After more than a year of stalemate, bitter recriminations and economic pain for the tiny Caribbean nation of the Bahamas, work on the stalled $3.5bn Chinese-funded mega resort called Baha Mar (pictured) is to resume next month, with opening set for the coming winter season.
Bahamian Prime Minister Perry Christie made the surprise announcement in a televised address to the country just after 7pm last night, saying that his government and the Export Import (Exim) Bank of China had agreed to have Baha Mar completed and sold to a "world-class hotel and casino operator", with construction expected to resume in September.
Approved by the Bahamas Supreme Court just two hours previously, the deal sees the Exim Bank, which lent the scheme $2.4bn in 2010, putting up the extra funds needed to finish the beachfront hotel and casino complex, which was estimated to be 97% complete when work ground to a halt amid legal battles in June last year.
That extra cost had previously been estimated at $600m.
No details were given on who the buyer might be.
Completing the work will be the Chinese contractor, China Construction America (CCA) Bahamas, which the scheme’s original developer, Sarkis Izmirlian, had denounced for causing the delays that led to his seeking bankruptcy protection last year.
Many businesses will be relieved to hear Prime Minister Christie say that, under the deal, Bahamian subcontractors owed substantial amounts for work on the resort would receive "a significant part, and possibly all, of the value of their claims".
Also relieved will be thousands of former Baha Mar staff recruited and trained to work at the complex, originally due to open in December 2014. Christie insisted they will receive unpaid salaries and other monies owed.
The difficulties of a project this size has hit our economy hard, but we will recover– Bahamas Prime Minister Perry Christie
Christie has been under severe pressure to resolve the impasse as a general election looms in May 2017. Conceived by developer Sarkis Izmirlian in 2005, Baha Mar was billed as the biggest leisure development in Caribbean history. With four luxury branded hotels and a number of gaming venues, it was to have ramped up the stagnant economy of the island nation of 345,000 people, which has seen high unemployment.
The prime minister was criticised for acting with the Chinese side in manoeuvring against Izmirlian, who sought Chapter 11 bankruptcy protection on 29 June last year after repeated missed 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.
With Izmirlian sidelined and no clear way forward emerging, ratings agency Standard & Poor’s lowered the Bahamas’ investment grade to just above so-called "junk" status in September last year, due in part to the stalled resort.
In his televised address yesterday, however, Christie justified his actions.
"For some twenty months I have been continuously focused, day and night, on efforts to find a solution for the completion of the Baha Mar Project," he said. "Throughout this period the government has had three key objectives: firstly, to ensure that construction at Baha Mar would be resumed as quickly as possible; secondly, to make every effort to ensure that the casino and casino hotel, the convention centre and its hotel, and the golf course, would open before the end of the 2016-2017 winter season; and thirdly, to ensure that payment of claims to Bahamian creditors and contractors, who previously had little or no prospect of recovering anything from Baha Mar.
"I am pleased to say that we have achieved all of these objectives."
Christie said there was still a "raft of paperwork to be completed" in order to implement this agreement, but claimed it was a "great day for Bahamians".
"The difficulties of a project this size has hit our economy hard, but we will recover," he said.
"Over the coming months, economic opportunities will be felt in more and more homes. The government will redouble its efforts to continue the programme of modernization that we began four years ago.
"My entire public and political life has been dedicated to fighting for Bahamians. I give God thanks and praise that we have been blessed with this outcome. This is a good day for the Bahamas. This is a great day for Bahamians."
After Christie’s staged announcement a number of people stepped up to the microphone to offer emotional thanks and praise to the prime minister, including representatives of the Baha Mar workers and retailers who had invested in the resort, and by a former president of the Bahamian Contractors Association.
The broadcast of the prime minister’s announcement can be seen here.
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Image: The Baha Mar resort complex after topping out in February 2013 (Baha Mar)