The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

Couriers and air freight providers yesterday warned that the proposed new cargo scanning fee will “definitely hurt business” despite it not being implemented on New Year’s Day as originally planned.

Eryn Bain, general manager of Airborne Freight and Cargo Services, told Tribune Business that her company and the wider industry are awaiting further information from the Customs Department on when JDL, a private company, will start levying the 40 cents per pound fee on imported goods.

“It hasn’t started yet and they haven’t told us when,” she said. “I don’t like it. This will definitely hurt business. I’m not sure when it will start. I’ve not been told anything about it. What they are doing now is repairing the current terminal.”

Another air freight cargo operator, speaking on condition of anonymity, added: “They have not started yet. This is something they are proposing to do once they build out the new air freight facility. I think this is a bunch of nonsense and it will inflate the price of freight, and then relay down so heavy on the island that I don’t think the Government will go along with it.

“This isn’t in place yet, and I don’t see how they will enforce it. They don’t even have scales out there because all of the scales are privately owned. The incoming company is supposed to be bringing in their own scales. I don’t know how Pete Deveaux got into the freight business.

“This is ridiculous, and we as a collective are already having conversations about it. We plan on raising hell if they come at us with it because it will just raise the price of freight to over $3 a pound. The cost per pound for freight averages between $2 and $2.25.”

The proposed fee is part of a $25m private-public partnership (PPP) type agreement that will see the Government outsource Lynden Pindling International Airport’s (LPIA) air freight terminal to JDL, a company linked to Peter Deveaux, head of The Island Game gaming chain.

Simon Wilson, the Ministry of Finance’s financial secretary, previously told Tribune Business that JDL’s fees were still being negotiated and the Government is hoping the final figure will be less than 40 cents per pound. However, he confirmed that the Davis administration hoped the arrangement will take effect early in the New Year if not from January 1, 2024.

Disclosing that the Government has been seeking a solution for the “compromised” LPIA air freight terminal, which he branded “a disgrace”, for some ten years, Mr Wilson said the JDL deal was designed to develop the property into a modern building while addressing the present security and revenue leakage woes. He described fears over the fees as “disingenuous”.

Tribune Business revealed on June 6 last year how the Government was seeking to solve the air freight terminal’s issues via a potential PPP outsourcing arrangement with JDL. Documents accompanying the 2023-2024 Budget, in an annex detailing private-public partnerships, set out the “justification to design, finance, build and operate a new air freight terminal”.

“The purpose of this proposal is for the Government to transfer the property consisting of the air freight terminal to a special purpose vehicle (SPV) owned by the Government, and then to lease that property to JDL in order to design, finance, build and operate a new air freight terminal,” the Budget documents stated.

Describing the Government’s negotiations with JDL as “long and arduous”, Mr Wilson added: “We are still fine tuning the agreement. The negotiations are still going on with the company. We have not reached a final fee cost. We hope it will be less than 40 cents a pound.

“We still have to settle some things. We want it to start early in the New Year. If it’s not New Year’s Day it will probably be the first week in January. They’ve started the renovation of the bathrooms, which were unusable. They’ve started some early activity. They’re trying to fix the rear door to make it operable after an attempted robbery several years ago, and improve efficiency. They’re trying to make the place more habitable.”

Mr Wilson argued that JDL’s fees, even if they turned out to be 40 cents per pound, paled when compared to what he said was the $25 minimum charge levied by courier companies for air freight imported into The Bahamas. He added that JDL’s charge was “less than 2 percent” of the latter sum, and “no one can say that’s unreasonable”.

“Those couriers are being disingenuous,” the financial secretary charged. “They charge their customers $2-$3 per pound. That’s outside the air transportation or air freight fees. Ours is a very minimal cost.

“The second thing is if you look at the amount of contraband interdicted at the air freight terminal - drugs, guns, bullets. If you look at what the Commissioner of Police put out, a gun can be purchased in Florida on Monday and used in a murder in Nassau on Wednesday. We have a security concern, and this is us trying to make sure we have a facility fit for purpose.”