Government files winding up petition against 14 Baha Mar companies

Deputy Director at BIS Elcott Coleby.
Deputy Director at BIS Elcott Coleby.

This Week in The Bahamas Commentary by Elcott Coleby: July 13 – 17
By Elcott Coleby

The future of the $3.5 billion Baha Mar mega resort continued to dominate news this week in The Bahamas.

Government files winding up petition against 14 Baha Mar companies

After two days of intense negotiations in Beijing could not produce an out of court agreement on the way forward for Baha Mar, Bahamas Attorney General Hon. Allyson Gibson filed a compulsory or involuntary winding up petition against the fourteen Bahamian incorporated companies that make up Baha Mar in The Bahamas Supreme Court on Thursday. This effectively paves the way for a court appointed provisional liquidator to supervise the completion and opening of Baha Mar in the shortest possible time.

According to Prime Minister Christie in a nationally televised address on Thursday night, these winding up proceedings work in very similar terms as a chapter 11, except that the process will be supervised by a Bahamian court and a liquidator as opposed to a US court and Mr. Izmirlian.

“These compulsory or involuntary winding-up proceedings” said the Prime Minister, “are designed to work in very similar terms as a chapter 11 but with the stark difference that they will be controlled by provisional liquidators under the supervision of the Bahamian Courts rather than being controlled by Mr. Izmirlian.”

The Prime Minister went on to explain why and how his government arrived at this decision in light of a court adjournment on 7th July for parties to pursue a preferred out of court agreement on the way forward for Baha Mar.

“It transpired at the Beijing negotiations that Baha Mar’s additional funding requirements had increased considerably, and now included not only funding for completion of construction, but funding to meet start up and operating expenses; funding to cover other liabilities and deferral of principal and the initial balloon payments under the loan facility with Eximbank.

“I am advised that both Eximbank and China Construction Company demonstrated flexibility in meeting Baha Mar’s expanded funding requirements, and project completion date. This notwithstanding, Baha Mar still wanted an extended period for further negotiations which, however, was not acceptable. Baha Mar was also not prepared to agree to terms which would have included the immediate discontinuance of their Chapter 11 Bankruptcy proceedings in the United States and their legal action against China Construction in the United Kingdom. These terms were demanded by Eximbank and China Construction, and supported by the Government, as conditions to any agreement for additional funding, resumption of construction and project completion date.”

The Prime Minister pointed out that the actions taken by the Attorney General were not designed to punish or destroy Baha Mar, but to the contrary “the purpose of the provisional liquidation is to enable the appointment of a neutral party to take control of the process and to work with the key stakeholders under the supervision of the Bahamian Court to prepare a strategic and workable roadmap for the completion and opening of the resort” explained the Prime Minister. “Such a solution will recognize and respect the rights and legitimate interests of the key parties, including Baha Mar and the Bahamian people.”

The Government meanwhile has made arrangements for a second payment of salaries of Baha Mar’s Bahamian employees, “with a view to such payments being recovered in due course so as not to place any additional strain on the Bahamian taxpayer” according to the nation’s chief.

Passport Office addresses backlog

In addition to the announcement of a newly introduced fee of $200 to expedite applications after 1st July, 2015, the Passport Office announced on Wednesday of this week that a system had been established to deal with the current backlog of passport applications.

“The new system affects applications that were previously submitted for persons who have travel plans prior to the collection dates indicated on the receipt they were given at the time of application; for those whose collection date has expired; and for those persons who have not received the passport and are in urgent need of the passport” the Office said in a press release.

The statement said that applicants with verifiable needs of their passports prior to the collection date provided or whose collection date has expired and the passport is still not ready, can now email this information, along with the details of the application (name, date of birth and application ID number) to MOFACUSTOMERSERVICE@BAHAMAS. GOV.BS .

The Office has assigned dedicated staff to process the emails, track the applications, expedite the same to meet the date of travel and email a new collection date AT NO ADDITIONAL COST.

This service applies only to applications submitted to the Passport Office up 9th July 2015.

This week in Parliament

The House met on Wednesday to debate the Travelers Currency Declaration Bill, health and safety in the workplace and a resolution for the government to acquire land in South Eleuthera for the construction of a mini hospital.

A formal agreement between the governments of The Bahamas and the United States on the declaration of currency between the two countries was debated and passed. This new law adds another layer to and bolsters the existing Bahamian anti-money laundering regime.

An Act to improve health and safety in the workplace was also passed.

The Auditor General’s report on the Urban Renewal small homes repair program was officially tabled in the House by Prime Minister Christie. This tabling paves the way for the Public Accounts Committee to continue its inquiry into that program.

The Speaker of the House read a letter written to him from the Auditor General indicating that going forward the office of the Auditor General would release an audit schedule ahead of time and would release the final audit report to both the Ministry and the House Speaker simultaneously. This new procedure was necessary to maintain the independence of the Auditor General.

Tabling the resolution to acquire privately owned land in South Eleuthera to construct a mini hospital was area MP and State Minister for Legal Affairs the Hon. Damian Gomez. The two parcels of land in question are owned by Philip Bethel and the estate of the late Gus Cooper. The parcels are 26.04 and 3.21 acres in size respectively.

The opposition questioned why the mini hospitals in Abaco and Exuma were not yet opened and felt that the government could have built the mini hospital on crown land.

Both bills and the resolution were passed unanimously in the House.

Urban Renewal co-chair praises Auditor General

In light of the tabling of the audit report on the Urban Renewal 2.0 Small Homes repair program by the Prime Minister and the letter the Auditor General wrote to Speaker outlining the procedure for the conduct of public accounts audits and the distribution of the report, co-chair of the Urban Renewal omission Algernon Allen praised the Auditor General. He said that he would be eager and happy to sit before the Public Accounts Committee (PAC) to discuss Urban Renewal because it was such a spiritual story of transformation.

“We are eager, happy to appear before the Public Accounts Committee” said Mr. Allen. Urban Renewal is a wonderful – indeed a spiritual story to tell. Urban Renewal is a story of social transformation and renewal. Transformation and Renewal of communities; more than 700 homes have been repaired here in New Providence in the last two years.”

Government meets with international credit ratings agency

Prime Minister and Minister of Finance, the Rt. Hon. Perry G. Christie and his State Minister for Finance the Hon. Michael Halkitis left Parliament early on Wednesday to meet with representatives from an international credit ratings agency to discuss what the country’s economic projections and sovereign credit and debt ratings would be amid the decision by the principal of Baha Mar to file for bankruptcy.

“There is no immediate threat of any downgrading” assured the State Minister for Finance Hon. Michael Halkitis but said that the ratings agency is watching closely to see how the whole bankruptcy proceedings revolves itself and its impact on tourism and the Bahamas economy as a whole.

He said that during the introductory meeting on Wednesday morning, he and the Prime Minister discussed Baha Mar within the context of the entire economy.

“We showed them that notwithstanding the difficulties of that very important development, there are other developments that are going on which will create some employment and contribute to the economy; having said all of that, it is in our interest to make sure that we try and resolve this situation as soon as possible.”

He admitted that the agency was looking for a speedy resolution to Baha Mar and if the resort was not opened soon, it would create a drag on the economy.

Historic labour agreement signed.

The Bahamas Government signed the first industrial agreement with the Bahamas Education Managerial Union (BEMU) on Wednesday of this week. On hand were Education Minister Fitzgerald and Labour Minister Gibson.

Characterized as “historic,” the five-year industrial agreement included Professional Development, Sabbatical Leave, Responsibility Allowance and “the introduction of a onetime payment for geographical posting for officers setting up a second home” as well as “the introduction of a Disturbance Allowance for persons posted away from the island in which they were domiciled in excess of three months.” The beneficiaries include the more than 400 union members including managers, supervisors and technical staff.

Also on hand to witness the historic signing were Donella Bodie, Permanent Secretary in the Ministry of Education, Science and Technology; Janice Miller, Acting Permanent Secretary, Ministry of Labour and National Insurance; Lionel Sands, Director of Education; senior government officials, Frank Carter, Labor Consultant and Lead Negotiator; Charles Wildgoose, President, BEMU and union executives.

The Hon. Jerome Fitzgerald, Minister of Education, Science and Technology, said no bargaining agreement pleases all of its members, however, “the key objective is that collectively, the members of BEMU will feel a sense of worth and appreciation”.

PM Christie delivers charge to youth skills and employment forum

The Inter-American Development Bank (IDB), the Bahamas Chamber of Commerce and Employer’s Confederation (BCCEC) and the National Development Plan Committee (NDP) collaborated on a forum to address the critical issues of narrowing the skills gap among our youth through a set of comprehensive and innovative training methodologies. This two day forum was officially opening on Thursday, 16th July at the British Colonial Hotel.

Delivering the keynote address was Prime Minister Christie who charged the participants to formulate strategies during their deliberations that would answer the following key questions:

“How do we empower young people to find jobs that match their skills and interests? How do we strengthen our employment services: both public and private? How do we allow young people to explore employment opportunities through meaningful internships and apprenticeships while engaging in formal education? How do we prevent young people from becoming disengaged from society and the labour force?

“These are vital questions for you to consider during the course of today’s workshop and as we prepare our National Development Plan for a stronger future.”

CEO of the Chamber of Bahamas Commerce and the Employers’ Confederation (BCCEC) Edison Sumner called for a public private sector partnership similar to the Tripartite Council to comprehensively addressing the workforce readiness and skills needs of youth entering the workforce.

Arianna medals in Toronto

Winning the bronze medal in the 100 meters freestyle in a time of 54.15 seconds, Bahamian Arianna Vanderpool-Wallace was the first Bahamian to medal in the Pan Am Games being held in Toronto, Canada. She entered the finals with the second fastest qualifying time of 54:00 seconds. She later opt out of the 100 meters butterfly to focus on the 50 meters freestyle.

Track and field competition begins this weekend but in a last minute rule change, the governing body required a reduction in the number of track and field athletes, bringing the total number to 680, affecting all 41 countries represented at the games. Numerous letters of protest were filed in response. BOC Chair Wellington Miller has confirmed that the number of Bahamian track and field athletes has not been reduced.

In passing…

Foreign Minister Hon. Mitchell was in Addis, Ababa this week representing the Bahamas at the Third International Conference on Financing for Development. Mr. Mitchell delivered the country’s statement on Tuesday, 14th July. This meeting continues the global elaboration of a framework to promote sustainable development beyond 2015 and in the face of global warming. Of course this meeting is the precursor to the COP1 Conference scheduled for December of this year in Paris, France

The Espy’s were held on ABC on Wednesday night and as for the best play category, New York Giants Odell Beckham won with his celebrated one hand catch won the award, beating out the play at the Bahamas Popeye Bowl game played on Christmas eve at the Thomas A. Robinson Stadium. Mychal’s son Klay Thompson lost to Lebron James for best championship performance. Klay’s three-point exploits during the 2015 NBA championship series were not good enough.

Nineteen young women graduated from the Zonta Club of New Providence’s 2015 Workforce Readiness Training Programme for Unemployed Women on Tuesday, July 14, at the Bahamas Training Vocational Institute (BTVI).Delivering the charge was Minister of Social Services and Community Development the Hon. Melanie Griffin who assured them that with the completion of this course, they had acquired “a firmer foundation upon which to build their dreams.” She further challenged them to view the graduation as a new beginning to a lifetime of learning and self-improvement; a new beginning to becoming good listeners, critical readers, creative thinkers and above all, to never again undervalue the talents that brought them this far.

Education Minister Fitzgerald announced this week that the government is expected to spend $7 million over the next six weeks on maintenance and repairs to the more than 164 public school buildings in the education system. Much of the work have commenced said the Minister and he expressed confidence that the repairs will be completed in time for the September opening of school. He also revealed that when the school year begins, the Ministry of Education expects to have the full complement of Bahamian specialty teachers, this in the areas of math and science. He thanked the College of The Bahamas.

“I was disappointed, but I understand that there is always a next step” was the response of Hotel union head Nicole Martin to the Supreme Court ruling on the payment of gratuities to workers at the Melia Resort. In his ruling, Justice Roy Jones opined that under the union’s 2003 collective bargaining agreement with the Bahamas Hotel and Employers Association, the employer (Melia) was not contractually obligated to pay gratuities on all-inclusive packages without an agreement on the gratuity rate and distribution formula.

The Bahamas Telecommunications Company (BTC) and the Bahamas Communications and Public Managers Union (BCPMU) have agreed on a new three year labour contract which takes immediate effect and is retroactive to 1st April 2014. The agreement allows BTC to make the necessary operational adjustments to meet customer requirements for expected competition. The agreement allows for employees separated from the company to access the original voluntary severance package in March 2015. As for the Public Communications and Public Office Unions (BCPOU), their agreement was described as a win-win by executives since benefits that had been removed were back on the negotiating table. The union highlighted the ability to save and freeze pensions for union members as one major negotiated benefit.

About the author: Elcott Coleby is a Deputy Director at the Bahamas Information Services. He holds a Bachelor of Science degree in Chemistry (B.Sc) and a Masters of Business Administration (MBA). He provides frequent commentary on public policy and communicates the works of the government. Address all comments to the following email:




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