The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

An outspoken QC is urging the Government to force the Grand Bahama Port Authority (GBPA) and Hutchison Whampoa to fulfill their Freeport obligations by ending the tax benefits they currently enjoy.

Fred Smith QC, the Callenders & Co attorney and partner, told Tribune Business he was calling for such drastic action on the basis that Freeport's quasi-governmental authority and its main business partner had effectively "abandoned" their responsibilities under the Hawksbill Creek Agreement.

Normally a staunch defender of Freeport's founding agreement, Mr Smith said he felt compelled to speak out because the city was currently "leaderless" with the GBPA effectively reduced to the role of "absentee landlord" and a de facto "tax collector".

He demanded that the GBPA, which is owned and controlled by the St George and Hayward families, "stand up and be counted" in defending Freeport and its 3,500 licensees from the central government "overreach" that has hampered investment and development in The Bahamas' second city.

"The reality is that the Port Authority has really given up the ghost of working to represent licensees and businesses in Freeport," Mr Smith told Tribune Business. "The Port Authority makes no effort to lobby for change in Nassau.

"It makes no effort to challenge central government overreach on jurisdiction in Freeport, and it intends to simply act as a tax collector for licensee fees and other dues.

"I never thought I would say this, but given the lack of energy, spirit, commitment and resolution of the Port Authority Group of Companies to protect and uphold the Hawksbill Creek Agreement, and support licensees, it may be that the Government should extend and expand incentive and development legislation to all licensees under the Hawksbill Creek Agreement but bring all the tax benefits to an end as against the GBPA, Grand Bahama Development Company (DevCo) and the Hutchison Group of Companies."

Such strong language by Mr Smith, also former external counsel to the GBPA, is likely to raise eyebrows among some observers. However, turning to DevCO, he argued that the current absence of taxation gave the company no incentive to go beyond a seeming strategy of "land banking" and develop its thousands of acres of real estate holdings.

"Maybe if they were subject to real property taxes they'd be forced to engage in partnership, development and sales," Mr Smith added. "The property held by the GBPA Group and Port Group Ltd, which has shaved off a lot of assets, would be subject to financial pressures to develop or liquidate into other investments."

Little has been seen or heard of the Memorandum of Understanding (MoU) that was agreed between the GBPA, its related assets and the last Christie administration. This committed the St Georges and Haywards to seeking a buyer for their interests, as well as the two largest land-owning companies - DevCo and Freeport Commercial & Industrial - to master-planning their holdings within two years.

"I, Fred Smith, am tired of defending the Hawksbill Creek Agreement for the benefit of the GBPA Group of Companies," the outspoken QC told Tribune Business. "They need top stand up and be counted. This all leads back to the fact the future of Freeport has become leaderless, and the Port Authority has abandoned its role under the Hawksbill Creek Agreement.

"The licensees are left floundering helplessly.... The Port Group of Companies has abandoned its role as a developer and is now just an absentee landlord collecting taxes. I understand the frustration of central government wanting to take positive steps to fill the vacuum left by the absence of the Port Authority, but the reason the Port Authority has gone missing in action is because of historical bickering with the Government and central government interference.

"This has become an intractable problem that has prejudiced 60,000 residents, and nearly 4,000 licensees and Freeport's very survival." Mr Smith said other options available to the Government involved forcing the Port Authority to go public or find it a developer partner.