The Chinese contractor building a mega resort in the Bahamas has broken its silence over the stalled scheme, accusing the developer of mismanaging the project and withholding payment.Â
The Bahamas subsidiary of China Construction America (CCA) put the blame for the delayed opening of the $3.5bn Baha Mar resort and casino squarely at the feet of the developer, Baha Mar Ltd, saying it had lied and acted against the interests of the Bahamian people.
The statement issued yesterday comes after Baha Mar Ltd filed for bankruptcy in a US court on 29 June, publicly blaming CCA for its financial difficulties.
Baha Mar Ltd.’s recent public attempt to shift responsibility away from itself … is misleading and dishonest– CCA Bahamas
Baha Mar Ltd., whose chairman and chief executive is Sarkis Izmirlian, has also initiated proceedings in the English High Court in London against CCA’s parent company, the state-owned China State Construction Engineering Corporation Limited (CSCEC), seeking financial reparations.
The Baha Mar scheme includes four luxury hotels, a vast casino and its own 18-hole golf course.
Called by the developer "the Caribbean’s largest single-phase hospitality investment in history", it was originally supposed to open in December 2014 but a revised opening date of March 2015 was missed and Baha Mar Ltd has been publicly accusing CCA of dragging its feet.
Hitting back yesterday, CCA insisted Baha Mar Ltd was entirely to blame for the delays because it mismanaged the mega project. It replaced the principal architect after construction began, issued late and incomplete design packages, and had made more than 1,300 changes, CCA said.
Baha Mar Ltd also failed to pay for work because it had not secured enough financing, according to CCA, which claimed to have done nearly $72m worth of work on the scheme since February, without payment.
CCA called the developer dishonest: "Baha Mar Ltd.’s recent public attempt to shift responsibility away from itself and blame CCA Bahamas and our subcontractors for the delays in the project’s completion is misleading and dishonest," it said.
"It is insulting to the many talented and hardworking employees and subcontractors that work for CCA Bahamas and harms the interests of the people and government of the Bahamas that are represented by this landmark project."
The company added: "We have continually acted in good faith in the performance of this work reliant upon the belief that Baha Mar Ltd. would [fulfil] its responsibilities as the owner.
Baha Mar Ltd. chairman and chief executive, Sarkis Izmirlian (Baha Mar Ltd)
"CCA Bahamas is committed to holding Baha Mar Ltd. accountable for its improper actions and failed commitments to the Bahamian government, the people of the Bahamas, and all of its creditors. We look forward to working with the financial community and the Bahamian government in order to complete this important project."
CCA also claimed that Baha Mar Ltd.’s decision to file for bankruptcy protection in the US was "calculated to benefit the project’s developer over the interests of the Bahamas and its people".
The statement said CCA Bahamas had retained Island Capital Group, a private real estate merchant bank, led by Andrew L. Farkas, as its restructuring and financial advisor in relation to the Baha Mar project.Â
CCA Bahamas has also retained the law firms of Shearman & Sterling LLP; Peckar & Abramson; Squire Patton Boggs in the United States and McKinney, Bancroft & Hughes in Nassau, Bahamas to represent it in connection with the pending US bankruptcy proceedings.
Background:
- In 2010 the state-controlled China Export-Import Bank (Exim) lent the project $2.4bn of the estimated $3.5bn total cost. CSCEC is reported to have taken a $150m equity stake, while Baha Mar Ltd. invested $850m. CCA was picked as the main contractor, and construction began in February 2011.
- Reports of problems on the project emerged in 2014.
- In May 2015 Baha Mar Ltd called on China Exim Bank to pressure CCA to get a move on.
- CCA had set out to be a top-10 contractor in the US with a turnover of $5bn by this year.
- It hasn’t achieved that, but it leapt from 82nd place last year to 32nd place this year in Engineering News-Record’s Top 400 Contractors table, with a turnover of just under $2bn in 2014.
- In April 2015 CCA opened its Latin American regional headquarters in Panama City, with the Bahamian deputy prime minister as a special guest.Â
Top photograph shows the Baha Mar resort at an earlier stage of construction (China Construction America)
