08222016 business

MONDAY, AUGUST 22, 2016

business@tribunemedia.net

HOME AMID ‘Wonderful start’ for CHINESE POINTE’S PERMIT WAIT bad mortgage acquirer

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net SIR Franklyn Wilson’s group has “gotten off to a wonderful start” with its ‘bad mortgage’ restructuring venture, which helped drive a $65 million yearover-year decline in banks’ non-performing home loans during the 2016 first half.

The Sunshine Holdings chairman confirmed to Tribune Business that his group’s newly-created entity, Gateway Financial, had recently acquired “several hundred” delinquent mortgages from one of the Bahamas’ main commercial banks.

He added that Gateway’s

• Bulk of $250m project waits on Ministry of Works • Workforce sent back to China after garage finish • Bay St project will ‘remobilise’ after approvals given

• Sir Franklyn unveils restructuring ‘Gateway’ • ‘Several hundred’ home loans purchased • Doing ‘whatever it takes’ to keep owners in homes efforts to subsequently restructure these loans had already proven “very effective”, and would allow many borrowers to remain in their homes on terms better aligned with their financial circumstances.

Sir Franklyn described the Gateway initiative as potentially “very significant” when it came to reviving the Bahamas’ stalled housing and construction markets, adding that it would bring both social and economic benefits.

“It’s public knowledge, or

ought to be public knowledge, that a company called Gateway Financial did acquire a portfolio of mortgages from one of the banks, and is running a programme that has gotten off to a wonderful start,” the Arawak Homes chairman told Tribune Business.

“There are some home owners giving testimonies that will eventually be made public, but suffice to say that there are a number of smiling faces on people whose mortgages have been restructured. It’s proving to

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

FRANKLYN WILSON be a very effective initiative.”

Sir Franklyn confirmed that Gateway Financial was part of the Sunshine Holdings’ group, and was owned by two of its member companies.

SEE PAGE FIVE

BAHAMAS CLEANER SEEKS $173K OVER BAHA MAR WORK

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

A cleaner has become the first Bahamian contractor to sue China Construction America (CCA) for breach of contract over the Baha Mar project, alleging it has been paid just 3 per cent of what is owed.

Franklyn Robinson, who trades as Ben Moore Toote Development Company, is claiming that he agreed

• First contractor to take on CCA (Bahamas) • Claims it received just 3% of contract sum • Chinese firm denies allegations a $178,862 contract with Baha Mar’s main contractor to provide cleaning services at the project site.

The deal was sealed on February 6, 2015, just pri-

‘WHAT A TANGLED WEB WE WEAVE’

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

THE Democratic National Alliance’s (DNA) leader says the Bahamian people “cannot let go” the Renward Wells ‘Letter of Intent’ (LOI) because they are “the biggest losers” from the saga.

Branville McCartney again renewed his demands for the Christie administration, plus Mr Wells, to “come clean” over the controversy following Friday’s revelations by Tribune Business.

This newspaper revealed documents which showed that the Government intended to issue an LOI - the same document signed by Mr Wells, and which led to his resignation as parliamentary secretary in the

• Bran: ‘We cannot let Renward Wells LOI go’ • Urges all parties to ‘come clean’ after new revelations • Says Bahamian people ‘biggest losers’ from debacle

Ministry of Works - to Stellar Energy over its $600$650 million waste-to-energy plant proposal.

In particular, a May 26, 2014, letter from Michael Halkitis, minister of state for finance, to the InterAmerican Development Bank’s (IDB) then-Bahamas country representative, said that “the Government has issued an initial LOI” to Stellar Energy.

SEE PAGE SIX

CCA ‘STONEWALLING’ VIA SARKIS LOCK OUT

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

Baha Mar’s main contractor was claiming as recently as two months ago that it could not produce documents for a New York court case because Sarkis Izmirlian had “locked it out” of the project site.

The “incredible” claim was blasted by attorneys representing one of China Construction America’s (CCA) US sub-contractors, who accused the company of “stonewalling” in response to its request for documents as part of the legal ‘discovery’ process.

Theodore Hacht, the attorney representing Con-

• Claiming still can’t access Baha Mar site in June • US firm wants ‘incompetence’ documents • Parent’s Baha Mar stake makes defence ‘a sham’

trolled Demolition Inc (CDI), which is demanding that CCA (Bahamas) pay it the outstanding $754,704 balance for work completed on the $3.5 billion project, told the southern New York court on August 18, 2016, that his client’s case was being “prejudiced” as a result.

SEE PAGE EIGHT

or to CCA’s dispute with Baha Mar’s owner, Sarkis Izmirlian, becoming public.

As a result, Mr Robinson and Ben Moore Toote Development Company, which he owns, are alleging that CCA (Bahamas) has paid them just $5,950 to-date, despite completing all their obligations under the contract.

“On February 6, 2016, the plaintiff and the defendant [CCA] agreed that the plaintiff would provide

the defendant with various cleaning services at the Baha Mar project in Nassau, Bahamas, and that the defendant would pay to the plaintiff the sum of $178,862 for such services rendered,” Mr Robinson and Ben Moore Toote’s statement of claim alleged.

“In part performance of the said agreement, the defendant has, to-date, paid the plaintiff the sum of $5,950.”

SEE PAGE FOUR

The Pointe’s Chinese workforce has been sent home until the downtown Nassau development obtains the necessary permits to begin construction of its 200-room condo hotel and associated amenities.

Leslie Pindling, spokesperson for the project’s developer, confirmed to Tribune Business that with the 1,000-space parking garage’s superstructure now complete, the Chinese construction workforce had been redeployed back home.

And he revealed that further heavy construction work depended on Neworld One Bay Street, the China Construction America (CCA) subsidiary, obtaining the necessary building permits from the Ministry of Works.

Mr Pindling was speaking after Tribune employees, while passing The Pointe construction site, saw only a few Bahamian but no Chinese - construction workers present.

“The ones you have not seen have gone back to China because they have built the superstructure they were supposed to do,” Mr Pindling said in reference to the parking garage.

“The superstructure has been constructed, and they’ve all been returned to China as such. We sent everybody back to China who had completed and finished the job.”

Tribune Business sources have suggested that The Pointe’s Chinese construction workforce has been sent to Panama, which is where CCA’s regional SEE PAGE SEVEN

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PAGE 2, Monday, August 22, 2016 THE TRIBUNE

MINISTER: SANDALS JOB FAIR ‘LOOKS SUSPICIOUS’

By NATARIO McKENZIE Tribune Business Reporter nmckenzie@tribunemedia.net

A Cabinet minister has admitted that the structure for this week’s Sandals job fair “looks very suspicious”, given that the 600 employees terminated from its Royal Bahamian property are being forced to reapply for their jobs.

Shane Gibson, minister of labour and national insurance, said: “The only thing I would say is that it looks very suspicious that you would terminate 600 employees while claiming that you had no choice, having been advised by your attorneys, that you had to terminate them.

“Then you turn around and ask these employees to interview for a job that they were doing for the past ‘x’ amount of years.

“You like these employees so much that you determine that the only way you can rehire them is to have them come in and interview for the same job that they were doing and you were happy with.”

Mr Gibson added: “It’s one

SANDALS, pictured after it was announced that 600 staff were being made redundant. Photo: Tim Clarke/Tribune Staff thing if you want to supplement have been reserved for former the employees you had there be- Sandals Royal Bahamian team fore by bringing in new blood, but members to reapply for their jobs, it’s another thing when you say to with new candidates allowed to employees you were happy with apply on Wednesday and Thurscan only be rehired if they are day. interviewed again; not if you said The resort chain is clearly using that the only reason they were let the two-month closure, undergo is because your lawyer told you taken to effect $4 million worth of it is the only choice you had.” essential repairs and upgrades, to According to an advertisement inject ‘fresh blood’ into its workby Sandals, today and tomorrow force and seek out the most pro-

ductive workers it can find.

But trade unionists and some politicians have argued that the job fair’s ‘two tier’ nature, and the requirement for workers to reapply for their posts, is an indication that Sandals is engaged in ‘union busting’.

The Royal Bahamian’s closure came after several clashes between the resort and the Bahamas Hotel, Maintenance and Allied Workers Union, which saw the latter initiate a criminal prosecution against its top executives, and West Bay Street blocked by dump trucks.

The union has for years been seeking to reach an industrial agreement for members with Sandals Royal Bahamian, and has become increasingly frustrated as all efforts to-date have proven fruitless.

The spectre of a ‘union busting’ exercise was last night raised by FNM leader, Dr Hubert Minnis, who said: “An FNM government will stand for all Bahamian workers, and will not allow the type of union busting we are witnessing at Sandals resort.

“We call upon the management of Sandals resort to immediately rehire all the workers it laid off when they re-open in October, and immediately re-engage with the Bahamas Hotel Maintenance and Allied Workers Union.”

Seeking to make some political capital from the situation, Dr Minnis added: “The Bahamian people deserve better than a Prime Minister that will just sit idly as a resort in the Bahamas engages in union busting, causing the loss of at least 600 Bahamian jobs.”

The Government has come under fire over the closure, although Mr Gibson has maintained that his Ministry only learned of the planned closure on August 1 from media reports.

Sandals has outlined a $4 million renovation to be undertaken during a two-month closure of its Cable Beach property, saying that the work was being “fast tracked” for what is shaping up to be its best winter season ever.

About 60 line staff employees have been sent to Sandals Emerald Bay in Exuma.

SANDALS URGES: BRING ‘A-GAME’ TO JOB FAIR FORMER Sandals Royal Bahamian employees and new applicants have all been urged by the resort chain to “bring their A-game” when its four-day job fair begins today.

The 600 workers who had to be terminated when Sandals Royal Bahamian closed on August 15 for nearly 10 weeks of infrastructure repairs will have the first opportunity to reapply. The first two days of the job fair will be reserved for former staff members, with the last two open to new applicants.

All interviews will be held at Christ the King Anglican Church Hall in Ridgeland Park, and will be conducted by representatives from Sandals Resorts International (SRI). New applicants are required to being a current police certificate.

“We are asking everyone

Nassau Ad

to bring their A-game,” said Jeremy Jones, Sandals’ director of corporate services. “At Sandals, we believe we hire attitude and train skills. Interviewers look for personality, enthusiasm and interest in learning new skills. We are giving everyone an equal opportunity to shine.”

A Sandals Resorts International (SRI) human resources spokesperson said leaders from various Sandals properties will participate in the interviews.

“If we are interviewing for a position in food and beverage, for instance,” she said, “the person being interviewed may be talking not only to human resources staff but to the head chef for all of SRI, and could end up qualifying for the next step in becoming a sous chef or pastry chef SEE PAGE NINE

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THE TRIBUNE

Monday, August 22, 2016, PAGE 3

Chamber chief: Don’t vilify foreign investors

By NATARIO McKENZIE Tribune Business Reporter nmckenzie@tribunemedia.net The Bahamas Chamber of Commerce’s (BCCEC) chief executive has warned against vilifying foreign investors given this nation’s “shameful” ‘ease of business’ rankings, warning that “it benefits no one to do so”.

Edison Sumner called for Bahamians to take a “balanced approach” over the Sandals matter, acknowledging concerns over the resort chain’s decision to close its Royal Bahamian property and terminate the 600 staff.

“It’s unfortunate what we are seeing happening now. The Chamber is always concerned when we see persons becoming displaced from their places of employment. These are always vey serious concerns to us,” Mr Sumner said.

“When you look at the number of people made redundant that is also concerning. It is important for us to understand the genesis behind this move and what were the intentions of the employer when they made the decision.”

He added: “It is our understanding that most of the individuals who were displaced will be invited to return through a job placement process. If that happens it means that those employes would have had a windfall and they will be back on the job in two months or so, and that may be a benefit to them as opposed to them going through furloughs or direct terminations without a chance of being rehired.”

Former Sandals Royal Bahamian employees are

• ‘Shameful’ business ease ranking acts as barrier • Chamber open to review of redundancy laws • Tripartite Council not being properly used effectively having to reapply for their positions at a fourday job fair, which starts today. While the first two days have been reserved for the 600 laid-off staff only, the final two will see ‘outsiders’ apply for posts at the resort.

This has prompted “suspicions” among politicians and trade unionists that Sandals does not intend to re-hire all former 600 staff, and that it may be engaged in ‘union busting’ given recent actions by the Bahamas Hotel, Maintenance and Allied Workers Union (see articles on Page 2B and 3B).

Meanwhile, Mr Sumner called for cool heads to prevail on all sides involved with the labour situation at Sandals Royal Bahamian.

“There has to be a balanced approach to this,” he urged. “We understand the plight of the workers even though we represent the employers. Without employees there can be no employers. There has to be a partnership and mutual respect between the employer and employees.

“It concerns us, however, when people in leadership get into the public domain and start hurling insults at foreign investors who are helping us build our economy. We are not going to give any investor a feee pass to come in and do as they

please because they also have to operate in a way that is consistent with our culture, goals and objectives to grow our economy.”

Mr Sumner continued: “We realise that in this case there appeared to have been a lack of communication between the employer and the employees, and the employer and the Government.

“I think if we are able to improve the level of communication, we might find that these processes might go a bit smoother if there is an understanding of what the intentions were when the employer made the decision.

“In this instance, the fact is that this particular investor has made it very clear that they intend to rehire persons who were disengaged. If that does not happen, even the Chamber will take grave issues with it,” the Chamber chief executive added.

“We’re not going to say that foreign developers have a free pass. They have to be responsible, live up to their obligations and ensure that Bahamians are not being mistreated. There has to be a balanced approach. We empathise with those who lost their jobs, but there must always be balance to these discussions about how things are happening, and it does not benefit any of us when we get into the public domain and hurl insults at foreign investors and castigate them publicly.”

Mr Sumner said the National Tripartite Council, featuring government, private sector and union representatives, was established to deal with issues such as those raised by the Sandals Royal Bahamian situation.

SANDALS CRITICS ‘CAN’T HAVE CAKE AND EAT IT’

By NATARIO McKENZIE Tribune Business Reporter nmckenzie@tribunemedia.net

A CABINET Minister has accused the Government’s critics of wanting to “have their cake and eat it” over the 600 Sandals redundancies, adding that the National Tripartite Council was the body responsible for reviewing labour laws.

Shane Gibson, minister of labour and national insurance, said the Christie administration was now being urged to adopt an interventionist stance by the same people who had previously called for ‘smaller government’.

“It is interesting when the same people who say we should have smaller governments, in times like these, ask for big government,”

* Minister slams interventionist calls * Says Tripartite Council body responsible for laws Mr Gibson said.

“Do you want government reaching their tentacles all over the place, getting into private sector business, or do you want smaller government where you allow the private sector to drive commerce. The same people who say the Government shouldn’t do this, the private sector should, now they want bigger government.

You can’t have your cake and eat it too.”

While the trade unions have urged the Government to enact legislation to avoid abrupt business closures,

such as the one initiated by Sandals, Mr Gibson reiterated that this was one of the reasons the Tripartite Council was established.

“Before we tabled social dialogue, and passed the legislation dealing with social dialogue, the minister could just initiate the process, have the stakeholders have an ‘in-out’ if he wanted, and then move ahead with it,” the Minister said.

“The process is different now versus before the Tripartite legislation was passed. You can’t have your cake and eat it too. When you act like a dictator, they say ‘no’. You can’t say when it’s convenient, the Government should dictate.

SEE PAGE NINE

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He argued, though, that the parties were not making full use of the Council.

“The Chamber is open to having a review of the redundancy clauses again, this time with the view of ensuring that employers provide adequate notice to their employees and others when redundancies are planned,” said Mr Sumner.

Sandals on Monday outlined a $4 million renovation that will be undertaken during the two-month closure of its Cable Beach property, saying the work was being “fast tracked” for what was shaping up to be its best winter season ever.

EDISON SUMNER

PAGE 4, Monday, August 22, 2016

THE TRIBUNE

BAHAMAS CLEANER SEEKS $173K OVER BAHA MAR WORK from page one The statement of claim continued: “The plaintiff has satisfied and discharged its obligations under the said agreement to the defendant [CCA].

“However, despite numerous demands for payment,the defendant has failed, neglected and/or refused to settle the balance due to the invoices issued by the plaintiff for the services rendered.”

Mr Robinson and Ben Moore Toote are thus claiming that CCA (Bahamas) has breached their contract by failing to pay 14 invoices submitted to it.

They are seeking the $172,912 balance alleged to be outstanding, plus interest and other relief as the Supreme Court sees fit.

CCA (Bahamas), though, in its April 12, 2016, defence disputed the $178,862 contract amount while admitting that it had paid Mr Robinson and Ben Moore Toote the $5,950.

And, while conceding that Mr Robinson and his firm had agreed to provide cleaning services to it, CCA (Bahamas) added: “The terms and amount payable under said agreement will be the subject of discovery and evidence led at trial.

“The plaintiff will be put to strict proof that it performed the services alleged in the invoices referred to, and that in the event the services were performed, they were performed with the skill and quality to be expected.”

CCA (Bahamas) and

its attorneys, McKinney, Bancroft & Hughes, also demanded that Mr Robinson and Ben Moore Toote prove they met all the terms of their contract.

“The defendant contends that the plaintiff has failed to satisfy and/or discharge its obligations to it under the said agreement,” CCA (Bahamas) added. “Furthermore, the defendant puts the plaintiff to strict proof of the loss and damage alleged.”

The significance of the claim by Mr Robinson and Ben Moore Toote is that they are the first known Bahamian contractor to sue CCA (Bahamas) in the Supreme Court for monies allegedly owed to them on the Baha Mar project.

Few, if any, other Bahamian contractors have gone this route, likely for fear of upsetting CCA, the Government or both.

With the construction industry relatively moribund, and private sector projects few and far between, few will likely be willing to initiate litigation due to concerns they may be cut out of future developments by both the Chinese and the Government.

Many Bahamian companies will also be hoping that they are re-engaged as subcontractors on the Baha Mar development, which would then give them the necessary leverage to demand payment from CCA (Bahamas) for monies outstanding.

US contractors, in contrast, have been more aggressive in seeking outstanding payments for work

done on the $3.5 billion project at Cable Beach.

Controlled Demolition Inc (CDI) initiated action against CCA (Bahamas) last year in the southern New York district courts.

CDI is seeking to collect an outstanding $754,704 balance for work on Baha Mar, having been hired to demolish the former Nassau Beach Hotel and towers ‘F’ and ‘J’ at the Wyndham resort - thus making way for the $3.5 billion campus.

Mark Loizeaux, CDI’s president, claimed in a November 4, 2015, affidavit that CCA “continually stalled” in paying the contract balance and led his company on a ‘merry dance’ for two-and-a-half years in its quest for payment.

And earlier this month, Novum Structures, a specialist contractor that provides architectural and structural services, accused CCA (Bahamas) of citing “false reasons” to excuse non-payment of an outstanding $555,000 balance owed to it.

Novum claimed: “CCA Bahamas has breached the contract by .... failing and refusing to fully pay Novum for the work it performed on the project, directing Novum to perform change order work at an agreedupon price and then refusing to pay for it; asserting false, pretextual reasons for not paying; approving Novum invoices and then failing to pay them in full; and breaching the contract’s implied covenant of good faith and fair dealing.”

THE TRIBUNE

Monday, August 22, 2016, PAGE 5

‘Wonderful start’ for bad mortgage acquirer from page one “Our corporate group is involved with it,” he said.

“It’s [Gateway] a group in which Sunshine Finance and RoyalStar Assurance are the two equity partners.”

Sir Franklyn added that Gateway Financial was doing “whatever it takes” to keep previously delinquent Bahamians mortgage borrowers in their homes.

He explained that the company was aided in this task by its “non-bank” status, which meant it was not burdened by the laws and regulations governing what commercial banks could do to aid struggling homeowners.

As a result, Sir Franklyn said Gateway Financial had much more “flexibility” when it came to devising solutions that were specific to each defaulted borrower’s circumstances.

“They[Gateway] do whatever they can to help people stay in their homes,” he told this newspaper.

“They can be as aggressive as circumstances allow, and that puts them in a position to do stuff banks are not able to do.

It’s working. Because it’s a non-bank, they have the flexibility to do whatever it takes.”

Sir Franklyn declined to identify the Bahamian commercial bank from which Gateway Financial had purchased the distressed mortgages, saying only that it was “one of the big clearing banks”.

Nor did he state the ‘purchase price’ paid by Gateway Financial and how heavily the portfolio was discounted, or the new terms offered to those mortgage holders, although much-reduced interest rates are likely to be part of the package.

Entities such as Gateway have been viewed as part of the solution to the Bahamas’ entrenched mortgage/

housing market crisis, as they can reduce the pile of ‘bad loans’ weighing down commercial bank balance sheets.

Selling such distressed loans enables commercial banks to recover some of their previous provisioning, and releases capital for lending to better-qualified home purchasers.

This, in turn, could help to revive the Bahamian mortgage market, which at end-June 2016, was still grappling with some $608.4 million worth of loan arrears.

And kick-starting commercial bank lending, and stimulating the domestic (Bahamian) housing market, would also boost key industries such as construction and real estate, increasing activity throughout the economy.

“It’s something that could be very significant,” Sir Franklyn told Tribune Business of Gateway Financial.

“The people stay in their homes, stabilise themselves in circumstances they can live with, and we get these distressed mortgages off the market.

“And the more we get them off the market, the quicker the potential to restart the home construction market.”

Sir Franklyn added that initiatives such as those being pioneered by Gateway Financial would also reduce the number of abandoned houses seen throughout New Providence and Grand Bahama, and said: “There’s social and economic implications to it.”

The Sunshine Holdings group’s Arawak Homes subsidiary would be among the prime beneficiaries should the hopedfor impact of Gateway’s activities fully materialise, but the wider Bahamian economy and society would also feel the same positive effects.

The Central Bank of the Bahamas, in its report on June’s economic developments, acknowledged that

Gateway Financial’s ‘acquisition’ had helped to produce a 12.5 per cent year-over-year decrease in non-performing bank mortgages during the 2016 first half.

This, in turn, drove a $63.2 million (7 per cent) decline in the Bahamian commercial banking industry’s total non-performing loans (those more than 90 days past due) over the same period.

“The reduction in total arrears was primarily due to a contraction in the dominant mortgage segment by $88.8 million (12.7 per cent) to $608.4 million, largely due to a $65.3 million (12.5 per cent) decrease in the nonperforming category— partly related to the sale of some non-performing claims,” the Central Bank confirmed.

The prime candidates as the source of Gateway’s distressed mortgage portfolio are likely to be Scotiabank, Royal Bank of Canada (RBC) or Bank of the Bahamas.

Tribune Business last year reported that Scotiabank, and its Toronto head office, were especially keen that an entity such as Gateway Financial be established in the Bahamas.

The bank was then looking towards Ascendancy, a Mexican company that had successfully undertaken a similar task in dealing with its non-performing loans in that nation.

Tribune Business sources familiar with the Ascendancy situation suggested its arrangement with Scotiabank involved purchasing around $30 million worth of the latter’s mortgage portfolio at a price equivalent to $0.24-$0.25 on the $1, or 25 per cent of their value.

Ascendancy was initially supposed to enter a joint venture partnership with Sir Franklyn’s group, but the Gateway Financial ownership - Sunshine Finance

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Sir Franklyn confirmed as much, disclosing that Gateway has a “strategic relationship” with Ascendancy, which was helping with its systems and in other areas.

Tribune Business revealed earlier this year how RoyalStar, one of the Bahamas’ main property and casualty insurers, had invested $3.45 million to acquire preference shares in a company

called Ascendancy Bahamas.

Anton Saunders, RoyalStar’s managing director, confirmed then that Ascendancy Bahamas had been created to buy distressed mortgage loans from Bahamian commercial banks at deeply-discounted prices.

This indicates that Ascendancy Bahamas has been renamed as Gateway Financial. The latter’s changed ownership structure is possibly a response to Government concerns,

which delayed the issuance of Gateway’s necessary permits.

Some suggested the Government had wanted to unveil its own Mortgage Relief Plan first, while others said the Christie administration was afraid of the potential stigma/ backlash associated with a Mexican company’s involvement in acquiring distressed Bahamian loans and subsequently impacting Bahamian lives, especially just before a general election.

PAGE 6, Monday, August 22, 2016

THE TRIBUNE

‘What a tangled web we weave’ from page one That letter was dated some five to six weeks BEFORE Mr Wells signed the fateful July 4, 2014, LOI with Stellar that led to his downfall and eventual resignation, prior to his decision to ‘cross the floor’ and join the Free National Movement (FNM).

Mr Halkitis accused Tribune Business of implying that he had acted improperly in relation to the IDB letter, and “creating the impression

of something untoward on my part”, but this newspaper made no such suggestion and did no such thing.

And, while confirming that the documents seen

by Tribune Business are genuine, Mr Halkitis failed to answer the main question that they - and this newspaper - raised: Why did the Wells LOI become so controversial, given the Government’s seeming intention to issue such a document to the same company?

Mr Halkitis’s May 26, 2014, letter to Astrid Wynt-

er, the IDB’s then-Bahamas country representative, deals exclusively with Stellar Energy’s proposal for a 70-80 Megawatt (MW) waste-to-energy plant to be located at the New Providence landfill on Tonique Williams Highway.

“The Bahamian government is considering the inclusion of waste-to-energy as a supplementary platform in the overall reform of the energy sector of the Commonwealth of the Bahamas,” Mr Halkitis wrote to Ms Wynter.

“Waste-to-energy has been recognised by the Bahamas government as a fundamental part to achieve the overall goal of the energy reform. To this effect, the Bahamas government has issued to SE [Stellar Energy] Group an initial LOI.” The LOI was even attached to the letter, for Mr Halkitis tells Ms Wynter to “see attachment A” in reference to the document.

Responding to Tribune Business’s exclusive revelations, Mr McCartney said they raised further questions in relation to the LOI controversy that required urgent answers from both the Christie administration and its former parliamentary secretary.

“What a tangled web we weave,” he told Tribune Business.

“I would like for the Government, inclusive of Renward Wells, to come clean with the Bahamian people. They’ve played the Bahamian people for fools because of their personal agendas and ambitions.”

The DNA leader urged the public to become more proactive in seeking answers from their political

leaders, adding in reference to the LOI: “We sat back, and allowed it.

“And, as a result, we have lost as a country in terms of that landfill being remediated by waste-to-energy.”

Mr McCartney said the LOI controversy, and subsequent fall-out, meant that the Bahamas had incurred an ‘opportunity cost’ from the failure of the Stellar Energy project to move forward.

Several observers have previously questioned to Tribune Business the technology that Stellar was proposing to employ; its belief that the New Providence landfill could generate 74 Mega Watts (MW) of energy; the scale of the $600$650 million project, and whether the company had the necessary financing.

Mr McCartney, though, implied that the LOI saga meant the Bahamas would likely never discover the answers to these questions and ‘what might have been’ in terms of a remediated landfill that spawned no fires or health concerns.

“We are the losers, the Bahamian people are the losers, because that landfill is still there; it has not been

remediated,” Mr McCartney told Tribune Business.

“It has caused health concerns, it has caused business concerns. It has impacted the environment, regrettably. We still have a landfill site that has not moved in terms of remediation, and it becoming waste-to-energy.

The Bahamian people are really the losers.

“This LOI situation, we cannot let it go with what’s been going on, especially with this dump stuff. We need to get answers from the Government. They’re doing things that cause us as a country to be where we are.”

Mr McCartney reiterated his belief that Mr Wells, and the LOI, had been caught up in a power struggle within the Christie administration over the best solution for the New Providence landfill’s woes.

“I think there may have been a struggle between the Prime Minister and Deputy Prime Minister as to who should get the contract,” the DNA leader told Tribune Business.

“One party wanted Stellar, the other didn’t, and that’s what brought it to the boil. That’s where the debacle came in.”

He continued: “The Prime Minister would have been aware of what was going on, and I put it to him: He was aware of the situation surrounding the LOI, and he failed to tell the Bahamian people the story.

“What a shame. The secrecy of the PLP. All of which is detrimental to the Bahamian people.”

Mr McCartney also had harsh words for the FNM over its seeming failure to pursue answers over the LOI, now that Mr Wells had been appointed Leader of Opposition Business in the House of Assembly.

“The FNM is now as culpable as the PLP in this,” he blasted. “They’re keeping quiet, and using it for political expediency. They are two sides of the same coin.

Disgraceful. They should be ashamed of themselves.”

THE TRIBUNE

Monday, August 22, 2016, PAGE 7

CHINESE HOME AMID POINTE’S PERMIT WAIT from page one

headquarters is located, rather than China while the developer waits to obtain the required permits. This means it will incur extra costs to remobilise and ship the workers back when the approvals come through.

Mr Pindling, meanwhile, implied it was ironic to now receive inquiries about a lack of Chinese workers, when CCA, as developer, had previously been criticised for not employing enough Bahamian construction workers and contractors at The Pointe.

He added, though, that CCA and its Neworld One Bay Street subsidiary were now waiting on Ministry of Works approvals before they could begin construction on the project’s main amenities.

Apart from the main 200-room condo hotel,

which is supposed to be branded by Hard Rock, the construction ‘to do’ list also includes The Pointe’s 134 luxury residences, 56slip marina and attractions that include restaurants, retail, a cinema, spa, bowling alley and performing arts centre.

“We are just attempting to get a building permit from the Ministry of Works,” Mr Pindling told Tribune Business. “Once we get that, we will start construction again.

“All the files are in, all the plans are in, and all the bills are paid. We’re just waiting for confirmation.”

When asked when Neworld One Bay Street anticipated receiving the necessary permits, Mr Pindling replied: “I have no control over the Ministry of Works.

It should be imminently.

We will get all the permits, and then do mobilisation for the job.”

He added that The Pointe did not wish to again be the subject of adverse publicity, which arose when the Ministry of Works issued a previous ‘stop work’ order because the necessary permits had not been issued.

Of the Bahamian contractors on-site, Mr Pindling said: “They’re doing the final product. That’s the parking garage, laying all the cement, doing all the roads, the landscaping and so forth.”

He added that CCA and Neworld One Bay Street were expecting to hold an official opening ceremony for the parking garage “quite soon”.

The Pointe, which has been billed as a $250 million investment on the fivesix acre site adjacent to the British Colonial Hilton, is set to dominate the entrance to downtown Nassau and views from its harbour when completed.

PAGE 8, Monday, August 22, 2016

THE TRIBUNE

CCA ‘stonewalling’ via Sarkis lock out from page one

He told Judge John Koetl that in late June 2016, CCA (Bahamas) said it could not discuss ‘discovery’ relating to the production - and exchange - of electronic documents because it was still unable to access its former offices at the Baha Mar construction site.

“On June 23, 2016, defendant [CCA] asserted that it could not meaningfully discuss electronic discovery because the owner had allegedly locked it out of the project site,” Mr Hacht wrote on CDI’s behalf.

His letter makes it clear that, by ‘owner’, CCA meant Baha Mar’s original developer, Sarkis Izmirlian, who was effectively removed from ownership and control of the $3.5 billion development last September by the provisional liquidators and, subsequently,

the China Export-Import Bank’s creditors.

Mr Izmirlian, and others involved with the Baha Mar project, especially its still unpaid Bahamian creditors, are likely to be amused

by CCA’s ‘excuse’, which was effectively shredded by CDI’s attorneys. “[CCA’s] assertion was not otherwise substantiated,” Mr Hacht wrote, “and without more it seems incredible that a sophisticated construction management firm, that is affiliated with an international construction conglomerate, whose parent is the government of the People’s Republic of China, simply lost all access to the company’s information systems, local hard drives, back-up systems and cloud storage because its physical accessibility to a job site was compromised.”

Mr Hacht and CDI are wise to be suspicious of

CCA’s assertions. While the contractor was ‘locked out’ of its offices in the immediate aftermath of Baha Mar’s Chapter 11 bankruptcy protection filing in late June 2015, Mr Izmirlian’s control over the project’s assets was ended by the Supreme Court in late September.

The Baha Mar project site is now under the control of the Deloitte & Touche receivership team, which acts as agents for the China ExportImport Bank, the development’s $2.45 billion secured creditor and CCA ‘affiliate’, given that both are owned by the Beijing government.

As a result, CCA, which had already removed many of its computers and files around the time of the Chapter 11 filing, should have no difficulty ‘accessing’ the Baha Mar site - especially since it is also negotiating a construction contract with the China ExportImport Bank for Baha Mar’s

completion.

Meanwhile, Mr Izmirlian and his team are likely to be interested in CDI’s allegation that CCA is “stonewalling” over its request for documents related to claims that the Chinese contractor was “incompetent” and engaged in “misconduct”.

Mr Hacht, on CDI’s behalf, alleged that CCA had on July 11, 2016, “frivolously objected to each and every request” for documents that was served upon it.

Document discovery is a key part of the legal process, as it enables all parties to obtain and exchange evidence that is relevant to their respective cases.

However, Mr Hacht’s letter reveals that CCA objected to his client’s demand for documents relating to Baha Mar/ Mr Izmirlian’s claims that it had breached its construction contract on the grounds that this was irrelevant.

“Defendant is merely stonewalling,” Mr Hacht alleged of CCA. “These requests seek information concerning the owner’s [Mr Izmirlian’s] allegations that [CCA] has breached the prime contract, performed incompetently and engaged in misconduct.

“In this lawsuit, [CCA] is alleging that, as a condition precedent to payment to plaintiff, [CCA] must receive payment from the owner.

“Plaintiff’s requests are targeted....to obtain information showing that the owner failed to pay [CCA] for reasons having nothing to do with CDI’s completed work.”

Mr Hacht’s letter also revealed that CCA (Bahamas) was refusing to divulge documents showing how it “allocated payments” received from Baha Mar for work on the $3.5 billion project.

CCA wanted to restrict this to documents relating

to payments received for CDI’s work, but the latter wants much broader discovery on this issue.

“Plaintiff is entitled to seek discovery as to all payments received from the owner [Mr Izmirlian] to determine whether [CCA] received payment sufficient to pay plaintiff, but improperly diverted such payments for its own benefit; and/or [CCA] wrongfully failed to invoice the owner for plaintiff’s work,” Mr Hacht wrote on CDI’s behalf.

The attorney also alleged that CCA was refusing to produce documents related to its parent company’s, China State Construction Engineering Corporation (CSCEC), ownership stake in Baha Mar. CSCEC held a $150 million preference share investment in Baha Mar, and Mr Hacht’s said this “would render CCA’s “pay-if-paid defense a sham”.

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