King Sol Kerzner is not pleased with the greenlight of Baha Mar

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King Sol is not pleased with the greenlight given for the Baha Mar Development. Will the South African now punish the slaves and sell the plantation? Only time will tell.

PARADISE ISLAND, The Bahamas, November 17th, 2010 – Following the announcement by Prime Minister Hubert Ingraham regarding the Baha Mar project, Kerzner International stated that while it welcomed any efforts to enhance and improve the tourism sector in The Bahamas, the proposed terms of the Baha Mar project violate the Kerzner Heads of Agreement with The Bahamas and raise serious concerns, as the Prime Minister alluded to in his press conference.  We intend to discuss with the Government how to address these concerns.

The Heads of Agreement for each of the three phases of development on Paradise Island required that at least 70% of the total construction labour force had to be Bahamian.  In order to induce Kerzner into making its substantial investment into The Bahamas, Kerzner’s Heads of Agreement embodied a provision guaranteeing Kerzner that if they made their investment, no subsequent investor would get more favourable terms.  The proposed Baha Mar project with its thousands of foreign Chinese workers would represent a material breach of this agreement.

Sol Kerzner, Chairman and Chief Executive Officer of the Company, commented:

“When Kerzner first invested in The Bahamas by acquiring what is now the Coral and Beach Towers out of bankruptcy in May 1994, we made our investment on the basis of agreements with the Government that gave us contractual assurances regarding our investment. Although we were confident in our abilities to re-establish the Bahamian tourism industry at that time, we did so in the face of truly dire economic conditions.  Accordingly, we insisted upon most favoured nation treatment, which would ensure that no subsequent investor would be given advantages that we never enjoyed.

“Since our first investment, we have always found Government – irrespective of the party in office – to be a faithful partner who has justified our initial and subsequent confidence in The Bahamas as an investor.  We have invested more than $2.3 billion over the course of our build-out of the three phases of Atlantis, increasing our room count from approximately 1,100 in 1994 to over 4,000 today.  We have grown the Bahamian workforce from approximately 1,200 employees when we commenced operations in 1994 to nearly 8,000 full-time employees today, not to mention the indirect employment that our investment has generated in the community.  Furthermore, we have spent millions on training programs to develop and improve the skills and professionalism of our work force, which has allowed Atlantis to be rated among the top resorts in the world.

“When we made our largest single investment of approximately $1 billion for Phase III, we did so based on a Heads of Agreement signed with the PLP Government in 2003. Among the many requirements that Government imposed on Kerzner under this and prior agreements was a strict rule that at least 70% of the total construction labour force would be Bahamian. As was the case with the two previous agreements with Government, our 2003 agreement included a most favoured nation provision that assured Kerzner that our investments would be protected from subsequent investors receiving more favourable terms.  These agreements represented a solemn promise by The Bahamas to us that any subsequent investor would only compete against us on a level playing field.

“Baha Mar proposes employing thousands of foreign Chinese workers, which would represent far more than 30% of the total labour force.  Approval of this arrangement by Government would be a clear breach of an investment agreement with a developer that has become its largest private employer and an investor who took a risk on The Bahamas when its economy was struggling far more than it is today.

“In his press conference, the Prime Minister indicated that he was not necessarily in favour of building a single phase development of more than 3,000 rooms.  I wholeheartedly agree.  It is our contention that a first phase of no more than 1,000 rooms should be built and absorbed into the market successfully before undertaking any subsequent phase.  Phasing in this manner would ensure a healthier, more stable tourism market and would protect the existing resorts and the Bahamian jobs within those resorts.”

7 COMMENTS

  1. Thank goodness Sol finally spoke openly on this project. Nothing wrong with starting one phase first and moving forward if that prospers with the BahMar. Many of us were concerned about this known revalation of playing on a equal ground. This deal from when it started was to big and was one sided. To this day am wondering with a Recession happening every 7-10 yrs and Tourists now favouring cruise ship travel how are these rooms to be filled? Every tourism employee knows the months of August, September, and October hotels barely reach 40% occupancy. I really hope all parties have thought this far.

  2. Tell Sol and the “house negro” Ingraham ….Bahamar is coming and the can either fish, cut bait or get the hell out of the boat

  3. Mr.Kerzner has a point, and a very valid one. A deal is a deal. I am now convinced that the current Prime Minister does not want this project to go forward. Reason being is it a coincidence that on the same day of the debate that Mr. Kerzner releases his statement, “We The People” is launched at Atlantis and that Kanyata Gibson is the speaker for the FNM in the house.
    Come on they want us to think that they want the project to go ahead but they really don’t. The only reason for the parade is that they do not want the Bahamian people to know that they don’t want it and at the same time they want to blame the PLP for it not going forward.

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