No progress reported toward remobilization of construction
Tom Dunlap, former president of the stalled $3.5 billion Baha Mar resort in Nassau, Bahamas, lashed out last week in an interview with the Bahamas Tribune at China Construction America (CCA), the subsidiary of state-owned China State Construction Engineering Company, for what he said was a neglect of the project, for which it was the main contractor.
Dunlap’s criticism mirrored the former criticism of Baha Mar founder and former CEO Sarkis Izmirlian, who ordered a stop in payments to CCA after the contractor missed several crucial deadlines in preparing the resort, the largest construction project in the history of the Bahamas, for what was supposed to be a December 2014 opening.
Izmirlian stopped payments after CCA missed the revised deadline of March 2015, and CCA halted all construction on the project, which reportedly was 97 percent complete. Failure of Bahamian officials to broker an agreement between the parties led to liquidation procedures initiated by the Bahamian government, which is still searching for a new owner for the project, which the country’s officials have said is vital to the economy of the island nation.
Last week, the Tribune published a letter penned by Dunlap in response to comments by CCA Senior Vice President Daniel Liu that The Pointe, another Bahamas hotel project it is working on, will be completed on time because there is “no shortage of money,” unlike Baha Mar, which he referred to as “some private development” as a “foreigners only” reserve that was not for the primary benefit of Bahamians.
Dunlap told the newspaper he was “flabbergasted at the outrageous and inaccurate reference by Mr. Liu to Baha Mar as ‘some private development.’ Had Mr. Liu spent more of the time that Baha Mar paid for him to spend on our project instead of gallivanting about the Caribbean looking for new projects, he would realize that Baha Mar is very public.
“With over 40 restaurants, clubs and retail shops, it was for all to use … including the very golf course that CCA was busy playing the days of the missed opening while we were hunkered down trying to address the catastrophe of their failure to meet the opening date. I would expect The Pointe to be on time. CCA has enjoyed a head start, having started construction before receiving building permits.”
Dunlap also said The Pointe appears to be using the same construction equipment that Baha Mar paid for and had shipped from China. “This significant head start and apparent free equipment and supplies will help assure an on time, on budget 2017 completion,” he noted sarcastically. “A little free material and equipment goes a long way.”
Dunlap added one more dig: “We can only hope that CCA will do a good job completing The Pointe and not leave another mess at the gateway to Nassau,” he said. “The people of the Bahamas don’t need another unfinished China Construction America project looming on their skyline, especially one at the gateway to its historic downtown.”
Meanwhile, Bahamas Prime Minister Perry Christie, in his mid-year budget communication in the House of Assembly, gave no indication his government is close to solving the dilemma of getting Baha Mar construction restarted.
“Make no mistake about it,” he said. “We are dealing with an extremely complicated situation that involves among others the previous developer (the Export-Import Bank of China), the general contractor, China State Construction Engineering Company, various hotel and casino operators, subcontractors and suppliers, retailers and concessioners, unsecured creditors, terminated employees, potential investors, the provisional liquidators and receiver managers, as well as the interests of the Bahamas government and the People’s Republic of China.”
He added that the growth rate projection for the country was reduced last year because of the failure of Baha Mar to open.
“The Ministry of Finance and the International Monetary Fund (IMF) now estimate that our economy grew by just over 1 percent in 2015 as compared to the projected 2.3 percent in the May budget communication,” he said. “Besides the impact of more moderate growth in our major trading partners, this more muted performance of our economy, of course, also reflected the delayed completion and opening of the Baha Mar resort project.”
He did offer some hope that an agreement is a hand with the Export Import Bank of China (Exim), the main financier of the project, to finance the completion of construction. “Although some progress has been made, there are still some issues left to be resolved,” he said. “In addition, the final agreement between China Exim Bank and CSCEC will have to go through internal procedures and obtain approval from regulatory authorities of both parties. Once the full remobilization arrangement is approved, CSCEC will be responsible for working out the construction timetable and plan, and by then China Exim Bank will be able to update the Bahamian government about the remobilization timetable and construction plan.
“The process of securing major investors/operators is under way and several substantial groups have already been introduced to the government while the process gathers pace.”
