The Baha Mar Resort and Casino was supposed to be one of the biggest luxury playgrounds in the Bahamas. More than four years into construction, the resort is now facing multiple problems with the developer filing for bankruptcy and blaming the Chinese general contractor handling project for the repeated delays. The China construction firm fired back Tuesday, accusing the developer of design and financial mismanagement.
The $3.5 billion Baha Mar project was reportedly to become the gateway into the U.S. resort industry for China's largest construction firm, China State Construction Engineering Corporation Limited. The project started in 2011 and was slated to open in December last year, but it was delayed. The opening date was then moved to March, unfortunately that target was missed too. It is now unclear when the project will be completed, given that construction has stopped on the Bahamas resort.
Businessman and developer, Sarkis Izmirlian, CEO of Baha Mar Resorts Ltd., filed for bankruptcy protection last week, blaming the China construction firm for the repeated delays, reports the Wall Street Journal. Izmirlian stated on chapter 11 of his filing, that China State Construction repeatedly missed construction deadlines and even accused the firm of inflating invoices for work it has completed.
According to Forbes, the developers also issued a lawsuit against China State Construction for allegedly breaching contract obligations, seeking up to $192 million in damages. On Tuesday, July 7, China State Construction issued a statement, firing back at the Bahamas developers.
The statement was issued by CCA Bahamas Ltd., a subsidiary of the China construction firm, and it states that "Baha Mar Ltd.'s decision to file for bankruptcy protection is the direct result of its failure to secure adequate financing and its mismanagement of the design of Baha Mar resort project." The statement, reports Forbes, further cited instances where the developers changed the principal architect after construction started, along with the delayed and incomplete delivery of design packages, and over 1,300 changes in construction directives.
The Forbes report further said that the Baha Mar developers refused to comment on China State Construction's accusation, but issued a statement stating that their chapter 11 filing contains the failed construction performance of the firm and that they are "not going to comment on CCA's press release attempt at damage control."
The Baha Mar resort, if completed, will include luxury condos and four hotels with more than 2,300 rooms. The commercial real estate project is also set to contain a 100,000-square-foot casino, an 18-hole golf course, more than 40 restaurants, along with a Lenny Kravitz designed nightclub.
Both the China State Construction and developers led by Sarzis Izmirlian, invested in the Baha Mar resort project. The China construction firm supplied $150 million for a preferred equity stake, while the developers put in $850 million in equity. China's Export-Import Bank also loaned $2.5 billion to the project.
