The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Grand Bahama Chamber of Commerce will make “extraordinary efforts” to ensure the Government announces a decision on Freeport’s expiring investment incentives by end-March 2015, its president warning the continued uncertainty was an investor “turn off”.

Kevin Seymour told Tribune Business that a decision on whether to renew the Port area’s real property tax, Business Licence and other exemptions would already have been taken in an ideal world, describing this as the Chamber’s “most pressing” issue.

Those investment incentives expire in August 2015, and Mr Seymour said it would be “helpful” if the Christie administration would publicly communicate its position by January.

Urging that it “not go beyond” March 31, the newly-elected Chamber president added that while there was general consensus that the exemptions should be renewed for another 40 years, the Government should not do so “willy nilly”.

Mr Seymour acknowledged the Government’s concern that it receive something in return for the tax revenue it is foregoing, adding that the best way to achieve this was by growing Freeport and Grand Bahama’s economy.

“Certainly, the most pressing issue for us right now is the one relating to the exemptions that are due to sunset in August 2015,” Mr Seymour said, setting out the Chamber’s agenda under his leadership.

“We want to ensure the Government makes a quick decision, one we feel should have been made by now, because it creates a level of uncertainty which, in our view, is not helpful for attracting new business investment into the island.”

He added: “We want to use extraordinary efforts to assist government in arriving at a definite decision by March 31.”

Mr Seymour, a retired PricewaterhouseCoopers (PwC) accountant and partner, acknowledged that with the Christmas holiday season almost here, a decision on Freeport’s expiring investment incentives was unlikely before the New Year.

The Government is also understood to be waiting on a report from its consultants, McKinsey & Co, which will provide recommendations on the approach it should adopt towards Freeport, before attempting to reach any conclusions.

“If we can get a decision by January that will be helpful, but it should not go beyond March 31,” Mr Seymour reiterated to Tribune Business.

“Right now, it’s proving to be a turn-off for people interested in doing business in Freeport but, just because of the uncertainty created by this, are reluctant to do so.”

While the Chamber’s position is that the expiring tax exemptions should be renewed for the remainder of the Hawksbill Creek Agreement, which expires in 2054, Mr Seymour agreed that the Government could not do simply by granting ‘a blank cheque’.

He himself, and the Chamber, have previously agreed that the exemptions’ renewal should be made conditional on the Grand Bahama Port Authority (GBPA), Hutchison Whampoa and the entities they jointly control fulfilling the developmental obligations they signed up to in 1993.

Setting out the concise position, a Chamber statement read: “Lobby the central Government to extend the tax exemptions under the Freeport Grand Bahama Act 1993 and the Hawksbill Creek Agreement (HCA), respectively, in exchange for certain work and undertakings by the GBPA and its subsidiary, DEVCO, through the year 2054, and to communicate this decision to the business community no later than March 31, 2015.”

The GB Chamber’s recent position paper on Freeport’s future, for 2015 and beyond, also suggested that the GBPA’s quasi-governmental powers be devolved to an independent trust, although its newly-elected president did not push that specific issue this time.

“I think it’s certainly a widely held view that the exemptions should be extended through the end of the Hawksbill Creek Agreement; in essence, the next 40 years,” Mr Seymour told Tribune Business.

“But this shouldn’t be something given by the Government willy nilly. We have met with the Government, and they have expressed concerns about getting comfort that revenues foregone through the extension can be made up in other ways.

“We believe we can make this up through the growth potential of Grand Bahama and Freeport.”

Mr Seymour said the Government’s ‘compensation’ concerns had been expressed to the Chamber by both Prime Minister Perry Christie and the minister for Grand Bahama, Dr Michael Darville, and his ministry.

“We most definitely don’t believe it would be prudent for the Government to just go ahead and make this extension without getting something in return,” he explained.

“As responsible partners, we should make sure we continue to contribute to the development and improvement of the national economy.”

Other Chamber objectives include pushing for lower energy costs on Grand Bahama, and the introduction of renewable energy technologies, plus the achievement of a four-week decision response time on all Bahamian/foreign investment applications.

The Chamber also intends to push the Government, the GBPA and wider business community to construct a “branded, state-of-the art hospital/healthcare and research facility in Freeport”.

It wants construction on this facility to start by 2016, and is calling for the Government to “implement a smart Immigration policy nationally, which focuses on attracting professionals such as research scientists, engineers, commercial attorneys, physicians, experts in the knowledge industry”.

“We definitely want to see steps being taken to make doing business easier, both in Grand Bahama and nationally,” Mr Seymour told Tribune Business.

“Far too often we are receiving complaints from frustrated investors who have thrown their hands up in the air, because it is far too time consuming and there is a lack of transparency up front.”

He also emphasised the intention for the Chamber to be recognised as the Grand Bahama business community’s “voice”, with the target of increasing its estimated 200-strong membership by 50 per cent.

Mr Seymour indicated that achieving this goal may have been made easier by issues such as the 2015 exemptions and Value-Added Tax (VAT), which had “galvanised” the private sector and shown there was “strength in numbers”.

The Bahamas’ impending accession to full World Trade Organisation (WTO) membership is also on Mr Seymour’s radar.

“We want to sensitise our members as to how that is likely to impact them, and their competitiveness, and how it’s likely to create opportunities and, as such, drive down the cost of doing business,” the Chamber president said.