The Tribune

• Places Haywards and St Georges on notice

• Warns that Hawksbill Creek 'doesn't work'

• And Port 'must change' with reaction mixed

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Prime Minister's decision to put the Grand Bahama Port Authority's (GBPA) owners on notice that he plans to take "decisive action" to halt Freeport's two-decade decline yesterday provoked mixed reactions from residents and politicians.

Philip Davis KC used the platform provided by the 2023-2024 Budget address to assert that Freeport's founding treaty, the Hawksbill Creek Agreement, "does not work" and that the GBPA's governance model "must change" if the city is to "realise the promise, growth and prosperity" it aspires to.

While not setting out specific details on the "decisive action" his government plans to take, the Prime Minister suggested these could be revealed during the Budget debate over the next month. His comments drew a mixed response, with one Freeport entrepreneur suggesting he and the Government should "stop throwing darts" at the GBPA and instead meet with its owners and management to map out the city's revival.

Michael Pintard, the Free National Movement (FNM) leader, and who as Marco City's MP is one of three Opposition parliamentarians on Grand Bahama, yesterday told Tribune Business he was opposed to the Davis administration either acquiring the GBPA itself or doing this and then "flipping" Freeport's quasi-governmental authority to a private company of its choosing.

While acknowledging that Freeport's status quo is untenable, he added that the "veiled, vague" statements by Mr Davis "send entirely the wrong message" to the city's residents and businesses, as well as creating "a sense of uncertainty" among potential investors.

However, a prominent Freeport resident, speaking on condition of anonymity, while agreeing that the Government must be careful not to be perceived as acting in a "dictatorial" manner, said it was time for the GBPA's owner, the Hayward and St George families, to exit given that they were failing to live up to their development obligations and shown themselves unwilling to halt the city's slide.

Using Grand Bahama's contracting economy as his launch pad, Mr Davis told the House of Assembly: "Grand Bahama contributes 12 percent of the overall GDP of The Bahamas, yet its economy declined by 9 percent compared to the previous year. There was a silver lining as the tourism sector witnessed a slight increase in 2022, which was evident in the growth of the accommodation and food service industries.

"Unfortunately, the statistics show a prolonged decline in the Grand Bahamian economy. The evidence confirms the view of my government that the Hawksbill Creek Agreement economic model, which was meant to attract foreign direct investment, does not work.

"Furthermore, in our view, the governance model of the Grand Bahama Port Authority must change. The Hawksbill Creek Agreement does not work, the Port Authority must change, in order to realise the promise, growth and prosperity which we all desire," the Prime Minister continued.

"Additionally, The Government of The Bahamas has serious concerns regarding the compliance of the GBPA and its related companies with the terms and conditions of the Hawksbill Creek Act [Agreement] and its subsequent amendments.

"Previous administrations have made efforts to tackle the situation, but the issue is clearly systemic and fundamental. We believe the time has come for decisive action. In due course, we will make a separate, detailed announcement. That may be during the course of the debate."

Tribune Business revealed earlier this year that the Government has been examining whether change at the GBPA is best achieved through either a private buyer acquiring the Hayward and St George families’ ownership interests, the Government doing itself or the regulatory and quasi-governmental powers being devolved back to Nassau.

The Prime Minister, in a prepared statement earlier this year, said: "Grand Bahama over the many years has failed to live up to its true promise and potential. And we are are in discussions with the Port Authority for the purposes of identifying a path towards putting Grand Bahama on the right track to enable it to fulfill its full potential and promise."

The GBPA owners, in a 2016 Memorandum of Understanding (MoU) signed with the Christie administration, committed to masterplan the development of their landholdings and seek a buyer for their interests within specified timelines. However, none of these conditions appear to have been fulfilled.

Reaction to the Prime Minister's comments was varied. Some suggested it was largely "noise", and the fact he revealed no details indicates either the Government does not have a defined plan or strategy, or that not all elements are in place. Darren Cooper, a Freeport businessman who was among the leaders of a protest march to the GBPA's headquarters last year, yesterday said it was better for the Government, the GBPA and its owners to talk than engage in confrontation.

Describing the Prime Minister's comments, and decision to go public, as "very interesting", Mr Cooper added: "I'm not sure what the impact will be, but I really hope the Prime Minister summons the GBPA to a round table discussion than talk to them through the media. He's the Prime Minister, and has the authority to lay out the cards as to what he expects from them and what his plans are moving forward for the Port Authority and Grand Bahama.

"The Prime Minister is only speaking to this company through the media. I hope they get round the table and have a meaningful discussion on the way forward for Grand Bahama. The behaviour of the Prime Minister; that there is a plan and he is not prepared to speak to them, and is just throwing darts in the public domain, it doesn't come back with a clear message and that he's justified in what he's doing.

"There may be a breakdown in communication between the Government and the Port Authority, and I hope the nation's chief sees the need to get all parties around the table." Mr Pintard, meanwhile, said the Opposition "are not supportive of the Government of The Bahamas" acquiring the GBPA, should it be seeking to do so, again accusing the Davis administration of lack of transparency and accountability.

While agreeing that "the status quo cannot be maintained as is", as Freeport's infrastructure is "slowly falling into disrepair", he argued that the better solution was to "let the market, and negotiations and discussions, drive this process" of seeking new ownership and investment partners for the GBPA.

"This veiled, vague statement by the Prime Minister sends entirely the wrong message to people living on the island of Grand Bahama," Mr Pintard argued. "I'm confident there's more than a handful of people wary of the possibility of the Government being in charge of not just the regulatory functions but the assets presently resident in the Port Group of Companies.

"It creates an environment of uncertainty. If you are contemplating a deal, you are likely to pause everything.... The Government should also not be a go-between to acquire and flip the GBPA to any private investor. That's a very real concern, and a bad role for a sovereign government to be playing, particularly when there can be multiple buyers and suitors for the GBPA."

However, one supporter of the Government's plans for a change of GBPA ownership, added: "It's the best thing. We need to be part of The Bahamas. It's untenable. The rest of The Bahamas is booming from an investment point of view and we've got nothing."

While Ian Rolle, the GBPA's president, has repeatedly touted $1bn worth of investments, the Freeport resident branded this as "pure baloney" and said none are connected to the GBPA. "They have mismanaged this economy terribly for the past 20 years," the source added. "A lot of investors wanted to come here, but they didn't let them come because they didn't want the competition.

"I understand he's [the Prime Minister] given them a written notice before now, and whatever it is is going to happen. I think the Government is just going to take it over and get rid of the families and let them go. This could all get very ugly if not handled right. Investors could lose confidence if they feel the Government is being dictatorial, but as far as I'm concerned change is good."

The GBPA, while described by some as a ‘regulatory shell’, still possesses considerable powers that include business licensing, building code and environmental enforcement, city management, and the power to levy fees and service charges together with the operation of a free trade zone that offers multiple forms of tax relief to investors.

However, its income-earning assets have been transferred to Port Group Ltd. These include the 50 percent equity stakes in Grand Bahama Development Company (DevCO) and the Freeport Harbour Company, likely to be the two families’ most valuable assets, together with interests in multiple other companies such as Freeport Commercial & Industrial, another major landowner.

Should the Government seek to take over the GBPA’s regulatory powers, one source said it would amount to an “abrogation” of the Hawksbill Creek Agreement and raise multiple legal issues that would have to be addressed. Among these, they added, would be the provision that requires four-fifths (80 percent) of licensees to approve the devolution of quasi-governmental authority to a local government-type entity.