Baha Mar deciding factors

The deciding factors for Baha Mar
tribune242 editorial


IT IS understandable why former Prime Minister Perry Christie was still haggling over the BahaMar deal up to two days before the 2007 election, which he lost.

Not only was he concerned about whether the developer had enough finances to see the project through, but he certainly did not want the "secret" clauses involving prime land in the agreement to be exposed on the floor of the House. Just before an election an admission that government was prepared to transfer 264,965 acres of public land on Cable Beach to a foreign investor could have scuttled his election.

Likewise, Prime Minister Ingraham is taking no chances in the new Baha Mar deal with a new partner. The request for work permits for foreign labourers -- 8,150 with the peak number at any given time being 5,000 -- is unprecedented. This is one decision that his government is not going to make alone. The Bahamian people -- through their duly elected representatives -- will now have to join government in saying aye or nay to the $2.5 billion project.

If either of these proposals -- the land deal or the labour request -- had been presented to the Bahamian people in 2007, there would have been a loud bellow: "Hell, no!"

But times have changed. Too many Bahamians are jobless. In 2007 no one could predict the world's economic collapse. Today suffering from that collapse, Bahamians need jobs. They have to educate their children and pay their bills. And so they will probably agree to the project provided all foreign workers on completion of their work are repatriated. Also if the developers do not live up to their agreement, all public land will revert to the government.

We certainly understand the position of the Chinese. Wherever they do similar projects, they use their own material and labour. Not only do they understand what they are dealing with and know how to cost it, but it is their money, and their policy is to invest it in their people. And so the concessions that they are now prepared to make to Bahamians from their point of view would be a considerable bending of their own rules to accommodate Bahamians.

It is said that all Chinese workers, 8,150 of them, will be engaged on Baha Mar's "Core" projects, while some 1,200 Bahamians will be employed in the non-"Core" projects. Mr Ingraham said that the Baha Mar principals are in discussion with their Chinese partners to also engage Bahamian contractors in a number of "trade packages" related to the Core project, totalling about $40 million. It is expected that this might engage about 3,300 Bahamians at the height of construction of the Core projects.

Mr Ingraham said that in the 1950s the law and the government permitted as high as 25 per cent of the labour force in construction and/or operation of tourism development to be foreign. Beginning in the 1980s, said Mr Ingraham, 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.

He reminded House members of the substantial foreign work force engaged to construct the Crystal Palace Resort and Casino, the Wyndham Crystal Palace Resort and the US Departure Terminal at the then Nassau International Airport. He said at those two projects there were Indians, Brazilians and other foreigners who far outnumbered the Bahamian work force.

When in 1992 his party became the government, it was decided to discontinue the PLP employment practices. In 1993, he said, on agreeing the terms of the redevelopment of Kerzner's Paradise Island, "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 was not to exceed 30 per cent foreign to 70 per cent Bahamian, increasing on the required Bahamian component above the 1954 statutory base of 25 per cent.

However, he pointed out that when the PLP succeeded his government, they did not adhere to this employment ratio on the construction of the Bimini Bay resort at North Bimini. As a result, foreign workers, mainly Mexican, far exceeded the number of Bahamians engaged on that project.

And now they are faced with the Baha Mar project: a 71 per cent foreign work force to a 29 per cent Bahamian work force.

The legislators now have to decide on behalf of their constituents: Will this revive employment and will the transfer of technology and skills to the Bahamian work force make this project not only viable, but also attractive?

This will be debated and decided in the House on Wednesday or Thursday, September 22 and 23.

In the meantime Baha Mar has to satisfy the Scotia Bank loan before it can conclude a deal with the Chinese bank. And so the two deciding factors- the Bahamian people on the one side, and Scotia Bank on the other before Baha Mar and their Chinese partners can turn the first sod of Bahamian soil.

September 09, 2010

tribune242 editorial

Bahamas Blog International