Baha Mar, billed as the biggest leisure development in Caribbean history

Bahamas gets new PM hostile to Baha Mar deal

11 May 2017 | By Rod Sweet 1 Comment

The saga of an unfinished Chinese-owned mega resort in the Bahamas entered an unpredictable new phase last night when the government of the country was swept aside in a dramatic landslide election.

Out is Perry Christie, whose Progressive Liberal Party (PLP) government facilitated a Chinese state bank’s takeover of the $4bn hotel and casino complex, Baha Mar, in Nassau.

And in with all but five seats in the 39-seat House of Assembly is Dr Hubert Minnis (pictured) of the Free National Movement (FNM), who railed against the Christie government’s deal with a Chinese buyer of the resort, Hong Kong-based Chow Tai Fook Enterprises, calling it a “brazen theft of our country’s assets”.

Dr. Hubert Minnis, leader of the Free National Movement, which won by a landslide on 10 May, 2017 (FNM)

While campaigning in March Minnis also pledged to uncover details of Chow Tai Fook’s purchase of Baha Mar from China’s Export Import Bank (Exim Bank), and even hinted at opposing the sale, details of which remain shrouded in mystery.

He would, he said in a 12 March statement posted on Facebook, “execute a real sale of Baha Mar to a qualified and respectable purchaser”.

This led to speculation in the Bahamian press that FNM’s pledge might open the door to Baha Mar’s original developer, the billionaire Sarkis Izmirlian, to try once more to buy the resort back.

The resort, which was supposed to open more than two years ago, became a hot issue in the election that saw former prime minister Perry Christie and a number of his prominent cabinet ministers lose their seats to the FNM.

Simmering concerns over delays and secrecy were eclipsed last month by a dramatic corruption scandal, in which Bahamian Education Minister Jerome Fitzgerald was revealed to have sought contracts worth millions of dollars in brokerage, trucking, and limousine services at Baha Mar while he served as minister.

Addressing a jubilant victory rally last night Minnis pledged to uncover corruption of all sorts.

“I want to assure those Bahamians who supported a party other than the FNM that they will have nothing to fear from us,” he said, reports newspaper The Tribune.

“I want to state clearly, however, that those who have abused positions of trust may have something to fear. We will give the auditor general the resources and tools he needs to find out how the people’s money was spent. If there is evidence of criminality we will let the law take its course.”

Billed as the biggest leisure development in Caribbean history, the audacious Baha Mar resort was meant to have boosted the fortunes of the tiny island nation, which has suffered from economic stagnation and high unemployment.

But the scheme has been in limbo since June 2015 when developer Sarkis Izmirlian sought Chapter 11 bankruptcy protection in the US, blaming the scheme’s Chinese contractor, China Construction America, a subsidiary of the giant China State Construction Engineering Corporation, for repeatedly missing opening deadlines.

Challenged in US courts by the Chinese side, Izmirlian failed in his Chapter 11 bid, while the Bahamas government forced the scheme into liquidation. The Exim bank subsequently placed the resort in receivership, supported by then-Prime Minister Christie.

The bank then tried to sell the resort through a strict sales process administered by the receivers, but no bids were accepted.

“The public disclosure of the PLP’s secret Baha Mar (deal) is breathtaking in its brazen theft of our country’s assets”– Statement by Dr. Hubert Minnis

Christie took credit for a breakthrough in August 2016, saying his government had arrived at a deal whereby the Exim Bank would pay for completing the resort, and sell it to an undisclosed “world-class hotel and casino operator”, which turned out to be Chow Tai Fook Enterprises.

The details of Baha Mar’s sale to Chow Tai Fook were contained in sealed Bahamian Supreme Court documents, prompting fierce criticism from Minnis and others.

Minnis then responded furiously when details of a Heads of Agreement (HOA) between the Christie administration and the buyer of Baha Mar were revealed on 1 May, less than two weeks before the election.

In the HOA the government committed to contribute $4m a year for eight years for marketing of Baha Mar.

Other concessions granted to the buyer including value added tax (VAT) exemption until the end of 2019 and a write-off of $10m in casino debt. Also allowed were up to 300 work permits for non-Bahamian workers in senior management positions. The resort would also be exempt from property tax for 10 years.

“Now the truth comes out,” Minnis said in a statement reported by the Tribune. “And it is not good for the Bahamian people.

“The public disclosure of the PLP’s secret Baha Mar (deal) is breathtaking in its brazen theft of our country’s assets.

“The astounding revelations from this disclosure leaves no doubt in anyone’s mind as to why our embattled Prime Minister Perry Christie and Attorney General (Allyson Maynard-Gibson) fought so hard to shroud this deal in secrecy – even going to the courts to seal the contents from public view.”

He went on, saying “it will be the Bahamian people who will shoulder the burden and pay the price for Perry Christie’s ill-advised and ill-conceived give away to his Chinese cronies”.

Meanwhile the resort is still not open.

Top image: Dr Hubert Minnis, leader of the Free National Movement, which won by a landslide on 10 May, 2017 (FNM)