The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Cabinet minister has blasted the former Ingraham administration’s “complete lack of engagement” for potentially costing the Bahamas $7-$10 million in ‘free’ European Union (EU) grant funding.

Ryan Pinder, minister of financial services, who has responsibility for all trade matters, singled out former Prime Minister Hubert Ingraham and his minister of state for finance, Zhivargo Laing, for failing to implement the necessary measures to access financing from the ninth European Development Fund (EDF) round.

Mr Pinder told Tribune Business that the previous government’s failure to complete all the necessary processes had left financing for Family Island-based infrastructure projects “floundering”, and the time in which the Bahamas could access the funds expired.

Blaming this on the Bahamas’ lack of “active engagement” with both the EU and CARICOM, Mr Pinder said the Government had adopted “a different approach” in a bid to repair what he termed “lost goodwill” due to the previous administration.

Mr Laing could not be reached for comment last night,despite a message being left on his cell phone.

But documents obtained by Tribune Business tell a slightly different story, indicating there were project execution difficulties with a number of the proposed ninth EDF initiatives during the first Christie administration’s term in office. These were unresolved by the time of the May 2007 general election.

In any event, Mr Pinder said the Bahamas was in discussions with both the EU and CARICOM over the 10th and 11th EDF rounds. And he added that the Government was also looking to obtain part of the 14-15 per cent share of the 160 million euro regional grant funding allocation that the EU has made to the Caribbean.

The Minister told Tribune Business that among the initiatives the Bahamas was targeting for grant financing was the provision of energy efficient, affordable housing through the Ministry of Housing; assistance with its crime fighting strategies; climate change; and help with implementing international trade infrastructure.

EDF funding is the last source of grant financing currently available to the Bahamas. Grant financing is particularly valuable because it is just that - a grant, meaning it is not a loan and does not have to be repaid, costing the Public Treasury nothing.

But, noting the issues lingering from the ninth EDF round under the FNM, Mr Pinder told Tribune Business: “The Minister of Finance, who had ultimate responsibility, failed to ensure the implementation of some of the funding elements in a timely manner, causing the Bahamas to forego some funding in that [ninth] envelope.”

Confirming that the sum lost was between $7-$10 million, the Minister added: “They lost that, and the reason it was lost was mainly due to the failure of the then-Minister of Finance to see that process through.

“We didn’t complete the internal processes for the whole thing. It floundered and floundered, and the time expired for getting that funding. Our administration is actively engaged to repair any goodwill factor that may exist because of our lack of engagement.”

Documents obtained by Tribune Business indicate that the EU, via the ninth EDF, was making some 7.89 million euros (a sum equivalent to just over $9.5 million) available to the Bahamas. They also show that the first Christie administration was far from blameless.

The EU-Bahamas Joint Annual Report for 2007, describes the ninth EDF as being “fully targeted on a capacity building programme in the Family Islands”. These projects included improving the quality of roads, sea defences, airports and other infrastructure, and maintenance schemes.

Noting that there “has been little or no progress” in 2007, the EU report said no implementation results could be reported.

Referrring to the allocation of $6.83 million euros to Family Island infrastructure projects, the report said issues had begun under the first Christie administration. “In August 2006, the Government of the Bahamas presented to the [EU] delegation the designs of three projects being part of the financing agreement,” it disclosed.

“The delegation reviewed these designs but considered them seriously incomplete, and requested that professional consultants be recruited to prepare them, as foreseen by the financing agreement.

“During the mission in July 2007, the Ministry of Works informed the EU delegation that they were working on the issue. As of December 2007, the EU delegation is unaware of any progress made by the Government of the Bahamas in the selection of consultants that will prepare the design and tender documents for the six sub-projects in the Family Islands.”

It was a similar story with the proposed 600,000 euros project to rehabilitate roads, bridges and seawalls in Lowe Sound, Andros. The works tender was held in November 2006 under the first Christie administration.

“The tender failed, because the Government of the Bahamas had not taken the comments on the draft dossier into account and there were some errors/omissions during the evaluation,” the EU report said.

The EU told the Government in June 2007 that the project would have to be re-tendered, the winning bidder coming in at $1.75 million - of which 460,000 euros was to come from the EDF. The Ministry of Works told the EU the following month that it planned to propose that the Government fund the project through its own resource, and “since then there has been a silence” from the Bahamas.

As for the new library and expansion at the Eugene Dupuch Law School, a project pegged at $12.6 million with $2.2 million coming from the EDF, problems arose here, too.

“During the mission in July 2007, the Prime Minister [Hubert Ingraham] informed the EU delegation that he was unable to support the Regional Law School in its current size, and that the design (and the corresponding costs) had to be downsized,” the EU report disclosed.

The EU-Bahamas joint annual operational review for 2009 said that given ninth EDF pojects “were still under preparation and are not yet under execution, it is considered premature to start programming the 10th EDF”.

The report noted: “The relationship between the [EU] delegation and the Government of the Bahamas is cordial. However, there is no flow of information on the state of play on the projects.

“Despite the best efforts of the delegation and a specific mission from Brussels, no policy dialogue is taking place between the Bahamas and the EU. There is very slow progress in the preparation of the ninth and 10th EDF national and regional projects.”

In a bid to make a break with the past, Mr Pinder told Tribune Business: “We’ve had a different approach, and are much more engaged in the region and CARICOM, and are much more engaged in development mechanics. We feel very optimistic that we will be in a good position.”

The Minister said that while it was the Bahamas’ national envelope that was “put at risk”, region-wide grant funding from the EU was also affected.

And, with EU grant funding available for use as social, economic, infrastructure and trade assistance, Mr Pinder said the Government was “actively engaged” in trying to access the 14-15 per cent of the 160 million euro regional fund that the EDF had made available to the Caribbean.

He added that he was trying to get the Bahamas into the 10th and 11 EDFs, and said: “This administration is committed to as wide a net as possible to see how the Bahamas can benefit from that, and advance it further in the interests of Bahamians.”

Arguing that there was “a complete lack of engagement” by the former government, Mr Pinder told Tribune Business: “Frankly, when you act disinterested for five years you have to reprove yourself in that regard, demonstrate that you’re committed.”

Arguing that only then would the Bahamas be “put on an equal footing for development purposes”, the Minister said: “The engagement at the Ministerial level in the region we have undertaken is very much embraced by the Caribbean in particular, and I see tremendous excitement and optimism that the Bahamas is engaged in regional affairs, raising the goodwill to the Bahamas to a higher level from what it was - dismal.”

When it came to projects that EDF grants could finance, Mr Pinder noted the joint EU-CARICOM emphasis on renewable energy and preventing climate change. The Government was also assessing whether it could be used to help implement its anti-crime strategies.

And, with the Ministry of Housing seeking to provide more affordable, energy efficient homes, Mr Pinder said he was inquiring whether the regional EDF envelope could be used here.

The Minister added that EDF financing could also help with trade matters, such as sanitary and phytosanitary (SPS) measures. “For SPS, you need to meet certain testing laboratory standards to implement it nationally and regionally,” Mr Pinder told Tribune Business.

“If we want to engage in trade between ourselves and the Dominican Republic, which has a large beef industry, we need SPS and testing facilities to facilitate trade in that regard.”

Given that such trade would benefit more than one nation, Mr Pinder said he was again looking at whether the Bahamas could access the EDF regional funding mechanism.

“We hope to find creative ways to get as much access to funding assistance as we possibly can,” he said.