The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The government will use “whatever means are necessary” to ensure the cruise industry does not bypass Nassau and other “major population centres” post-COVID-19, a Cabinet minister pledged yesterday.

Dionisio D’Aguilar, minister of tourism and aviation, told Tribune Business that the government simply “won’t allow the multi-billion dollar industry to exclude the Bahamian capital and other major islands from its voyage itineraries once it resumes sailing in the pandemic’s aftermath.

Throwing his and the government’s support behind Nassau Cruise Port’s ongoing $130m bond offering, Mr D’Aguilar sought to reassure potential investors that Prince George Wharf is guaranteed to receive millions of passengers per year from cruise ship calls that will not slack-off in frequency.

“I want to emphasise that we will nudge and encourage the cruise companies to visit our major population cities on their itineraries,” he told this newspaper, adamantly asserting that the prospect of vessels bypassing Nassau to call exclusively at their Bahamian private islands was virtually non-existent.

“I think that won’t happen for two reasons,” Mr D’Aguilar said. “First and foremost, the Government won’t allow that to happen. Then there are 118 cruise ships under construction, so the industry is looking for ports. When you have so much additional capacity - I don’t know how much of that is underway, and how much is still a dream and subject to being cancelled - there is a substantial demand for ports.

“The government recognises population centres are where most economic impact is to be had, so if the cruise companies come to The Bahamas they are going to be nudged by whatever means are necessary to visit the major population centres and create economic impact.

“Ever since this government took office it’s been approving projects in population centres and not private islands.” Besides the Carnival and Royal Caribbean/ITM projects in Freeport, Mr D’Aguilar also pointed to Disney Cruise Line’s Lighthouse Point development - and the Mediterranean Shipping Company (MSC) and Virgin Cruises projects targeting Bimini - as evidence of this policy.

The minister’s comments are designed to ease investor fears that the cruise lines may elect to increasingly bypass Nassau in favour of the multi-billion dollar investments they have made in their private islands, such as Royal Caribbean’s ‘Perfect Day’ experience at Coco Cay in the Berry Islands, especially after losing out to Global Ports Holding in the bidding to transform and operate Prince George Wharf.

This, together with concerns over the timing and extent of any cruise industry rebound post-COVID-19, is thought to have given some potential investors and their advisers pause for thought as to whether they should buy into Nassau Cruise Port’s $130m capital raising.

“I just wanted to express the Government’s support for what we feel will be an excellent project, an excellent investment,” Mr D’Aguilar added. “It may not seem so right now, but it’s amazing that our research is indicating a lot of people are interested in taking a cruise. It’s a very resilient industry despite the negative press swirling around it. What we’re hearing from our partners is that the industry remains very robust, and continues to be strong.”

He added that this feedback was being provided to the Ministry of Tourism by the likes of online booking engines and travel agencies, which were all reporting that many persons scheduled to take a cruise during the COVID-19 pandemic had opted to defer their trip to a later date rather than cancel it outright.

Mr D’Aguilar said it was not unusual for the Government to give public backing to capital raisings by major infrastructure-type projects, saying it had done so with both the Nassau Airport Development Company’s (NAD) financing and the Arawak Port Development Company initial public offering (IPO) when public sector employees were enabled to buy shares via salary deductions.

“This is the third gateway project,” he told Tribune Business. “It’s an infrastructure project that, certainly on the other side of this COVID-19 pandemic, will result in a world-class cruise port which undergirds and underpins a critical component of our tourism industry.

“It’s commenced construction and doesn’t require any government funding, which allows the Government to divert scarce resources into other projects. It leverages our ability to do more and, at the end of the day, we will get a brand new cruise port and an infusion into the domestic economy through construction employment.”

Mr D’Aguilar added that it should be “extremely encouraging” to potential investors in the $130m bond issue that Mehmet Kutman, Global Ports Holding’s chairman, had personally guaranteed to cover any shortfall should the full amount not be raised so that the development can proceed according to plan.

“It’s extremely important that the necessary funds are raised to get this project underway, and I’m sure some investors may be a little gun shy given the current economic situation and the impact on the cruise industry,” he said. “I’m not worried, and I think as a segment of our tourism economy it will bounce back fairly quickly over the next two years, and quicker than other destinations given our proximity to Miami, Fort Lauderdale and Port Canaveral.”

Mr D’Aguilar said the Government remained confident that the Royal Caribbean/ITM joint venture’s acquisition of the Grand Lucayan will move forward, albeit with delays, after it informed this newspaper that it had “secured the required liquidity” and was now in talks with potential lenders to raise the necessary financing.

“No one has said that the projects have been cancelled,” he told Tribune Business, also referring to Carnival’s Freeport project. “Obviously we’re in a wait and see position. We are very encouraged by that, and certainly the Holistica (Royal Caribbean/ITM) deal seems to be moving forward, albeit with some understandable delays given the pandemic and difficulties in focusing on it with this distraction. The project is alive.

“We definitely remain engaged, and are fully understanding of the conditions on the ground and what’s happening. We remain available to assist in any way to bring these projects to fruition and get them underway in the quickest possible time.”