The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Nassau Cruise Port yesterday estimated it will generate more than $78m for the Government during the 2023 calendar year after a Cabinet minister blasted the project as “the worst deal in Bahamian history”.

The Prince George Wharf operator, in a late afternoon statement, forecast that the Government will earn multiple millions more from cruise passenger activity than the sums given by Keith Bell, minister of labour and Immigration, during his presentation in the 2023-2024 Budget debate. 

The House of Assembly was treated to a situation where Mr Bell, in seeking to portray the Minnis administration as having given the cruise port away for next to nothing, attacked an agreement the very Cabinet of which he is part upheld and saw through to a completion that culminated in the May 26 official opening by Prime Minister Philip Davis.

Branding the cruise port’s outsourcing, and $322.5m transformation, as a “bad deal”, Mr Bell asserted that the Government - over the five-year period to 2027 - is forecast to earn just $18m from land and seabed leases at Prince George Wharf while Nassau Cruise Port, in contrast, will earn collective revenues of $578.4m over the same period.

But the cruise port operator, while doubtless seeking to avoid being dragged into a political battle, asserted that the Public Treasury will earn this year alone earn four times’ the figure quoted by Mr Bell for a full five-year period due to revenue streams that the Cabinet minister seemingly neglected in his presentation.

Besides the pierage and wharfage fees, Nassau Cruise Port pointed out that the Government also earns $18 per head in cruise passenger departure taxes after the Minnis administration eliminated the rebates previously granted to the cruise lines. With the departure tax rates set to increase from July 1, as per the 2023-2024 Budget, and passenger volumes rising thanks to Nassau Cruise Port’s expansion, the Government’s income is set to only increase further.

Using 2019 as the benchmark, which produced a then-record 3.85m cruise visitors for Nassau, Nassau Cruise Port said combined pierage and wharfage charges have historically worked out at an average $0.78 per passenger. Using this rate, and the $18 departure tax, and multiplying these by 3.85m passengers resulted in wharfage/pierage revenues of around $3.003m for 2019 and departures taxes of $69.3m.

Combined, this totals $72.303m, which dwarfs the $2.5m-$2.6m that Mr Bell alleged is all that the Government is receiving from the seabed and land leases. “Nassau Cruise Port completed the construction of the new berth six and extension of berth one in early 2022, which has materially improved the cruise port’s vessel capacity and consequently the number of passengers calling on Nassau,” the cruise port said.

“In 2023, Nassau is forecasted to surpass 2019’s passenger count by approximately 300,000 passengers and, in 2024, the total number of cruise passengers is estimated to climb to 4.6m passengers.” Michael Maura, Nassau Cruise Port’s chief executive, told Tribune Business yesterday that the Bahamian capital is still forecast to receive some 4.2m passengers this calendar year.

Based on 4.2m passengers for 2023, and 4.6m forecast for 2024, multiplying these figures by the $18 departure tax gives $75.6m and $82.8m in such revenues, respectively, for 2023 and 2024. Again, both sums massively exceed the Government’s projected earnings as given by Mr Bell and, when the minimum $2.5m lease payment is factored in, the Public Treasury’s income from Prince George Wharf is projected at $78.1m for 2023 and $85.3m for 2024. 

These represent 8 percent, or as $5.8m year-over-year increase for 2023 compared to 2022, and a $13m or 18 percent increase for 2024 when benchmarked against last year. These figures are, if anything, likely to be under-estimates of what the Government will earn from cruise passengers given that departure taxes for those leaving from Nassau will be raised from $18 to $23 as of July 1 this year.

Cruise passengers, from that date onwards, will also be required to pay a $5 ‘environmental levy’ and $2 “tourism enhancement levy”, which will ultimately take the sum paid in taxes and levies from the present $10 to $30.

“While the Government is earning more in departure taxes and lease payments combined in 2023 and 2024, what the Government and Bahamian people are also benefiting from is Nassau Cruise Port’s redevelopment of 18 acres of Bahamian commercial entertainment, retail and food and beverage, and the region only wishes they could have mirrored what we have done,” Mr Maura told Tribune Business.

“The financial benefits to the country, and the Government of The Bahamas specifically, go far beyond the noticeable increase in departure tax revenues plus the $2.5m in lease payments. I’m sure the Government appreciates, and acknowledges, that renovating 11 upland acres for retail, a Junkanoo museum, amphitheatre, food and beverage creates a great experience for one and all, and translates into an increase for thousands of Bahamians and consequently an increase in revenues for the Government of The Bahamas.”

The Nassau Cruise Port, in its statement, forecast that passenger numbers will continue to climb throughout the decade. For the 12 months to end-March 2025, it is predicting that 5m visitors will arrive at Prince George Wharf, with this number increasing to 5.2m, 5.4m and 5.6m for its financial years to end-March 2026, 2027 and 2028. For the five-year period to end-March 2028, some 25.8m persons are projected to cross its wharves and jetties.

Over that same period, Nassau Cruise Port’s revenues are projected to rise from $34.1m in the year to end-March 2024 to $47.4m the following year, with further increases to $60.4m, $64.7m and $68.9m in the years to end-March 2026, 2027 and 2028. Over that same five-year period, the cruise operator is forecasting it will earn a collective $275.5m in top-line revenue income.

The latter figure is well short of the collective $578.4m that Mr Bell alleged Nassau Cruise Port will earn over the five years to end-2027. Nassau Cruise Port sources were unable to explain the discrepancy between their forecasts and the figures given by Mr Bell, although it appeared he may have been reading from an old 2018 “unsolicited” proposal submitted by Global Ports Holding, the company’s 49 percent controlling shareholder.

Much has changed since 2018, especially the fact that the world has gone through the unexpected COVID-19 pandemic, which shut down the cruise industry worldwide for some 15 months and threw out all previous financial forecasts and projections. Mr Bell, though, yesterday charged that Nassau Cruise Port was predicted to earn some $3.1bn in revenues over the life of its 25-year concession agreement plus the two-year winding down period.