The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government refused to approve a $20 million agriculture project for North Andros because it did “not warrant” the special treatment it was seeking in the form of investment incentives.

Khaalis Rolle, minister of state for investments, told Tribune Business that the Big Island Farms proposal, which promised to create 150 jobs, would have placed Bahamian poultry producers and farmers at a “competitive disadvantage” if it had obtained the incentives it was seeking - incentives they could not access.

And he added that the project was “not special enough” to require the Government to go through an extensive process of amending numerous laws just to accommodate its desires.

Mr Rolle was responding after Big Island’s principal, Florida-based investor Robert Parker, wrote to Prime Minister Perry Christie on May 8 to inform him that he was “abandoning” the Big Island proposal after waiting seven years for government approvals.

Mr Parker, in a letter obtained by Tribune Business, blamed government inaction for the loss of several investors and financial backers, including the Jamaica-based Caribbean Broilers group and “the largest poultry farmer in western Canada”.

He told this newspaper that it was “a damn shame” that the Big Island proposal would not proceed, adding that it had promised to pave the way for Bahamian entrepreneurs to own their own broiler houses.

Mr Rolle, though, shot back by describing Mr Parker’s investment incentive demands as “untenable”, adding that “no self-respecting government” would have granted Big Island preferential treatment to its own people.

“The crux of the matter is that what he was asking for in concessions, there was no provision in law,” Mr Rolle told Tribune Business. “We’d have had to amend the law to accommodate him.”

Seemingly referring to the Bahamian entrepreneurial opportunities, the Minister added: “The project had some attractive elements to it, but nothing warranting amending existing laws and putting Bahamians at a disadvantage.

“It was untenable. The Ingraham administration was not prepared to do it, the Christie administration was not prepared to do it. No government would have done that. No self-respecting government would have entertained what he was requesting.

“What he was requesting would have put Bahamian businesses at a disadvantage. I was not prepared to give him incentives Bahamians weren’t getting. He’s not a good fit for the Bahamas.”

Correspondence seen by Tribune Business certainly suggests that Mr Parker’s proposal also received a lukewarm response, at best from the Ingraham administration, something that is conceded by the Big Island Farms principal himself.

In his letter to Mr Christie, Mr Parker said the Big Island proposal - initially pegged at a $14.5 million investment - was first submitted to the Government in 2007, the year the Ingraham administration won the general election.

“We had two Canadian investors on board, “ Mr Parker wrote, “one of whom was the largest poultry farmer in western Canada, and the other a major investor in agricultural projects in Canada.

“After three years in attempting to get necessary concessions from the FNM government, the investors decided that the Bahamas was probably not a place that they wanted to invest a sizeable amount of money.”

Mr Parker said he then managed to get Caribbean Broilers’ chief executive, Mark Haskins interested in the project. “We spent two days going over our proposal, and a day going to Andros and Nassau,” he told Prime Minister Christie.

“To say the least, Mark was extremely impressed and very interested. Thereafter, I tried for six months to get an appointment with Prime Minister Ingraham, without success. I told Mark we should wait until after the election and meet with the new Prime Minister.”

“It it were such a good project, they [the Ingraham administration] would have approved it,” Mr Rolle added. Tribune Business understands that the Government was also concerned over whether Mr Parker had the necessary financing to pull off the project, and found his approach unsettling.

Documents seen by Tribune Business show that Mr Parker and Big island were seeking at least a 40 per cent Customs tariff on imported chicken, arguing that protection against foreign rivals was “absolutely essential to have a viable poultry industry”.

Among the other incentives being sought by Mr Parker and Caribbean Broilers were:

• The implementation of anti-dumping legislation in the Bahamas to prevent inferior quality chicken being sold at ‘below cost’ prices in this nation, a common complaint of local producers.

• A total exemption from Customs and Stamp Duty on all machinery and equipment needed to construct and operate Big Island Farms. Mr Parker wanted this extended to spare parts and replacements.

• Mr Parker alleged in a July 17, 2012, letter to Mr Rolle that the Ingraham administration had given the project permission to generate its own electricity. This could not be confirmed, but Big island also wanted complete Customs and Stamp Duty exemption for its diesel fuel imports.

• Big Island wanted the ability to harvest pine trees “without cost” from Crown Land, and also extract ‘pit rock’ “without cost” from a site designated by the Ministry of Agriculture.

• Discounted work permit fees

• And, finally, Mr Parker requested that the Government negotiate a Tax Information Exchange Agreement with Jamaica similar to the one it reached with Canada. This would have facilitated Caribbean Broilers’ profit repatriations to Jamaica, ensuring they avoided ‘double tax’ by only being taxed in the Bahamas.

Mr Parker, in an interview with Tribune Business, said he had been trying to secure new investors in the two years since Caribbean Broilers withdrew, but “nobody wants to touch the Bahamas right now”.

“I’ve got a good friend who is a major Wall Street player,” Mr Parker said. “He said: ‘I think I can find some people’, but he wasn’t able to. He said he had a good friend in the Bahamas who wants to go into the chicken business. I sent him the business plan, but he said no, he doesn’t have any interest in investing in the Bahamas.

“That’s what I heard from everybody. I spoke to a lot of people in Canada who have homes in the Bahamas but won’t invest here.”

Disputing Mr Rolle’s suggestions on the ‘special treatment’ demand, Mr Parker added: “Probably 98 per cent of the concessions we requested in the letter to him have been granted.”

He said subsequent discussions with the minister of agriculture, V Alfred Gray, resulted in “no disagreement over concessions”.

Mr Parker said his initial $14.5 million proposal was seeking financing from the US Export-Import Bank. But, when Caribbean Broilers appeared on the scene, this sum was increased to $20 million as the Jamaican group wanted to add six-seven extra broiler houses.

“It projects between $8-$11 million in net profit annually, so it’s an outstanding investment, but I’m sorry to see what happened,” Mr Parker told Tribune Business. “It’s just a shame. It would have helped everybody in North Andros.

“It would have immediately created about 120 construction jobs, and on the production side we figured we’d use about 80-90 people in Andros. Caribbean Broilers is a large producer of hogs, and we talked in the future of putting in a hog processing plant and setting people up in their own broiler houses.”

Explaining how this would have worked, Mr Parker added: “Part of the project with Caribbean Broilers was that we would hire people initially to run the broiler houses until they were trained how to do it, and then we would sell the houses over a period of months to them.

“In Jamaica, the farmers own the broiler houses and the integraters own the packing houses. They pay the farmers so much per pound of chicken produced. We were going to set it up with a bunch of farmer investors, and they would supply us with chicken from their own houses. It’s a damn shame.”

Mr Parker and Caribbean Broilers had proposed 60 broiler houses owned by Bahamian farmers.

Mr Parker said he met with Mr Christie, four of his ministers and 12 officials on June 8, 2012, for a meeting that “could not have been more positive”. The meeting was confirmed by Mr Rolle, and Mr Parker said he and Mr Haskins began seeking funding from Brightway Capital, a Dallas-based $2.4 billion private equity firm.

An October 2, 2012, letter to Mr Rolle betrayed his impatience. “We find it hard to believe that after 78 days since our requests for additional concessions was received, we have had no response whatsoever from government,” Mr Parker wrote.

“As you will recall, at our June 8, 2012, meeting with the Prime Minister he requested that we submit a letter outlining additional concessions that Caribbean Broilers would require in order to proceed with the project, and that he indicated we would receive an immediate response.

“If we had received a timely response, we could have been providing gainful employment for between 75 and 100 hundred Bahamians at North Andros for the past two months.”

Mr Parker argued that no legislative changes were necessary apart from ‘anti-dumping legislation’, and said none of Big Island’s investment incentive requests were “unreasonable or unwarranted”.

He added, though, that Caribbean Broilers had “withdrawn from the project because of the significant delay in obtaining the concessions requested”. The company, Mr Parker said, could be brought ‘back on board’ if a response was received.

Mr Parker told Tribune Business that Mr Haskins informed him of Caribbean Broilers’ pull back on the way to a meeting with Mr Gray. “He said our people are pulling back from this as the Bahamas does not have a very good reputation,” he added of Mr Haskins’ comments.

“He said that we’ll listen to what the Minister has to say, but I don’t think we want to go through with it. That’s bad.”

In a January 2013 letter to Mr Gray, Mr Parker said: “After more than seven months since our meeting of June 8, 2012, I have a feeling that Mr Haskins and his Board of Directors have some significant concerns about making a $20 million investment in the Bahamas.

“When government takes more than six months to respond to a letter that was requested by the Prime Minister, it equates to justifiable concerns. We were all very enthusiastic about the project after meeting with the Prime Minister and his staff. But one can lose enthusiasm with the long passage of time.”