The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Nassau Container Port’s operator yesterday said it plans to make a $4m-$6m investment to complete its “one-stop shop” model after the government approved its 15-acre expansion.

Dion Bethell, Arawak Port Development Company’s (APD) president and chief financial officer, told Tribune Business it had received “a commitment letter” from the government agreeing to lease land adjacent to the existing port for construction of a Customs Freight Station and Road Traffic Department vehicle inspection facility.

While the BISX-listed port operator has yet to receive the proposed lease terms from the government, Mr Bethell said the additions to the Arawak Cay-based port will help to safeguard the government’s revenues and prevent the smuggling of illegal goods while also improving road safety on New Providence’s streets.

“We understand the government has made the approval for additional land for the Customs Freight Station,” he revealed. “We got the approval for that in a letter that came through on September 9 and was received on September 11, so we’re going to proceed ahead with the plans to construct that.

“In that facility we will also have a Road Traffic inspection and licensing facility. That is to complete our one-stop shop concept.” Mr Bethell said the Customs station will help underpin the department’s new Electronic Single Window (ESW) platform, known as Click2Clear, for the online clearance of physical goods imported into New Providence.

With the new system designed to enable Customs to conduct better risk analysis, and detect potential concerns with both specific importers and container shipments, the APD chief said the new facility - to be designed, financed and constructed by the port operator - would enable the department to better conduct in-depth inspections of imported cargo on-site.

“In the past, if you needed to rummage through any container you had potential issues with, you had to move it across the street and do the inspection at the customer’s place of business,” Mr Bethell added, explaining that international best practice required that such inspections be done at the receiving port.

“There’s just so much that could happen in transit between the port and the customer’s place of business,” he continued. “If Customs wants to do risk analysis and more intrusive inspections they will be able to do it at our facility.

“Then, with the other component, we bring in quite a lot of vehicles; more used than new. Bahamians have become very savvy. They go online, purchase a vehicle and wait six to eight weeks for it to arrive. When they arrive, they usually go straight on the road uninsured, not inspected and not ready for the road.

“We would have insurance brokers in there. People will be able to get insurance in that facility and have the vehicle inspected, so when they leave the car is ready for the road.”

APD’s container throughput volumes at Arawak Cay are projected to increase by 3,000 or a modest 2.3 percent to 133,000 twenty-foot-equivalent units (TEUs) for the 12 months to end-June 2020. For the 2019 financial year, it saw bulk car volumes of 14,138, which were 2,862 or 17 percent less than budgeted car volumes of 17,000.

Mr Bethell said APD planned to also use its additional 15 acres, which is adjacent to its existing southern boundary, for additional storage. He explained: “We have a lot of overflows from time to time of excess vehicles and containers.

“We’re doing the renderings for it now. That goes through the process with the Board, and we will send out an RFP for architects and contractors to be able to build the facility. We’ve just recently received it [the Government’s letter] and the Board has approved it proceeding. We’ve already engaged a consultant to help put together a master plan and prepare the renderings.

“The intent and plan is to proceed. We could not do it sooner as we have to lease the land. We will not own it. We will lease it on a long-term basis. We’re waiting for a copy of the lease from the Department of Lands and Surveys and the Attorney General’s Office, but with that commitment letter we have enough to proceed with that part of planning.”

Mr Bethell told Tribune Business that while APD had yet to learn the scope of Customs and Road Traffic’s accommodation requirements, it was estimating that construction costs will run to $4m to $6m per year. He added that the BISX-listed port operator had multiple financing options, including its own operational cash flow, for funding construction.

Elsewhere, the APD chief said the continued landing and clearance of international freight cargo at Potter’s Cay “remains on our radar” due to it the “loophole” it creates in breaching the Government’s agreement with the port operator as well as the potential revenue loss for itself and the Public Treasury.

“This activity not only breaches certain agreements made with APD, but also undermines national security, Public Treasury revenue collection objectives, health and safety standards and the cost of living,” APD argued in its annual report. “The company will continue its lobby to the Ministry of Finance to address and resolve this issue, which is so inimical to positive, sustainable progress.”

Mr Bethell added yesterday of Potter’s Cay: “We feel that’s always a way for persons to try and circumvent the fees of the port, which translates into operating income for APD. Usually, when that’s the case, it’s also a means of circumventing the Government ports, and that’s not in line with the intent and spirit in which APD was established.

“We’re supposed to have a facility where all duty-paid cargo enters through our facility, and not alternatives like Potter’s Cay. There’s the loss of revenue, whether its import duties, Excise Tax, VAT or any other charges. We feel that’s just a loophole and a problem that continues, and it remains on our radar.”

Mr Bethell said there had been “no further progress” on other business opportunities APD had been exploring to deliver further value for its 11,000 shareholders by developing new revenue streams. In particular, he identified the possibility of establishing a liquefied natural gas (LNG) bunkering facility at the port to supply this fuel to cruise ships, Bahamas Power & Light (BPL) or both as one initiative that has not moved forward.

The APD president confirmed that the port operator was still continuing to seek expansion opportunities at other facilities in The Bahamas or internationally, but nothing had materialised yet.