China’s big ambitions stumble at Bahamas resort

Nassau, Bahamas/Beijing (Reuters) – China’s push to extend its influence in the Western Hemisphere has hit an embarrassing setback at an unfinished, $3.5 billion resort and casino project in the Bahamas.

A series of construction delays, funding squabbles, lagging inspections and faulty work at the Baha Mar resort in Nassau have led to contention and finger-pointing in recent months among the local developer, a Chinese state-backed contractor and China’s export finance bank.

And on Monday, Baha Mar Ltd, developer of the 2,323 room resort located along Cable Beach near downtown Nassau, filed for voluntary bankruptcy protection in a Delaware court, saying that China State Construction Engineering Corp, the project’s general contractor, had ceased “all material work.”

The turmoil and internal squabbles over Baha Mar have roiled the Caribbean nation’s fragile economy, while aggravating would-be tourists and idling thousands of workers amid sky-high Bahamian unemployment and slack revenue growth.

For China, which backed the project with a $2.45 billion concessionary loan and supplied a government-owned construction firm to build the resort, the fiasco represents a formidable hurdle to the country’s billion-dollar aspirations to deepen ties to Latin America.

“For the Caribbean and Central America, this is a cautionary lesson in the view that Chinese state-sponsored investment in tourism or other areas is in any way assured to be well-run or efficient,” said Matt Ferchen, an expert on China-Latin America relations at the Carnegie-Tsinghua Central for Global Policy in Beijing.

Buildings at the sprawling resort, which includes a Las Vegas-style casino along with Grand Hyatt and Rosewood hotels, appears near completion from the outside, and at least some rooms have been readied. A well-manicured Jack Nicklaus Signature 18-hole golf course stands waiting, though landscaping, a parking garage and tennis courts on the resort grounds remain unfinished.

Baha Mar was originally scheduled to open in December, but that deadline was missed, as was an end-of-March deadline.

The second delay proved “devastating” to Baha Mar Ltd, which had hired more than 2,000 hotel and casino workers to staff the opening, the developer said in its court filing.

Interviews by Reuters with more than 20 contractors, inspectors, Bahamian government officials and executives who have worked on the project revealed shortcomings in the resort’s construction and planning.

On-site inspectors, who requested anonymity because they were not authorized to speak, said China Construction, after falling behind, rushed to schedule inspections as they completed various phases of the project.

The company did not return several messages seeking comment.Earlier this year, a pipe burst when an interior water system at the resort was tested, said Colin Higgs, permanent secretary of the Bahamas Ministry of Works and Urban Development.

Inspectors and contractors said the broken pipe caused flooding in a fully furnished restaurant at the resort. Higgs also said inspections on several miles of electrical wiring were not yet completed.

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