The Tribune

• Chamber chief urges Special Economic Zone set-up

• Hopes Gov’t ‘pulls trigger’ on shipping port PPP offer

• Dorian-hit island sees 20-30 power outages in 3 days

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Abaco’s Chamber of Commerce president yesterday called for the Dorian-ravaged island to be designated as a ‘second Freeport’ to further spur its recovery from the devastating storm.

Ken Hutton, addressing the Abaco Business Outlook conference, said the Chamber is proposing the creation of an Abaco Special Economic Zone modelled along similar lines to the Hawksbill Creek Agreement’s free trade area “but without the problems” that have bedevilled the Grand Bahama Port Authority (GBPA) over previous decades.

While few details were provided, Mr Hutton subsequently told Tribune Business that the Special Economic Zone was being eyed as a “more permanent creation” if the concept was shown to benefit the island’s recovery, economic growth and contribution to the Public Treasury.

The Special Economic Zone would be led by the private sector, and target both post-Dorian reconstruction and the attraction of new investment to Abaco in an effort to create “forward-looking” momentum.

“I think it’s something more permanent,” Mr Hutton replied, when asked by Tribune Business how long such a Special Economic Zone would exist, “and how fast it’s able to bring Abaco back as a prime earner for the Treasury.” He added that, if effective, the Zone would “last longer”, but if it failed to function as advertised it would come to an end much more quickly.

The Chamber president devoted his speech to the concerns and challenges Abaco faces in rebounding from the twin blows of Hurricane Dorian and COVID-19, adding: “Abaco knows what Abaco needs. No one else knows what Abaco needs.”

In particular, he voiced optimism that the newly-elected Davis administration will “pull the trigger pretty quickly” on the public-private partnership (PPP) proposal for reconstructing Marsh Harbour’s shipping port that the Abaco Chamber submitted to its predecessor two days before the general election was called.

“We need an immediate PPP for reconstruction,” Mr Hutton told the Outlook. “Under the last government, the Abaco Chamber of Commerce was asked to out together and submit a proposal to rebuild the Marsh Harbour port using a PPP.”

He added that reconstruction would have been financed from private sources, thus imposing no further strain on the Government’s already-precarious fiscal position, with the plan involving the shipping companies and all relevant stakeholders. There was also “the possibility of owning shares” in the project, and finished port, for local Abaco residents.

“It’s an urgent issue for Abaco,” Mr Hutton reiterated. “We put a proposal in, and two days later the election was called. Timing was not in our favour. The proposal is still there and hopefully the new government will look at it and pull the trigger on it pretty quickly.”

Virtually no reconstruction has occurred at the Marsh Harbour port despite the devastation inflicted by Hurricane Dorian, despite the fact it is the main gateway for rebuilding materials and all other day-to-day supplies required by the island.

Mr Hutton, the Chamber and the wider business community have long feared the inaction could endanger waivers provided by the US Coast Guard and International Maritime Organisation (IMO) that presently allow the port to operate despite its non-compliance with global safety and security standards.

Should the exemption from the International Shipping and Port Security (ISPS) standard be discontinued, ships bringing building materials and other vital reconstruction supplies to Abaco will be unable to directly return to the US.

Such a development would force these cargo vessels to instead offload their goods in Nassau or Freeport rather than Abaco, resulting in increased costs and extra time to get vital products to homeowners and businesses still rebuilding their Dorian-ravaged properties.

Elsewhere, Mr Hutton identified unreliable electricity supplies as another major obstacle to Abaco’s reconstruction. “We had six power outages yesterday alone, some lasting several hours,” he said. “Unfortunately, water is tied into the power system, so when power goes out we have no water, which definitely affects tourism business that need water for the kitchen and any other firm.

“With power restoration, they are working on it, but we’ve had 20-30 outages in the last 72 hours. It’s a challenge, I know, but we need to get a handle on that to make sure everyone has power on a regular basis.”

The Abaco Chamber chief, while praising the Prime Minister for extending the tax breaks on vehicles imported as Dorian replacements, again urged the Government to extend the VAT exemptions on building materials and construction services for another three to five years so that Bahamians and second homeowners can “plan and budget” with certainty.

“The extension of those concessions for property owners is very important for them to come back and rebuild,” Mr Hutton added. “Many have not had a chance to come back and rebuild because of COVID.

“The most important thing is we need those concessions for longer than six months. We need those extended for three to five years. We cannot get anything done in six months. Furniture ordered today, you’re likely to get in four to five months’ time. These are huge barriers to being able to rebuild.

“We need certainty and clarity going forward, and six months at a time is very prohibitive as people cannot make plans or budget.” The Abaco Chamber chief added that it was also vital to resolve sewerage and water problems that are hindering the restoration of two vital second home communities, Treasure Cay and Eastern Shores.

The island’s economy relied heavily on second homeowners as its primary driver pre-COVID, and Mr Hutton said it appeared as if only 20 percent of Treasure Cay owners had started reconstruction due to the sewerage woes and other factors such as COVID-19. 

Noting that Abaco’s population had dropped from 25,000 to just 700 within days of Dorian’s passage, he added that while it has now rebounded to between 12,000-15,000 any further growth is being hindered by the lack of multi-family and rental housing options on the island.

Non-governmental organisations (NGOs) had been deterred from building multi-family homes, such as duplexes and triplexes, for fear they would be classified as commercial properties. As a result, businesses are unable to hire or bring in workers because there is nowhere to house them.

“We’re coming with suggestions and possible solutions,” the Chamber president said, adding that the group was proposing the development of a new housing community between Central Pines and “the cut-off road” where homes would be well above sea level.

And suggestions have also been made to turn the 16-acre Mud site, which has just been cleaned up and fenced in, into a community park and memorial gardens to commemorate Dorian victims. Financed by private donations, it would also incorporate “small business stores and an innovation centre”.

And, noting that Abaco has 61,737 acres of arable land, but just 11,737 acres or 19 percent are being used for such purposes, Mr Hutton said: “We need to change that.” He added that there were also opportunities for commercial logging, as “there’s probably 20-30 miles of dead trees in Abaco that need to come down. They are a fire risk beyond measure”.

The Chamber president added: “In crisis lies opportunity. As the Prime Minister said, we have a real chance to break the mould here instead of re-doing what was done before. We need to focus, with the Government, on getting some immediate wins. There are a lot of things that can be done which will result in immediate wins.”