Baha Mar Pledges $200M Construction To Bahamian Contractors
Robert Sands, Baha Mar’s senior vice-president for governmental and external affairs, said the developer hoped to begin construction work once it and its equity partner, China State Construction, received all the relevant approvals from the Bahamian and Chinese governments.
Unwilling to put a timeframe on those approvals, following last night’s announcement that Baha Mar had concluded a $2.5 billion loan agreement with the China Export-Import Bank – Tribune Business having predicted that they would sign “within the week” – Mr Sands said the developer hoped to meet with the Ingraham administration “as soon as possible”.
“The significant part about that first phase construction is that it’s in excess of $200 million, and we have committed to awarding all those contracts to Bahamian contractors,” Mr Sands told Tribune Business, adding that Baha Mar wanted to go out to tender on bids/start construction as soon as the Bahamian government’s approvals were obtained.
First phase construction involves the re-routing of West Bay Street around Baha Mar’s 1,000-acre resort campus, away from its present position through the heart of the development site.
That move will also involve the demolition of the existing bank and government office buildings on West Bay Street, requiring the construction of new, relocated properties for Fidelity Bank (Bahamas); Commonwealth Bank; Scotiabank (Bahamas); the Straw Market; police/fire station and Cecil-Wallace Whitfield building in a new Commercial Village.
Site preparation for the main contractor, China State Construction, will also be involved, as will demolition of the former Nassau Beach Hotel and towers ‘F and J’ – the two easternmost towers – at the Wyndham Resort.
Stephen Wrinkle, the Bahamian Contractors Association’s (BCA) president, said Bahamian contractors stood to gain “a fair slice of the pie” on the phase one work, adding that Baha Mar had already sent out pre-qualification packages for the work. He expected movement on tenders to being in earnest once Baha Mar officials began to return from abroad.
When asked how many Bahamian construction industry jobs would be created by the first phase, Mr Sands replied: “It is very difficult to assess, but I can tell you that it is in excess of a couple hundred jobs.
“Certainly, for the first 12 months, it could be in excess of 250 jobs, and could climb to as high as 350-400 jobs.”
While the agreement signed with Baha Mar’s “minority equity partner”, China State Construction, provides for the latter to act as general contractor for the main resort campus and use its own labour, Mr Sands said the developer had “reaffirmed our commitment to use as many qualified Bahamians as possible to work on the construction phase”.
With construction of Baha Mar expected to take three-and-a-half years from start to finish, Mr Sands said the developer was “committed to employ 3,300 Bahamian jobs over the life of the construction phase of the project”.
While several thousand Chinese workers would likely be employed to work on the project by China State Construction, Mr Sands encouraged Bahamians to focus on the long-term benefits and spin-offs provided by the project, namely that it would employ 8,000 Bahamians when fully built-out.
“Because of its size and nature, it also creates a tremendous amount of entrepreneurial opportunities for Bahamians. I think this is an opportunity for all of us to look forward to its fruition,” Mr Sands said.
He added that it did not necessarily follow that Baha Mar and China State Construction were collectively investing $100 million in equity into the project, given the $2.5 billion loan and $2.6 billion construction cost price tag.
And Mr Sands declined to comment on the status of talks between Baha Mar and Scotiabank over the latter’s $170 million syndicated loan, the maturity date for which was due to expire today. That possibly explains Baha Mar’s haste to last night seal the deal with the Chinese.
Tribune Business sources indicated, though, that Baha Mar was now set to “re-engage” Scotiabank over that loan, having prioritised sealing the agreement with China before turning its attention to this.
This newspaper reported yesterday how Baha Mar and its principals, the Lyford Cay-based Izmirlian family, had offered to make Scotiabank “whole” and repay the entire loan, having previously offered to pay down $85 million or 50 per cent during proposals that were swapped between the two sides.
“Baha Mar appreciates Scotiabank’s support during these economic times, and is satisfied Scotiabank supports the development of Cable Beach,” was all Mr Sands was prepared to say.
When completed, Baha Mar’s 3,000 total rooms will add 1,700 rooms to the Bahamas’ total hotel room inventory, subtracting the 550 that exist at the Wyndham and 750 at the Sheraton.
“I think this is a positive step forward in realising the vision for Baha Mar,” Mr Sands said of the $2.5 billion loan signing. “It really marks a significant milestone and speaks to the tenacity and confidence the Izmirlian family had in its vision for Baha Mar.
“They never wavered, and remained steadfast in moving this project forward on a variety of levels, and bringing it close to fruition.”
Mr Sand said the creation of a “one of a kind” resort in western New Providence would complement the success of Atlantis on Paradise Island, and “help showcase the Bahamas as a premier tourist and resort destination, and assist in the growth of Bahamian tourism overall.”
Source: The Tribune
