The Tribune

By KHRISNA RUSSELL

Deputy Chief Reporter

krussell@tribunemedia.net

DISNEY Island Development Ltd, the company set to construct a multi-million-dollar cruise facility in South Eleuthera, will receive hefty exemptions to carry out the project that would otherwise result in millions added to the public purse.

What appears to be a “most favoured nation’ clause also accompanies the exemptions as Disney also will be entitled to receive any benefits not specifically mentioned in the agreement that may become available to any other cruise line or their affiliates under the Hotels Encouragement Act and its regulations.

While tabling the heads of agreement yesterday, Prime Minister Dr Hubert Minnis seemed to slam critics of his administration who suggested there was motive behind the government’s decision to sign the HOA in a closed-door meeting two weeks ago on March 7.

According to the prime minister, the process has been one of openness and good governance. He told the lower chamber that in the past, various agreements by other governments were never tabled in the House and others remained sealed from public view for years.

As the tabled agreement that outlines Disney’s terms of work and the state’s obligations, Dr Minnis said no construction or work can be done until an environmental impact assessment is complete to the satisfaction of the government.

The projected investment by the developer is estimated between $250m and $400m.

Once complete and over a 25-year period, the project is expected to provide an $805.1m increase to the Bahamian GDP and a $357.5m increase in Bahamian government revenues.

There was some confusion yesterday regarding the heads of agreement as the version given to the press did not include the concessions. However, once inquiry was made to the House of Assembly yesterday which handles copying and disseminating documents tabled to the press, The Tribune was advised an updated version would be sent out. 

It is unclear what version was tabled by Dr Minnis yesterday.

“Mr Speaker before I close,” Dr Minnis said, “I just want to point out that there was some concern about us making the announcement first in Eleuthera. We thought it was appropriate as Disney has sought Eleuthera, we know that it was suffering for a very long time and we thought it was appropriate that they should have been the first to hear the changes that were coming.

“I think moving forward investments that affect certain islands within the Bahamas out of respect they should know what is happening to their island.”

He continued: “So I do not apologise to anyone for respecting the population of South Eleuthera.

“Our administration is pleased that this development will bring sustainable development, jobs and economic opportunity to communities in South Eleuthera that have struggled economically for decades,” Dr Minnis said earlier in his address to Parliament.

“In keeping with our commitments to good governance, inclusive of transparency and accountability, the government through the press announced the signing of the heads of agreements.

“Because the agreement directly affected the good people of South Eleuthera, we conducted a town hall meeting to highlight significant elements of the agreement. The response was overwhelmingly positive. The same day, the government issued a press statement with many of the details of the agreement made public.

“In a subsequent press statement, we announced that the full agreement would be laid on the table of the House of Assembly at the earliest possible date, which is today (yesterday), because the House did not meet last week.

“I am pleased that this agreement is being laid on the table of the House today (yesterday), which is in record speed.”

Concessions

The exemptions contained in the agreement are fairly standard.

It stipulates that Disney will be exempt from customs, excise and stamp duties on imports and exports of all construction plants, materials, furnishings, machinery, equipment and supplies for the project’s development.

This is provided that the developer is not exempt from any customs or stamp duties upon consumable stores – except for water, fuel and lubricants.

Additionally, the HOA said Disney is exempt from real property taxes from the date of the acquisition of the property and the date of the least for 20 years, including after the date the cruise facility opens for business. The concession will only stand provided that the exemption from real property tax may be granted for further 10-year periods if the property has been well maintained and refurbished by the developer.

Further, the developer will not have to pay any tax, assessment or imposition upon or against revenue derived from operations upon the project and its amenities.

Exemptions from customs, excise and stamp duties will also apply to potable water, fuel and lubricants brought to the property for use during construction, operations, for cruise ships or passenger boats.

There also will be no business licence fees or similar impositions for ship based operations.

Disney is also entitled to receive any benefits, not specifically mentioned in the agreement, that may become available to any other cruise line or their affiliates under the Hotels Encouragement Act and its regulations.

The document further binds Disney to produce at least 30 percent of the energy demand of the project.

Additionally, in collaboration with the minister responsible for Crown land and other relevant government agencies, Disney will lease the seabed for a term of 50 years.

The heads of agreement even incorporates an anti-corruption clause.

“Each of the parties agree that is has not performed and will not perform in connection with the heads of agreement any act for the purposes of improperly influencing any act or decision of any public official or any other person, including any public official to do or omit to do any act in violation of his or her lawful duties or to use his or her influence to affect any act or decision of any government or public enterprise or for the purpose of obtaining an improper or unfair business advantage,” it read.

An act in the heads of agreement is defined as a making an offer whether directly through intermediary any payment or offer or promise of payment or anything of value. It went on to define an act as receiving any payment or offer or promise of payment or anything of value.

Last week, Official Opposition Leader Philip “Brave” Davis suggested the deal was shrouded in secrecy, as it was not made known immediately that the agreement was signed on Thursday, March 7.

Instead, Dr Minnis announced two days later during a town hall meeting in Eleuthera that the deal was done.

Following this, government statements were released outlining some features of the agreement.

The deal allows for the conveyance of 190 acres of land along the southernmost point of the property — a $6.29m value — to the government for establishment of a national park.

Core elements of the proposed project, according to a statement from the Office of the Prime Minister, include low density development and sustainable design, public access and economic opportunities for Bahamians.

Under the HOA, Disney has ensured a minimum of 120 Bahamians will be employed directly during the construction of the project.

The OPM’s statement said the cruise line will also create “as many as 150 permanent, sustainable jobs with health benefits in a range of positions for Bahamians once construction is completed”.

Disney also committed to aim for an overall ratio of 80 percent Bahamian workers to 20 percent non-Bahamian workers during the life of the construction phase of the project.