The Tribune

By FAY SIMMONS

Tribune Business Reporter

jsimmons@tribunemedia.net

The Attorney General yesterday reinforced the Government’s determination to make the Grand Bahama Port Authority “meet its obligations” as he defended its demands for financial reimbursement.

Ryan Pinder KC, addressing the Senate during the 2023-2024 Budget debate, backed Prime Minister Philip Davis’ assertions that Freeport’s quasi-governmental authority has not responded to any of the billings and invoices seeking compensation for costs incurred in providing public services that exceed tax revenues generated by the city.

He said: “To-date the GBPA has not responded to any of our requests for reimbursement to these expenses. The first time we heard anything about their objection to the amounts we are seeking is in their press release. With respect to the amount of expenses we believe we are entitled to, this calculation has been done on behalf of the Government by an internationally-recognised and respected accounting firm.”

“The method of calculation of the expenses has been provided to the GBPA, with no response. We understand that they might disagree with the calculations, and that is fine. The method for [resolving] such dispute, however, is not in the public domain with misconceived press releases, but through adequate methods of dispute resolution found in the Hawksbill Creek Agreement.”

Earlier this week, the GBPA said in a statement that the sums demanded by the Government are “contested” and “it is yet to be satisfied” that the claims are supported by credible evidence. Mr Pinder, though, alleged this statement contained numerous “inaccuracies and misrepresentations”, although he did not directly specify what they are.

He said: “Two days ago, the Grand Bahama Port Authority (GBPA) thought it appropriate, although we as the Government disagree, that they air the discussions and dispute with the Government in the public domain. What is more troubling is that the statement was full of inaccuracies and misrepresentations. Although we don’t believe in negotiating any dispute in the press, I think it appropriate to lay out the facts.”

Mr Pinder explained that the Government is following a section of the Hawksbill Creek Agreement that stipulates the Government must be reimbursed for certain activities and services if the costs involved in providing them exceed tax revenues generated from Freeport. Since this section was never amended, it is still in force.

He added: “First of all, it should be made clear that any claim by thje Government is pursuant to section 1(5) of the Hawksbill Creek Agreement. This section has never been amended and therefore remains in force and binding. Section 1(5) of the Hawksbill Creek Agreement provides that costs borne by the Government for certain activities and services provided would be reimbursed by GBPA for amounts in excess of Customs duties and emergency taxes collected.”

Mr Pinder argued that attempts to collect the alleged arrears owed by the GBPA under the former Christie administration were “resisted”, leading to the two sides agreeing a Memorandum of Understanding (MoU) that provided “governance concessions”being put in place a year later.

He said: “Furthermore, their assertion that no government has ever pursued these amounts is patently incorrect. The GBPA would recall that, in 2015, under Prime Minister Christie, a Hawksbill Review Committee was comprised to review matters related to the obligations under the Hawksbill Creek Agreement, including the applicability of section 1 (5) reimbursements.

“The Hawksbill Creek Agreement Review Committee under the former PLP government went so far as to commission their own independent financial review of amounts that would be owed. At that time the GBPA likewise resisted the pursuit and calculation.

“This resistance resulted in a Memorandum of Understanding being entered into in 2016 with the Government that provided certain governance concessions and pledged to work through all questions raised by the Government regarding Section 1(5).”

Mr Pinder also argued that the former Minnis administration “abandoned” and attempted to “reverse’” the collection efforts by their predecessors. He said: “Communication on the section 1(5) claims continued after the entering of the MOU. Shortly thereafter the PLP lost the general election and there was a change of government.

“The last FNM administration abandoned the work of the former government on this issue, and even went so far as to try to reverse everything that the Government had done in favour of the shareholders of the GBPA. So, as you can see, this issue of Section 1(5) is not a novel one.

“The Christie administration believed the Government was entitled to be reimbursed for costs under Section 1(5) and the Brave Davis administration likewise believes so. You would have to ask other administrations why they felt it unnecessary to pursue rights for the Government and Bahamian people that were clearly laid out in law and in contract under the Hawksbill Creek Agreement.”

Senator Darren Henfield, the FNM’s leader in the Senate, conceded that the relationship between the current and previous administrations and the GBPA is “broken”. He also maintained that addressing the issues between the two publicly is “counterproductive and ill-advised”.

He said: “We will all readily agree that something is broken in Grand Bahama, which successive governments and the Grand Bahama Port Authority have not been able, thus far, to fix. Grand Bahama’s economy has been stagnant for far too long with no real solution in sight. But I believe that it is counter-productive and ill-advised for the Government of The Bahamas and the Grand Bahama Port Authority to continue to engage in a public war of words.”

Mr Henfield added that the public discord between the GBPA and the Government will shake investor confidence. He said: “It does not grow confidence in hopes of rebuilding the economy of Grand Bahama, nor does it grow confidence in foreign direct investors who might be interested in investing in Grand Bahama. I encourage the dialogue between the two.”