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“Breakthrough” hailed for Baha Mar resort as Chinese contractor returns to site

28 September 2015 | By GCR Staff | 0 Comments

In what is being called a “breakthrough” for the stalled, $3.5bn Baha Mar resort in the Bahamas, the resort’s Chinese contractor has returned to site after more than two months to assess the work needed to complete the project.

China Construction America (CCA) officials visited the site last week on Wednesday, 23 September, according to a statement from liquidators appointed by the Bahamas Supreme Court.

The site visit by CCA followed a meeting in New York between the Bahamian prime minister Perry Christie and officials from CCA’s parent company, China China State Construction Engineering Corporation (CSCEC), on Monday, 21 September.

Also last week the prime minister held a 45-minute conference call with the project’s main financier, the state-owned China Export Import Bank (Exim Bank), about getting the resort finished and open.

Christie said he was “reassured” by the conversation with CSCEC.

“Despite the delays which have occurred with its opening, I have been reassured today, as a result of very positive discussions, of the commitment of the chairman of [CSCEC] to his full cooperation to ensure its early completion and opening,” he said in a statement last week.

Still unclear is the role of the resort’s developer, Baha Mar Ltd, whose filing for bankruptcy protection in the US on 29 June sparked a legal battle.

The Bahamian government, the contractor and the Exim Bank joined in fighting this bid by Baha Mar Ltd for protection from creditors under Chapter 11 of the US bankruptcy code.

Such protection would have allowed the developer to avoid liquidation as it pursues a claim for damages worth $192m against CSCEC in the English High Court in London.

However, the US bankruptcy court dismissed Baha Mar Ltd’s case on 15 September.

Earlier in September the Bahamian Supreme Court asserted its jurisdiction over the matter by naming provisional liquidators for Baha Mar Ltd as Bahamian accountant Ed Rahming, a partner in KRyS Global, and two UK accountants from AlixPartners Services. He adjourned further proceedings until 2 November.

Work on the resort, said to be 97% complete, stalled after a missed opening deadline of 27 March, with the developer claiming contractor delays and poor workmanship. The contractor has blamed the developer for non-payment and mismanagement.

Bahamian media report that the prime minister is due to hold talks with Sarkis Izmirlian, chair and chief executive of Baha Mar Ltd, today.

Izmirlian had tried to eject CCA from the project by offering to split the cost of finishing the resort with the Exim Bank and finding other contractors, but his offer was not taken up.

About CCA’s reintroduction to the site last week, Alastair Beveridge of Alix Partners said in a statement: “We’re delighted to be working alongside CCA. Their role here is extremely important and together we will now assess what needs to be done, and how long it will take, in order to complete Baha Mar such that it may open its doors to the public and introduce thousands of new visitors to The Bahamas.”

He added, “The work that we will now jointly undertake will inform the next round of talks with all parties. Those talks will take place in due course following the completion of our assessment.”

Meanwhile 120 local Bahamian contractors are demanding payment of $74.3m in total for work already done before they resume work on the resort, Bahamian newspaper The Tribune reports.