Bahamas News

In the latest twist to the debacle surrounding the pullout of Harrah’s from the Cable Beach re-development deal, Baha Mar on Monday made public the letter Harrah’s wrote the company last Thursday announcing that it was abandoning the partnership.

The letter confirms that Harrah’s did indeed point to comments made by Prime Minister Hubert Ingraham in the House of Assembly last Wednesday as one of the reasons it was pulling out.

But in a statement it released to the press on Sunday, Harrah’s did not list those comments as a reason why it was terminating its arrangements with Baha Mar.

The company said in the Sunday statement it greatly appreciated the efforts and cooperation of the Bahamian government throughout the negotiation process that led to a signing of an agreement confirming its involvement in the $2.6 billion project as one of Baha Mar’s joint venture partners.

“There is no question that Prime Minister Ingraham was committed to the project and recognized its potential contribution to his nation’s economy,” the Harrah’s press statement said.

But in its letter to Baha Mar, Harrah’s said given comments made by the prime minister in the House of Assembly, it had doubts about government land being turned over to Baha Mar in accordance with Baha Mar’s heads of agreement with the Government of The Bahamas.

On Wednesday, the prime minister said the passage of the resolution in parliament would not mean the government would immediately transfer the land in question.

“All it means is that Parliament is authorizing us to do so,” Mr. Ingraham said. “The land will only be transferred if and when Baha Mar honours the deal. And if the deal is not honoured by March 2009, then there will be no deal.”

He added, “We expect that the benchmarks which have been agreed will be honoured. The first benchmark is March 18; that is not going to be met and I would doubt that the benchmark for next month is going to be met.

“But I am not unduly concerned about the individual monthly benchmarks. I am concerned about the cumulative total – March 2009. When we arrive at that point it is either a deal or it is not a deal.”

In its letter, Harrah’s pointed to long delays that were already affecting the project.

“The long delays in reaching agreement with the government and completing the assemblage of the relevant land rights have contributed to considerable doubt about whether the project can be financed at all given the continuously deteriorating debt markets,” wrote Charles L. Atwood, a Harrah’s executive.

“These delays also raise grave concerns about increased costs and risk and create apprehension about your ability to execute in a timely manner. When coupled with Prime Minister Ingraham’s comments to the House of Assembly [Wednesday], we do not believe the land will be delivered to the joint venture as planned. As you are aware, this issue has been of utmost importance to us from the inception of our negotiations, as without these land conveyances, the project cannot proceed.”

In the House of Assembly last week, Mr. Ingraham also said that while he believes Harrah’s has the means to carry out the Cable Beach project, he was not satisfied that Baha Mar had the financial resources to do so.

Harrah’s also pointed to these comments in its letter to Baha Mar.

“When we entered into the Sub scri ption and Contribution Agreement on January 12, 2007, we expected that you would satisfy all the necessary conditions no later than June 30, 2007. That did not happen,” Mr. Atwood wrote.

“You requested an extension until December 31, 2007, which we granted on several conditions set out in a letter agreement on October 4, 2007. The December 31, 2007 deadline came and went as well. At your request, we had considered another extension prior to that date, but discussions failed because you were unwilling to resolve disputes that had arisen between us.

“As of today (March 6, 2008) conditions remain unsatisfied and the prime minister has publicly stated that he questions your financial wherewithal and ability to meet the deadlines imposed by the government, both of which are crucial to the success of the project.”

But Harrah’s did not completely close the door on any possible future involvement in the Baha Mar project.

Mr. Atwood wrote, “Please be aware that if you are able to resolve these issues and continue with Baha Mar, we hope you will consider exploring alternatives by which a Caesars-branded casino and hotel might be included in the project.”

Late Monday afternoon, Prime Minister Ingraham read the letter in the House of Assembly and also tabled it.

He said that he learnt on Monday March 3, 2008 that Harrah’s was reconsidering its joint venture arrangements with Baha Mar. The prime minister noted that that was two days before he commented on the Baha Mar deal in the House.

Mr. Ingraham said he was merely seeking to dampen the public’s expectations about the Baha Mar project.

Source: Bahama Journal