Baha Mar: The hotel that threatens to bankrupt the Bahamas. The Baha Mar resort was supposed to add 12 per cent to the Caribbean island’s GDP. But it has turned into the world’s biggest white elephant and the investors have gone to war. The case will soon hit the London courts. Michael Bow reports
Read the sad tale of too big a project, not enough funds, but this jumps out (emphasis added)
Mr Izmirlian, the son of commodity tycoon Dikran Izmirlian, who made his money cornering the global peanut market, was asked to try and revitalise the rundown area of Cable Beach, a dilapidated area of the island long overlooked in favour of other boltholes.
He bought land around Cable Beach and signed a deal with a US construction group in 2007 to develop the site. He securedfinancing for the project but the onset of the global financial crisis scuppered the plans.
But in March 2009 Mr Izmirlian got a break, thanks to the Chinese.
CSCEC, through its US arm CCA, agreed to come on board and construct the resort with the proviso that debt financing came from Cexim, which stumped up $2.45bn of secured credit.
CCA, led by president and chief executive Ning Yuan, is the largest division of CSCEC and has been operating in the US for 30 years. CSCEC added another $150m and Mr Izmirlian $850m.
The Chinese company was given the green light to start building in February 2011, with a completion scheduled in November 2014.
Despite the company’s size, the Baha Mar president Tom Dunlap said it had concerns about whether the Chinese could deliver such an ambitious construction project. CSCEC drafted around 5,000 migrant Chinese labourers on to the holiday island to build the resort, winning work permits for them from the Bahamian government.
“Although [CSCEC] is one of the world’s largest contractors, it had little experience in constructing single-phase resorts projects of [the] size and complexity of the [Baha Mar] project,” Mr Dunlap said in a statement filed as part of the bankruptcy proceedings.
Keep that in mind every time you read about the proposed Nicaragua Canal.
