The government of the Bahamas has come under pressure to oppose an alleged deal that would see the stalled $3.5bn mega resort, Baha Mar, sold to the Chinese contractor that failed to complete it last year.
Business figures and staff laid off from the unfinished resort and are among those demanding that Bahamian Prime Minister Perry Christie reject the sale of Baha Mar to China Construction America (CCA), the US subsidiary of state-owned China State Construction Engineering Corporation.
The country’s main opposition party this week labelled the government’s handling of the issue as “acting on desperation”.
CCA’s failure to complete Baha Mar in time for two scheduled openings of the resort has been blamed for the 2015 bankruptcy of the scheme’s developer, Baha Mar Ltd, led by Sarkis Izmirlian, who is also trying to buy back into the scheme.
Under a barrage of negative media coverage the prime minister was also forced this week to deny reports that he had agreed to give or sell 500 Bahamian citizenships to Chinese investors in return for Chinese entities getting the resort finished and open for business – a crucial issue for Christie, who faces a general election next year amid high unemployment.
The scheme’s secured creditor, state-owned Export-Import Bank of China (Exim) is trying to sell Baha Mar to recover the $2.4bn it lent the project under a deal signed in 2010.
I don’t know why [the government’s] position would be to promote CCA finishing the project when they didn’t do it the first time– Bahamian Contractors Association president
Izmirlian, who has refused to participate in the court-approved sale process managed by receivers on the grounds that it is opaque and rigged against him, has repeatedly offered to take back Baha Mar while ensuring that the Exim bank and unsecured creditors get all they are owed. Politically, this is a major issue because 123 Bahamian contractors and subcontractors are estimated to be owed $74m for work done.
According to local media nine serious purchase offers were submitted to Baha Mar receivers Deloitte & Touche by the 9 May deadline, but newspaper The Tribune asserts that the government is pushing for a sale agreement between the Exim bank and CCA.
Bahamian attorney general Allyson Maynard-Gibson, and the prime minister’s senior policy adviser, Sir Baltron Bethel, are currently in Beijing attempting to finalise the deal, the newspaper alleges.
The idea has drawn criticism in the Bahamas, including from among 2,000 laid-off employees of the resort, who were hired and trained by Baha Mar Ltd ahead of scheduled openings in December 2014 and March 2015.
They are reported to have written to Christie demanding he prevent CCA from finishing the resort or being its eventual owner.
In a letter obtained by The Tribune, they reportedly write: “Do we want to place Baha Mar once again in the hands of CCA which has a proven history of enriching itself at the expense and suffering of Bahamians? Your answer for the sake of The Bahamas and all who live here should be a resounding NO!”
This week a former Bahamian Contractors Association president said it would be “beyond stupid” to permit CCA to finish Baha Mar without local creditors first being paid.
“I don’t know why [the government’s] position would be to promote CCA finishing the project when they didn’t do it the first time,” he told The Tribune.
He added: “To let the Bahamian contractors and suppliers hang out to dry while the Chinese come back and finish the project is inconceivable to me, and any right thinking Bahamian must think the Government has to include resolution of the outstanding debts before they commence work.
“Some people do stupid things, but that would be beyond stupid. I can’t imagine them not including this in the negotiations.”
The situation was inflamed on Sunday, 22 May when radio talk show host Steve McKinney claimed on his “Hard Talk” programme that CCA had requested a number of difficult concessions from the government in return for taking over Baha Mar, including 30-year exclusivity with regards to its casino licence, a 30-year Value Added Tax exemption, a 25% increase in concessions currently enjoyed by the resort, and the granting of 500 citizenships to Chinese nationals attached to the project in various capacities.
The following day Prime Minister Christie issued a statement insisting it was an “absolute lie” that his Government had agreed to the sale or grant of Bahamian citizenships to Chinese investors.
“This is a non-negotiable position of my government,” Christie said. “Moreover, it is for me personally, a matter upon which no compromise is possible. I can therefore assure the Bahamian people, without any equivocation whatsoever, that no deal offering Bahamian citizenship in return for an investment in The Bahamas will ever be entered into while I head the government of The Bahamas.”
Christie did not mention the other allegations in his statement.
The affair prompted the country’s opposition political party, the Free National Movement (FNM), to accuse the government of acting in “desperation” to secure a deal.
“It points to a very serious desperation on behalf of the Christie administration, and acting on desperation is never a good idea,” said FNM deputy leader, KP (Peter) Turnquest, in an interview with The Tribune.
The prime minister is expected to say more about the allegations during a budget debate in the House of Assembly this week.
Photograph: On left, Bahamian Prime Minister Perry Christie with supporters (Myplp.org)
