The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Freeport’s economic malaise is today blamed on 12 years of “ineptitude and gross mismanagement” by the Grand Bahama Port Authority (GBPA) and its affiliates, a well-known attorney bemoaning its owners’ failure to reinvest despite extracting $300 million from the city.

Terence Gape, a Freeport-based Dupuch & Turnquest partner for more than 40 years, writes in Tribune Business today (see Page 3B) that the GBPA’s two shareholder families - not the Government - are responsible for the city’s ongoing “economic crisis”.

Backing the approach adopted by the Christie administration and its Hawksbill Creek Agreement Review Committee, Mr Gape said the latter’s 12 recommendations were in line with “the majority of Grand Bahama public opinion”.

While agreeing with his fellow attorneys, the Callenders & Co duo of Carey Leonard and Fred Smith QC, that the Hawksbill Creek Agreement’s integrity should be preserved, Mr Gape argues that it would be a mistake to maintain Freeport’s ‘status quo’ via a blanket renewal of the expiring tax incentives.

He instead proposes that only Freeport’s large industrial sector be given an instant 20-year renewal, in order to facilitate ‘pipeline’ projects such as PharmaChem’s $100 million expansion and the proposed Phase V at the Freeport Container Port.

Arguing that Freeport’s economy was “moribund” despite the real property tax, capital gains and income tax breaks having been in place for the past 30 years, Mr Gape said calls for their renewal merited deeper consideration by the Government.

“Carey [Leonard] and others seem to be developing an argument that the tax exemptions not being immediately renewed, and somehow an immediate resurgence of the Freeport economy not happening, is the fault of the Government,” Mr Gape writes on Page 3B.

“I would point out that this present deplorable condition of the Freeport/Grand Bahama economy is NOT the fault of the Government, and the Committee is quite right that there is a need for significant changes to take place before these exemptions should be universally granted.”

He added: “It must also be agreed that because of the ineptitude and/or gross mismanagement by the families [Haywards and St Georges] and DevCo (families and Hutchison) over the past 12 years, in particular, Freeport’s economy remains in crisis.

“The Families have taken over $300 million out of Freeport and the Bahamas since 1993 and have not re-invested in Freeport. Never had a plan.”

Mr Gape argues that a ‘blanket renewal’ of the expiring investment incentives would merely preserve this “status quo”, and that the Government needs to use them to force ownership and management changes at the GBPA and Grand Bahama Development Company’s (DevCo).

DevCo is 50/50 owned by the GBPA’s Port Group Ltd affiliate and Hutchison Whampoa, with the latter holding management rights over a company that owns some 70,000 acres.

Mr Gape, though, argues that DevCo’s “present ownership and direction cannot stand”, given the 16-year inertia that has seen minimal real estate-related development in Freeport.