The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The government will take full control of Grand Bahama International Airport’s operations by June 1 following today’s handover of the facility’s ownership by Freeport Harbour Company.

Algernon Cargill, pictured, director of aviation, yesterday told Tribune Business there will be a 30-day “transition” period before the state-owned Airport Authority assumes full responsibility for day-to-day management at the island’s premier aviation gateway.

“The contract is being signed, and the government will actually take control of the airport 30 days thereafter by June 1,” he explained. “The transition period is 30 days. The ownership changes tomorrow [today], but the agreement calls for a 30-day transition period from the current owner, the Freeport Harbour Company, which is part of the Hutchison Whampoa group.”

Today’s signing brings long-running negotiations between the Government and Freeport Harbour Company’s owners to an end, and represents the first sign - albeit modest - of tangible progress in reviving Freeport’s devastated economy in the aftermath of Hurricane Dorian and the COVID-19 pandemic.

While the Government is only paying $1 to acquire Freeport Harbour Company’s subsidiary, Grand Bahama Airport Company, some observers have voiced misgivings about the deal’s structure. Mr Cargill previously confirmed to this newspaper that the airport’s 50/50 owners, Hutchison Whampoa and the Grand Bahama Port Authority (GBPA), will retain all the Dorian insurance proceeds.

This means a multi-million dollar claims payout, which some have said was as high as $25m, will not be injected into the airport’s rebuilding, which leaves the Government and a proposed private operating partner to raise the $50m-$60m required to finance post-Dorian restoration.

While many have hailed the purchase as vital to Freeport and Grand Bahama’s “economic survival”, others feel Hutchison Whampoa and the GBPA had effectively been allowed to abandon their developmental obligations to Freeport under the Hawksbill Creek Agreement.

And the Government (Bahamian taxpayer) is to “reimburse” Hutchison Whampoa for half the costs it incurs in paying due severance and other benefits to the airport’s 60-70 staff, who will leave its employment and be transferred to the state-owned Airport Authority.

Mr Cargill, meanwhile, disclosed that the bidding documents seeking private sector operators/managers for Grand Bahama International Airport and a series of Family Island airports have been consolidated into one mammoth Request for Proposal (RFP) rather than being split into separate tenders for each facility.

Confirming that the Government had been advised to do this by its newly-hired consultants, LeighFisher, the aviation chief added that the bidding process launch was now some “60 to 90 days out”. He confirmed that bidders could seek to operate all the airports involved, some or just one.

“We wanted to issue one document rather than several,” Mr Cargill added, confirming that airports in Abaco, Exuma, Great Harbour Cay, North Eleuthera, Long Island and San Salvador - as well as Grand Bahama International Airport will be included in the tender.

“It’s a huge project that LeighFisher is guiding us through,” he continued. “It all depends on the response, so we can have Freeport with the others or have several operators. What LeighFisher has recommended is a market-leading RFP, where the market dictates what offers come in as opposed to the Government dictating.

“We’ve already had five to six unsolicited offers ahead of the RFP, but we have told everyone we will not entertain any questions until the RFP process is complete because we want to be fully transparent in that process. 

“There’s a lot of people showing interest, and wanting to negotiate directly, but we said ‘no’, we will go through the RFP process. We want to ensure the process includes all voices, and the proposals will all be reviewed in the same manner using a disciplined and scientific process to find the right partner.”

Mr Cargill also disclosed that the construction ground-breaking for Exuma’s $65m airport revamp is due to take place next week Friday, with the Prime Minister scheduled to be in attendance. While declining to name the winning contractor, he said work is due to take between 18-24 months.

“Great Harbour Cay is 75 percent to 80 percent complete, and that’s a brand new airport,” the aviation director told Tribune Business. “We go out to tender next week on the Long Island airport. That airport is finally at the tender stage. We’re going to rebuild the Treasure Cay airport, that’s in the final stages of development, and North Eleuthera depends on the land transaction being completed.”

The latter $65m upgrade has run into opposition from nearby commonage land owners, whose holdings are required to facilitate that expansion. The Government is set “to pursue very soon” the compulsory land acquisitions needed in North Eleuthera and elsewhere for its Family Island airport transformation.

Mr Cargill confirmed that discussions are ongoing with local investment bank, RF Holdings, which has been contracted to raise $140m in private capital to fund the airport redevelopments and supplement existing financing from the Inter-American Development Bank (IDB). The structure and timing of the fund-raising is still being assessed.

“The airports are the first and last port of entries for persons arriving by air, so it’s important to leave a favourable impression with amenities that tourists want,” Mr Cargill said. “What we have in most Family Island airports falls far short of expectations.

“This will be a large jump in the tourism experience, and we expect it to have a positive effect on earnings. In Grand Bahama, the airport is the third part of the puzzle. The Government completed the purchase of the Grand Lucayan, is set to sell it to Royal Caribbean and Holistica, and now this. We have the air and sea, and now we have this. These things are being developed in tandem in order that we can revive Grand Bahama’s economy.”