The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The government is breathing a sigh of relief that it did not award Nassau cruise port's multi-million dollar transformation to the cruise line consortium given COVID-19's disruption, a Cabinet minister revealed yesterday.

Dionisio D'Aguilar, minister of tourism and aviation, told Tribune Business that Prince George Wharf's redevelopment would now likely be facing several years' delay had it done so with the cruise industry reeling from its worldwide closure and multi-billion dollar losses due to the pandemic.

He argued that the COVID-19 fall-out had further justified the government's selection of Global Ports Holding, the Turkish-headquartered, London-listed port operator, as the winning bidder for a 25-year concession that obligates it to redevelop, operate and maintain The Bahamas' main cruise tourism gateway.

Mr D'Aguilar admitted his surprise that Nassau Cruise Port Ltd, the 49 percent-owned Global Ports subsidiary, had exceeded its $130m target with the two-week bond capital raising that closed on Friday. He added that "this is how a public private partnership (PPP) should be done" with the majority of funding generated by Bahamian investors rather than coming from overseas sources, which happened with Lynden Pindling International Airport's (LPIA) funding.

The minister also took a swipe at the Government's political opponents, pointing out that the massive infrastructure works associated with the cruise port upgrade "have not cost the Bahamian government one dollar". He accused persons who believed the Public Treasury and, by extension, Bahamian taxpayers should finance all capital works project of being "so 20th century" in their mindset and outlook.

"I was pleasantly surprised that even in these uncertain times Nassau Cruise Port Ltd was able to go into the market, target $130m and exceed that," Mr D'Aguilar told Tribune Business. "I say to all the naysayers: It didn't cost the Bahamian government a single dollar to raise the money to redevelop that port.

"Imagine if we were waiting on government, and if the cruise consortium had got it. I think the Government made the right decision. I think it's [the port] going to get the attention it needs. There is no doubt that the cruise industry will come back and be much more robust.

"The port will be well-positioned to take advantage of this rebound, and it will keep the port of Nassau as one of the premier destinations for cruises in the Caribbean." Global Ports Holding's main competition for the Nassau cruise port deal came from a consortium of four cruise lines - Carnival, Disney, Norwegian and Royal Caribbean - who also teamed with a Bahamian investor group.

However, their bid was rejected amid concerns over what some perceived as the cruise lines' "conflict of interest", since they would be both operator and customer if the group was selected as Prince George Wharf's manager. And the port would also directly compete with their multiple Bahamian private islands, with some likening their involvement to "the fox guarding the hen house".

The cruise lines also came under increasing scrutiny by many Bahamians amid the perception they retain the vast majority of the industry's economic benefits, while this nation gets the crumbs, especially given their increased reliance on the same private islands where they control the majority of attractions and activities.

Meanwhile, Nassau Cruise Port Ltd had sought a mix of $80m in Bahamian currency, and $50m in US dollars, to finance Prince George Wharf's redevelopment through the next 16 months, which will carry it through into phase three. Mr D'Aguilar said it was "very important" that Bahamian investors, rather than their overseas counterparts, had provided the bulk of the financing.

"This is how a PPP should be done," he told this newspaper. "In the past, when we did the other gateway, LPIA, 75 percent of the money raised was from non-Bahamians. We're allowing Bahamian institutional investors a place to invest their money and get a return on Bahamian assets, and these Bahamian institutions represent many, many Bahamian pensioners and investment groups.

"These people that think government must do these things and take on infrastructure projects are so 20th century. In a country that has so many ports and airports, there's no way the Government of The Bahamas can ever be expected to keep these vital pieces of infrastructure modernised and state-of-the-art.

"We have these problems with the Family Island airports. There's only so many the Government will be able to fix. That is a wonderful model that the Government has to enter into; a PPP to upgrade and modernise vital pieces of the tourism infrastructure."

Around 20,000 Bahamian retail investors will be given an opportunity to own part of Prince George Wharf once the offering of shares in The Bahamas Investment Fund takes place next year. That fund will own a 49 percent equity stake in the project.

Global Ports Holding's matching contribution will take total equity funding to $74.3m. This, combined with another $80m debt financing raise scheduled for 2021, will provide the funding for the "superstructure" phase three of the cruise port's transformation, with a new passenger arrivals building, Junkanoo Museum, and amphitheatre.