Trouble in paradise: China’s Bahamas showpiece ‘to open six months late’

The $3.5bn Bahamian beach resort and casino being built by China Construction America is facing lengthy delays amid reports of labour discord and payment disputes. 

Baha Mar is being developed by Sarkis Izmirlian, the chief executive of Baha Mar Resorts. When complete, it will contain four hotels with 2,200 rooms, 307 luxury condominiums with a upper price of $12bn, a 9,300 square metre casino, a night club and a golf course. The night club is being designed by singer Lenny Kravitz and the golf course by Jack Niklaus.  

Work began in February 2011 and was expected to be completed by the 2014 Christmas tourist season, however, a spokesperson for Baha Mar Resorts told the Wall Street Journal recently, "We’re focused on late spring 2015." 

The idea for the resort was a long cherished dream of Mr Izmirlian, but it is was realised through the financial connections of China Construction America, which is the subsidiary of contracting giant, China State Construction Engineering Corporation (CSCEC). 

China’s Export-Import bank agreed to provide a $2.5bn loan, CSCEC put in $150m for a preferred equity stake, while the Izmirlian family invested about $850m. 

The aim of the scheme from the point of view of China Construction America was to announce its arrival as a major player in the US market. Yuan Ning, president of China Construction America (CCA), told newspaper China Daily in November that the firm was operating to a five-year plan covering 2011 to 2015. He said the aim was to achieve a turnover of $5bn, which would place the company at about the same level as KBR in the US rankings. 

One attraction of undertaking a breakthrough project in the Bahamas was that it was outside US jurisdiction, where Chinese firms could expect to have a freer hand in matters such as importing labour. However, this is one aspect of China Construction’s strategy that seems to have caused problems. 

China Construction has imported a workforce of about 4,000 from China, with the result that, in a country with 15% unemployment, more than 70% of the labourers on Baha Mar are foreign. According to the Wall Street Journal, the project has sown discord among local workers and business owners who complain they haven’t shared in the economic benefits of the project so far. 

Miscommunication between China Construction and Western subcontractors also has caused problems. According to the Wall Street Journal, when construction fell behind schedule this year, the Chinese firm postponed the removal date of cranes it used for high-rises without informing subcontractors. As a result, dozens of workers and machines showed up to excavate pools and irrigation channels only to find their way blocked by the cranes concrete pads, and were forced to sit idle for months. 

Other problems have arisen with late payments. Some subcontractors have complained to the local paper The Tribune of 120-days payment periods. Robert Myers, the principal of Caribbean Landscaping, said his company was among those enduring "frustrating" waits to receive payment. He said there were times when his company, which has worked on the golf course, had to stop work because it had run out of money. 

Sources close to Baha Mar have told the Bahamian press has suggested that decisions are being made in China rather than at site level, which has contributed to problems with co-ordinating works packages and slow payment. 

A Baha Mar study estimated that the resort will, when completed, create 8,000 jobs directly and indirectly on the island. The Bahamian prime minister even agreed to move his office down the road to create more room for the project.

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