The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government was yesterday urged to intervene in the increasingly bitter dispute involving Freeport Harbour’s marine pilots before it undermined what one MP described as “the gateway” to the city’s maritime and industrial economy.

K P Turnquest, the Opposition finance spokesman and MP for east Grand Bahama, told Tribune Business his party was “concerned about any kind of action that will affect the smooth running of the Harbour”.

His comments came as Erin Ferguson, managing director of the Bahamas Marine Pilots Association (BMPA), accused the Freeport Harbour Company (FHC) and Grand Bahama Port Authority (GBPA) of attempting to delay activation of their Business Licence despite having no grounds to do so.

Arguing that the provision of pilotage services through an independent company would be “safer” than the current arrangement, where the pilots work for the Harbour Company and Bahamas Oil Refining Company (BORCO), Mr Ferguson also called for the creation of an independent regulator to oversee the sector.

And the BMPA chief “absolutely” agreed that the Government needed to step in as an independent mediator, bringing all sides together to promptly resolve a dispute that he alleged only threatened to undermine safety in Freeport Harbour and its anchorage.

Glenys Hanna-Martin, minister of transport and aviation, yesterday indicated that while the Government was monitoring the Freeport-based dispute, it had no plans to intervene yet.

That position might soon be subject to change, though, given the increasing international maritime and investor concerns over the situation - a development that could threaten the major industrial enterprises so vital to Freeport’s economy.

Tribune Business has obtained evidence that the dispute has already appeared on the international insurance industry’s radar screen. This sector provides a vital service to the maritime industry when it comes to covering their vessels.

The UK Protection and Indemnity Club’s newsletter, seen by this newspaper, said: “We have been informed by our local correspondent that there have been significant changes to the pilotage organisation at Freeport, Bahamas.

“Pilots previously employed by the Freeport Harbor Company have resigned on masse and are forming an independent company to provide pilotage services to all vessels in Bahamian waters.

The changes affect Freeport Harbour, Freeport Container Port, cruise vessel terminal berths and the BORCO island oil terminal. The newly-formed company has stated that it will charge the same rates as previous, indicating that there should be no additional costs to members.”

Describing the dispute as “a hot one”, Mr Turnquest told Tribune Business: “We are concerned about any kind of action that will affect the smooth running of the Harbour.

“It represents the gateway to the major investment Hutchison Whampoa has in the Container Port, as well as the cruise harbour and freight business.”

The MP added: “It’s important we get that right. I believe both the pilots and companies involved have the best interests of Grand Bahama and its residents at heart, and hopefully they will work out the situation among themselves for the smooth and efficient operation of the private sector.

“We’d be very concerned if any long-term, protracted and public dispute arose. They both have the interests of the maritime sector at heart, so let’s hope there’s common ground they can achieve.”

Mr Ferguson, meanwhile, said assertions that the BMPA did not have a Business Licence were incorrect.

He explained that its member pilots were planning to offer their services through Freeport Pilotage Company, an entity formed in 1986. The BMPA, though, was encountering difficulties with the GBPA and Freeport Harbour Company in reactivating its dormant Business Licence.

Mr Ferguson, arguing that the licence was current and up-to-date, said: “The particular issues they are attempting to frustrate us on, which they know they don’t have any grounds to, are that to bring the licence out of dormancy, we have to show a registered location and provide an annual return.”

While the BMPA has a registered location, this has to first be inspected by the Port Authority before the licence can be reactivated, and Mr Ferguson alleged that the GBPA had so far failed to carry this out.

“They’re delaying the inspection,” he added. “We’ve called them and asked what the delay is, and they’ve said we are on their schedule.”

In addition, Mr Ferguson said the Port Authority wanted the BMPA’s Freeport Pilotage Company to get pre-approval to operate in the harbour from its owner, Freeport Harbour Company - the very same company it is engaged in a dispute with.

Such approval has to come from the Port Director, who is appointed by the Port Authority and ratified by the Government, yet whose salary is paid by the Freeport Harbour Company.

Mr Ferguson said the latter was attempting to use this relationship to prevent the Port Director approving the BMPA and its company. He argued that, when it came to regulatory matters, the Port Director was answerable to the Port Authority first; not the Harbour Company.

Another potential ‘conflict’ in play is that the Port Authority’s affiliate, Port Group Ltd, which has the same Hayward and St George family shareholders, also has a 50 per cent equity stake in the Harbour Company.

This is potentially a factor in Mr Ferguson’s call for the creation of an independent regulator, a Pilotage Authority, which would draw its members from each industry player - the BMPA, Harbour Company, BORCO, ship owners and other Harbour users.

The Authority, he explained would establish pricing and training standards, overseeing all marine pilots and their work.

“It should not be in the hands of a private company,” Mr Ferguson argued of harbour pilotage regulation. “It’s like Hutchison running the police in Freeport.”

He suggested that the situation was one where the Freeport Harbour Company and BORCO wanted to retain control of the marine pilot situation, rather than have these services provided by an independent company.

Mr Ferguson said the BMPA’s creation would neither result in an increase in pilotage fees, because these are set by the Freeport Harbour Rules, nor create a for--profit, Bahamian-owned monopoly - as others had alleged.

“The fees are not regulated by us. Freeport Harbour Rules lay out what the fees are,” he told Tribune Business. “These fees cover the cost of operating the business, training, equipment and maintenance, and pay the pilots.

“They [Harbour Company and BORCO] wouldn’t lose any money. Freeport Pilotage Company would be set as self-funding, but not as a for-profit business.”

Mr Ferguson said Freeport Harbour Company and BORCO effectively enjoyed pilotage monopolies under the existing set-up, as he called on the Christie administration to mediate a resolution to what is shaping up as a protracted dispute.

“We need them to step in and provide the regulation,” he added. “If the Government doesn’t step in, the pilots’ resignations take effect on the 28th, and we would essentially be in a competitive pilotage jurisdiction, which statistics show yield more accidents, as one group will do what another won’t.”

The Government to-date, Mr Ferguson said, had urged the BMPA not to take any action that would harm Freeport’s economy, with the Ministry of Labour playing the leading role.

The BMPA chief said that come March 28, the Freeport Harbour Company and BORCO will be left with two pilots each, down from 18. And the Ministry of Labour had told him that no work permits for foreign pilots would be forthcoming, given that there were qualified Bahamians willing and able to do the work.