Bahamas Mega-Resort Stands Empty, Casualty of Dispute With Chinese Partners

The uncertain future of Baha Mar, a $3.5 billion mega-resort nearing completion on Nassau’s white-sand Cable Beach, points to the challenges China faces as it finances and builds large-scale construction projects overseas amid language and cultural barriers, lack of regulation and allegations of graft. “The more problems there are and, in a way, the more media attention these problems attract, they erode positive attitudes towards Chinese presence in the region,” said Ariel C. Armony, director of the University Center for International Studies at the University of Pittsburgh, who has researched the perception of Chinese investment in the Americas. After losing its American backer during the financial crisis, Baha Mar was revived in 2009 by China Construction America, a Jersey City-based subsidiary of a Chinese state-owned construction company, the China State Construction Engineering Corporation. The company facilitated a $2.5 billion loan from the Export-Import Bank of China, a state-owned lender with which it has close ties, and invested $150 million for its own equity stake. In exchange, China Construction America would serve as the resort’s contractor, using Chinese workers. The rest of the financing came from Sarkis Izmirlian, the Swiss-born developer who conceived Baha Mar and invested $850 million. Since his project filed for bankruptcy last summer, there has been finger-pointing from all sides. But there is broad agreement on two points: Baha Mar is spectacular, and there is plenty of blame to go around for its failure to open. Read more. (Subscription required.)