Baha Mar Closer To Closing China Deal
Sources close to developments told Tribune Business that Baha Mar’s chairman and chief executive, Sarkis Izmirlian, and his development team had met with China Export-Import Bank officials over the weekend to tie down all outstanding commercial and business issues related to the Cable Beach project’s financing.
This newspaper was told that the meeting went “very well”, and that Baha Mar and its Chinese partners, the bank and China State Construction, were now “moving towards the finalisation of the documents” necessary to give legal effect to their partnership.
In addition, Baha Mar was working with the Government and its existing syndicate of bank financiers, led by Scotiabank, to bring the redevelopment deal to completion.
Tribune Business understands that once the agreement with the Chinese is finalised, Baha Mar will then present the Government with its final development plans for the Cable Beach strip.
No Baha Mar official was available for comment yesterday, but in an interview with Tribune Business published earlier this month, Mr Izmirlian said: “We’re really in the final stages of negotiations with China Ex-Im Bank and China State Construction. We see the light at the end of the tunnel.
“We’re optimistic that in the near future we’re going to conclude those negotiations, but until it’s signed we don’t have a deal. The good news is that we’re making a lot of progress, and thanks to the support of the Prime Minister and the Government, who’ve been working with us all these months, and the flexibility Scotiabank has given us in the past few months, we think it’s going to happen in early 2010.”
While confirming that a “decent” number of work permits were being sought by the Chinese for their construction personnel, Mr Izmirlian pledged: “On balance, the quantity of Bahamian jobs outweighs the need for short-term work permits.”
He added: “China State Construction is going to be the general contractor, but at the same time there’s going to be many sub-contracts going to be awarded to Bahamian companies. We are committed to creating as many opportunities as possible for Bahamian citizens and Bahamian companies, and as soon as we sign the agreement, all the first stage contracts will go to Bahamian contractors.”
First stage construction will involve the West Bay Street re-routing; the Commercial Village, which will house the re-located Straw Market, commercial banks and government buildings lining the southern side of the existing road, and other buildings. Previous estimates pegged that work’s costs at around $115 million.
“All the construction drawings and design drawings are done,” Mr Izmirlian told Tribune Business. “We have bid out, and are in the final stages of negotiating, the contracts for the Commercial Village and the road. Within weeks of signing [with the Chinese] I believe construction will start and create jobs for Bahamians.
“If the labour is available, and depending on what happens on New Providence with projects such as the airport redevelopment, you’re looking at probably close to 2,000-2,500 Bahamian jobs during construction, and that’s going to have a significant impact on the local construction industry. It’s tens of millions of dollars and hundreds of Bahamian jobs being created within months.”
While the general plan is for China State Construction, as general contractor, to build the ‘core’ of Baha Mar – the main hotels and casino, and the taller buildings – there will be some “overlap” with Bahamian contractors, who could enjoy further “opportunities” in areas such as the convention centre and shopping district.
Mr Izmirlian told Tribune Business that Baha Mar believed the current economic cycle gave it a “great opportunity” from a timing perspective, when it came to both resort construction and opening.
“We think it’s still a good time to be building,” he explained. “Materials are reasonable and contractors are keen for business. Prices are very attractive right now. This is the time to be building a resort, and opening it three-and-a-half to four years from now when the economy has fully recovered. I believe we’ve got a great opportunity, as it’s not only the right time to build but the right time to open.”
Mr Izmirlian said Baha Mar was targeting a “three-and-a-half year build out”, meaning that the Cable Beach strip’s redevelopment would be completed in late 2013 or early 2014.
Source: The Tribune
