Major Chinese contractor is being sued in the New York Supreme Court over allegations that it delayed knowingly and intentionally the construction of an integrated resort in Nassau, the Bahamas, the Financial Times reported.
China Construction America, a subsidiary of one of the world’s largest contractors China State Construction Engineering, is accused by the massive casino complex’s original developer of purposefully delaying the development of the property. At the same time, China Construction America was charging the developer behemoth amounts of money in allegedly fraudulent fees.
It was back in 2005 when the government of the Bahamas awarded the license for the casino resort to developer BML Properties. The real estate firm is owned by Armenian businessman Sarkis Izmirlian, who is known to be the son of the owner of a Switzerland-based peanut farming company.
BML Properties eventually ended up taking on emergency investment from China Construction America and Export-Import Bank of China.
Baha Mar, located not far from the capital of the Bahamas, was expected to account for 12% of the Bahamian gross domestic product. The property was built to feature 2,200 hotel rooms, casino floor, and a number of food and beverage and entertainment options, including a Jack Nicklaus-designed golf course.
However, the property filed for bankruptcy in 2015, missing its opening deadline. As a result, the Bahamas had its sovereign rating downgraded by S&P Global. The Baha Mar resort eventually opened doors in the spring of 2017 after being acquired by Hong Kong-listed Chow Tai Fook Enterprise.
More Information about the Case
BML Properties has filed a complaint against the Chinese contractor suggesting that the latter crafted a massive-scope conspiracy to hamper the project’s completion, while collecting millions of dollars in unjustified fees. According to Baha Mar’s original developer, China Construction America understaffed the construction site and used it to train new workers, and thus purposefully delayed the resort’s eventual opening.
BML Properties has also said in its complaint to the New York Supreme Court that the contractor moved staff and machines from the resort’s site to that of a separate and competing resort in a bid to sabotage the $3.5-billion project. Baha Mar’s original developer is now seeking $2.25 billion in damages from China Construction America.
This is not the first time that the two companies face each other in court in relation to their participation in the Nassau casino project. In 2015, BML Properties sought damages of over $192 million in the United Kingdom High Court.
With market cap of around $42 billion, China Construction America’s parent company China State Construction Engineering is one of the largest contractors in the world. The state-run corporation has participated in different other projects over the years, including a residential tower in Manhattan and the construction of Africa’s tallest building as well as of a stadium in North Carolina, US.
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