The Tribune

• ‘Road map’ for city’s revival unveiled

• City’s future ‘lies in the blue economy’

• Calls for work permit, investment free-up

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A prominent attorney yesterday charged that “the ball is in the government’s court” after it was presented with a “road map” for reviving Freeport and the wider Bahamian economy via “a radically different approach”.

Robert Adams, who heads the Revitalization and Economic Expansion of Freeport (REEF) committee, told Tribune Business “the road to the turnaround of our national economy lies through Freeport” as he unveiled the body’s final “vision” for achieving the city’s rebirth together with specific actions, steps and timelines for achieving this.

Calling for The Bahamas to build upon the existing strengths of its second city, especially its maritime hub and ventures such as the container port, shipyard and harbour company, he argued that “the future of Freeport lies” in the so-called “blue economy” and government policies that support such a venture.

Mr Adams agreed that close collaboration between the Government and Grand Bahama Port Authority (GBPA), the latter of which drove the REEF committee’s creation, was “critical” if Freeport’s economic and social transformation is to be achieved. Yet relations between the two have often been strained since the late Edward St George’s passing in late 2004.

Conceding that “we’ve had too many years of disharmony” between Nassau and Freeport’s quasi-governmental authority, the REEF chair said Freeport had “flourished” for almost a decade post-1992 due to the GBPA and the then-Ingraham administration being of one accord on the city’s development. For the REEF proposal to stand any chance, Mr Adams admitted that the two “need to get back to those years”.

The government’s willingness to embrace more liberal work permit and foreign investment regimes, “as originally intended under the terms of the Hawksbill Creek Agreement”, are central to the REEF proposal yet several Tribune Business sources yesterday suggested the Minnis administration - which has a copy of the report - has not been fully engaging with the committee or the reform proposals.

“Hopefully the government will see the good wisdom of what has been proposed,” Mr Adams replied, when questioned by this newspaper yesterday. “During the consultation phase we had quite a few discussions with the government. During the drafting phase of the report, discussions with the government slowed.

“The report is now in the hands of the minister of state for finance, Senator Kwasi Thompson. I’ve received an assurance from him that the government is reviewing it, and giving consideration to what has been proposed. I anticipate there will be another round of discussions with the government in the not-too-distant future.

“We’ve given them time to review, consider and digest what we put forward. Hopefully in the coming weeks we’ll see a relaunch of discussions with the government, and hopefully they will implement some of what we have proposed. We hope,” he continued.

“We’ve set out what we think ought to be the vision for the city and way forward in as much detail as we can at this stage, as well as proposing timeframes to be taken. The ball is now very much in the court of central government. We stand ready and willing to work along with them in a constructive manner to achieve what we propose. Partnership is critical, I agree. It is critical.”

Multiple ‘ease of doing business’ and other reforms can only be implemented with government action and consent. These proposals include allowing companies in sectors reserved for Bahamian ownership only “to sell minority stakes in those businesses to foreign equity partners, or joint venture with such partners” should they so wish.

The REEF committee argues that doing so will “enhance their access to capital and skills” and “optimise their return on their investments”, while also calling on the Government to address “regulatory anomalies”, duplication and overlaps involving itself and the GBPA.

Arguing that this will bring “clarity and certainty” to areas that have restricted private sector development in Freeport, the proposal calls for real property tax exemptions to be extended to all in the Port area. The REEF committee also calls for the Government to repeal provisions in electricity and communications sector legislation, and the Environmental Planning and Protection Act, that give it “conflicting regulatory powers” with those of the GBPA.

This conflict has already generated litigation involving the Utilities Regulation and Competition Authority’s (URCA) ability to regulate Grand Bahama Power Company and Cable Bahamas in the Port area, but the committee does not suggest how this should be resolved. It also calls for the Government to “reframe transient expatriate workers as valued revenue sources, as opposed to threats to Bahamian jobs (see other article on Page 1B).

Other proposals call for the creation of a secure digital Know Your Customer (KYC) vetting system that would “make it significantly easier for customers to open and operate banks accounts”, along with a review of the 1 percent Customs processing fee “to make Freeport more competitive as a transhipment centre”.

The creation of a ‘one-stop shop’ agency dedicated to promoting Freeport to international investors, as well as “a transparent and fair Customs regime” involving standardised inspections and fees, are other components detailed by the REEF committee.

Describing this as “a road map”, which sets out the Government and GBPA’s responsibilities as well as the timeframes for achieving these steps, Mr Adams said: “We wanted to lay out the immediate steps to be taken. We wanted to try and put around those steps some realistic timeframes, and we wanted to conduct a broader discussion about the way forward and what the emphasis should be on.

“The new thrust of exploring opportunities in the blue economy and maritime sector in Freeport is something we wanted to pay very close attention and really tap some of the ideas discussed in the consultation phase. After much deliberation it seems to us this is the direction future and existing government policies towards Freeport should be focused towards: The blue economy.

“We need to do it. That’s where it is. That’s where the future lies. Ultimately, in terms of regulation and the regulatory environment, we should strive for best-in-class in the maritime industry. What the REEF committee is saying is this sector, the blue economy, is well within our grasp. It’s familiar to us and one in which we have developed some expertise,” he added.

“Because we have this expertise we should be able to, with innovation and government support and legislation, be able to harness some new opportunities from the blue economy so we can grow our job market.”

The so-called “vision” report, prepared for the committee by the KPMG accounting firm, does not provide any numbers on the potential boost for jobs, economic activity and Freeport’s contribution to Bahamian gross domestic product (GDP) if all proposals are implemented.

However, it calls on The Bahamas to build on Freeport’s existing strengths and industries by making the city “the blue economy of the Caribbean” by leveraging present maritime assets and infrastructure into becoming a ship’s “crew change centre”, “liquefied natural gas (LNG) refuelling hub; hull cleaning; survival craft and lifeboat repair centre; and ship waste removal and clean-up.

“While many jurisdictions, as well as other islands in The Bahamas, struggle to identify opportunities for the way forward, Freeport is unique in that the COVID-19 pandemic, global developments, and its current economic model has given rise to future opportunities for growth,” the KPMG report said.

It added that “the COVID-19 pandemic has highlighted the weaknesses that exist in developing mega resorts”, which some will see as ironic given the Government’s focus on the Grand Lucayan deal, and called for Grand Bahama to instead reform its tourism product by focusing on boutique resorts.

And the report also called for Freeport to relaunch efforts to become a transhipment/logistics hub via the Sea Air Business Centre (SABC), adding: “While the necessary infrastructure exists, historically, power and labour costs have acted as significant barriers to positioning Freeport as a competitive special economic zone.

“Three core recent developments have made revisiting the expansion and redevelopment of the industrial sector a viable option to attract new business to Freeport.” These included Grand Bahama Power Company’s provision of discounted electricity rates for qualifying businesses, together with the growing reliance on technology as opposed to large labour forces in automated manufacturing processes.

Mr Adams told Tribune Business: “The road to the turnaround of our national economy lies through Freeport. I firmly believe that. Freeport has historically prior to the hurricane of 2004 been a major positive contributor to the national economy.”

That year saw the Royal Oasis closure and loss of 1,250, together with Mr St George’s death, which ultimately sparked a long-running legal battle over his estate that also sucked in fellow GBPA owners, the Hayward family. And some observers may argue that the final REEF report again does not acknowledge the share of responsibility the GBPA’s two family owners bear for Freeport’s current condition.

Still, Mr Adams said: “The years that Freeport flourished were the years when there was a harmonious relationship between the Government and Port Authority. I would describe that period as between 1992 and 1999, and some may say later than that. That is when we saw a major resurgence in the development of Freeport. That’s what we need to get back to.

“In years when there was disharmony, lack of communication and lack of follow-up, Freeport has not done well. We’ve had too many of those years. Hopefully we can get things back on track.”