Prime Minister Questions Baha Mar Survival

Bahamas Prime Minister Perry Christie (l.) said the continuing impasse between the Baha Mar resort and its contractor threatens the company’s ability to pay its employees.

Bahamas Prime Minister Perry Christie last week publicly commented on the crisis at Baha Mar for the second time, noting that the continuing impasse between the owner of the resort and its construction contractor will eventually threaten the operator’s ability to pay in excess of 1,000 employees already working for the under-construction project.

Construction on the $3.4 billion Baha Mar Resort, which originally was slated to open last December, has ground to a halt as its owner, Baha Mar Ltd., battles with it construction contractor, China Construction America, over the quality and timing of the Chinese state-owned construction firm’s work. Baha Mar is refusing to pay the firm, and the firm is refusing to resume construction until paid.

The main loan financing the project, from the state-owned China Export-Import Bank, was agreed to despite its timing in the depths of the recession on condition that the state-owned construction company be used as the primary contractor. It has been a rocky relationship, with Baha Mar CEO Sarkis Izmirlian publicly deriding the firm’s work as inferior in quality in announcements delaying the grand opening of what is the largest construction project in the history of the Bahamas.

The original plan was to open in time for last winter’s busy season. Izmirlian first delayed the opening until spring, and then indefinitely as he tries to work out an agreement with the contractor on the project.

Bahamas Prime Minister Perry Christie—also criticized by Izmirlian for not offering government assistance in training the expected 5,000 employees—commented publicly on the situation for a second time last week, telling the Nassau Tribune that he has been in extensive talks with Izmirlian about the state of the project, which he says carries a “national urgency” for the future of Bahamian citizens.

Christie in particular expressed an urgency to preserve not only the expected jobs, but the jobs of more than 1,000 employees already on the Baha Mar payroll, whose jobs are threatened by the prospect that the operator will soon be unable to pay them. With construction halted, those employees are being assigned tasks like cleanup and security watch.

“Thousands of Bahamians have made decisions to go and work there,” Christie said, “and every day is a day of challenge. And we could see it coming where the point could be reached where the developer says ‘I could no longer carry a payroll,’ and so I am now directly involved in a very meaningful way in that exercise to try and bring a resolution to it. It is what it is right now.”

Izmirlian was expected to meet again with Christie this week to discuss a possible resolution to the impasse.