Atlantis: Get a move on with gaming reforms
By ALISON LOWE
Business Reporter
alowe@tribunemedia.net
Branding announcements that Jamaica is set to grant three casino licenses this year as "a big problem" for Bahamian tourism, Kerzner International (Bahamas) top executive has expressed great frustration at the Government's delay in implementing reforms to this nation's gaming regulations.
Speaking to Tribune Business about the wait for the Government to move ahead with reforms proposed by the Bahamas Hotel Association and the Casino Association, George Markantonis, the company's managing director and president, told Tribune Business he finds the entire situation "very frustrating" and warned of the implications for Bahamian tourism.
"It's been over a year. It's very frustrating. This isn't, to me, that difficult. You're only talking about two major casinos and, frankly, every day we are losing ground in the gaming world. We just have some regulations that are annoying to the consumer. It's way easier to go and gamble elsewhere," said Mr Markantonis.
He noted that many of the recommendations "were procedural (and) not sensitive", providing all the more reason why their consideration and implementation could have moved ahead more swiftly.
Meanwhile, Vincent Vanderpool-Wallace, minister of tourism and aviation, told Tribune Business he was now in possession of the final recommendations for reform of the Bahamas' gaming laws and regulations, and hoped to present them to the industry next month.
In an e-mailed response to this newspaper, he said: "I had the final review of the recommendations from the Gaming group with me, and hope to present it for consideration next month. I am not sure how long it will take to change regulations to effect whatever is agreed, but we will advance it as quickly as possible."
Mr Markantonis and other industry chiefs say the changes are necessary to keep the Bahamas competitive as a destination for gamblers.
Mr Markantonis' comments come after Jamaica's minister of tourism, Edmund Bartlett, spoke to the world's media at the recent Caribbean Marketplace tourism trade show, which took place in Montego Bay last week, about his government's "casino dream".
He revealed that Jamaica intends to grant three casino licenses this year and is taking applications for others, with the expectation that each casino could bring in $40 million in revenue to the Government annually.
Mr Markantonis said he sees this development as a "big problem" for the Bahamas, and a "bigger issue" than the fact that the Jamaican government has also just opened a state-of-the-art convention centre - the Caribbean's largest - in Montego Bay in the hopes of gaining a greater share of this lucrative tourism market that the Bahamas, and Atlantis especially, has traditionally benefited from.
"I do think that will be a problem for us - I am not going to hide it. If they do approve all these mega-resort casino licenses there, it's just more casinos coming right on our doorstep.
"We have to keep working on the gaming regulations we have here, make sure they are friendly to the casinos we have here and, at the same time, we have to work on our marketing programs like anything else. You can't just roll over; you learn how to compete in a tougher market," said Mr Markantonis.
Casinos in the Bahamas have suffered significant year-over-year declines in revenue in recent times. Atlantis reported an 8 per cent decline in 2010, while Crystal Palace saw an 18.5 per cent drop. While this is in part because of sluggish tourism levels overall, industry stakeholders have consistently pointed to out-dated gaming regulations as a contributing factor in a narrowing of this nation's competitive advantage.
In March 2009, Robert Sands, then Bahamas Hotel Association president, told this newspaper he believed "radical change" would be needed to gaming regulations if the Bahamas is to maintain a competitive edge against other popular destinations.
When Mr Vanderpool-Wallace last spoke to Tribune Business in October 2010 on the subject of the reforms proposed by the hotel and gaming industry to the sector's regulatory framework, he suggested the proposals were "in front of (him) right now" and under active consideration.
The Minister suggested the Government is looking to marry its own recommendations that it believes will be "even more beneficial" to Bahamian casino gaming with those proposed by the private sector, as it moves to "enhance and hold on to the significant competitive advantages" this nation has.
January 24, 2011
tribune242
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 Kerzner International. Show all posts
Showing posts with label Kerzner International. Show all posts
Monday, January 24, 2011
Monday, November 22, 2010
Sir Sol Kerzner and the Baha Mar deal
Kerzner's concerns on Baha Mar project
By PAUL G TURNQUEST
Tribune Staff Reporter
pturnquest@tribunemedia.net
A NEW day is dawning in the Bahamas. An entity that was once only talked about will soon become a reality on Cable Beach - Baha Mar.
At an estimated value of over $2.6 billion, it is considered by all estimates to be a monolithic project. To some it is considered a monstrosity that will consume all that was here before it. To others it is a golden egg.
To the chairman and CEO of Kerzner International, Sir Sol Kerzner, it is something else altogether.
Last week, Sir Sol made a rare appearance in the local press by issuing a statement to the media on the impending approval of Bah Mar.
In his statement, Sir Sol said that while they welcomed any project that would enhance and improve the tourism sector in The Bahamas, "the proposed terms of the Baha Mar project violates the Kerzner Heads of Agreement with The Bahamas." He promised that Kerzner International would discuss with the Government how to address this "breach" in their "most favoured nation" clause.
Principle
Since this statement there has been much talk in the press about what exactly a most favoured nation clause is. According to the Minister of State for Finance, Zhivargo Laing, a MFN classification is an internationally established economic principle, centrally recognized by the World Trade Organization (WTO), which seeks to establish a level playing field between mutual parties.
"The term is counter intuitive," Minister Laing explained.
"The name suggests that you treat the entity with MFN status more favourably than others, but what it really means is that you treat everyone alike; you don't treat anyone more favourably," he said.
Based on the MFN principle, if one MFN entity is granted special Customs rates, for example, then all MFN entities should be granted special Customs rates. The specific rates would be established by government policy or law.
In the case of the Bahamas, the Hotels Encouragement Act addresses the issue of concessions, while allowances for labour are specified in government policy, he said.
In order to establish whether a breach of MFN privilege exists, Mr Laing suggested one would have to assess a competing agreement "in its totality" and not compare a single line item. He said the question of a breach is "not so simple from the government's point of view."
In fact during the Prime Minister's wrap up on the Baha Mar debate he said, "I do not concede that we would be in breach of the deal with Kerzner. The relationship between the Bahamas and Kerzner has been mutually beneficial," Prime Minister Ingraham said.
Sir Sol, however, has taken the conversation to another level when he revealed during a teleconference with the press last week that if Baha Mar were to be approved in its current state the jobs of over 8,000 employees at Atlantis could be put at risk.
"It seems to me pretty ridiculous in this current environment, even if the economic environment were a lot better to look to come in and double the current number of rooms overnight. It seems to me pretty irresponsible. I also believe that one should take into account that we have 8,000 people working with us, and if this were to move forward the likelihood is that people's jobs would have to be threatened. It is just impossible, practically impossible to double the size of the market.
Pressure
"As we said in our statement, last year was a tough year and occupancy was under pressure. Well guess what, this year is even tougher. So it seems pretty ridiculous to me that these folks are wanting to move forward," he said.
And move forward they have. The Baha Mar labour resolution was passed unanimously before the House of Assembly (36 voting for, with four absent), which allows for 8,150 foreign workers, but no more than 5,000 at one time to be employed on the Baha Mar Cable Beach project.
Following this unanimous vote in the House of Assembly last week, Baha Mar's senior vice-president of external affairs, Robert "Sandy" Sands said that construction for the single-phase $2.6 billion Baha Mar development project could break ground as early as January, pending the close of the Export Import (EXIM) Bank of China loan.
Contractors have already been chosen for the first six construction packages, totaling $60 million, which will include the new Commercial Village contracts and the new West Bay Street.
According to Mr Sands, the initial payout will cover construction contracts and also includes numerous Bahamian architects, engineers, quantity surveyors, suppliers and many other related parties who will participate in these first six contract packages.
Prior to the approval of this massive project, Sir Sol said that he did not want to speculate on what he would do if Baha Mar was approved without at least the development being "phased" in as his Atlantis properties were. Now that the project has been pushed through the proverbial pipeline, the question remains: What will Atlantis do in response?
Addressing these concerns, Prime Minister Hubert Ingraham informed the nation that he was confident that Sir Sol's concerns about Baha Mar could be resolved satisfactorily.
He also publicly proclaimed his respect and gratitude for Sir Sol's contributions to the country, adding that he will do anything in his power to ensure the Atlantis product remains successful on Paradise Island. However this commitment, he said, does not mean he will not be fair to other developers.
"We were always concerned, when we came to office that there was nothing in the Baha Mar deal that would have given them a better deal than Kerzner. I think I can say that the thing that ticked Kerzner (off) more than anything else is a statement by Perry Christie to the effect that Baha Mar only wants to get what Kerzner got," said Mr Ingraham on the radio show Issues of the Day.
"There is no question in my mind of my high regard for Sol Kerzner and what he has done for the Bahamas. I was berated by many when he came in 1994 and what he has done for the Bahamas has transformed our tourism industry.
"He has provided us with 2,000 more jobs than he committed to, he has a very successful project on Paradise Island and I will do all I can, for as long as I can, to ensure that his project is successful."
"That has nothing to do with whether I will be fair to anybody else. (But) I will not knowingly give anybody else a better deal than Kerzner got," stated the nation's chief.
During his live radio interview, Mr Ingraham also accused the former Christie administration of engaging in secret deals with Baha Mar by promising them concessions not included in their contract.
He said these secret concessions are part of what government is trying to renegotiate.
"The PLP government gave Baha Mar a deal over and above what they signed in the contract. So on the same day that they signed the contract they issued what was called side letters offering Baha Mar more.
"We tried to pull those things back. We are now doing an analysis to see the extent to which we have been successful, we think we have been somewhat successful in ensuring that there is equity and balance between the two."
Hopefully this "equity" and "balance" between the two resorts will eventually allow the two properties to complement each other, without there being any cannibalism in the marketplace, he said.
However, this appears highly unlikely if both hotels will be aiming for the same dwindling number of "high-end" visitors.
At this stage it is not easy to dismiss Atlantis' concerns as a mere fear of competition when one considers that our air arrivals have not actually been booming over the past few years. With a global recession still wreaking havoc on our tourism industry, no "expert" is willing to guess on when things are expected to turn around in that sector.
Maybe, like the haunting voice in the Hollywood film "A Field of Dreams," if Baha Mar builds it, the tourists will come.
November 22, 2010
Tribune242 Insight
By PAUL G TURNQUEST
Tribune Staff Reporter
pturnquest@tribunemedia.net
A NEW day is dawning in the Bahamas. An entity that was once only talked about will soon become a reality on Cable Beach - Baha Mar.
At an estimated value of over $2.6 billion, it is considered by all estimates to be a monolithic project. To some it is considered a monstrosity that will consume all that was here before it. To others it is a golden egg.
To the chairman and CEO of Kerzner International, Sir Sol Kerzner, it is something else altogether.
Last week, Sir Sol made a rare appearance in the local press by issuing a statement to the media on the impending approval of Bah Mar.
In his statement, Sir Sol said that while they welcomed any project that would enhance and improve the tourism sector in The Bahamas, "the proposed terms of the Baha Mar project violates the Kerzner Heads of Agreement with The Bahamas." He promised that Kerzner International would discuss with the Government how to address this "breach" in their "most favoured nation" clause.
Principle
Since this statement there has been much talk in the press about what exactly a most favoured nation clause is. According to the Minister of State for Finance, Zhivargo Laing, a MFN classification is an internationally established economic principle, centrally recognized by the World Trade Organization (WTO), which seeks to establish a level playing field between mutual parties.
"The term is counter intuitive," Minister Laing explained.
"The name suggests that you treat the entity with MFN status more favourably than others, but what it really means is that you treat everyone alike; you don't treat anyone more favourably," he said.
Based on the MFN principle, if one MFN entity is granted special Customs rates, for example, then all MFN entities should be granted special Customs rates. The specific rates would be established by government policy or law.
In the case of the Bahamas, the Hotels Encouragement Act addresses the issue of concessions, while allowances for labour are specified in government policy, he said.
In order to establish whether a breach of MFN privilege exists, Mr Laing suggested one would have to assess a competing agreement "in its totality" and not compare a single line item. He said the question of a breach is "not so simple from the government's point of view."
In fact during the Prime Minister's wrap up on the Baha Mar debate he said, "I do not concede that we would be in breach of the deal with Kerzner. The relationship between the Bahamas and Kerzner has been mutually beneficial," Prime Minister Ingraham said.
Sir Sol, however, has taken the conversation to another level when he revealed during a teleconference with the press last week that if Baha Mar were to be approved in its current state the jobs of over 8,000 employees at Atlantis could be put at risk.
"It seems to me pretty ridiculous in this current environment, even if the economic environment were a lot better to look to come in and double the current number of rooms overnight. It seems to me pretty irresponsible. I also believe that one should take into account that we have 8,000 people working with us, and if this were to move forward the likelihood is that people's jobs would have to be threatened. It is just impossible, practically impossible to double the size of the market.
Pressure
"As we said in our statement, last year was a tough year and occupancy was under pressure. Well guess what, this year is even tougher. So it seems pretty ridiculous to me that these folks are wanting to move forward," he said.
And move forward they have. The Baha Mar labour resolution was passed unanimously before the House of Assembly (36 voting for, with four absent), which allows for 8,150 foreign workers, but no more than 5,000 at one time to be employed on the Baha Mar Cable Beach project.
Following this unanimous vote in the House of Assembly last week, Baha Mar's senior vice-president of external affairs, Robert "Sandy" Sands said that construction for the single-phase $2.6 billion Baha Mar development project could break ground as early as January, pending the close of the Export Import (EXIM) Bank of China loan.
Contractors have already been chosen for the first six construction packages, totaling $60 million, which will include the new Commercial Village contracts and the new West Bay Street.
According to Mr Sands, the initial payout will cover construction contracts and also includes numerous Bahamian architects, engineers, quantity surveyors, suppliers and many other related parties who will participate in these first six contract packages.
Prior to the approval of this massive project, Sir Sol said that he did not want to speculate on what he would do if Baha Mar was approved without at least the development being "phased" in as his Atlantis properties were. Now that the project has been pushed through the proverbial pipeline, the question remains: What will Atlantis do in response?
Addressing these concerns, Prime Minister Hubert Ingraham informed the nation that he was confident that Sir Sol's concerns about Baha Mar could be resolved satisfactorily.
He also publicly proclaimed his respect and gratitude for Sir Sol's contributions to the country, adding that he will do anything in his power to ensure the Atlantis product remains successful on Paradise Island. However this commitment, he said, does not mean he will not be fair to other developers.
"We were always concerned, when we came to office that there was nothing in the Baha Mar deal that would have given them a better deal than Kerzner. I think I can say that the thing that ticked Kerzner (off) more than anything else is a statement by Perry Christie to the effect that Baha Mar only wants to get what Kerzner got," said Mr Ingraham on the radio show Issues of the Day.
"There is no question in my mind of my high regard for Sol Kerzner and what he has done for the Bahamas. I was berated by many when he came in 1994 and what he has done for the Bahamas has transformed our tourism industry.
"He has provided us with 2,000 more jobs than he committed to, he has a very successful project on Paradise Island and I will do all I can, for as long as I can, to ensure that his project is successful."
"That has nothing to do with whether I will be fair to anybody else. (But) I will not knowingly give anybody else a better deal than Kerzner got," stated the nation's chief.
During his live radio interview, Mr Ingraham also accused the former Christie administration of engaging in secret deals with Baha Mar by promising them concessions not included in their contract.
He said these secret concessions are part of what government is trying to renegotiate.
"The PLP government gave Baha Mar a deal over and above what they signed in the contract. So on the same day that they signed the contract they issued what was called side letters offering Baha Mar more.
"We tried to pull those things back. We are now doing an analysis to see the extent to which we have been successful, we think we have been somewhat successful in ensuring that there is equity and balance between the two."
Hopefully this "equity" and "balance" between the two resorts will eventually allow the two properties to complement each other, without there being any cannibalism in the marketplace, he said.
However, this appears highly unlikely if both hotels will be aiming for the same dwindling number of "high-end" visitors.
At this stage it is not easy to dismiss Atlantis' concerns as a mere fear of competition when one considers that our air arrivals have not actually been booming over the past few years. With a global recession still wreaking havoc on our tourism industry, no "expert" is willing to guess on when things are expected to turn around in that sector.
Maybe, like the haunting voice in the Hollywood film "A Field of Dreams," if Baha Mar builds it, the tourists will come.
November 22, 2010
Tribune242 Insight
Prime Minister Hubert Ingraham: I will not knowingly give anybody else a better deal than Kerzner got...
PM responds to Kerzner’s claims
By KRYSTEL ROLLE
Guardian Staff Reporter
krystel@nasguard.com
Prime Minister Hubert Ingraham said yesterday that he is not concerned with the statements made by Kerzner International’s Chairman and CEO Sol Kerzner that thousands of jobs may be at risk as a result of the Baha Mar project.
Kerzner told reporters on Thursday that the 8,000 jobs at the Atlantis Resort on Paradise Island would be placed in jeopardy if the government approves the Baha Mar project in its current form.
“It’s a deal that makes no sense,” Kerzner said. “It’s a deal that could be harmful to the people of The Bahamas and certainly to future investors and indeed ourselves.”
Kerzner has also argued that the deal between the government and Baha Mar violates the most favored nation status clause his company agreed to with the government in successive agreements.
Under these agreements, no investor should receive more favorable terms with the government than Kerzner’s company.
Ingraham said he thinks the issue with Kerzner will come to a satisfactory conclusion.
“I have many discussions with Mr. Kerzner,” said Prime Minister Ingraham, who was a guest on Love 97’s radio talk show Issues of the Day. “I think that we will resolve this issue satisfactorily. I think so.”
Despite the public criticisms of the Baha Mar deal by Kerzner, the House of Assembly unanimously approved the Baha Mar resolution on Thursday.
The company is seeking 8,150 work permits for non-Bahamian construction workers. The government brought the resolution to the House in order to get the ‘blessing’ of members before it finally approves the project, likely by the end of the month.
“We were always concerned that when we came to office that there was nothing in the Baha Mar deal that would give them a better deal than Kerzner, ”?Ingraham said yesterday. “I think I can say that the thing that ticked Kerzner more than anything else is a statement made by (Progressive Liberal Party Leader) Perry Christie to the effect that Baha Mar only wanted to get what Kerzner got. And he (Kerzner) was of the view that Baha Mar was getting more than him. And he was very hurt that Christie would make such a statement.”
Ingraham said Kerzner is concerned about Baha Mar’s lower construction labor costs, as compared to his company’s construction labor costs. Baha Mar will be mostly using Chinese labor to build its resort. Kerzner used more Bahamian labor at his property, increasing costs.
According to Ingraham, Kerzner is also concerned about the sum Baha Mar paid for the land the development is located on.
Ingraham said one of the reasons why they insisted there had to be a substantial increase to the contract value for Bahamian contractors was to help to offset any question about Kerzner’s concerns.
As a result of negotiations between Ingraham and the Chinese, and subsequent negotiations between the Chinese and Baha Mar, subcontracts to Bahamians in connection with the Baha Mar project will increase from $200 million to $400 million.
Ingraham said he wants to be sure that the government is not giving Baha Mar a better deal than Kerzner.
He added that when the Free National Movement (FNM) government negotiated a deal with Baha Mar in 2008, it did not give Baha Mar some of the concessions the Christie administration had agreed to.
“They issued side letters offering Baha Mar more. We tried to pull those things back. We think we have been somewhat successful ensuring that there is equity and balance between the two,” Ingraham said.
In response to criticism that he treats Kerzner with more regard than he does other developers, Ingraham didn’t shy away from the relationship he shares with the hotel developer. However, he added that all developers are treated fairly.
“There’s no question of my high regard for Sol Kerzner for what he has done for The Bahamas,” Ingraham said adding that Kerzner provided The Bahamas with 2,000 more jobs than he committed to.
“I will do all I can for as long as I can to ensure that his project is successful, but that has nothing to do with whether I will be fair to anyone else. But I will not knowingly give anybody else a better deal than Kerzner got,” he said.
Ingraham added that the Baha Mar project is only going forward because of his government.
He said there was no means by which Baha Mar’s CEO Sarkis Izmirlian could get the funding from the Chinese unless the government gave the Chinese the go ahead.
China Export-Import Bank (China Eximbank) is extending a $2.45 billion loan to Baha Mar.
11/21/2010
thenassauguardian
By KRYSTEL ROLLE
Guardian Staff Reporter
krystel@nasguard.com
Prime Minister Hubert Ingraham said yesterday that he is not concerned with the statements made by Kerzner International’s Chairman and CEO Sol Kerzner that thousands of jobs may be at risk as a result of the Baha Mar project.
Kerzner told reporters on Thursday that the 8,000 jobs at the Atlantis Resort on Paradise Island would be placed in jeopardy if the government approves the Baha Mar project in its current form.
“It’s a deal that makes no sense,” Kerzner said. “It’s a deal that could be harmful to the people of The Bahamas and certainly to future investors and indeed ourselves.”
Kerzner has also argued that the deal between the government and Baha Mar violates the most favored nation status clause his company agreed to with the government in successive agreements.
Under these agreements, no investor should receive more favorable terms with the government than Kerzner’s company.
Ingraham said he thinks the issue with Kerzner will come to a satisfactory conclusion.
“I have many discussions with Mr. Kerzner,” said Prime Minister Ingraham, who was a guest on Love 97’s radio talk show Issues of the Day. “I think that we will resolve this issue satisfactorily. I think so.”
Despite the public criticisms of the Baha Mar deal by Kerzner, the House of Assembly unanimously approved the Baha Mar resolution on Thursday.
The company is seeking 8,150 work permits for non-Bahamian construction workers. The government brought the resolution to the House in order to get the ‘blessing’ of members before it finally approves the project, likely by the end of the month.
“We were always concerned that when we came to office that there was nothing in the Baha Mar deal that would give them a better deal than Kerzner, ”?Ingraham said yesterday. “I think I can say that the thing that ticked Kerzner more than anything else is a statement made by (Progressive Liberal Party Leader) Perry Christie to the effect that Baha Mar only wanted to get what Kerzner got. And he (Kerzner) was of the view that Baha Mar was getting more than him. And he was very hurt that Christie would make such a statement.”
Ingraham said Kerzner is concerned about Baha Mar’s lower construction labor costs, as compared to his company’s construction labor costs. Baha Mar will be mostly using Chinese labor to build its resort. Kerzner used more Bahamian labor at his property, increasing costs.
According to Ingraham, Kerzner is also concerned about the sum Baha Mar paid for the land the development is located on.
Ingraham said one of the reasons why they insisted there had to be a substantial increase to the contract value for Bahamian contractors was to help to offset any question about Kerzner’s concerns.
As a result of negotiations between Ingraham and the Chinese, and subsequent negotiations between the Chinese and Baha Mar, subcontracts to Bahamians in connection with the Baha Mar project will increase from $200 million to $400 million.
Ingraham said he wants to be sure that the government is not giving Baha Mar a better deal than Kerzner.
He added that when the Free National Movement (FNM) government negotiated a deal with Baha Mar in 2008, it did not give Baha Mar some of the concessions the Christie administration had agreed to.
“They issued side letters offering Baha Mar more. We tried to pull those things back. We think we have been somewhat successful ensuring that there is equity and balance between the two,” Ingraham said.
In response to criticism that he treats Kerzner with more regard than he does other developers, Ingraham didn’t shy away from the relationship he shares with the hotel developer. However, he added that all developers are treated fairly.
“There’s no question of my high regard for Sol Kerzner for what he has done for The Bahamas,” Ingraham said adding that Kerzner provided The Bahamas with 2,000 more jobs than he committed to.
“I will do all I can for as long as I can to ensure that his project is successful, but that has nothing to do with whether I will be fair to anyone else. But I will not knowingly give anybody else a better deal than Kerzner got,” he said.
Ingraham added that the Baha Mar project is only going forward because of his government.
He said there was no means by which Baha Mar’s CEO Sarkis Izmirlian could get the funding from the Chinese unless the government gave the Chinese the go ahead.
China Export-Import Bank (China Eximbank) is extending a $2.45 billion loan to Baha Mar.
11/21/2010
thenassauguardian
Saturday, November 20, 2010
Perry Christie - Opposition Leader says: ... if the government considers itself a partner in the deal with Baha Mar, it should have dealt with the alleged breach with Kerzner outside of the House of Assembly
Christie: Issues with Kerzner should have been resolved first
By CHESTER ROBARDS
Guardian Staff Reporter
chester@nasguard.com
Leader of the Opposition Perry Christie admonished the government during his contribution to debate in the House of Assembly yesterday, for not moving to resolve their apparent breach of a ‘Most Favored Nation’ (MFN) clause with Kerzner International, before bringing the Baha Mar resolution to Parliament for a vote.
Christie said if the government considers itself a partner in the deal with Baha Mar, it should have dealt with the alleged breach with Kerzner outside of the House of Assembly.
According to him, when the government was made aware that Kerzner considered the allowance of 8,000 Chinese workers for the Baha Mar project a violation of MFN, the prime minister should have met with them to resolve the issue before yesterday.
“It looks like there is antagonism in the product, serious difficulties in the product, where the government is making a decision to breach an agreement,” said Christie.
“Because, if we are saying that we are going to approve it (Baha Mar) and he (Sol Kerzner) is saying we are in breach of it (MFN), Parliament should suspend itself, since we have been asked to come to this point to have a determination made as to whether or not we are in breach.”
According to him, the matter of a breach of contract is “a matter to do with partners” and “not to do with public relations of a government”.
He said he was taken aback when Member of Parliament for Marco City, Zhivargo Laing read the press statement in the House of Assembly that was issued by Kerzner International outlining what it considered to be a breach of MFN.
“I was shocked yesterday,” he said. “This (MFN breach) is essentially a major legal matter that has exercised the minds of lawyers here in the attorney general’s office and the Queens Counsel of England.”
Christie also used much of the beginning of his alloted time in the House to respond to the government’s accusations that his party was not an effective government when they were in power and with regard to the Baha Mar agreement.
He got extremely testy with his colleagues across the floor yesterday, reminding them to act like parliamentarians while addressing the House and each other, as Bahamians look to them as a good example.
“We are coming to a time in the country where we have to be careful that we do not begin applying in our country retribution and reaction,” he said.
“That is not good for this country and our leadership in this country must exercise the greatest care as we move forward, dealing with people's reputations.
“Recognize that as best we can, we will try to avoid the snaring remarks and try to focus on the issues at hand.”
11/19/2010
thenassauguardian
By CHESTER ROBARDS
Guardian Staff Reporter
chester@nasguard.com
Leader of the Opposition Perry Christie admonished the government during his contribution to debate in the House of Assembly yesterday, for not moving to resolve their apparent breach of a ‘Most Favored Nation’ (MFN) clause with Kerzner International, before bringing the Baha Mar resolution to Parliament for a vote.
Christie said if the government considers itself a partner in the deal with Baha Mar, it should have dealt with the alleged breach with Kerzner outside of the House of Assembly.
According to him, when the government was made aware that Kerzner considered the allowance of 8,000 Chinese workers for the Baha Mar project a violation of MFN, the prime minister should have met with them to resolve the issue before yesterday.
“It looks like there is antagonism in the product, serious difficulties in the product, where the government is making a decision to breach an agreement,” said Christie.
“Because, if we are saying that we are going to approve it (Baha Mar) and he (Sol Kerzner) is saying we are in breach of it (MFN), Parliament should suspend itself, since we have been asked to come to this point to have a determination made as to whether or not we are in breach.”
According to him, the matter of a breach of contract is “a matter to do with partners” and “not to do with public relations of a government”.
He said he was taken aback when Member of Parliament for Marco City, Zhivargo Laing read the press statement in the House of Assembly that was issued by Kerzner International outlining what it considered to be a breach of MFN.
“I was shocked yesterday,” he said. “This (MFN breach) is essentially a major legal matter that has exercised the minds of lawyers here in the attorney general’s office and the Queens Counsel of England.”
Christie also used much of the beginning of his alloted time in the House to respond to the government’s accusations that his party was not an effective government when they were in power and with regard to the Baha Mar agreement.
He got extremely testy with his colleagues across the floor yesterday, reminding them to act like parliamentarians while addressing the House and each other, as Bahamians look to them as a good example.
“We are coming to a time in the country where we have to be careful that we do not begin applying in our country retribution and reaction,” he said.
“That is not good for this country and our leadership in this country must exercise the greatest care as we move forward, dealing with people's reputations.
“Recognize that as best we can, we will try to avoid the snaring remarks and try to focus on the issues at hand.”
11/19/2010
thenassauguardian
Friday, November 19, 2010
Sir Sol Kerzner says: The proposed deal between the Government of The Bahamas and Baha Mar violates previous agreements between the government and Kerzner International
Sol Kerzner hits out on Baha Mar
By BRENT DEAN
The Nassau Guardian
Deputy News Editor
brentldean@nasguard.com
Says Baha Mar deal violates agreements made with his company
The proposed deal between the Government of The Bahamas and Baha Mar violates previous agreements between the government and Kerzner International, charged Sir Sol Kerzner yesterday.
“Baha Mar proposes employing thousands of foreign Chinese workers, which would represent far more than 30 percent of the total labor force.
Approval of this arrangement by government would be a clear breach of an investment agreement with a developer that has become its largest private employer, and an investor who took a risk on The Bahamas when its economy was struggling far more than it is today,” said Sir Sol Kerzner, chairman and chief executive officer of Kerzner International in a statement.
The House of Assembly is scheduled to conclude debate on the Baha Mar resolution today. The company is seeking 8,150 work permits for Chinese workers to help construct the $2.6 billion resort. The government is seeking the blessing of the House as it grants the work permits. The opposition has said it supports the deal.
In previous heads of agreements between Kerzner and the government, it pledged to grant Kerzner most favored nation status, meaning no investor would be granted concessions greater than Kerzner.
However, in a rare public statement, Kerzner, who is the largest private sector employer in the country, said Baha Mar is being granted much more than his company received.
“When we made our largest single investment of approximately $1 billion for Phase III, we did so based on a heads of agreement signed with the PLP government in 2003. Among the many requirements that government imposed on Kerzner under this and prior agreements was a strict rule that at least 70 percent of the total construction labor force would be Bahamian,” said Kerzner.
“As was the case with the two previous agreements with government, our 2003 agreement included a most favored nation provision that assured Kerzner that our investments would be protected from subsequent investors receiving more favorable terms. These agreements represented a solemn promise by The Bahamas to us that any subsequent investor would only compete against us on a level playing field.”
Prime Minister Hubert Ingraham said on Sunday that the Baha Mar deal would be approved by the end of the month. It is unclear if Kerzner’s intervention will have any effect on that pronouncement.
Yesterday Baha Mar was not pleased with Kerzner’s public intervention.
“We are not going to comment on Mr. Kerzner’s public relations statement. The Baha Mar project has been well vetted with the public, the government and its investors. We are happy the Baha Mar resolution is being debated in Parliament today,” said the company in response to Kerzner.
Kerzner International said it intends to discuss with the government how to address its concerns. As a result of the deal, Baha Mar is to receive on the labor and land components of the proposed deal, Kerzner can argue it is entitled to the same.
The government is transfering 265 acres of public land at Cable Beach to Baha Mar as a part of the deal.
Kerzner International emphasized that the heads of agreement for each of the three phases of development on Paradise Island required that at least 70 percent of the total construction labor force had to be Bahamian.
Bahamian labor is more expensive than labor from countries such as China and Mexico.
The company and its chairman argued that the deal Baha Mar is to receive “would represent a material breach” of its agreement with the government.
“When Kerzner first invested in The Bahamas by acquiring what is now the Coral and Beach Towers out of bankruptcy in May 1994, we made our investment on the basis of agreements with the government that gave us contractual assurances regarding our investment. Although we were confident in our abilities to re-establish the Bahamian tourism industry at that time, we did so in the face of truly dire economic conditions,” said Kerzner in his remarks.
“Accordingly, we insisted upon most favored nation treatment, which would ensure that no subsequent investor would be given advantages that we never enjoyed. Since our first investment, we have always found government – irrespective of the party in office – to be a faithful partner who has justified our initial and subsequent confidence in The Bahamas as an investor. We have invested more than $2.3 billion over the course of our build-out of the three phases of Atlantis, increasing our room count from approximately 1,100 in 1994 to over 4,000 today.
“We have grown the Bahamian workforce from approximately 1,200 employees when we commenced operations in 1994 to nearly 8,000 full-time employees today, not to mention the indirect employment that our investment has generated in the community. Furthermore, we have spent millions on training programs to develop and improve the skills and professionalism of our work force, which has allowed Atlantis to be rated among the top resorts in the world.”
Both the governing Free National Movement and opposition Progressive Liberal Party support the Baha Mar deal.
11/18/2010
thenassauguardian
By BRENT DEAN
The Nassau Guardian
Deputy News Editor
brentldean@nasguard.com
Says Baha Mar deal violates agreements made with his company
The proposed deal between the Government of The Bahamas and Baha Mar violates previous agreements between the government and Kerzner International, charged Sir Sol Kerzner yesterday.
“Baha Mar proposes employing thousands of foreign Chinese workers, which would represent far more than 30 percent of the total labor force.
Approval of this arrangement by government would be a clear breach of an investment agreement with a developer that has become its largest private employer, and an investor who took a risk on The Bahamas when its economy was struggling far more than it is today,” said Sir Sol Kerzner, chairman and chief executive officer of Kerzner International in a statement.
The House of Assembly is scheduled to conclude debate on the Baha Mar resolution today. The company is seeking 8,150 work permits for Chinese workers to help construct the $2.6 billion resort. The government is seeking the blessing of the House as it grants the work permits. The opposition has said it supports the deal.
In previous heads of agreements between Kerzner and the government, it pledged to grant Kerzner most favored nation status, meaning no investor would be granted concessions greater than Kerzner.
However, in a rare public statement, Kerzner, who is the largest private sector employer in the country, said Baha Mar is being granted much more than his company received.
“When we made our largest single investment of approximately $1 billion for Phase III, we did so based on a heads of agreement signed with the PLP government in 2003. Among the many requirements that government imposed on Kerzner under this and prior agreements was a strict rule that at least 70 percent of the total construction labor force would be Bahamian,” said Kerzner.
“As was the case with the two previous agreements with government, our 2003 agreement included a most favored nation provision that assured Kerzner that our investments would be protected from subsequent investors receiving more favorable terms. These agreements represented a solemn promise by The Bahamas to us that any subsequent investor would only compete against us on a level playing field.”
Prime Minister Hubert Ingraham said on Sunday that the Baha Mar deal would be approved by the end of the month. It is unclear if Kerzner’s intervention will have any effect on that pronouncement.
Yesterday Baha Mar was not pleased with Kerzner’s public intervention.
“We are not going to comment on Mr. Kerzner’s public relations statement. The Baha Mar project has been well vetted with the public, the government and its investors. We are happy the Baha Mar resolution is being debated in Parliament today,” said the company in response to Kerzner.
Kerzner International said it intends to discuss with the government how to address its concerns. As a result of the deal, Baha Mar is to receive on the labor and land components of the proposed deal, Kerzner can argue it is entitled to the same.
The government is transfering 265 acres of public land at Cable Beach to Baha Mar as a part of the deal.
Kerzner International emphasized that the heads of agreement for each of the three phases of development on Paradise Island required that at least 70 percent of the total construction labor force had to be Bahamian.
Bahamian labor is more expensive than labor from countries such as China and Mexico.
The company and its chairman argued that the deal Baha Mar is to receive “would represent a material breach” of its agreement with the government.
“When Kerzner first invested in The Bahamas by acquiring what is now the Coral and Beach Towers out of bankruptcy in May 1994, we made our investment on the basis of agreements with the government that gave us contractual assurances regarding our investment. Although we were confident in our abilities to re-establish the Bahamian tourism industry at that time, we did so in the face of truly dire economic conditions,” said Kerzner in his remarks.
“Accordingly, we insisted upon most favored nation treatment, which would ensure that no subsequent investor would be given advantages that we never enjoyed. Since our first investment, we have always found government – irrespective of the party in office – to be a faithful partner who has justified our initial and subsequent confidence in The Bahamas as an investor. We have invested more than $2.3 billion over the course of our build-out of the three phases of Atlantis, increasing our room count from approximately 1,100 in 1994 to over 4,000 today.
“We have grown the Bahamian workforce from approximately 1,200 employees when we commenced operations in 1994 to nearly 8,000 full-time employees today, not to mention the indirect employment that our investment has generated in the community. Furthermore, we have spent millions on training programs to develop and improve the skills and professionalism of our work force, which has allowed Atlantis to be rated among the top resorts in the world.”
Both the governing Free National Movement and opposition Progressive Liberal Party support the Baha Mar deal.
11/18/2010
thenassauguardian
Monday, November 15, 2010
Sir Sol Kerzner - Kerzner International Chairman and CEO - has concerns about the terms of the Baha Mar deal
Kerzner concerned about terms of Baha Mar deal
By CANDIA DAMES
Guardian News Editor
candia@nasguard.com
Kerzner International Chairman and CEO Sir Sol Kerzner has concerns about some of the terms of the $2.6 billion Baha Mar deal, Prime Minister Hubert Ingraham said yesterday.
Ingraham told reporters at a meet the press event that he met with Kerzner yesterday morning to discuss those concerns.
“There are some concerns on the part of Kerzner as to the extent to which Baha Mar is getting a deal from The Bahamas that is more favorable to them than Kerzner got,” Ingraham said.
“In 2003 when the government of the day signed an agreement for Kerzner to do its phase three, it agreed that nobody would get a better deal in The Bahamas for any development than Kerzner got.”
He added, “They are concerned about the extent to which they themselves had to pay huge sums of money for property to do their development and Baha Mar was given property at [concessionary] prices. Secondly, they were required to hire 70 percent (Bahamian) workers on their job, and only 30 percent foreigners and we are considering giving Baha Mar these 5,000 to 8,000 Chinese workers.”
Ingraham said Kerzner International officials will get back to the government on the extent to which they have justifiable reasons for their concerns.
“And we will review their concerns and make determinations, but in the meantime it will not interfere with our intention to approve the Baha Mar project by the end of this month,” he said.
Asked whether Kerzner International plans to pursue a phase four of its development, Ingraham said, “The reality is even if they had the money and even if they had the will, the desire, nobody would do a phase four at Atlantis if you’re going to put down on Cable Beach another 2,600 hotel rooms and all the facilities.
“The reality is that there is only one market. Nassau is only just one place and airlift and business and profitability and room rates and the whole host of things (come into play). So it isn’t likely that they are going to do another phase at the moment. That’s not likely.”
Ingraham said Kerzner told him yesterday that there is no truth to rumors that he is considering selling the Atlantis Resort on Paradise Island.
“He said absolutely not,” Ingraham said. “I believe him.”
11/15/2010
thenassauguardian
By CANDIA DAMES
Guardian News Editor
candia@nasguard.com
Kerzner International Chairman and CEO Sir Sol Kerzner has concerns about some of the terms of the $2.6 billion Baha Mar deal, Prime Minister Hubert Ingraham said yesterday.
Ingraham told reporters at a meet the press event that he met with Kerzner yesterday morning to discuss those concerns.
“There are some concerns on the part of Kerzner as to the extent to which Baha Mar is getting a deal from The Bahamas that is more favorable to them than Kerzner got,” Ingraham said.
“In 2003 when the government of the day signed an agreement for Kerzner to do its phase three, it agreed that nobody would get a better deal in The Bahamas for any development than Kerzner got.”
He added, “They are concerned about the extent to which they themselves had to pay huge sums of money for property to do their development and Baha Mar was given property at [concessionary] prices. Secondly, they were required to hire 70 percent (Bahamian) workers on their job, and only 30 percent foreigners and we are considering giving Baha Mar these 5,000 to 8,000 Chinese workers.”
Ingraham said Kerzner International officials will get back to the government on the extent to which they have justifiable reasons for their concerns.
“And we will review their concerns and make determinations, but in the meantime it will not interfere with our intention to approve the Baha Mar project by the end of this month,” he said.
Asked whether Kerzner International plans to pursue a phase four of its development, Ingraham said, “The reality is even if they had the money and even if they had the will, the desire, nobody would do a phase four at Atlantis if you’re going to put down on Cable Beach another 2,600 hotel rooms and all the facilities.
“The reality is that there is only one market. Nassau is only just one place and airlift and business and profitability and room rates and the whole host of things (come into play). So it isn’t likely that they are going to do another phase at the moment. That’s not likely.”
Ingraham said Kerzner told him yesterday that there is no truth to rumors that he is considering selling the Atlantis Resort on Paradise Island.
“He said absolutely not,” Ingraham said. “I believe him.”
11/15/2010
thenassauguardian
Saturday, October 2, 2010
Baha Mar project is a political hot potato
Baha Mar project still needs consideration
tribune242 editorial
THE BAHA MAR development is not one of easy solution -- politically it is a hot potato. The only reason it is being considered is that many Bahamians believe that in these economic hard times a big project is needed to get Bahamians back to work -- and Baha Mar happens to be that big project.
Prime Minister Hubert Ingraham does not necessarily agree. One day the Bahamas is going to run out of big projects -- certainly the need for them in New Providence. There are still the Family Islands to develop, but as time moves forward the Bahamas will have to find something other than "big projects" to sustain growth.
Nor does the Prime Minister believe that Baha Mar, even at this time, is the "saviour for the Bahamas."
However, what appears to many Bahamians to be an answer to prayers could present enormous problems in the future. Certainly enormous political problems.
For example, if government agrees to allow the Chinese to employ over the period of the $2.6 billion contract, 8,100 of their countrymen with Bahamians only on the periphery of construction, then future investors can expect the same. Certainly Kerzner International, which has preferred investor status, has every right in future to ask for the same concessions. And don't forget local business people, who should be entitled to employ the best talent for their businesses, will also expect to have more freedom to go abroad if the required talent cannot be found here. This is something that Bahamians should ponder very seriously. At the pace at which this country is developing -- especially with the unlimited vistas being opened by new technology -- there will be no place for D grade students. Of course, this is something for students and their parents to come to grips with now. They have to settle down to reality -- government can no longer protect them. They have not had to make the effort because their mediocrity has been protected by Immigration restrictions for too long.
But there are other worries. As Mr Ingraham pointed out, if Baha Mar is completed as planned will the investors be able to fill the added 3,500 rooms when many hotel rooms already here are empty?
"We will be building the largest single resort development in the country with exclusively foreign labour, foreign labour where there is no transfer of any knowledge to locals," Mr Ingraham said. "At the same time be putting a number of rooms that is larger than any we've got in the country, without any major hotelier being involved to date."
"Well if I have difficulty dealing with less than 1,800 rooms what is it likely to be the case if I put 3,500 rooms there? What makes me feel and what gives me the level of confidence that all of a sudden I've become a magician in terms of the management of a hotel and I'm going to have a very successful operation with high levels of occupancy and good levels of revenue to repay the loan of $2.4 billion?"
Added to which the Chinese now have a hotel in Freeport which they cannot fill.
"And if I am having discussions about the question of repaying a loan of $200 million that is dragging on and on, does that raise any question that I ought to be concerned with? These are all matters that the government has to be concerned with," Mr Ingraham said.
What is now exercising the minds of many Bahamians is what happens to the large resort and the land on which it sits if the land is transferred in fee simple to Baha Mar, which in future might default on the loan to the China Export-Import Bank. Does the bank, and eventually the Beijing government become landlords of 1,000 acres of Cable Beach? This is of great concern to many Bahamians.
Mr Ingraham said he would feel more confident about the development, if like Atlantis, it were brought on stream in stages, opening only 1,000 rooms to start with. Atlantis developed its mega project in three stages. The fourth stage is being held until the Baha Mar resort is resolved. Obviously, the Kerzners -- experts in the resort business --also believe that the Bahamas cannot fill the rooms of two mega resorts operating on one island at the same time.
However, Mr Ingraham believes the Baha Mar project and Atlantis can co-exist without one being detrimental to the other if the phased approach to development is taken.
If one kills off the other by over reaching it is the Bahamas and its people who will suffer. As each resort fights for guests, room rates will fall and so will local employment.
Mr Ingraham and his government -- and the Opposition if it will take its responsibilities seriously -- have a lot to think about as they do their best to protect the future of the country and its people.
October 01, 2010
tribune242 editorial
tribune242 editorial
THE BAHA MAR development is not one of easy solution -- politically it is a hot potato. The only reason it is being considered is that many Bahamians believe that in these economic hard times a big project is needed to get Bahamians back to work -- and Baha Mar happens to be that big project.
Prime Minister Hubert Ingraham does not necessarily agree. One day the Bahamas is going to run out of big projects -- certainly the need for them in New Providence. There are still the Family Islands to develop, but as time moves forward the Bahamas will have to find something other than "big projects" to sustain growth.
Nor does the Prime Minister believe that Baha Mar, even at this time, is the "saviour for the Bahamas."
However, what appears to many Bahamians to be an answer to prayers could present enormous problems in the future. Certainly enormous political problems.
For example, if government agrees to allow the Chinese to employ over the period of the $2.6 billion contract, 8,100 of their countrymen with Bahamians only on the periphery of construction, then future investors can expect the same. Certainly Kerzner International, which has preferred investor status, has every right in future to ask for the same concessions. And don't forget local business people, who should be entitled to employ the best talent for their businesses, will also expect to have more freedom to go abroad if the required talent cannot be found here. This is something that Bahamians should ponder very seriously. At the pace at which this country is developing -- especially with the unlimited vistas being opened by new technology -- there will be no place for D grade students. Of course, this is something for students and their parents to come to grips with now. They have to settle down to reality -- government can no longer protect them. They have not had to make the effort because their mediocrity has been protected by Immigration restrictions for too long.
But there are other worries. As Mr Ingraham pointed out, if Baha Mar is completed as planned will the investors be able to fill the added 3,500 rooms when many hotel rooms already here are empty?
"We will be building the largest single resort development in the country with exclusively foreign labour, foreign labour where there is no transfer of any knowledge to locals," Mr Ingraham said. "At the same time be putting a number of rooms that is larger than any we've got in the country, without any major hotelier being involved to date."
"Well if I have difficulty dealing with less than 1,800 rooms what is it likely to be the case if I put 3,500 rooms there? What makes me feel and what gives me the level of confidence that all of a sudden I've become a magician in terms of the management of a hotel and I'm going to have a very successful operation with high levels of occupancy and good levels of revenue to repay the loan of $2.4 billion?"
Added to which the Chinese now have a hotel in Freeport which they cannot fill.
"And if I am having discussions about the question of repaying a loan of $200 million that is dragging on and on, does that raise any question that I ought to be concerned with? These are all matters that the government has to be concerned with," Mr Ingraham said.
What is now exercising the minds of many Bahamians is what happens to the large resort and the land on which it sits if the land is transferred in fee simple to Baha Mar, which in future might default on the loan to the China Export-Import Bank. Does the bank, and eventually the Beijing government become landlords of 1,000 acres of Cable Beach? This is of great concern to many Bahamians.
Mr Ingraham said he would feel more confident about the development, if like Atlantis, it were brought on stream in stages, opening only 1,000 rooms to start with. Atlantis developed its mega project in three stages. The fourth stage is being held until the Baha Mar resort is resolved. Obviously, the Kerzners -- experts in the resort business --also believe that the Bahamas cannot fill the rooms of two mega resorts operating on one island at the same time.
However, Mr Ingraham believes the Baha Mar project and Atlantis can co-exist without one being detrimental to the other if the phased approach to development is taken.
If one kills off the other by over reaching it is the Bahamas and its people who will suffer. As each resort fights for guests, room rates will fall and so will local employment.
Mr Ingraham and his government -- and the Opposition if it will take its responsibilities seriously -- have a lot to think about as they do their best to protect the future of the country and its people.
October 01, 2010
tribune242 editorial
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