Speaking Notes
Rt. Hon. Hubert
A. Ingraham
Resolution on
Baha Mar Project
18 November,
2010
Nassau, Bahamas
Purpose
for Tabling this Resolution
I have been
disappointed but not surprised by the failure of Members Opposite to
recognize that my Government has made considerable and measurable progress
in making lemonade from the lemons which they left on the table when
they were put out of office in 2007.
Similarly,
I am not surprised by their baseless allegation that I or my Government
mistreats international investors. The record does not support
this.
As regards
the matter at hand, the Resolution before us seeks the approval of Honourable
Members for (1) the approval of the project, and (2) the issuance of
up to 8,150 work permits for non-Bahamians to be engaged on the project
but with no more that 5,000 being engaged at any given time.
Since this
request for such a large number of work permits for a single project
is without precedent, my Government thought it prudent to bring this
matter to this place. It is regretted that Members Opposite, who
maintain their commitment to participatory, open and transparent democracy,
do not share our effort and commitment to govern in the sunshine.
I and my Government do not believe that this debate to be a waste of
time; we believe it to be a necessary part of open, transparent and
accountable Government.
Summary
of Original HOA and Current Proposed Development
The original
agreement in 2005 called for a $1 billion hotel development, inclusive
of new hotels an upgraded existing 3 hotels and with amenities to include
casino, convention centre, expanded golf course, possible marina, beach
and pool amenities.
As Members are aware the present
proposed development was expanded to a $2.6 Billion Investment and is
to comprise 6 hotels (including existing Sheraton and Wyndham with
2200 new and additional rooms plus the 1250 existing rooms now open
at the Sheraton and the Wyndham hotels; a 100,000 sq. ft. casino;
a 150,000 sq. ft. stand alone Convention Centre, a 20 acre beach and
pool experience, an 18 hole golf course (joint venture with the Government)
and additional residential products including time share.
Baha Mar has advised the Government
and the press of agreements reached between themselves and three hotel
operators for the operation of three of the new hotels – that is Rosewood,
Morgan and Hyatt.
Sale of
Government owned Land
There has been
much discussion over the past two days about the sale of government-owned
land to this project. And there has been an attempt to equate
the sale of two government-owned hotels during the first FNM Administration
in the mid-1990s by the Hotel Corporation to the sale of leased Crown
Land agreed by the Christie Administration in 2005.
I had occasion
during an earlier debate in this place dealing with Crown Lands to explain
the difference between Crown Lands and Government-owned land.
During that
debate we also spoke extensively about the conditions under which land
is leased.
It is important
that the Bahamian people be informed that firstly, the hotels sold by
the Hotel Corporation were free-hold properties purchased by the Government
of The Bahamas and later sold by a Government of The Bahamas.
The land underlying
the Wyndham Crystal Palace Hotel and Casino, the Sheraton Cable Beach
Hotel, and the Nassau Beach Hotel was Crown Land which has from time
immemorial been long leased for development,
but never sold,
to the private sector by each Government of The Bahamas - whether prior
to Independence or after – that is not until 2005 when it was sold
by the former Administration.
The Hobby Hall
Parcel and the Cable Beach Golf Course was private land conveyed to
the Government of The Bahamas for the perpetual benefit of the Bahamian
people. It’s ownership in trust for the Bahamian people has
been respected by successive Bahamian Government whether UBP, PLP or
FNM - up to 2005.
The 2005 Agreement
signed between the Government led by Members Opposite and Baha Mar,
set terms determining conditions under which the Government must transfer
certain parcels in fee simple to Baha Mar.
These are facts
Mr. Speaker. They do not require debate.
One of my early
actions on coming to office was to table in this Place the original
agreement concluded with Baha Mar in 2005 and the supplemental Agreement
concluded in 2007 when approval was also received from this House for
the transfer of the Government-owned land as provided for in the 2005
Agreement.
For the information
of Honourable Members I refer to a schematic prepared by Baha Mar which
sets out land included in its proposed project. See
Land Transfer
Summary Sheet
Foreign
State Owning Crown Land
Mr. Speaker,
It is the view
of my Government that it is an untenable position to permit any foreign
State to own land in The Bahamas. Under the law, any financial institution
providing funding for a development in The Bahamas has a number of alternatives
to protect their interest should that project fail. One of these
protections is foreclosure. As I said at my Press Conference on
Sunday past, should this project not succeed, and I have no reason to
believe that it will not, and should I be in the position that I now
hold, my Government would not agree to foreclosure on these properties
(previously Crown Land) to any foreign State or any entity which is
owned by a foreign State.
Conclusion
of New Deal with China State Construction & Baha Mar
Mr. Speaker,
I believe it may be useful for me to repeat for the record of this Honourable
House information already in the public domain, having been presented
to the Bahamian press and through them to the Bahamian people during
my press conference last Sunday afternoon.
At that time
I advised that as a result of candid discussions with the Chinese Export
Import Bank, the China State Construction Engineering Company, and following
upon discussions between those companies and their partner, Baha Mar,
a consensus was reached on a number of significant issues related to
the proposed Baha Mar Cable Beach Redevelopment.
Increased
Subcontracts
First, the
construction value of works to be subcontracted to Bahamian contractors
and subcontractors has been doubled from $200 million to $400 million.
Bahamians will also work on elements of the Core Project.
The significance of this is that a considerable portion of the new subcontracts
will include work on the Core Project.
This increase
in works to be put to bid to Bahamian contractors will result in the
largest award of contracts to Bahamian contractors on a single project.
Contracts will be awarded to large, medium, small scale and individual
contractors. This is in keeping with my Government’s commitment
to deepening and broadening economic opportunities for all Bahamians.
China State Construction
and Baha Mar has provided information on specific and increased works
to be put to bid to Bahamian General Contractors and Sub-contractors.
These examples include trade packages for the Core project not previously
considered for contract to Bahamian companies.
Generally, bid packages will
cover the full spectrum of builders trades including masonry; drywall
and finishes; carpentry, painting and tiling, landscaping, electrical
and mechanical; plumbing; finish trades; and so on.
Specifically, prime Core Project
packages (not previously contemplated by Baha Mar and its principal
contractor) to
now be made available for Bahamian Contractors’
bidding will include, but not necessarily be limited to:
Ø
Core Project site work (demolition of existing buildings; underground
utilities; earth works; parking lots; lighting; for example)
Ø
The
Baha Mar Convention Centre (structure; masonry; mechanical
and electrical; drywall; tile and finishes for example)
Ø
The
Hyatt Timeshare Villas (structure; masonry; mechanical and
electrical; drywall and finishes, etc.)
Ø
Core Project -
there are 24 individual free standing buildings within
the Core Project site including restaurants; retails shops; bars;
and pool restrooms, for example, that will be bid to Bahamian General
and Sub Contractors for full scopes including structural, masonry or
envelopes; full interior fit out; mechanical, electrical, and plumbing.
Ø
Site wide concrete, pavers, specialty walks and pool decks will be bid
to Bahamian Contractors.
-
Within the towers,
there are numerous restaurants and retail shops that will be bid to
Bahamian General and Sub Contractors for fit out including mechanical,
electrical, plumbing, kitchens, and full finishes.
Increased
Employment of Bahamians
On the issue
of the employment of Bahamians and the transfer of skills to our Bahamian
people, Baha Mar has indicated to the Government that as a result of
the substantial increase in the volume of subcontracts to be awarded
to Bahamian subcontractors, the numbers of Bahamians to be employed
during the construction phase will increase.
This figure,
which is dependent upon the availability of the quantities of Bahamian
construction workers required, may be revised upward to 4,500 I am told.
Regardless the exact figure to be attained, significantly more Bahamians
will be employed during construction.
Moreover, given
that subcontracts will include work in the Core Project, the opportunity
would exist for the transfer of skills to Bahamians.
Extensive
Training Programmes
Additionally
China State Construction Engineering Company and Baha Mar have agreed
to an extensive and comprehensive $8 million training and retraining
programme for Bahamian workers. Baha Mar and CSCEC will collaborate
with the BTVI and The Bahamas Contractors’ Association for the training
of construction workers.
Baha Mar has
also agreed to establish a Training and Service Academy which will provide
extensive training prior to the opening of the various hotels and other
amenities for persons who will be employed during the operation of the
resort. The Academy will be permanent, offering ongoing training
opportunities for employees and prospective employees.
I outlined the timing of training
to be offered for permanent employment in the Baha Mar Resort on Sunday.
I repeat them now:
The Government is informed
that the Baha Mar Training Academy in conjunction with its Human Resources
Departments and Baha Mar’s hotel/casino brand partners will put in
place a training programme thru the Academy:
Pre opening (12-24 months
before opening): The hotel and casino brands will begin to select
high performance individuals that will be placed within their hotel
system throughout the world. These individuals will be placed in job
shadowing programs, on the job training programs, and hotel specific
systems training programs. Baha Mar will also be hiring executive staff
and training individuals who will staff the anticipated job fairs and
will be conducting employment interviews.
Pre opening (12 months
before opening): The Hiring and Job Fairs will begin with specific
employment targets required to enable the project to meet its training
and operational ramp up needs. Baha Mar anticipates hiring and training
approx 7000 employees during this period. It is also expected that a
number of the Bahamian construction workers in a variety of trades will
be interested in filling ongoing maintenance positions since they will
be very familiar with the projects mechanical, electrical and plumbing
infrastructure.
Post Opening and Stabilized
Operation: Baha Mar will continue to provide training for new employees
and for continuing training for existing employees.
Such training
will help to empower the Bahamian people by advancing wealth-creation,
providing extensive opportunities for professionals and securing jobs
and livelihoods. Such broad agreement will pave the way for this
large-scale project which will assist our economic recovery.
Table Letter
from Baha Mar/China State Construction Engineering Corporation and Email
Exchange between OPM and Baha Mar
Government
to Monitor Technical Issues
Mr. Speaker,
I should like
to note that it has been Government policy for some time now to not
only require the completion of EIA and MPA’s for major developments
in our country but to also require that the Ministry of Public Works
engage appropriate technical personnel – typically civil engineers
– to monitor and ensure that required standards are maintained throughout
the construction phase of a development. Suffice it to say that
the Ministry of Works will be charged with ensuring that our policy
is observed and enforced throughout the construction of the Baha Mar
Resort.
Concern
Re Phasing-In of New Rooms
Mr. Speaker:
The worst economic recession
since the Great Depression is dramatically altering the world travel
and tourism industry. Reduced occupancy, depressed room rates,
reduced airlift for leisure destinations and hence reduced tourism derived
revenues are realities being faced by tourism based economies around
the world.
Amidst this reality is also
a reality that non-traditional tourism markets are growing – in Latin
America and in Asia (China and India). We must not miss opportunities
that are presenting themselves in these markets.
That notwithstanding, I have
already commented upon my concerns with regard to the opening of the
full Baha Mar Resort immediately upon its completion, releasing more
than 2,000 new and additional rooms on the Nassau/Paradise Island hotel
market at one time.
I continue to pursue with Baha
Mar and its partners a system of phased introduction of the new and
additional rooms onto our market so as to protect existing business
and further and importantly, to prevent room rate competition downward
to detriment of our tourism product.
Honourable Members are aware
that Baha Mar currently owns some 2,000 hotel rooms, only 1,250 of which
are now open. New construction will add 2,200 new rooms, of which
approximately 300 may be condominiums. [This will result in an
additional 2,650 hotel rooms to be brought on-line in a relatively short
period.]
My Government remains in discussion
with Baha Mar about the timing of the opening of some of the hotels
and or more particularly with the closure of the Wyndham Hotel for refurbishment
and upgrade in a phased programme permitting the transfer and absorption
of that hotel’s staff into the new hotels during that refurbishment
period projected to last for between 14 to 18 months.
Kerzner’s Concern Re MFN
Honourable members will be
aware of the expressed concerns of Kerzner International with regard
to the opening of more than 1,000 new hotel rooms at one time.
I alluded to this on Sunday
past. Kerzner International spoke to this in a press release issued
last evening. That press release also set out its concern that
Baha Bar may be benefitting from terms more favourable than those extended
to Kerzner under its various agreements with the Government in relation
to the development of Atlantis and other Kerzner properties on Paradise
Island.
The entry of Kerzner in The
Bahamas has been good, indeed very good for The Bahamas. Kerzner has
created as many as 2,000 more new and additional jobs to that required
under the terms of the various Agreements concluded with the Government.
Kerzner’s impact on training – whether of workers involved in the
construction of his various resort properties, or for workers engaged
in the operation and maintenance of Kerzner’s properties is clearly
evident. The impact of Kerzner International – of Atlantis,
the Ocean Club and the Cove, with their themed park, marina etc is also
evident.
Yes, Kerzner is good for The
Bahamas. It is also true that The Bahamas has been good to Mr.
Kerzner. It has not been a one way street. The relationship
has been mutually beneficial.
I note that Kerzner International
is late in expressing its concern with the Baha Mar project; having
not voiced those concerns in 2005 when the dimensions of this project
would have been very widely covered in the Bahamian press, nor in 2007
when my Government made the details of the various Agreements concluded
with Baha Mar public in this place. On behalf of the Government,
I do not concede that we have breached our agreements with Kerzner.
I await receipt of the particulars of Kerzner’s claim which we will
review and determine. We always honour our deals. And the
arrangement with Kerzner is no exception.
I believe, Mr. Speaker, that
the horse has left the barn. I am fully confident that this Honourable
House will signal its approval for this project to proceed.
I am also aware that its opening
will provide special challenges to our tourism sector. I have
expressed my concerns and reservations to Baha Mar and its partners.
The relevant Government agencies
and departments, most particularly the Ministry of Tourism, is fully
informed of their duties and responsibilities as regards ensuring that
Baha Mar and its partner hotel operators take necessary and appropriate
action early so that critical marketing, public relations and advertising
is put in place to ensure the successful opening of these Resorts
and
perhaps as importantly, that such action not be responsible
for damage to the business base of existing hotel properties in The
Bahamas.
The Bahamas is a premier warm
weather vacation destination. We had our origin in the tourism
field in being a luxury vacation destination. After a period of
decline during the latter part of the 1980s, the glamour associated
with Bahamian tourism in the 1950s and 1960s returned very much as the
result of the magnificent developments undertaken by Kerzner International
on Paradise Island.
Kerzner’s hotels brought
back to The Bahamas in unprecedented numbers, upscale visitors in pursuit
of good service in modern well maintained hotels. Kerzner’s
lead was taken up and significant developments followed – in Cable
Beach, in Grand Bahama, in Exuma, in Andros, in Abaco, etc.
We must be keenly aware that
we, because of our size, will always be a vacation destination for discerning
visitors – hence our interest in promoting and supporting the development
of smaller, boutique hotels. We cannot compete with the large
vacation destinations – in Mexico, Cuba, Dominican Republic etc- whose
strength in the market place comes from their large, skilled
and
cheap labour force. And so we do not wish to act in a manner that
precipitates a race to the bottom in hotel room rates for example.
In this regard, I record my
satisfaction that among two of the three hotel operators who are to
partner with Baha mar are two top luxury operators of small hotels –
Rosewood and Morgan’s.
And I am happy that Baha Mar
will, after an absence of many, many years, bring Hyatt back to The
Bahamas. Ironically, Hyatt will be returning to Cable Beach where it
once operated the Emerald Beach Hotel on the site of the present Wyndham
Hotel and Crystal Palace Casino.
I believe that if property
managed, this project will bring great benefit to the Bahamian economy
and to our people. I and my government are committed to working
with Baha Mar to ensure that this project succeeds and that our entire
tourism sector continues to grow from strength to strength.
Mr. Speaker:
I await the expression of support
for the Resolution by Honourable members.
