Sarkis Izmirlian JCN Man of the Year
The Bahama Journal
As we here at JCN have done for the past ten years; so do we continue this year: we have decided to recognize certain deserving men and women for the contribution they have made [and continue to make] to the ongoing development of the Bahamas.
We do so not only because we can; but because we must –as a responsible media organization – continue to do all that we can to help build up our nation; and so by the same token, we must always give credit where and when credit is due others.
We note also that, right-thinking Bahamians throughout the length and breadth of the Bahamas are today excited at the vistas of opportunity they see as they contemplate the initiation of the Baha Mar project, slated for the Cable Beach strip.
As in the case of these highly expectant Bahamians, we too look forward to the start-up and completion of this mega-project.
In this regard, it should not take the genius that comes with rocket-science to understand and appreciate the import of a project that promises to employ thousands of Bahamians.
Such a venture would also bring with it a multiplier effect that promises to buoy other aspects of the Bahamian economy, its society and its competitiveness in that wider world where in the struggle for economic pre-eminence and consumer satisfaction, it is excellence that matters most of all.
Izmirlian is this Journal’s Man of the Year because he has been able to match word with deed in support of his stated conclusion to the effect that the Baha Mar project – in its guise as a world-class resort - will significantly benefit The Bahamas and all Bahamians.
We believe him when he says that, “… Baha Mar will make The Bahamas one of the premier tourist locations in the world…"
And so, distilled to its essence, the word we are getting is to the effect that, Baha Mar will draw millions of vacationers and business travelers every year to the resort's six hotels, with almost 3,500 rooms and condos, the largest casino in the Caribbean, the largest convention center in The Bahamas, a world-class golf course, retail village and much more.
In addition, it is to be noted that, Baha Mar –once fully operational- will boast having a staff that is fully operational, with some 98 per cent of the staff being Bahamian.
This is excellent-good news.
It is this new information that supports and under girds the decision we have made to name this entrepreneur par excellence – Sarkis Izmirlian- as our man of the year.
He is this year’s choice not only because of his tenacity and vision; but also for being that kind of investor who clearly has a phenomenal depth of confidence in the Bahamas and in its people.
In addition, he is clearly that kind of man who is driven to get things up and going; here we would also venture that this man has a depth of confidence in himself and in his capacity to get up from under any number of disappointments and challenges.
To put the matter concerning Izmirlian in its proper perspective; this investor makes things happen; in this, he is to be distinguished from all those others who wait patiently for things to line up this or that way.
This is not to say that, he does not recognize the need for perseverance; indeed, he surely had his share of this as he plotted his way through what might have – on first glance- seemed to be seemed so very many high hurdles.
As the record shows; this man persevered; stuck to his guns; sought out and found a worthy strategic partner in the guise of the Chinese Export-Import Bank and has thereafter gone on to victory.
As we now know, “The proposed Cable Beach development would be financed by the Export-Import Bank of China and constructed by the China State Construction Engineering Corporation…”
And clearly, while we reference victory on the part of this man –Sarkis Izmirlian – we are also minded to take note of the fact that, the Bahama Mar project signals good news not only for those who govern, but also for the nation’s Loyal Opposition.
As the record would show, the initial conversations and tentative agreements concerning Baha Mar and the revitalization of the Cable Beach Strip came up for consideration in that time when, the Free National Movement was then in opposition.
In toto, then, the vast majority of our people are also winners in that saga that now involves Sarkis Izmirlian, Baha Mar and the transformation of the tourism product in the Bahamas.
This believer in the Bahamas deserves not only our recognition; but also that of all right-thinking Bahamians.
And so, we salute Sarkis Izmirlian as JCN’s Man of the Year.
December 31, 2010
The Bahama Journal
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 Sarkis Izmirlian. Show all posts
Showing posts with label Sarkis Izmirlian. Show all posts
Friday, December 31, 2010
Sunday, November 28, 2010
The history of the Baha Mar project
The history of the 1,000 acre Baha Mar project
BY LARRY SMITH
AFTER years of manoeuvering over the 1,000-acre Baha Mar project on Cable Beach, the Ingraham government (in its own words) has finally made sweet lemonade from the sour fruit left on the table by the Christie administration.
In April 2005 the newly formed Baha Mar Development Company (owned by a Lyford Cay-based property developer named Sarkis Izmirlian) bought three aging hotels on the Cable Beach strip with a $200 million loan from the Bank of Nova Scotia. The venerable Nassau Beach was subsequently closed, while the Crystal Palace and Cable Beach Hotels were renovated and re-branded.
That same year Baha Mar concluded an agreement with the Christie administration for a $1 billion-plus development, including several hotels, a casino, retail village, convention centre, expanded golf course, and beach and pool amenities. Ironically, had the project got underway when it was supposed to, it would have opened in the midst of the Great Recession - with potentially devastating consequences.
Side agreements to the 2005 agreement included deferred taxes that could later be paid in instalments, a $20 million marketing contribution from the Ministry of Tourism, and a commitment to upgrade the airport and other infrastructure.
There was also an agreement to transfer to the developer hundreds of acres of both Crown and government land on Cable Beach worth an estimated $150 million.
However, Baha Mar proved unable to raise $400 million in capital, show evidence of further financing, produce detailed plans, or attract world class partners by the agreement's stated deadline of October 2006.
With an election approaching, the Christie government scrambled to revive the project. And by early 2007 it had been reorganised as a joint venture with Harrah's Entertainment. The planned capital spent more than doubled to $2.6 billion (along with more than a quarter billion dollars in government concessions) and promoters were hailing the project as unprecedented in scope and character.
The revised project included a larger casino, double the meeting room space, and 1200 more hotel rooms.
But despite "vigorous negotiations" a deal could not be finalised before May 2007. And when the electoral dust had settled, Perry Christie was replaced as prime minister by Hubert Ingraham, who immediately launched a review of the project.
Although the new government eventually decided it would abide by the 2005 terms, Baha Mar insisted on further negotiations, according to the prime minister. And by February 2008 he unveiled a supplemental Heads of Agreement that trimmed some of the concessions given three years earlier.
"There is high expectation by the Bahamian public about the Baha Mar project," Ingraham acknowledged in March, 2008 during passage of a parliamentary resolution to authorise the transfer of public lands to the developer. "We will do all we can to facilitate it, but I do not want to oversell it."
March 2009 was the new deadline set for the government's conditions to be met so that the deal could be finalised. But long before that could happen, Harrah's got cold feet due to the economic downturn and pulled out of the partnership, putting the whole project in jeopardy. Unable to obtain regular financing in the capital markets, Baha Mar turned to the cash-rich Chinese government to save the development.
Earlier this year, China's Export-Import Bank agreed to arrange $2.5 billion in financing, and Beijing's state-owned construction corporation signed on to build the project, which will feature six hotels and add 3,500 hotel rooms and condos to the country's current inventory of 15,000 - more than half of which in Nassau.
Following the prime minister's recent trip to China to firm up the details of the construction arrangements, the House of Assembly unanimously passed a government-sponsored resolution to approve the project, including the unprecedented issuance of up to 8,150 work permits for non-Bahamian construction workers.
After talks with the Chinese, Ingraham was able to announce that he had doubled the share of business for Bahamian subcontractors, with more than construction 4,000 jobs now on offer, and that some $8 million would be spent on training programmes for Bahamian workers.
"We put down some benchmarks, like the $400 million in Bahamian contracts, and said if they accepted our terms we would approve the project by the end of November," the prime minister told me.
"We always disclose the terms of deals - not like the PLP when they signed the 2005 Baha Mar Heads of Agreement with a confidentiality clause, and contemporaneously issued side letters containing larger exemptions from taxes and committing even more public money in violation of the (phase three) deal they had agreed with Kerzner two years earlier."
In fact, this last point has proven to be the only remaining fly in the Cable Beach lemonade.
The prime minister does not accept that the current Baha Mar deal violates the guarantees to Atlantis developer Sol Kerzner that no subsequent investor would get more favourable terms. Kerzner's complaint focused on the ratio of Bahamian to non-Bahamian construction workers, presumably because Baha Mar will benefit from a cheaper, more skilled, and more productive labour force.
"Among the many requirements that the government imposed (on us) was a strict rule that at least 70 per cent of the total construction labour force would be Bahamian. However, this new (Baha Mar) deal will constitute a complete reversal of (that) standard," Kerzner said angrily.
The prime minister's response is that "the government will review Kerzner's claim and seek to resolve all issues."
The question of whether the Bahamas can accommodate thousands of new hotel rooms opening at the same time is another issue for Atlantis.
"The reason is that the tourism infrastructure needs to catch up to additional demand.
"Airlift is not going to grow and develop in one day just because another 3,000 luxury rooms are opened. And I think that is very critical...and not easily done," Managing Director George Markantonis told The Tribune recently.
The Baha Mar project will get underway before the end of this year, with contracts awarded to Bahamian firms. The China State Construction & Engineering Company should begin work by the spring, and the project could be substantially completed by 2014.
In response to market concerns, Baha Mar has agreed to stagger the opening of the new hotels over a five-month period stretching into 2015, and close the Crystal Palace Hotel during renovations.
According to the Chinese, the project relies on being developed, marketed and operated as a single phase "to induce demand that would not otherwise exist for a series of standalone hotels."
They point out that the Hyatt, Morgan's and Rosewood hotel companies are investing $62 million of their own money into the project, and note that the airport will be redeveloped by the time Baha Mar opens. Expectations are that the tourism market will have rebounded by then.
Another issue that has received somewhat less attention in the media is the provision of water and power for such a massive project being built and brought on stream at one time. As we all know, these commodities are relatively scarce on New Providence these days, and there are fears that our infrastructure will be further strained in the short-term.
In fact, BEC will need to generate an additional 25 megawatts of electricity to accommodate the projected power demand for Baha Mar.
And the developer is supposed to cover the cost of a new BEC substation, as well as build a central sewerage system, and a reverse osmosis plant for potable water.
Although there was understandable shock and dismay when Baha Mar's requirement for such a large foreign labour component first became known, public opinion seems to have quickly moved to accept the inevitable - no doubt fully motivated by the recession.
For example, in June of this year the PLP said it would not involve itself in the decision to allow thousands of Chinese workers into the country and seemed determined to let the government twist in the wind. But only two months later they were singing a different tune, based on the state of the economy.
And from the sense of jubilation conveyed by the government since the Baha Mar deal was approved, it seems that the studied scepticism of the past few years was aimed not only at getting the best deal possible in a difficult environment, but also at drawing the opposition into a full embrace of the project's current framework in order to minimize the obvious political risks.
As one well-connected insider told me: "I'm sure there was some political thinking involved, but for the most part it was to get a doable deal."
What do you think?
Send comments to
larry@tribunemedia.net
Or visit www.bahamapundit.com
November 24, 2010
tribune242
BY LARRY SMITH
AFTER years of manoeuvering over the 1,000-acre Baha Mar project on Cable Beach, the Ingraham government (in its own words) has finally made sweet lemonade from the sour fruit left on the table by the Christie administration.
In April 2005 the newly formed Baha Mar Development Company (owned by a Lyford Cay-based property developer named Sarkis Izmirlian) bought three aging hotels on the Cable Beach strip with a $200 million loan from the Bank of Nova Scotia. The venerable Nassau Beach was subsequently closed, while the Crystal Palace and Cable Beach Hotels were renovated and re-branded.
That same year Baha Mar concluded an agreement with the Christie administration for a $1 billion-plus development, including several hotels, a casino, retail village, convention centre, expanded golf course, and beach and pool amenities. Ironically, had the project got underway when it was supposed to, it would have opened in the midst of the Great Recession - with potentially devastating consequences.
Side agreements to the 2005 agreement included deferred taxes that could later be paid in instalments, a $20 million marketing contribution from the Ministry of Tourism, and a commitment to upgrade the airport and other infrastructure.
There was also an agreement to transfer to the developer hundreds of acres of both Crown and government land on Cable Beach worth an estimated $150 million.
However, Baha Mar proved unable to raise $400 million in capital, show evidence of further financing, produce detailed plans, or attract world class partners by the agreement's stated deadline of October 2006.
With an election approaching, the Christie government scrambled to revive the project. And by early 2007 it had been reorganised as a joint venture with Harrah's Entertainment. The planned capital spent more than doubled to $2.6 billion (along with more than a quarter billion dollars in government concessions) and promoters were hailing the project as unprecedented in scope and character.
The revised project included a larger casino, double the meeting room space, and 1200 more hotel rooms.
But despite "vigorous negotiations" a deal could not be finalised before May 2007. And when the electoral dust had settled, Perry Christie was replaced as prime minister by Hubert Ingraham, who immediately launched a review of the project.
Although the new government eventually decided it would abide by the 2005 terms, Baha Mar insisted on further negotiations, according to the prime minister. And by February 2008 he unveiled a supplemental Heads of Agreement that trimmed some of the concessions given three years earlier.
"There is high expectation by the Bahamian public about the Baha Mar project," Ingraham acknowledged in March, 2008 during passage of a parliamentary resolution to authorise the transfer of public lands to the developer. "We will do all we can to facilitate it, but I do not want to oversell it."
March 2009 was the new deadline set for the government's conditions to be met so that the deal could be finalised. But long before that could happen, Harrah's got cold feet due to the economic downturn and pulled out of the partnership, putting the whole project in jeopardy. Unable to obtain regular financing in the capital markets, Baha Mar turned to the cash-rich Chinese government to save the development.
Earlier this year, China's Export-Import Bank agreed to arrange $2.5 billion in financing, and Beijing's state-owned construction corporation signed on to build the project, which will feature six hotels and add 3,500 hotel rooms and condos to the country's current inventory of 15,000 - more than half of which in Nassau.
Following the prime minister's recent trip to China to firm up the details of the construction arrangements, the House of Assembly unanimously passed a government-sponsored resolution to approve the project, including the unprecedented issuance of up to 8,150 work permits for non-Bahamian construction workers.
After talks with the Chinese, Ingraham was able to announce that he had doubled the share of business for Bahamian subcontractors, with more than construction 4,000 jobs now on offer, and that some $8 million would be spent on training programmes for Bahamian workers.
"We put down some benchmarks, like the $400 million in Bahamian contracts, and said if they accepted our terms we would approve the project by the end of November," the prime minister told me.
"We always disclose the terms of deals - not like the PLP when they signed the 2005 Baha Mar Heads of Agreement with a confidentiality clause, and contemporaneously issued side letters containing larger exemptions from taxes and committing even more public money in violation of the (phase three) deal they had agreed with Kerzner two years earlier."
In fact, this last point has proven to be the only remaining fly in the Cable Beach lemonade.
The prime minister does not accept that the current Baha Mar deal violates the guarantees to Atlantis developer Sol Kerzner that no subsequent investor would get more favourable terms. Kerzner's complaint focused on the ratio of Bahamian to non-Bahamian construction workers, presumably because Baha Mar will benefit from a cheaper, more skilled, and more productive labour force.
"Among the many requirements that the government imposed (on us) was a strict rule that at least 70 per cent of the total construction labour force would be Bahamian. However, this new (Baha Mar) deal will constitute a complete reversal of (that) standard," Kerzner said angrily.
The prime minister's response is that "the government will review Kerzner's claim and seek to resolve all issues."
The question of whether the Bahamas can accommodate thousands of new hotel rooms opening at the same time is another issue for Atlantis.
"The reason is that the tourism infrastructure needs to catch up to additional demand.
"Airlift is not going to grow and develop in one day just because another 3,000 luxury rooms are opened. And I think that is very critical...and not easily done," Managing Director George Markantonis told The Tribune recently.
The Baha Mar project will get underway before the end of this year, with contracts awarded to Bahamian firms. The China State Construction & Engineering Company should begin work by the spring, and the project could be substantially completed by 2014.
In response to market concerns, Baha Mar has agreed to stagger the opening of the new hotels over a five-month period stretching into 2015, and close the Crystal Palace Hotel during renovations.
According to the Chinese, the project relies on being developed, marketed and operated as a single phase "to induce demand that would not otherwise exist for a series of standalone hotels."
They point out that the Hyatt, Morgan's and Rosewood hotel companies are investing $62 million of their own money into the project, and note that the airport will be redeveloped by the time Baha Mar opens. Expectations are that the tourism market will have rebounded by then.
Another issue that has received somewhat less attention in the media is the provision of water and power for such a massive project being built and brought on stream at one time. As we all know, these commodities are relatively scarce on New Providence these days, and there are fears that our infrastructure will be further strained in the short-term.
In fact, BEC will need to generate an additional 25 megawatts of electricity to accommodate the projected power demand for Baha Mar.
And the developer is supposed to cover the cost of a new BEC substation, as well as build a central sewerage system, and a reverse osmosis plant for potable water.
Although there was understandable shock and dismay when Baha Mar's requirement for such a large foreign labour component first became known, public opinion seems to have quickly moved to accept the inevitable - no doubt fully motivated by the recession.
For example, in June of this year the PLP said it would not involve itself in the decision to allow thousands of Chinese workers into the country and seemed determined to let the government twist in the wind. But only two months later they were singing a different tune, based on the state of the economy.
And from the sense of jubilation conveyed by the government since the Baha Mar deal was approved, it seems that the studied scepticism of the past few years was aimed not only at getting the best deal possible in a difficult environment, but also at drawing the opposition into a full embrace of the project's current framework in order to minimize the obvious political risks.
As one well-connected insider told me: "I'm sure there was some political thinking involved, but for the most part it was to get a doable deal."
What do you think?
Send comments to
larry@tribunemedia.net
Or visit www.bahamapundit.com
November 24, 2010
tribune242
Monday, November 22, 2010
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
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
Wednesday, November 3, 2010
Hubert Ingraham versus Perry Christie - and the emerging Chinese superpower
Another Watershed for Ingraham & Christie
by Simon
bahamapundit
Hubert Ingraham arrived in China in a strong and enviable position. Much of this comes from the office he holds as Prime Minister of a strategically-located Bahamas with diverse and impressive assets relative to our size.
Moreover, a considerable amount of the Prime Minister’s strengthened position is rooted in his character and experience, including a combination of international experience and domestic credibility.
The posture with which Mr. Ingraham has travelled to the emerging Chinese superpower is in obvious and stark contrast to the posture with which former Prime Minister Perry Christie would have made this journey.
Mr. Christie would have gone in a considerably weaker position for reasons rooted in his political character, including an operating style marked by indecision and pandering.
Whereas Mr. Ingraham enters into a negotiation with some inscrutability and poker-faced, Mr. Christie is generally an easy mark, easy to read and easy to push over. Bahamians know that Mr. Ingraham will always drive a harder bargain while Mr. Christie is prone to give away the store.
Domestic Credibility: On the eve of his departure for China, Mr. Ingraham and his predecessor, Opposition Leader, Perry Christie each held a press conference. In tone and substance they were a study in contrast.
Mr. Ingraham noted that Baha Mar was among one of a wide range of issues on the agenda during his trip. The Leader of the Opposition’s press conference focused almost exclusively on Baha Mar, with little reference to various other bilateral matters. Yet, what they both said about Baha Mar was revealing.
WATERSHED
The debate over Baha Mar has been another watershed for these former law partners and cabinet colleagues. The current debate is etching into the national consciousness the essential differences between the men in terms of vision, character and governance.
In his brief statement at a press conference in which Dr. Bernard Nottage took the lead in outlining the PLP’s position on Baha Mar, Mr. Christie left little doubt that he would have headed to China mostly as the gushing representative of Baha Mar.
In one of the most disturbing public performances by someone who served as prime minister, Mr. Christie all but abandoned the national interest in the favour of a private interest. It is an interest that has repeatedly demonstrated that it lacked the vision, track record and wherewithal to redevelop Cable Beach. Indeed, Baha Mar has repeatedly failed to meet various deadlines over the course of several years.
Just in September, Mr. Sarkis Izmirlian, the Chairman and Chief Executive Officer of Baha Mar spoke at a 25th anniversary event marking the China State Construction and Engineering Company’s presence in the United States.
“As some of you may know, my family and I have a vision for the country of The Bahamas, and its huge potential for tourism. We were approached by the Bahamian Government to consider redeveloping a beautiful area of Nassau called Cable Beach.”
Mr. Izmirlian also spoke glowingly that a successful Baha Mar project would “showcase to the world China State’s ability to deliver an intricately designed, and complex, resort metropolis on a somewhat remote island in The Caribbean.”
So, what exactly is Mr. Izmirilian’s vision for The Bahamas, and when exactly did we outsource that vision to a private developer? And, when did New Providence become a “somewhat remote island in the Caribbean?”
Mr. Izmirlian may want to check this bit of condescension and take note that many Bahamians do not find his vision for Cable Beach in the country’s broader interest. But it is not primarily Mr. Izmirlian who the Bahamian people are questioning.
EQUITABLE DEAL
Bahamians continue to wonder why Mr. Christie and the PLP chose the family in question to redevelop one of the more valued tourism sites in the country. Whatever the reasons, the PLP cannot shirk responsibility for the fact that it is because of that choice that we are in the position we are today. Because of Baha Mar’s lack of resources, the company turned to China for financing.
The genesis and convoluted nature of the Baha Mar project rest with Mr. Christie. As the drama at Baha Mar continues to unfold, Mr. Christie and the PLP have delivered a series of mixed and often incoherent messages. This rambling has damaged their domestic credibility on Baha Mar and related matters.
While Mr. Ingraham has repeatedly stressed that his overriding concern is an equitable deal for The Bahamas, the PLP and Mr. Christie have shown divided loyalties on the Baha Mar project. Sometimes, their posturing and pandering has been comical.
Having agreed to Chinese workers building the new National Stadium and signalling that they would agree to a considerable Chinese presence to build Baha Mar, the PLP voted against allowing Chinese workers to construct the Gateway Road Project.
Never mind that there would be Bahamian workers on the road project and that the terms of the loan were quite generous. The PLP sought to score a political brownie point and ride a wave of hysteria about a Chinese takeover. Not only did most Bahamians see through such an obvious ploy, so did the Chinese Government.
In striking contrast, Ingraham has demonstrated to the Chinese that while he is prepared to do business with them, that it must be mutually beneficial to both countries. He has refrained from any China-bashing in order to pander to some elements of the populace. Undoubtedly, the Chinese have taken note.
The Chinese must also be bemused and amused by Mr. Christie’s chest-thumping on the National Stadium. The stadium is a typical gift of the Chinese Government after the launch of diplomatic relations with a developing country.
In this case, those relations were established during a previous Ingraham administration. Moreover, even after the offer of a national stadium, the Christie administration, in typical fashion, failed to get the construction started.
FAVOURABLE COMMENTARY
The Prime Minister’s tough pre-trip stance to the Chinese Government of what may be acceptable regarding Baha Mar has earned him favourable commentary in various quarters in the Caribbean. Most Bahamians are relieved that it is Mr. Ingraham and not Mr. Christie who has journeyed to China to negotiate on the country’s behalf.
International Experience: Mr. Ingraham’s domestic credibility boosts and mirrors his credibility with the Chinese Government. That credibility is reinforced by Mr. Ingraham’s decisiveness. Reportedly, the Chinese were as frustrated by Mr. Christie’s late-again manner as were the Bahamian people.
Mr. Ingraham appointed two senior figures as Bahamian Ambassador to China, including Sir Arthur Foulkes who was non-resident and former cabinet minister Elma Chase Campbell, the first resident Ambassador. While the PLP did eventually send a resident diplomat to China, it took a while and he was a relatively junior civil servant.
It is a no-brainer for the Chinese which Bahamian leader they trust to talk straight to them. It is the man and the leader of the party which, in 1997, inaugurated diplomatic relations with the most populous country on earth. It decidedly is not the leader of the party that was about to send an ambassador to Taiwan if it had won re-election.
The Chinese also respect seniority. This is the Prime Minister’s second official visit to China, his first having occurred 13 years ago. Mr. Ingraham’s international resume is extensive as a senior head of government in the Americas. He has served as Chairman of Caricom on various occasions, where he is the senior leader in the regional grouping.
Prime Minister Ingraham has overseen the bilateral interests of The Bahamas with three American Presidents from Bill Clinton to George W. Bush to Barack Obama. Recently, he was elected to chair the Boards of Governors of the International Monetary Fund and World Bank Group.
One of the press reports following Mr. Ingraham’s election noted: “The chairman’s country should also be in good standing in the international community, and the person selected to be chairman is expected to be widely respected among finance and development officials.”
The Chinese will have all of this information in their briefing notes on Mr. Ingraham as he and his delegation travel from Hong Kong to Beijing to Shanghai and are hosted at various meals.
They will find in Hubert Ingraham an appreciative guest. Yet, they will also discover, like Mr. Izmirlian, that the current Bahamian Prime Minister will not be swayed by pomp and circumstance or flattery and a few nice meals.
bahamapundit
by Simon
bahamapundit
Hubert Ingraham arrived in China in a strong and enviable position. Much of this comes from the office he holds as Prime Minister of a strategically-located Bahamas with diverse and impressive assets relative to our size.
Moreover, a considerable amount of the Prime Minister’s strengthened position is rooted in his character and experience, including a combination of international experience and domestic credibility.
The posture with which Mr. Ingraham has travelled to the emerging Chinese superpower is in obvious and stark contrast to the posture with which former Prime Minister Perry Christie would have made this journey.
Mr. Christie would have gone in a considerably weaker position for reasons rooted in his political character, including an operating style marked by indecision and pandering.
Whereas Mr. Ingraham enters into a negotiation with some inscrutability and poker-faced, Mr. Christie is generally an easy mark, easy to read and easy to push over. Bahamians know that Mr. Ingraham will always drive a harder bargain while Mr. Christie is prone to give away the store.
Domestic Credibility: On the eve of his departure for China, Mr. Ingraham and his predecessor, Opposition Leader, Perry Christie each held a press conference. In tone and substance they were a study in contrast.
Mr. Ingraham noted that Baha Mar was among one of a wide range of issues on the agenda during his trip. The Leader of the Opposition’s press conference focused almost exclusively on Baha Mar, with little reference to various other bilateral matters. Yet, what they both said about Baha Mar was revealing.
WATERSHED
The debate over Baha Mar has been another watershed for these former law partners and cabinet colleagues. The current debate is etching into the national consciousness the essential differences between the men in terms of vision, character and governance.
In his brief statement at a press conference in which Dr. Bernard Nottage took the lead in outlining the PLP’s position on Baha Mar, Mr. Christie left little doubt that he would have headed to China mostly as the gushing representative of Baha Mar.
In one of the most disturbing public performances by someone who served as prime minister, Mr. Christie all but abandoned the national interest in the favour of a private interest. It is an interest that has repeatedly demonstrated that it lacked the vision, track record and wherewithal to redevelop Cable Beach. Indeed, Baha Mar has repeatedly failed to meet various deadlines over the course of several years.
Just in September, Mr. Sarkis Izmirlian, the Chairman and Chief Executive Officer of Baha Mar spoke at a 25th anniversary event marking the China State Construction and Engineering Company’s presence in the United States.
“As some of you may know, my family and I have a vision for the country of The Bahamas, and its huge potential for tourism. We were approached by the Bahamian Government to consider redeveloping a beautiful area of Nassau called Cable Beach.”
Mr. Izmirlian also spoke glowingly that a successful Baha Mar project would “showcase to the world China State’s ability to deliver an intricately designed, and complex, resort metropolis on a somewhat remote island in The Caribbean.”
So, what exactly is Mr. Izmirilian’s vision for The Bahamas, and when exactly did we outsource that vision to a private developer? And, when did New Providence become a “somewhat remote island in the Caribbean?”
Mr. Izmirlian may want to check this bit of condescension and take note that many Bahamians do not find his vision for Cable Beach in the country’s broader interest. But it is not primarily Mr. Izmirlian who the Bahamian people are questioning.
EQUITABLE DEAL
Bahamians continue to wonder why Mr. Christie and the PLP chose the family in question to redevelop one of the more valued tourism sites in the country. Whatever the reasons, the PLP cannot shirk responsibility for the fact that it is because of that choice that we are in the position we are today. Because of Baha Mar’s lack of resources, the company turned to China for financing.
The genesis and convoluted nature of the Baha Mar project rest with Mr. Christie. As the drama at Baha Mar continues to unfold, Mr. Christie and the PLP have delivered a series of mixed and often incoherent messages. This rambling has damaged their domestic credibility on Baha Mar and related matters.
While Mr. Ingraham has repeatedly stressed that his overriding concern is an equitable deal for The Bahamas, the PLP and Mr. Christie have shown divided loyalties on the Baha Mar project. Sometimes, their posturing and pandering has been comical.
Having agreed to Chinese workers building the new National Stadium and signalling that they would agree to a considerable Chinese presence to build Baha Mar, the PLP voted against allowing Chinese workers to construct the Gateway Road Project.
Never mind that there would be Bahamian workers on the road project and that the terms of the loan were quite generous. The PLP sought to score a political brownie point and ride a wave of hysteria about a Chinese takeover. Not only did most Bahamians see through such an obvious ploy, so did the Chinese Government.
In striking contrast, Ingraham has demonstrated to the Chinese that while he is prepared to do business with them, that it must be mutually beneficial to both countries. He has refrained from any China-bashing in order to pander to some elements of the populace. Undoubtedly, the Chinese have taken note.
The Chinese must also be bemused and amused by Mr. Christie’s chest-thumping on the National Stadium. The stadium is a typical gift of the Chinese Government after the launch of diplomatic relations with a developing country.
In this case, those relations were established during a previous Ingraham administration. Moreover, even after the offer of a national stadium, the Christie administration, in typical fashion, failed to get the construction started.
FAVOURABLE COMMENTARY
The Prime Minister’s tough pre-trip stance to the Chinese Government of what may be acceptable regarding Baha Mar has earned him favourable commentary in various quarters in the Caribbean. Most Bahamians are relieved that it is Mr. Ingraham and not Mr. Christie who has journeyed to China to negotiate on the country’s behalf.
International Experience: Mr. Ingraham’s domestic credibility boosts and mirrors his credibility with the Chinese Government. That credibility is reinforced by Mr. Ingraham’s decisiveness. Reportedly, the Chinese were as frustrated by Mr. Christie’s late-again manner as were the Bahamian people.
Mr. Ingraham appointed two senior figures as Bahamian Ambassador to China, including Sir Arthur Foulkes who was non-resident and former cabinet minister Elma Chase Campbell, the first resident Ambassador. While the PLP did eventually send a resident diplomat to China, it took a while and he was a relatively junior civil servant.
It is a no-brainer for the Chinese which Bahamian leader they trust to talk straight to them. It is the man and the leader of the party which, in 1997, inaugurated diplomatic relations with the most populous country on earth. It decidedly is not the leader of the party that was about to send an ambassador to Taiwan if it had won re-election.
The Chinese also respect seniority. This is the Prime Minister’s second official visit to China, his first having occurred 13 years ago. Mr. Ingraham’s international resume is extensive as a senior head of government in the Americas. He has served as Chairman of Caricom on various occasions, where he is the senior leader in the regional grouping.
Prime Minister Ingraham has overseen the bilateral interests of The Bahamas with three American Presidents from Bill Clinton to George W. Bush to Barack Obama. Recently, he was elected to chair the Boards of Governors of the International Monetary Fund and World Bank Group.
One of the press reports following Mr. Ingraham’s election noted: “The chairman’s country should also be in good standing in the international community, and the person selected to be chairman is expected to be widely respected among finance and development officials.”
The Chinese will have all of this information in their briefing notes on Mr. Ingraham as he and his delegation travel from Hong Kong to Beijing to Shanghai and are hosted at various meals.
They will find in Hubert Ingraham an appreciative guest. Yet, they will also discover, like Mr. Izmirlian, that the current Bahamian Prime Minister will not be swayed by pomp and circumstance or flattery and a few nice meals.
bahamapundit
Saturday, October 23, 2010
The Progressive Liberal Party (PLP) supports the $2.6 billion Baha Mar project
PLP SUPPORTS BAHA MAR
By KEVA LIGHTBOURNE
Guardian Senior Reporter
kdl@nasguard.com
Progressive Liberal Party (PLP)Leader Perry Christie last night threw his party's support behind the $2.6 billion Baha Mar project, while accusing Prime Minister Hubert Ingraham of seeking to negotiate a new Cable Beach deal on his upcoming trip to China.
At an hour-and-a-half news conference held at the PLP's Farrington Road headquarters, Christie stressed that the current economic conditions in the country call for the project to be embraced.
"It is in a very real sense, the only new substantial ray of sunshine that has presented itself. Nothing else holds out the kind of promise that Baha Mar does,"said Christie.
"It is not so much that it is the best big project that is available right now, the reality is that it is the only big project that is available to us right now. We do not have a choice. We do not have the luxury of choosing between the Baha Mar project and some other big project. Baha Mar is the only one that has the capacity right now to inject some desperately needed adrenaline into this anemic economy that is ailing us now."
Christie said it would be useless for Ingraham to negotiate a new deal with the Chinese without project developer Sarkis Izmirlian and his group at the same negotiating table.
"There needs to be a tripartite approach to this. Simple logic and plain, good sense demand it,"said the PLP leader.
"Suppose the prime minister negotiates a new deal that the Izmirlians cannot or will not live with? What then? What would he have accomplished then?" Christie asked." In that case, one foot forward would have been taken followed by two steps backward. That makes no kind of sense."
Ingraham is scheduled to leave for China today. He said earlier this week he would be meeting with China State Construction Engineering Corporation and the China Export-Import Bank to discuss the project the proposed contractor and financier of the project.
"I therefore call upon the prime minister to invite representatives of the Baha Mar group to join his meeting with the Chinese in China. It is, after all, Baha Mar's project. It seems only sensible and logical and appropriate to have the project owners at the table too so that everything can be settled all at the same time,"Christie said.
The opposition leader also criticized Ingraham for, what he described as, changing the requirements the developers must satisfy before the deal reaches Parliament.
"We don't have a hope in hell of being taken seriously by investors, especially in these very difficult times, if we continue to have a prime minister who keeps on changing the rules of engagement with investors, and who on top of that, believes in negotiation by press conferences,"Christie said.
"You cannot be calling press conferences to tell investors what they must do in order to win your favor. You cannot be telling them one thing in private and then call a press conference to lay down a whole new set of conditions."
Baha Mar's vision is to create a world-class resort destination, which represents the largest single-phase resort in the Caribbean.
Baha Mar has requested 8,150 work permits for the project. It is expected that the majority of the foreign workers helping to construct the project will be Chinese. The current deal requires that the core of the project be exclusively built by foreign labor.
The PLP's official 38-page position on Baha Mar was delivered by Bain and Grants Town MP Dr. Bernard Nottage.
While stating that the PLP supports the project, Dr. Nottage said they expect any deal would:
- Maximize the participation of Bahamian construction and related labor content, including both skilled and unskilled workers.
- Minimize the foreign construction labor content to that which is required for the successful completion and implementation of the project.
- Ensure training and skills transfer for Bahamian construction workers during the course of the entire project.
- Ensure that Bahamians are trained and available for permanent jobs in the operation of the resort.
- Ensure that there will be a myriad of opportunities for Bahamian entrepreneurs to benefit from in the resort when completed.
"The size and scope of this project represent the magnitude of what is needed to provide jobs for the vast number of Bahamian citizens who emerge onto the job market on an annual basis,"said Dr. Nottage.
10/22/2010
thenassauguardian
By KEVA LIGHTBOURNE
Guardian Senior Reporter
kdl@nasguard.com
Progressive Liberal Party (PLP)Leader Perry Christie last night threw his party's support behind the $2.6 billion Baha Mar project, while accusing Prime Minister Hubert Ingraham of seeking to negotiate a new Cable Beach deal on his upcoming trip to China.
At an hour-and-a-half news conference held at the PLP's Farrington Road headquarters, Christie stressed that the current economic conditions in the country call for the project to be embraced.
"It is in a very real sense, the only new substantial ray of sunshine that has presented itself. Nothing else holds out the kind of promise that Baha Mar does,"said Christie.
"It is not so much that it is the best big project that is available right now, the reality is that it is the only big project that is available to us right now. We do not have a choice. We do not have the luxury of choosing between the Baha Mar project and some other big project. Baha Mar is the only one that has the capacity right now to inject some desperately needed adrenaline into this anemic economy that is ailing us now."
Christie said it would be useless for Ingraham to negotiate a new deal with the Chinese without project developer Sarkis Izmirlian and his group at the same negotiating table.
"There needs to be a tripartite approach to this. Simple logic and plain, good sense demand it,"said the PLP leader.
"Suppose the prime minister negotiates a new deal that the Izmirlians cannot or will not live with? What then? What would he have accomplished then?" Christie asked." In that case, one foot forward would have been taken followed by two steps backward. That makes no kind of sense."
Ingraham is scheduled to leave for China today. He said earlier this week he would be meeting with China State Construction Engineering Corporation and the China Export-Import Bank to discuss the project the proposed contractor and financier of the project.
"I therefore call upon the prime minister to invite representatives of the Baha Mar group to join his meeting with the Chinese in China. It is, after all, Baha Mar's project. It seems only sensible and logical and appropriate to have the project owners at the table too so that everything can be settled all at the same time,"Christie said.
The opposition leader also criticized Ingraham for, what he described as, changing the requirements the developers must satisfy before the deal reaches Parliament.
"We don't have a hope in hell of being taken seriously by investors, especially in these very difficult times, if we continue to have a prime minister who keeps on changing the rules of engagement with investors, and who on top of that, believes in negotiation by press conferences,"Christie said.
"You cannot be calling press conferences to tell investors what they must do in order to win your favor. You cannot be telling them one thing in private and then call a press conference to lay down a whole new set of conditions."
Baha Mar's vision is to create a world-class resort destination, which represents the largest single-phase resort in the Caribbean.
Baha Mar has requested 8,150 work permits for the project. It is expected that the majority of the foreign workers helping to construct the project will be Chinese. The current deal requires that the core of the project be exclusively built by foreign labor.
The PLP's official 38-page position on Baha Mar was delivered by Bain and Grants Town MP Dr. Bernard Nottage.
While stating that the PLP supports the project, Dr. Nottage said they expect any deal would:
- Maximize the participation of Bahamian construction and related labor content, including both skilled and unskilled workers.
- Minimize the foreign construction labor content to that which is required for the successful completion and implementation of the project.
- Ensure training and skills transfer for Bahamian construction workers during the course of the entire project.
- Ensure that Bahamians are trained and available for permanent jobs in the operation of the resort.
- Ensure that there will be a myriad of opportunities for Bahamian entrepreneurs to benefit from in the resort when completed.
"The size and scope of this project represent the magnitude of what is needed to provide jobs for the vast number of Bahamian citizens who emerge onto the job market on an annual basis,"said Dr. Nottage.
10/22/2010
thenassauguardian
Thursday, September 23, 2010
Baha Mar Development... Debate
Debate on the Baha Mar development
By LARRY SMITH
DEBATE on the government's resolution to approve the Baha Mar development was scheduled to begin today in Parliament - five years after the initial deal was concluded in 2005. But the debate was postponed until the project's principals can come to terms with the Bank of Nova Scotia on outstanding debt.
It's been a long road - although not quite as long as the 13-year BTC sell-off - and conditions in 2005 were vastly different from what they are today. Back then, the credit boom underway in the US had a marked spillover effect on the Bahamas, with major developments planned around the country.
But most of these projects collapsed in the wake of the Great Recession that swept the world in 2008. The Baha Mar project was kept ticking over, even when the original joint venture partners withdrew. It was the brainchild of a Lyford Cay resident named Sarkis Izmirlian, whose grandfather left Armenia in the final years of the Ottoman Empire.
Sarkis' father, Dikran, made his fortune by cornering the world peanut trade. And the family became property developers in Britain, where one of their companies owns the 13-acre site on which London's City Hall is located. While Dikran lives in Switzerland, Sarkis manages the family's assets from the Bahamas.
He is said to be an astute developer who conceived the grandiose Baha Mar project partly to make a name for himself. But the project has been able to survive only because the Chinese are investing their huge currency reserves in support of their strategic interests. According to China's Commerce Ministry, some 800,000 Chinese are now working on energy, infrastructure and housing projects around the world.
Without clear evidence, we should discount the allegations that have been made about the use of Chinese convicts as workers on these projects. But we do think it makes sense for our government to seek a broad political consensus for the project in view of the large foreign labour component.
The 1,000-acre Baha Mar project is owned by the Izmirlian family, with the Chinese Export-Import Bank providing $2.5 billion in financing over 20 years and the China State Construction & Engineering Co as principal contractor.
Challenges
It was unclear at this writing whether the Bank of Nova Scotia, which financed the Izmirlian's earlier acquisition of Cable Beach hotels, would become an equity investor. But it is fair to ask how Baha Mar expects to repay a $2.5 billion loan from China when it has already encountered challenges servicing the current $200 million loan to Scotiabank.
Still, it is the view of most observers that Cable Beach needs to be redeveloped for the country's tourism industry to remain competitive, and whether the land used for collateral is conveyed on a long-term lease or as freehold is beside the point.
The optimum use for that land is resort development and nobody else in the current environment can finance such a project.
And even though a large portion of the $2.5 billion will return to China in the form of interest, wages and materials purchases, this is still a major foreign investment for the Bahamas that will help to stimulate the economy in the short term and drive tourism growth in the longer term.
Conflict of Interest
According to the Institute of Auditors, conflict of interest is when someone in a position of trust has a competing professional or personal interest that makes it difficult to fulfil his or her duties impartially, or that creates an appearance of impropriety.
But exactly what does that mean in the Bahamas? Well, the short answer is...very little.
The Bahamas is a small place, which makes it difficult for any of us to avoid apparent conflicts. And they happen all the time, at every level, in both the public and private sectors. There are very few explicit rules, and even where rules exist, there are no real sanctions.
In the political realm, the old United Bahamian Party oligarchs have been described as "the poster boys for conflict of interest and corruption." Back before the days when cabinet ministers earned official salaries, UBP politicos routinely represented companies doing business with the government and awarded themselves contracts as a matter of right.
Things were so bad that prior to the 1967 general election the UBP itself had issued a code of ethics requiring ministers to withdraw from any case in which they had a private interest.
But that didn't stop politicians like Sir Stafford Sands from acting as paid agents for Freeport gambling interests, as documented by the 1967 Commission of Inquiry.
Sands (who was finance and tourism minister at the time) received over $1.8 million in consultancy fees from the Grand Bahama Port Authority between 1962 and 1966. The Port also gave hundreds of thousands of dollars in political contributions to the UBP.
When the Progressive Liberal Party came to power in 1967 it promised to change all that.
The Pindling administration issued a new code of ethics that prohibited ministers from accepting substantial gifts from persons doing business with the government.
Fast forward 15 years and the Bahamas was in the throes of a criminal takeover by South American drug cartels.
The Colombian flag was raised over Norman's Cay in George Smith's Exuma constituency by the notorious gangster Carlos Lehder, who drove ordinary visitors away at gunpoint and orchestrated hourly cocaine flights to the US.
The 1984 Commission of Inquiry found that Smith had accepted gifts and hospitality from Lehder, who is now serving a long sentence in an American jail. In fact, one parliamentarian said at the time that "Pindling and his crew make the Bay Street Boys look like schoolchildren."
The 1993 inquiries into Bahamasair and the Hotel Corporation were initiated by the first Free National Movement government. They documented decades of gross mismanagement, conflict of interest, and official corruption under the PLP. In response, the FNM promised a government in the sunshine that would be fully accountable to the people.
In the years since there have been many accusations of conflict of interest featuring politicians of both major parties, but none of them have matched the scale and sheer brazenness of those earlier controversies.
For example, during the second FNM administration Brent Symonette resigned as chairman of the Airport Authority after it became known that a company in which he had a minor interest had been contracted to do paving work at the airport. Charges were made against Tommy Turnquest for allowing an air conditioning contractor to pay for his leader-elect victory party. And Dion Foulkes was accused of awarding contracts for school repairs without a public tender.
When the PLP was re-elected in 2002, Perry Christie made a lot of noise about integrity in public life, and issued another code of ethics for ministers that basically re-stated existing guidelines. But his promised law codifying rules on conflict of interest never came before parliament.
Controversies
And so the controversies continued. Leslie Miller and other PLP officials were accused of renting buildings to the government they served, a common practice.
Minister of Local Government V. Alfred Gray was accused of remaining active in his law firm, which was representing one party in a local government dispute. Neville Wisdom faced charges of impropriety in awarding contracts for Junkanoo bleachers.
PLP Minister Bradley Roberts and then chairman of the Water & Sewerage Corporation Don Demeritte were accused of leading a conspiracy that would have bilked Bahamians of millions of dollars. According to testimony in an industrial tribunal, the chairman instructed the corporation's general manager to call off the bidding process for a reverse osmosis plant at Arawak Cay, and start negotiations with a firm whose principal was Jerome Fitzgerald, a PLP senator. This matter is still before the court.
The most sensational case of conflict of interest during the PLP's last term involved Shane Gibson's relationship with expired American sex symbol Anna Nicole Smith.
Gibson resigned from the cabinet in February 2007 after The Tribune published embarrassing photos of him on a bed with Smith at her Eastern Road home, although both were fully clothed.
Gibson insisted he did not have a sexual relationship with Smith and denied doing her any favours.
At the time, the "attack" on Shane was characterised by a fellow PLP minister as "the successful manipulation of misinformation by people whose stock in trade is nastiness and sleaze."
Well, now we have something that trumps all of that potted history.
A minister who takes advantage of a private helicopter flight in order to attend two official meetings on two different islands over two consecutive days - the evening premiere of a conservation film on Abaco, and a meeting with visiting American experts in the Exuma Cays the next morning.
"I would not have been able to do either with regular flights, or even make the previously agreed times by boat," Environment Minister Earl Deveaux told me. "It is difficult, if not impossible, to discharge this job, with the required oversight, if we are not able to use the facilities of the principals."
For George Smith's information, the Aga Khan is not a criminal - unlike Carlos Lehder. He is as desirable an investor as Sarkis Izmirlian. His Swiss-registered Development Network runs a variety of multi-billion-dollar humanitarian programmes in 25 countries around the world. And the Aga Khan Health Services is one of the most comprehensive, private, not-for-profit healthcare systems in the developing world.
Before we jump to conclusions, perhaps we should ask what are the actual regulations that apply to official conflict of interest in the Bahamas these days.
The answer to that question is contained in the manual of cabinet procedure, which states that a minister "must not, except as may be permitted under the rules applicable to his office, accept any gift, hospitality or concessional travel offered in connection with the discharge of his duties."
On my reading, accepting a trip for a personal benefit rather than for a public duty would likely be considered a breach of this rule.
Yet incumbents of both major parties have accepted personal hospitality from big investors or foreign governments fairly routinely over the years, and usually without any controversy.
The real elephant in the room in this context is the financing of political parties by big investors and corporate interests.
There are no rules at all in this regard, and everything is done behind closed doors.
I have it on good authority that each of the 82 main party candidates in the 2007 general election received an average of $30,000 in campaign funds. Added to that are general party expenses for advertising, printing, logistics, travel, and give-aways.
Clearly, Bahamian elections cost millions of dollars. Where do you think that money comes from?
So should we be concerned about a free helicopter ride to a business meeting? You be the judge.
What do you think?
Send comments to
larry@tribunemedia.net
Or visit www.bahamapundit.com
September 22, 2010
tribune242
By LARRY SMITH
DEBATE on the government's resolution to approve the Baha Mar development was scheduled to begin today in Parliament - five years after the initial deal was concluded in 2005. But the debate was postponed until the project's principals can come to terms with the Bank of Nova Scotia on outstanding debt.
It's been a long road - although not quite as long as the 13-year BTC sell-off - and conditions in 2005 were vastly different from what they are today. Back then, the credit boom underway in the US had a marked spillover effect on the Bahamas, with major developments planned around the country.
But most of these projects collapsed in the wake of the Great Recession that swept the world in 2008. The Baha Mar project was kept ticking over, even when the original joint venture partners withdrew. It was the brainchild of a Lyford Cay resident named Sarkis Izmirlian, whose grandfather left Armenia in the final years of the Ottoman Empire.
Sarkis' father, Dikran, made his fortune by cornering the world peanut trade. And the family became property developers in Britain, where one of their companies owns the 13-acre site on which London's City Hall is located. While Dikran lives in Switzerland, Sarkis manages the family's assets from the Bahamas.
He is said to be an astute developer who conceived the grandiose Baha Mar project partly to make a name for himself. But the project has been able to survive only because the Chinese are investing their huge currency reserves in support of their strategic interests. According to China's Commerce Ministry, some 800,000 Chinese are now working on energy, infrastructure and housing projects around the world.
Without clear evidence, we should discount the allegations that have been made about the use of Chinese convicts as workers on these projects. But we do think it makes sense for our government to seek a broad political consensus for the project in view of the large foreign labour component.
The 1,000-acre Baha Mar project is owned by the Izmirlian family, with the Chinese Export-Import Bank providing $2.5 billion in financing over 20 years and the China State Construction & Engineering Co as principal contractor.
Challenges
It was unclear at this writing whether the Bank of Nova Scotia, which financed the Izmirlian's earlier acquisition of Cable Beach hotels, would become an equity investor. But it is fair to ask how Baha Mar expects to repay a $2.5 billion loan from China when it has already encountered challenges servicing the current $200 million loan to Scotiabank.
Still, it is the view of most observers that Cable Beach needs to be redeveloped for the country's tourism industry to remain competitive, and whether the land used for collateral is conveyed on a long-term lease or as freehold is beside the point.
The optimum use for that land is resort development and nobody else in the current environment can finance such a project.
And even though a large portion of the $2.5 billion will return to China in the form of interest, wages and materials purchases, this is still a major foreign investment for the Bahamas that will help to stimulate the economy in the short term and drive tourism growth in the longer term.
Conflict of Interest
According to the Institute of Auditors, conflict of interest is when someone in a position of trust has a competing professional or personal interest that makes it difficult to fulfil his or her duties impartially, or that creates an appearance of impropriety.
But exactly what does that mean in the Bahamas? Well, the short answer is...very little.
The Bahamas is a small place, which makes it difficult for any of us to avoid apparent conflicts. And they happen all the time, at every level, in both the public and private sectors. There are very few explicit rules, and even where rules exist, there are no real sanctions.
In the political realm, the old United Bahamian Party oligarchs have been described as "the poster boys for conflict of interest and corruption." Back before the days when cabinet ministers earned official salaries, UBP politicos routinely represented companies doing business with the government and awarded themselves contracts as a matter of right.
Things were so bad that prior to the 1967 general election the UBP itself had issued a code of ethics requiring ministers to withdraw from any case in which they had a private interest.
But that didn't stop politicians like Sir Stafford Sands from acting as paid agents for Freeport gambling interests, as documented by the 1967 Commission of Inquiry.
Sands (who was finance and tourism minister at the time) received over $1.8 million in consultancy fees from the Grand Bahama Port Authority between 1962 and 1966. The Port also gave hundreds of thousands of dollars in political contributions to the UBP.
When the Progressive Liberal Party came to power in 1967 it promised to change all that.
The Pindling administration issued a new code of ethics that prohibited ministers from accepting substantial gifts from persons doing business with the government.
Fast forward 15 years and the Bahamas was in the throes of a criminal takeover by South American drug cartels.
The Colombian flag was raised over Norman's Cay in George Smith's Exuma constituency by the notorious gangster Carlos Lehder, who drove ordinary visitors away at gunpoint and orchestrated hourly cocaine flights to the US.
The 1984 Commission of Inquiry found that Smith had accepted gifts and hospitality from Lehder, who is now serving a long sentence in an American jail. In fact, one parliamentarian said at the time that "Pindling and his crew make the Bay Street Boys look like schoolchildren."
The 1993 inquiries into Bahamasair and the Hotel Corporation were initiated by the first Free National Movement government. They documented decades of gross mismanagement, conflict of interest, and official corruption under the PLP. In response, the FNM promised a government in the sunshine that would be fully accountable to the people.
In the years since there have been many accusations of conflict of interest featuring politicians of both major parties, but none of them have matched the scale and sheer brazenness of those earlier controversies.
For example, during the second FNM administration Brent Symonette resigned as chairman of the Airport Authority after it became known that a company in which he had a minor interest had been contracted to do paving work at the airport. Charges were made against Tommy Turnquest for allowing an air conditioning contractor to pay for his leader-elect victory party. And Dion Foulkes was accused of awarding contracts for school repairs without a public tender.
When the PLP was re-elected in 2002, Perry Christie made a lot of noise about integrity in public life, and issued another code of ethics for ministers that basically re-stated existing guidelines. But his promised law codifying rules on conflict of interest never came before parliament.
Controversies
And so the controversies continued. Leslie Miller and other PLP officials were accused of renting buildings to the government they served, a common practice.
Minister of Local Government V. Alfred Gray was accused of remaining active in his law firm, which was representing one party in a local government dispute. Neville Wisdom faced charges of impropriety in awarding contracts for Junkanoo bleachers.
PLP Minister Bradley Roberts and then chairman of the Water & Sewerage Corporation Don Demeritte were accused of leading a conspiracy that would have bilked Bahamians of millions of dollars. According to testimony in an industrial tribunal, the chairman instructed the corporation's general manager to call off the bidding process for a reverse osmosis plant at Arawak Cay, and start negotiations with a firm whose principal was Jerome Fitzgerald, a PLP senator. This matter is still before the court.
The most sensational case of conflict of interest during the PLP's last term involved Shane Gibson's relationship with expired American sex symbol Anna Nicole Smith.
Gibson resigned from the cabinet in February 2007 after The Tribune published embarrassing photos of him on a bed with Smith at her Eastern Road home, although both were fully clothed.
Gibson insisted he did not have a sexual relationship with Smith and denied doing her any favours.
At the time, the "attack" on Shane was characterised by a fellow PLP minister as "the successful manipulation of misinformation by people whose stock in trade is nastiness and sleaze."
Well, now we have something that trumps all of that potted history.
A minister who takes advantage of a private helicopter flight in order to attend two official meetings on two different islands over two consecutive days - the evening premiere of a conservation film on Abaco, and a meeting with visiting American experts in the Exuma Cays the next morning.
"I would not have been able to do either with regular flights, or even make the previously agreed times by boat," Environment Minister Earl Deveaux told me. "It is difficult, if not impossible, to discharge this job, with the required oversight, if we are not able to use the facilities of the principals."
For George Smith's information, the Aga Khan is not a criminal - unlike Carlos Lehder. He is as desirable an investor as Sarkis Izmirlian. His Swiss-registered Development Network runs a variety of multi-billion-dollar humanitarian programmes in 25 countries around the world. And the Aga Khan Health Services is one of the most comprehensive, private, not-for-profit healthcare systems in the developing world.
Before we jump to conclusions, perhaps we should ask what are the actual regulations that apply to official conflict of interest in the Bahamas these days.
The answer to that question is contained in the manual of cabinet procedure, which states that a minister "must not, except as may be permitted under the rules applicable to his office, accept any gift, hospitality or concessional travel offered in connection with the discharge of his duties."
On my reading, accepting a trip for a personal benefit rather than for a public duty would likely be considered a breach of this rule.
Yet incumbents of both major parties have accepted personal hospitality from big investors or foreign governments fairly routinely over the years, and usually without any controversy.
The real elephant in the room in this context is the financing of political parties by big investors and corporate interests.
There are no rules at all in this regard, and everything is done behind closed doors.
I have it on good authority that each of the 82 main party candidates in the 2007 general election received an average of $30,000 in campaign funds. Added to that are general party expenses for advertising, printing, logistics, travel, and give-aways.
Clearly, Bahamian elections cost millions of dollars. Where do you think that money comes from?
So should we be concerned about a free helicopter ride to a business meeting? You be the judge.
What do you think?
Send comments to
larry@tribunemedia.net
Or visit www.bahamapundit.com
September 22, 2010
tribune242
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
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
Thursday, September 9, 2010
Baha Mar Chairman and CEO Sarkis Izmirlian Allays Foreign Worker Fears
Baha Mar Chief Allays Foreign Worker Fears
By IANTHIA SMITH
Clearing the air on the foreign labour component of his multi-billion dollar proposed hotel project, Baha Mar Chairman and CEO Sarkis Izmirlian claimed the situation is not as bad as it looks, as thousands of Chinese workers will not be in the country long.
In fact, Mr. Izmirlian said the whole labour issue surrounding Baha Mar has been totally misconstrued.
"It’s true that at the peak of construction we are going to have about 4,950 expat workers in The Bahamas, but that is only for a period of six months," he explained when he appeared as a guest on the Love 97/JCN weekly talk show "Jones and Co with host Wendall Jones on Sunday.
"Construction [will last for] four years. During the four years, the average number of expat workers is only going to be 1,700. So it is much lower than the numbers that are being put out there. But the best part is when construction is over and the expats go home, we are going to create 6,500 full-time high paying Bahamian jobs."
Initial reports indicated that the Chinese government proposed to hire 3,300 Bahamians during the construction phase of the Cable Beach project and 5,000 to 8,000 Chinese workers.
Government officials said this translates into five Chinese workers to every three Bahamian workers.
Recently commenting on the disparity, National Security Minister Tommy Turnquest said never has any government policy allowed a ratio of non-Bahamian to Bahamian workers on construction projects of this magnitude.
But according to Mr. Izmirlian, the plan is to create 4,000 Bahamian jobs during construction.
"When you compare the number of expats, the number of Bahamian jobs and the economic impact during construction it is really as not as it has been described in the press," he said.
The government is expected to bring a resolution to parliament tomorrow to determine the number of Chinese labourers required for the project, a move former Cabinet minister Pierre Dupuch calls "illegal."
He claims it usurps the constitutional power given to the government.
But the number of Chinese labourers is not the only issue Baha Mar officials face.
Whether the project moves ahead is contingent on Baha Mar resolving its debt with Scotiabank.
Baha Mar owes the bank some $200 million.
On Sunday, Mr. Izmirlian moved to allay any fears of his company’s inability to satisfy the debt.
"We’re committed to finding a solution with the bank. We are committed to moving this project forward for me, my family and for the benefit of The Bahamas. I don’t see that as a hindrance," he said.
"Again, it takes a little bit of time, but I think we’ve reached a point where we are ready. The government is ready to bring this to parliament. We’re ready to start construction, so hopefully over the next few weeks, we should be done."
When asked if he thinks the project has become political, Mr. Izmirlian said, "any project of this size would be."
"I hope that we can put the politics behind us because to me the message from the Bahamian people is loud and clear – they want to move on. They need jobs. The country needs it," he said.
"I can’t think of a downside to this project. It’s great to create a small hotel here in The Bahamas, but when you have this level of unemployment, this many children coming out of school each year, you need a big bang. You don’t need a promise of the future. You need it today."
Officials from the National Congress of Trade Unions of the Bahamas (NCTUB) recently threw their support behind the development, claiming they are satisfied the controversial project is in the country’s best interest.
NCTUB President John Pinder said his union also supports the number of foreign workers being drafted as, "we do not have the skill set to do this project on our own."
Mr. Izmirlian accepts that more training is needed.
In fact, he said very early after construction starts, Baha Mar will work with the various unions, the Bahamas Technical and Vocational Institute (BTVI) and other schools to train Bahamians.
"We need to give them the skills so that when the hotel opens, they are ready to start," he said.
"It’s going to be a challenge to train people, but our goal is to train, train and train."
Baha Mar is projected to generate almost $15 billion in GDP, with more than 8,100 direct and indirect jobs, totaling in excess of $7 billion in wages over a 20-year period.
September 7th, 2010
jonesbahamas
By IANTHIA SMITH
Clearing the air on the foreign labour component of his multi-billion dollar proposed hotel project, Baha Mar Chairman and CEO Sarkis Izmirlian claimed the situation is not as bad as it looks, as thousands of Chinese workers will not be in the country long.
In fact, Mr. Izmirlian said the whole labour issue surrounding Baha Mar has been totally misconstrued.
"It’s true that at the peak of construction we are going to have about 4,950 expat workers in The Bahamas, but that is only for a period of six months," he explained when he appeared as a guest on the Love 97/JCN weekly talk show "Jones and Co with host Wendall Jones on Sunday.
"Construction [will last for] four years. During the four years, the average number of expat workers is only going to be 1,700. So it is much lower than the numbers that are being put out there. But the best part is when construction is over and the expats go home, we are going to create 6,500 full-time high paying Bahamian jobs."
Initial reports indicated that the Chinese government proposed to hire 3,300 Bahamians during the construction phase of the Cable Beach project and 5,000 to 8,000 Chinese workers.
Government officials said this translates into five Chinese workers to every three Bahamian workers.
Recently commenting on the disparity, National Security Minister Tommy Turnquest said never has any government policy allowed a ratio of non-Bahamian to Bahamian workers on construction projects of this magnitude.
But according to Mr. Izmirlian, the plan is to create 4,000 Bahamian jobs during construction.
"When you compare the number of expats, the number of Bahamian jobs and the economic impact during construction it is really as not as it has been described in the press," he said.
The government is expected to bring a resolution to parliament tomorrow to determine the number of Chinese labourers required for the project, a move former Cabinet minister Pierre Dupuch calls "illegal."
He claims it usurps the constitutional power given to the government.
But the number of Chinese labourers is not the only issue Baha Mar officials face.
Whether the project moves ahead is contingent on Baha Mar resolving its debt with Scotiabank.
Baha Mar owes the bank some $200 million.
On Sunday, Mr. Izmirlian moved to allay any fears of his company’s inability to satisfy the debt.
"We’re committed to finding a solution with the bank. We are committed to moving this project forward for me, my family and for the benefit of The Bahamas. I don’t see that as a hindrance," he said.
"Again, it takes a little bit of time, but I think we’ve reached a point where we are ready. The government is ready to bring this to parliament. We’re ready to start construction, so hopefully over the next few weeks, we should be done."
When asked if he thinks the project has become political, Mr. Izmirlian said, "any project of this size would be."
"I hope that we can put the politics behind us because to me the message from the Bahamian people is loud and clear – they want to move on. They need jobs. The country needs it," he said.
"I can’t think of a downside to this project. It’s great to create a small hotel here in The Bahamas, but when you have this level of unemployment, this many children coming out of school each year, you need a big bang. You don’t need a promise of the future. You need it today."
Officials from the National Congress of Trade Unions of the Bahamas (NCTUB) recently threw their support behind the development, claiming they are satisfied the controversial project is in the country’s best interest.
NCTUB President John Pinder said his union also supports the number of foreign workers being drafted as, "we do not have the skill set to do this project on our own."
Mr. Izmirlian accepts that more training is needed.
In fact, he said very early after construction starts, Baha Mar will work with the various unions, the Bahamas Technical and Vocational Institute (BTVI) and other schools to train Bahamians.
"We need to give them the skills so that when the hotel opens, they are ready to start," he said.
"It’s going to be a challenge to train people, but our goal is to train, train and train."
Baha Mar is projected to generate almost $15 billion in GDP, with more than 8,100 direct and indirect jobs, totaling in excess of $7 billion in wages over a 20-year period.
September 7th, 2010
jonesbahamas
Monday, August 23, 2010
The Progressive Liberal Party (PLP) change of heart on the Baha Mar deal and work permits for as many as 8,000 Chinese workers
PLP MAY CHANGE STANCE ON BAHA MAR
By KRYSTEL ROLLE
Guardian Staff Reporter
krystel@nasguard.com:
The Progressive Liberal Party(PLP)may have had a change of heart as it relates to its stance on the controversial foreign work component issue surrounding the Baha Mar deal - which could result in as many as 8,000 Chinese workers being granted work permits.
Yesterday PLP Leader Perry Christie said despite indicating in June that the party would not involve itself in the decision to allow thousands of Chinese workers to receive work permits, he would do what is best for the country.
"We have since met with the principle shareholder of Baha Mar and we were briefed by the top executives of the company, Christie said. "We are meeting this afternoon to consider our position on the matter in anticipation of going back to Parliament.
"The Progressive Liberal Party is absolutely aware of the state of our economy--the deteriorated state of our economy and the urgency for there to be some kind of development.
"In that regard we are going to take a position based on the needs of the country. And we're not going to be tied to anything that I may have said in the past in regards to the work permits. We want to be able to provide a very concerted view on the matter. We(the PLP)begin meeting on the matter at our parliamentary meeting today(yesterday).
In June, Prime Minister Hubert Ingraham said the approval of the "extraordinary" number of Chinese workers required to help construct the resort development would not be given without opposition support.
But at that time, Christie said the prime minister is "on his very own" as it regards deciding on the Baha Mar labor issue.
He said the PLP had not been given sufficient information on the deal and therefore would not involve itself. When speaking with The Nassau Guardian yesterday, Christie said he still has not spoken to the prime minister yet.
"I know representatives have met with the Chinese ambassador, and I don't know if the prime misinter has some special information to provide me with, but I anticipate that if he has new information that would be provided to me prior to our going to Parliament. I have not heard from him yet."
Ingraham met with Chinese Ambassador Hu Dingxian at the Office of the Prime Minister in Cable Beach on Thursday, to discuss the Baha Mar project.
Last week The Guardian also spoke to Leader of Government Business in the House of Assembly Tommy Turnquest, who confirmed that the Ingraham administration intends to bring the labor resolution to Parliament on September 8.
The Guardian understands that since the announcement from the Cabinet Office late last month that the government of the People's Republic of China had approved the Baha Mar deal, Baha Mar officials have been meeting with officials from the prime minister's office to answer questions about the project.
Turnquest said the MPs would be allowed to express their views on the labor issue before the government makes a final determination.
If a majority of MPs take issue with that component, he said the government would have to take that into consideration prior to making its decision.
Turnquest said publicly that at the height of construction Baha Mar could have up to 8,000 foreign workers on the project.
Baha Mar has said that out of the 10,000 proposed construction jobs the project will create, at least 3,300 will be set aside for Bahamians. Eight thousand permanent jobs are also projected once the resort is completed.
The proposed Cable Beach development would be financed by the Export-Import Bank of China and constructed by the China State Construction Engineering Corporation.
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, Baha Mar's Chairman and Chief Executive Officer Sarkis Izmirlian said in a press statement last month.
8/22/2010
thenassauguardian
By KRYSTEL ROLLE
Guardian Staff Reporter
krystel@nasguard.com:
The Progressive Liberal Party(PLP)may have had a change of heart as it relates to its stance on the controversial foreign work component issue surrounding the Baha Mar deal - which could result in as many as 8,000 Chinese workers being granted work permits.
Yesterday PLP Leader Perry Christie said despite indicating in June that the party would not involve itself in the decision to allow thousands of Chinese workers to receive work permits, he would do what is best for the country.
"We have since met with the principle shareholder of Baha Mar and we were briefed by the top executives of the company, Christie said. "We are meeting this afternoon to consider our position on the matter in anticipation of going back to Parliament.
"The Progressive Liberal Party is absolutely aware of the state of our economy--the deteriorated state of our economy and the urgency for there to be some kind of development.
"In that regard we are going to take a position based on the needs of the country. And we're not going to be tied to anything that I may have said in the past in regards to the work permits. We want to be able to provide a very concerted view on the matter. We(the PLP)begin meeting on the matter at our parliamentary meeting today(yesterday).
In June, Prime Minister Hubert Ingraham said the approval of the "extraordinary" number of Chinese workers required to help construct the resort development would not be given without opposition support.
But at that time, Christie said the prime minister is "on his very own" as it regards deciding on the Baha Mar labor issue.
He said the PLP had not been given sufficient information on the deal and therefore would not involve itself. When speaking with The Nassau Guardian yesterday, Christie said he still has not spoken to the prime minister yet.
"I know representatives have met with the Chinese ambassador, and I don't know if the prime misinter has some special information to provide me with, but I anticipate that if he has new information that would be provided to me prior to our going to Parliament. I have not heard from him yet."
Ingraham met with Chinese Ambassador Hu Dingxian at the Office of the Prime Minister in Cable Beach on Thursday, to discuss the Baha Mar project.
Last week The Guardian also spoke to Leader of Government Business in the House of Assembly Tommy Turnquest, who confirmed that the Ingraham administration intends to bring the labor resolution to Parliament on September 8.
The Guardian understands that since the announcement from the Cabinet Office late last month that the government of the People's Republic of China had approved the Baha Mar deal, Baha Mar officials have been meeting with officials from the prime minister's office to answer questions about the project.
Turnquest said the MPs would be allowed to express their views on the labor issue before the government makes a final determination.
If a majority of MPs take issue with that component, he said the government would have to take that into consideration prior to making its decision.
Turnquest said publicly that at the height of construction Baha Mar could have up to 8,000 foreign workers on the project.
Baha Mar has said that out of the 10,000 proposed construction jobs the project will create, at least 3,300 will be set aside for Bahamians. Eight thousand permanent jobs are also projected once the resort is completed.
The proposed Cable Beach development would be financed by the Export-Import Bank of China and constructed by the China State Construction Engineering Corporation.
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, Baha Mar's Chairman and Chief Executive Officer Sarkis Izmirlian said in a press statement last month.
8/22/2010
thenassauguardian
Sunday, June 20, 2010
Pray That The Baha Mar Deal Is Sealed
“We Better Pray Baha Mar Deal Is Sealed”
By ROGAN SMITH:
As the verbal tug of war rages over the multi-billion dollar Baha Mar project and whether to allow 5,000 Chinese workers to enter the country - one leading contractor says Bahamians better pray that The Bahamas gets the deal, if not the entire island’s tourism product will be resting "solely on the shoulders of Sol Kerzner and Atlantis."
Prime Minister Hubert Ingraham sent tongues wagging when he announced earlier this week that he would not have approved the Baha Mar deal if his administration were in office in 2005.
Former Prime Minister and Opposition Leader Perry Christie approved the Cable Beach project.
Since Mr. Ingraham’s announcement, Mr. Christie has expressed serious concerns about the way Mr. Ingraham "politicises" the investment sector in the country and he warned him to desist his "irresponsible" approach to potential investors.
Two years ago gaming giant, Harrah’s Entertainment – Baha Mar’s former strategic partner – pulled out of the deal reportedly in response to comments Mr. Ingraham made in the House of Assembly.
At the time Mr. Ingraham expressed reservations about the financial viability of the Baha Mar developers, indicating that he had more confidence in Harrah’s ability to finance the project.
But, Bahamian Contractors Association (BCA) President Stephen Wrinkle said it is crucial that the Baha Mar project comes on stream as it would help to significantly grow the economy.
The $2.6 billion project promises to create thousands of temporary and full-time jobs and transform the drab Cable Beach area into a glitzy tourist mecca.
"I think he has [Mr. Kerzner] carried the load magnificently for several years, but can you imagine 8,000 new jobs and 5,000 new rooms? The room tax alone from that is [huge]. Phenomenal income streams are going to be available for that mega project," Mr. Wrinkle said during a recent Bahama Journal interview.
"I would like to see as much support given by to the government to Mr. (Sarkis) Izmirlian [Baha Mar Chairman and CEO] and his team. I think they’ve done a fantastic job of holding on. They went through a terrible experience with their Nevada group and a huge failure. They’ve incurred serious carrying costs. I think at the end of the day it’s going to be a better project than it would’ve been because you always learn more from your losses than you do your gains. But, they’ve stood the test of time and quite frankly I think we can see a renewed Cable Beach."
Mr. Wrinkle said the project would also provide huge benefits for The Bahamas.
"We’re going to have double the marketing that we have now; double the amount of people arriving at the airport now and double all the numbers that Kerzner has," he said.
"Remember what an impact we had when they built phase three of Atlantis. What they’re doing with Baha Mar is equal to all of the phases they did at Atlantis and they’re doing it one phase. This is a big deal," he said.
Regarding the Chinese workers that the government plans to bring in, Mr. Wrinkle said they are needed.
"They are calling for 8,000 workers out there; 4,000 workers have got to be found; we can’t provide 4,000 workers. We’d be hard pressed to provide half of that. On these big international projects it’s just a fact of life. We’ve sat at the table; the BCA has tried to represent the interests of Bahamian contractors and workers and we’ve had some success with Baha Mar; they’ve been receptive," he said.
"They have a commitment with the government to hire Bahamians. It’s in their Head of Agreement. It is in the contract with China State Construction and China Finance Bank. There is language in there that mandates that they make the effort and employ Bahamians where possible."
He continued: "The problem in the past is it’s never been fully implemented. So, we’ve been very active in trying to make sure that we have a seat at the table and that wherever and whenever we can gain access to work that it’s offered. These projects are so enormous that when you think in terms of $2 billion in a build-up that they say is going to take five years, every day, whether they hit a lick or not, is going to cost them several million dollars. So, the productivity has to be there. Imagine trying to run 8,000 people on a construction site. This is a huge endeavour and after that we’re going to have 8,000 permanent jobs."
June 17th, 2010
jonesbahamas
By ROGAN SMITH:
As the verbal tug of war rages over the multi-billion dollar Baha Mar project and whether to allow 5,000 Chinese workers to enter the country - one leading contractor says Bahamians better pray that The Bahamas gets the deal, if not the entire island’s tourism product will be resting "solely on the shoulders of Sol Kerzner and Atlantis."
Prime Minister Hubert Ingraham sent tongues wagging when he announced earlier this week that he would not have approved the Baha Mar deal if his administration were in office in 2005.
Former Prime Minister and Opposition Leader Perry Christie approved the Cable Beach project.
Since Mr. Ingraham’s announcement, Mr. Christie has expressed serious concerns about the way Mr. Ingraham "politicises" the investment sector in the country and he warned him to desist his "irresponsible" approach to potential investors.
Two years ago gaming giant, Harrah’s Entertainment – Baha Mar’s former strategic partner – pulled out of the deal reportedly in response to comments Mr. Ingraham made in the House of Assembly.
At the time Mr. Ingraham expressed reservations about the financial viability of the Baha Mar developers, indicating that he had more confidence in Harrah’s ability to finance the project.
But, Bahamian Contractors Association (BCA) President Stephen Wrinkle said it is crucial that the Baha Mar project comes on stream as it would help to significantly grow the economy.
The $2.6 billion project promises to create thousands of temporary and full-time jobs and transform the drab Cable Beach area into a glitzy tourist mecca.
"I think he has [Mr. Kerzner] carried the load magnificently for several years, but can you imagine 8,000 new jobs and 5,000 new rooms? The room tax alone from that is [huge]. Phenomenal income streams are going to be available for that mega project," Mr. Wrinkle said during a recent Bahama Journal interview.
"I would like to see as much support given by to the government to Mr. (Sarkis) Izmirlian [Baha Mar Chairman and CEO] and his team. I think they’ve done a fantastic job of holding on. They went through a terrible experience with their Nevada group and a huge failure. They’ve incurred serious carrying costs. I think at the end of the day it’s going to be a better project than it would’ve been because you always learn more from your losses than you do your gains. But, they’ve stood the test of time and quite frankly I think we can see a renewed Cable Beach."
Mr. Wrinkle said the project would also provide huge benefits for The Bahamas.
"We’re going to have double the marketing that we have now; double the amount of people arriving at the airport now and double all the numbers that Kerzner has," he said.
"Remember what an impact we had when they built phase three of Atlantis. What they’re doing with Baha Mar is equal to all of the phases they did at Atlantis and they’re doing it one phase. This is a big deal," he said.
Regarding the Chinese workers that the government plans to bring in, Mr. Wrinkle said they are needed.
"They are calling for 8,000 workers out there; 4,000 workers have got to be found; we can’t provide 4,000 workers. We’d be hard pressed to provide half of that. On these big international projects it’s just a fact of life. We’ve sat at the table; the BCA has tried to represent the interests of Bahamian contractors and workers and we’ve had some success with Baha Mar; they’ve been receptive," he said.
"They have a commitment with the government to hire Bahamians. It’s in their Head of Agreement. It is in the contract with China State Construction and China Finance Bank. There is language in there that mandates that they make the effort and employ Bahamians where possible."
He continued: "The problem in the past is it’s never been fully implemented. So, we’ve been very active in trying to make sure that we have a seat at the table and that wherever and whenever we can gain access to work that it’s offered. These projects are so enormous that when you think in terms of $2 billion in a build-up that they say is going to take five years, every day, whether they hit a lick or not, is going to cost them several million dollars. So, the productivity has to be there. Imagine trying to run 8,000 people on a construction site. This is a huge endeavour and after that we’re going to have 8,000 permanent jobs."
June 17th, 2010
jonesbahamas
Friday, December 4, 2009
How the Baha Mar project collapsed
PRIME MINISTER Ingraham's expressed doubts on March 5 last year when moving a Resolution in the House of Assembly to authorise the Treasurer to transfer certain lands and buildings to Baha Mar Cable Beach Resorts, was like manna falling from heaven.
It was the excuse Harrah's Entertainment's new owners were looking for to cover the fact that they were manoeuvring behind the scenes to pull out of the $2.6 billion Cable Beach deal, while smiling coyly and announcing to the public that all stations were "go."
At first Opposition leader Perry Christie had agreed with Mr Ingraham's questioning of Harrah's commitment to the deal. "It seems to me," said Mr Christie at the time, "that Harrah's were looking for a way out and they used the speech and the words of the Prime Minister as an excuse, or part excuse for the way out."
However, Mr Christie suddenly changed his tune. Did he realise that if he let Mr Ingraham off the hook, the spotlight of blame would be on him and his government for the inordinate delays in signing the Baha Mar agreement? It didn't take Mr Christie long to rewrite his script. He urged Mr Ingraham to accept the blame and "responsibility" for setting back, "if not killing the proposal." Mr Christie, while admitting that other factors contributed to Harrah's walk out, continued to put full blame on Mr Ingraham's "intemperate language" and injecting the fear that the land conveyances for the project were in doubt. This, said Mr Christie, were the "straws that broke the camel's back."
While accusing fingers were still being pointed at Mr Ingraham, later that year a drama was being played out in a court room in New York, when the deceit of Harrah's new owners was unmasked. It was revealed that three days before signing the Heads of Agreement with the Ingraham government and making a public announcement of its intention to go ahead with the project, Harrah's new owners were plotting to pull out of the deal. This meeting took place in January. Mr Ingraham did not speak in the House until March.
Tribune Business reported allegations that the move to withdraw from the Baha Mar joint venture was directly linked to the takeover of Harrah's by two US private equity giants, Apollo Management and Texas Pacific, which purchased the gaming giant for $27.8 billion, and assumed $10.7 billion in debt, on January 28, 2008 -- three days before the supplemental heads of agreement were signed between Baha Mar and Government. Caesars Bahamas consented to the deal.
In the court case, Baha Mar alleged that Harrah's and its new owners decided to withdraw from the project to aid the former's balance sheet position, but instead of notifying its partners it looked for an excuse to withdraw. This was in January, 2008. Mr Ingraham made his remarks in the House two months later -- March 5, 2008.
And so we are left with the first part of Caesar Bahamas Investment Companies' printed complaint to its intended joint partner -- Baha Mar Joint Venture Holdings -- that "the long delays in reaching agreement with the government and completing the assemblage of the relevant land rights have contributed to considerable doubt about whether the project can be financed at all given the continuously deteriorating debt markets. These delays also raise grave concerns about increased costs and risk and create apprehension about your ability to execute in a timely manner."
Baha Mar was unable to execute in a timely manner because, as Sarkis Izmirlian told prime minister Christie in a letter on January 25, 2006: "You had given me your personal assurance that you would ensure that the Government would move to expeditiously accomplish the above (which Mr Izmirlian listed) by the New Year. Yet this did not happen." And he concluded: "If we cannot achieve the early February timeframe for accomplishing the above, I will have to inform Harrah's and Starwood that, despite my best efforts these past three odd years, the Government of The Commonwealth of the Bahamas has failed me. I certainly do not want to be known as the developer (and I'm certain you don't want to be known as the Prime Minister) that lost Caesars and Starwood. Today, more than before, I need your unambiguous support, Mr Prime Minister." This letter was dated January 26, 2006. Harrah's new owners did not come on the scene until two years later -- January 28, 2008.
As Bahamas Business pointed out, if the supplemental Heads of Agreement had been concluded with the PLP government by March 1, 2007 as they should have been, "the Bahamas, Cable Beach and Baha Mar would not be in the mess they are now in." The deal would have been airtight before Mr Ingraham won the government and Mr Christie would have been assured of his own legacy.
If the contracts had been concluded in March, 2007, "then Harrah's would likely have been locked into the Baha Mar deal and the project would have been well underway." But they were not concluded on time. A year later new buyers were in the picture and had taken over the gambling giant, the global economic situation started to look grim, and what was once a "hot" deal had turned "cold."
A major development project had collapsed, because, according to Mr Izmirlian, the Christie government had not met the promised deadlines, and as a result had lost Caesars and Starwood. The Bahamas was out in the cold, and the jobs that both governments had depended on to keep the economy moving were no more.
December 04, 2009
tribune242
It was the excuse Harrah's Entertainment's new owners were looking for to cover the fact that they were manoeuvring behind the scenes to pull out of the $2.6 billion Cable Beach deal, while smiling coyly and announcing to the public that all stations were "go."
At first Opposition leader Perry Christie had agreed with Mr Ingraham's questioning of Harrah's commitment to the deal. "It seems to me," said Mr Christie at the time, "that Harrah's were looking for a way out and they used the speech and the words of the Prime Minister as an excuse, or part excuse for the way out."
However, Mr Christie suddenly changed his tune. Did he realise that if he let Mr Ingraham off the hook, the spotlight of blame would be on him and his government for the inordinate delays in signing the Baha Mar agreement? It didn't take Mr Christie long to rewrite his script. He urged Mr Ingraham to accept the blame and "responsibility" for setting back, "if not killing the proposal." Mr Christie, while admitting that other factors contributed to Harrah's walk out, continued to put full blame on Mr Ingraham's "intemperate language" and injecting the fear that the land conveyances for the project were in doubt. This, said Mr Christie, were the "straws that broke the camel's back."
While accusing fingers were still being pointed at Mr Ingraham, later that year a drama was being played out in a court room in New York, when the deceit of Harrah's new owners was unmasked. It was revealed that three days before signing the Heads of Agreement with the Ingraham government and making a public announcement of its intention to go ahead with the project, Harrah's new owners were plotting to pull out of the deal. This meeting took place in January. Mr Ingraham did not speak in the House until March.
Tribune Business reported allegations that the move to withdraw from the Baha Mar joint venture was directly linked to the takeover of Harrah's by two US private equity giants, Apollo Management and Texas Pacific, which purchased the gaming giant for $27.8 billion, and assumed $10.7 billion in debt, on January 28, 2008 -- three days before the supplemental heads of agreement were signed between Baha Mar and Government. Caesars Bahamas consented to the deal.
In the court case, Baha Mar alleged that Harrah's and its new owners decided to withdraw from the project to aid the former's balance sheet position, but instead of notifying its partners it looked for an excuse to withdraw. This was in January, 2008. Mr Ingraham made his remarks in the House two months later -- March 5, 2008.
And so we are left with the first part of Caesar Bahamas Investment Companies' printed complaint to its intended joint partner -- Baha Mar Joint Venture Holdings -- that "the long delays in reaching agreement with the government and completing the assemblage of the relevant land rights have contributed to considerable doubt about whether the project can be financed at all given the continuously deteriorating debt markets. These delays also raise grave concerns about increased costs and risk and create apprehension about your ability to execute in a timely manner."
Baha Mar was unable to execute in a timely manner because, as Sarkis Izmirlian told prime minister Christie in a letter on January 25, 2006: "You had given me your personal assurance that you would ensure that the Government would move to expeditiously accomplish the above (which Mr Izmirlian listed) by the New Year. Yet this did not happen." And he concluded: "If we cannot achieve the early February timeframe for accomplishing the above, I will have to inform Harrah's and Starwood that, despite my best efforts these past three odd years, the Government of The Commonwealth of the Bahamas has failed me. I certainly do not want to be known as the developer (and I'm certain you don't want to be known as the Prime Minister) that lost Caesars and Starwood. Today, more than before, I need your unambiguous support, Mr Prime Minister." This letter was dated January 26, 2006. Harrah's new owners did not come on the scene until two years later -- January 28, 2008.
As Bahamas Business pointed out, if the supplemental Heads of Agreement had been concluded with the PLP government by March 1, 2007 as they should have been, "the Bahamas, Cable Beach and Baha Mar would not be in the mess they are now in." The deal would have been airtight before Mr Ingraham won the government and Mr Christie would have been assured of his own legacy.
If the contracts had been concluded in March, 2007, "then Harrah's would likely have been locked into the Baha Mar deal and the project would have been well underway." But they were not concluded on time. A year later new buyers were in the picture and had taken over the gambling giant, the global economic situation started to look grim, and what was once a "hot" deal had turned "cold."
A major development project had collapsed, because, according to Mr Izmirlian, the Christie government had not met the promised deadlines, and as a result had lost Caesars and Starwood. The Bahamas was out in the cold, and the jobs that both governments had depended on to keep the economy moving were no more.
December 04, 2009
tribune242
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