"The misinformation about Baha Mar must stop. Just last week, for example, a statement was made to the media that, when we were the developers of Baha Mar, it did not have a completion guarantee from CCA. That assertion is patently false. Specifically, we required and had two completion guarantees from CCA's parent company, China State Construction Engineering Corporation. CEXIM also held a completion guarantee from CSCEC. In fact, as the public record shows, our Baha Mar brought suit to enforce the completion guarantees in the United Kingdom contemporaneously with the commencement of the Chapter 11 reorganization process. Unfortunately, as the public record also demonstrates, the Government of The Bahamas interfered and instead forced Baha Mar into liquidation proceedings, bringing additional delays to the project.
"In turn, the Government's hand-picked provisional liquidators did nothing whatsoever to actively pursue the completion guarantee claim, which could have amounted to hundreds of millions of dollars for Bahamian creditors. Furthermore, the Receivers, as agents of the China Exim Bank, also did not pursue the suit to enforce the completion guarantees. This is not surprising given that the China Exim Bank has the same owner as CSCEC and its subsidiary, CCA. It also is important to note that subsequently our affiliate, Granite Ventures, brought proceedings in The Bahamas Supreme Court in an attempt to have the guarantees claims pursued. But, reflecting its common ownership with CSCEC, CEXIM chose not to pursue the claims despite it being to the detriment of all parties affected by CCA's failures on Baha Mar.
"Such performance guarantees in terms of CCA once again are very much called for with respect to Baha Mar. As the Chapter 11 filings and Bahamian court papers make clear, CCA was a serial failure in meeting schedules it set to complete Baha Mar. That same incorrect statement to the media about performance guarantees also noted the high costs associated with the original development of Baha Mar. These costs are almost all a direct result of CCA's documented over billing and numerous failures—its failures to perform competently, its failures to have proper procedures and controls in place, its failures to properly staff the project, and, importantly, its failure to meet completion commitments made both to us and Prime Minister Christie. Throughout the process, independent mediation on numerous occasions found CCA to have committed these violations.
"And now, sadly for The Bahamas and the prospects of Baha Mar, the same song, with some slightly different notes, is being played. Chow Tai Fook, which has refused to close on its supposed ownership of the property until construction is completed, suggests publicly a possible, although seemingly unrealistic, opening time for Baha Mar only to, within days, push that opening back to a much later ambiguous date—admitting in so many words it is all dependent on when CCA actually completes, if it ever does. Chow Tai Fook's statements regarding a soft opening which it presently projects for April can't even provide an approximate number of rooms that will be open!
"What we do know is, over the last few weeks, the activity around Baha Mar has revealed the uncertainty around opening. However, we do not know if there is a casino operator in place for Baha Mar, or whether the Government of The Bahamas even has granted a gaming license to operate the casino. Hyatt issues a very bare bones press release confirming it will be part of an opened Baha Mar, but says nothing more about when. Rosewood goes a step further and, in what appears to be a huge walk back from Chow Tai's Graeme Davis' rose-colored statements about soft and full openings, makes clear that it will not commit to being part of Baha Mar until sometime in 2018.
"With delays now into 2018, CCA and the liquidation process have cost the country almost $4 billion in revenue, 15,000 jobs on an FTE basis and over $500 million in tax revenues from sources such as VAT, import duties, gaming taxes, departure taxes and NIB contributions. During this delay, Baha Mar, and therefore our country have lost an estimated 1.6 million stop over visitors, with the expectation that each would have spent approximately $576 per day in The Bahamas.
"As Baha Mar's former developer, we reiterate our position that, despite never having received a response to our many purchase offers to CEXIM, we stand ready, willing and able to buy Baha Mar today and complete it immediately with Bahamian workers and Bahamian contractors. The chronic delays created by CCA for either self interest or patent incompetence must stop now. The Bahamas deserves better."
Robert Siegfried / Ross Lovern
212-521-4832 / 212-521-4876
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/is-baha-mar-a-potemkin-hotel-300418146.html
SOURCE BMD Holdings Ltd.