Scant Signs Of Progress In Ongoing Baha Mar Mess
Photo courtesy of Baha Mar
All indications are the April Inter-American Development Bank (IDB) meeting slated for the conference center at the stalled $3.5 billion Baha Mar complex will take place as scheduled. Yet it’s just as likely that gathering will be the only sign of activity at the forlorn mega-resort for the foreseeable future.
The 15 months-behind-deadline project remains hopelessly stalled. Even Perry Christie, the Bahamas prime minster who in January told Bahamians “Not for one second did I doubt Baha Mar would eventually open its doors,” has taken a step back, recently describing the situation as “extremely complicated.”
Perry noted the increasingly intractable impasse now involves “the previous developer, the general contractor, various hotel and casino operators, subcontractors and suppliers, retailers and concessioners, unsecured creditors, terminated employees, potential investors, the provisional liquidators and receiver manager [and]... the interests of the Bahamas government and the People’s Republic of China.”
Local subcontractors were hired earlier this year to complete the convention center. But otherwise, the 97 percent complete, but inactive, resort remains in receivership. “Intensive discussions” reportedly continue as China Exim Bank, the project’s chief financier, and CSCEC, parent of CCA Bahamas, Baha Mar’s construction firm, formulate a plan to finally launch the shuttered resort.
Yet there have been virtually no positive developments since CEXIM said in a December statement that “a number of potential investors” have expressed interest in taking over the bankrupt project.
READ MORE: Bahamas PM: Baha Mar Will Open this Year
Instead, much of the news has been troubling. One potential investor, Sol Kerzner and partner Andrew Farkas of Island Capital Group, said recently that “numerous” proposals made to CEXIM officials have failed to result in “meaningful” negotiations because the financier has failed to provide access to a prospectus that includes a detailed accounting of the project.
Indeed, CEXIM has not submitted counter-proposals and insists only that the bank be “made whole,” said Kerzner. Farkas said it would cost “millions of dollars” just to properly evaluate the work necessary to complete the project. Despite several meetings in Beijing and the Bahamas, said Farkas, the partners have failed to receive “adequate information to make a determination.”
In February, a confidential memo from a CCA official to his CSCEC supervisors introduced in the Bahamas Supreme Court revealed the builders realized in January 2015 that the $3.5 billion mega resort was behind schedule and likely to miss its opening deadline. Yet CSEC officials later assured Christie and Sarkis Izmirlian, the resort’s original developer, that the project would meet its re-scheduled March 27 opening.
That was followed by another February bombshell as CEXIM attorneys acknowledged in a statement what other project observers had already opined: the resort’s value is “declining with each passing day” due to inactivity at the site.
Finally, other Supreme Court documents presented earlier this month indicate CCA officials used Baha Mar expense accounts to purchase expensive meals and luxury goods. “CCA executives were spending money that could and should have been going to pay Bahamian creditors,” said Ross Lovern, a New York-based spokesman for Izmirlian.
In a statement to the Tribune, CEXIM officials said critics of the bank have “ulterior motives” in seeking to blame the lender for Baha Mar’s failure. CEXIM has made “tremendous efforts in addressing the issues related to the project,” the statement said. Bank officials view criticism of the lender’s actions as “entirely unfounded.”
“[CEXIM] has been working hard to look for a competent investor who can take over the project with an integrated overall plan for the management of all parts of the project, so that it will generate sustainable and maximum value for all stakeholders,” the statement adds.
The Bahamas itself may be the biggest loser among the hundreds of terminated employees, unpaid subcontractors and suppliers, as well as frustrated vacationers, tour operators and travel agencies all negatively impacted by the Baha Mar imbroglio.
Citing Baha Mar’s woes, the International Monetary Fund (IMF) in January downgraded the nation’s economic growth forecast to 1.5 percent for 2016. Christie acknowledged the dour IMF forecast in a recent parliamentary address. He said the Bahamian economy expanded by barely one percent in 2015 due to factors including Baha Mar’s delayed completion and opening.
Still, the prime minister said the Bahamas’ economic growth will rise to just over two percent in 2017. He added, “The completion and opening of Baha Mar will bolster growth even higher and to a significant extent.”
However, just when the star-crossed development's completion and opening may occur is anyone’s guess.
More by Brian Major
Get Travel Deals and Travel News
Recent Travel Opinions
Cruise Line & Cruise Ship
Airlines & Airports