on the resolution is not expected to begin until near the end of September, the prime minister yesterday laid out some of the aspects of the deal to ensure that the Bahamian people are fully informed on the requirements, consequences and benefits that are projected to result for The Bahamas if the development proceeds as currently proposed.
The total value of the project is estimated at $2.6 billion. Ingraham revealed yesterday that a contract for the amount of $1,918,965,693 has been negotiated with the China State Construction Company as primary contractors for the project.
Ingraham said the terms of the funding obtained by the developers of the resort"include a requirement that the overwhelming majority, if not virtually all of the workers to be engaged on the core project, over the life of the project, be foreign workers--some 8,150 persons."
Baha Mar officials have stated that at no time will more than 5,000 foreigners be working on the site.
"It is projected that some 1,200 Bahamians will be engaged in the construction of the non-core project that is, the new West Bay Street, the new Commercial Village and the initial site preparation for the core project,"Ingraham added.
Using the construction phase of the Atlantis Resort as a comparison, Ingraham noted that before that was constructed his government established that the ratio of Bahamians to non-Bahamians on the site would not exceed 30 percent foreign to 70 percent Bahamian.
Ingraham said that was done despite the need at that time for large numbers of expatriate experts and labor for the efficient completion of the project.
He added that the established ratio was obtained during two phases of construction of the Kerzner International resorts under FNM administrations and was continued during the PLP government during the third phase expansion of the project.
Ingraham said based on Baha Mar's numbers, it is proposed that 71 percent of the workforce be foreign and 29 percent Bahamian.
"This represents a complete reversal of conditions imposed upon Kerzner, for example,"he said.
"What must be determined is whether this invaluable benefit of skills transfer and improved exposure to new technologies can or will occur in a project where contact between Bahamians and foreign experts is likely to be limited."
As previously reported, the Baha Mar project is to comprise six hotels with approximately 3,500 rooms and condominiums, an approximately 100,000 square foot casino, 200,000 square feet of convention facilities, a 20-acre beach and pool experience, an 18-hole golf course and a 60,000 square-foot retail village and additional residential products.
To achieve this, Ingraham explained that a large amount of government and crown land must be transferred to the developers.
The Radisson, now the Sheraton, was transferred to Baha Mar in 2005. The Wyndham Crystal Palace and the Nassau Beach Hotel are currently on leased crown land, the prime minister noted.
But Ingraham said the approval for the Baha Mar project requires the transfer of the land occupied by both hotel properties, the Hobby Horse Hall parcel, Fidelity Bank, Cecil Wallace-Whitfield Centre(which houses the Ministry of Finance and the Office of the Prime Minister), the Cable Beach Police Station and the old West Bay Street, new corridor number seven, 50 acres of Gladstone Road, the Prospect Ridge parcel, Water and Sewerage Corporation parcel, BEC Parcel, BECâ substation, plus an additional parcel of .783 acre for a total of 264.965 acres.
Ingraham said because of the conditions set by Baha Mar's financiers China Import Export Bank and the China State Construction Company these lands are required to be transferred in advance of the start of construction of the project.
"It is the position of my government that these lands will only be transferred for the expressed purpose of facilitating the development and that should the development not proceed the land must return to the government,"he said.
Baha Mar has said 8,00 permanent jobs are also projected once the resort is completed.
If the project receives Bahamas government approval, Baha Mar's first course of action would be to award nearly$60 million of construction contracts to six Bahamian contractors, representing early infrastructure works needed to prepare the site.
It is expected that all outstanding matters relating to the Scotiabank loan will be resolved within the next two-week period.
Debate is expected to start on September 23 or 24.
9/9/2010
thenassauguardian
By KRYSTEL ROLLE
Guardian Staff Reporter
krystel@nasguard.com:
Prime Minister Hubert Ingraham yesterday tabled a resolution in Parliament for the multi-billion dollar Baha Mar project, laying out some of the details of the proposed deal which would require the government to transfer more than 260 acres of land to the developers before any work even begins, and grant more than 8,000 work permits to foreigners.
"The resolution results from the fact that the foreign labor component intended during the construction of the resort exceeds levels ever experienced in The Bahamas and is beyond anything ever contemplated by my government,"Ingraham said.
Ingraham indicated that debate of the resolution would not begin until Baha Mar resolves the outstanding loan matter that it has with Scotiabank.
Baha Mar CEO Sarkis Izmirlian will travel to Toronto, Canada, next week to meet with bank officials on the issue.
The progress on the Baha Mar deal is being held up by the payment of an outstanding loan the company has with Scotiabank, reportedly worth around $160 million. The Cable Beach properties are being held as security.
While debate on the resolution is not expected to begin until near the end of September, the prime minister yesterday laid out some of the aspects of the deal to ensure that the Bahamian people are fully informed on the requirements, consequences and benefits that are projected to result for The Bahamas if the development proceeds as currently proposed.
The total value of the project is estimated at $2.6 billion. Ingraham revealed yesterday that a contract for the amount of $1,918,965,693 has been negotiated with the China State Construction Company as primary contractors for the project.
Ingraham said the terms of the funding obtained by the developers of the resort"include a requirement that the overwhelming majority, if not virtually all of the workers to be engaged on the core project, over the life of the project, be foreign workers--some 8,150 persons."
Baha Mar officials have stated that at no time will more than 5,000 foreigners be working on the site.
"It is projected that some 1,200 Bahamians will be engaged in the construction of the non-core project that is, the new West Bay Street, the new Commercial Village and the initial site preparation for the core project,"Ingraham added.
Using the construction phase of the Atlantis Resort as a comparison, Ingraham noted that before that was constructed his government established that the ratio of Bahamians to non-Bahamians on the site would not exceed 30 percent foreign to 70 percent Bahamian.
Ingraham said that was done despite the need at that time for large numbers of expatriate experts and labor for the efficient completion of the project.
He added that the established ratio was obtained during two phases of construction of the Kerzner International resorts under FNM administrations and was continued during the PLP government during the third phase expansion of the project.
Ingraham said based on Baha Mar's numbers, it is proposed that 71 percent of the workforce be foreign and 29 percent Bahamian.
"This represents a complete reversal of conditions imposed upon Kerzner, for example,"he said.
"What must be determined is whether this invaluable benefit of skills transfer and improved exposure to new technologies can or will occur in a project where contact between Bahamians and foreign experts is likely to be limited."
As previously reported, the Baha Mar project is to comprise six hotels with approximately 3,500 rooms and condominiums, an approximately 100,000 square foot casino, 200,000 square feet of convention facilities, a 20-acre beach and pool experience, an 18-hole golf course and a 60,000 square-foot retail village and additional residential products.
To achieve this, Ingraham explained that a large amount of government and crown land must be transferred to the developers.
The Radisson, now the Sheraton, was transferred to Baha Mar in 2005. The Wyndham Crystal Palace and the Nassau Beach Hotel are currently on leased crown land, the prime minister noted.
But Ingraham said the approval for the Baha Mar project requires the transfer of the land occupied by both hotel properties, the Hobby Horse Hall parcel, Fidelity Bank, Cecil Wallace-Whitfield Centre(which houses the Ministry of Finance and the Office of the Prime Minister), the Cable Beach Police Station and the old West Bay Street, new corridor number seven, 50 acres of Gladstone Road, the Prospect Ridge parcel, Water and Sewerage Corporation parcel, BEC Parcel, BECâ substation, plus an additional parcel of .783 acre for a total of 264.965 acres.
Ingraham said because of the conditions set by Baha Mar's financiers China Import Export Bank and the China State Construction Company these lands are required to be transferred in advance of the start of construction of the project.
"It is the position of my government that these lands will only be transferred for the expressed purpose of facilitating the development and that should the development not proceed the land must return to the government,"he said.
Baha Mar has said 8,00 permanent jobs are also projected once the resort is completed.
If the project receives Bahamas government approval, Baha Mar's first course of action would be to award nearly$60 million of construction contracts to six Bahamian contractors, representing early infrastructure works needed to prepare the site.
It is expected that all outstanding matters relating to the Scotiabank loan will be resolved within the next two-week period.
Debate is expected to start on September 23 or 24.
9/9/2010
thenassauguardian
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
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