The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A positive resolution to Freeport’s expiring investment incentives is “as important to the Bahamian economy’s future” as the Value-Added Tax (VAT) Act, a senior private executive said yesterday.

Barry Malcolm, the Grand Bahama Chamber of Commerce’s president, told Tribune Business that next year’s expiration of Freeport’s real property tax, Business Licence and other incentives represented “the final opportunity” to positively amend the Hawksbill Creek Agreement.

He said that if the Government, Grand Bahama Port Authority and its licensees, and the Chamber “got it right”, they had the chance to “position Freeport as a premier economic driver for the Bahamas”.

Mr Malcolm added that while other Bahamian islands had the necessary infrastructure to support tourism and financial services, Freeport had the platform to make international trade a true ‘third pillar’ of the economy.

The Grand Bahama Chamber president also praised the Government’s decision to engage world-renowned management consultants, McKinsey & Co, to dialogue0 with stakeholders and develop a plan for Freeport’s future and that of the Hawksbill Creek Agreement.

“The engagement of McKinsey is an excellent move by the powers that be, the Government,” Mr Malcolm said. “McKinsey is an excellent firm. They have a stellar international reputation, and the guidelines and policy options they will provide for the Government will potentially be good for Grand Bahama and the country.”

Mr Christie, during his visit to the Grand Bahama Shipyard on Friday, said McKInsey’s consultations with Freeport stakeholders would take place over the next six-eight weeks.

The consultants will focus on both the investment incentives that expire on August 1 next year, and how Grand Bahama can be better promoted/marketed to international investors and tourists.

Tribune Business understands that McKinsey representatives had already met with some in the private sector to obtain their views.

This newspaper was also told that the consultants will refine some preliminary ‘number crunching’ by the Government on what it could yield from levying real property tax on Freeport, and the revenues it is currently giving up.

McKinsey is understood to be working closely with Dr Michael Darville, minister for Grand Bahama, and the team at his ministry.

Dr Darville, sources said, is especially keen on setting up the marketing/promotional organization for Freeport that the GBPA and Hutchison Whampoa both committed to establish, and fund, under the 1993 Act. This never happened.

While not commenting on any of this, Mr Malcolm told Tribune Business: “There needs to be a clear understanding of the policy choices for Grand Bahama, and there needs to be a clear understanding of the impact of those policy choices.

“All available information needs to be fed into the mix, so proper and informed decisions can be made to sustain Grand Bahama’s economy for the long-term.

“The 2015 changes are, in many ways, the final opportunity for tweaking and refining of the Hawksbill Creek Agreement. It’s certainly the view of the licensees that the refinement be done in such a way that Freeport is a strong economic driver for Grand Bahama and the country as a whole.”

Identifying the Bahamas’ three main economic drivers as tourism, financial services and international trade, Mr Malcolm said only Freeport had the platform to facilitate the latter and make this nation a worldwide hub.

“I would say that progressive resolution of the 2015 changes to the Hawksbill Creek Agreement are as important to the future of the Bahamian economy as any of the tax legislation or other legislation being looked at presently,” he told Tribune Business.

“If the Chamber, the licensees, the Government and the port Authority get it right, we can use the Hawksbill. Creek Agreement, and the refinements to the Hawksbill Creek Agreement that come in 2015, to position Freeport as a premier economic driver for this country……….

“What is needed is for a policy refinement, and policy focus, of the Government and Grand Bahama Port Authority to commit Freeeport, and drive Freeport, to be the kind of economic enterprise that it can be for the country as a whole.”