The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Prime Minister last night urged the private sector to break free of the “scare tactics” employed whenever the Government demands the Grand Bahama Port Authority (GBPA) “live up to its obligations”.

Philip Davis KC, in a widely-anticipated address to a Grand Bahama Chamber of Commerce business dinner, urged the business community to “leave fear in the past” as he sought to justify why his administration is demanding that Freeport’s quasi-governmental authority repay $357m to the Public Treasury.

Reiterating that maintaining Freeport’s “status quo” is the only thing he opposes, he set out the Government’s case for why the city’s 3,000-plus licensees should withdraw support for the GBPA by arguing that its owners and management are “leaning on you”, only interested in charging fees and failing to attract and make the “game changing investments” desperately needed to revive the city’s economy.

Mr Davis, who sought to reassure the private sector by pledging that his government “will never take steps that water down any of the rights, privileges or benefits you enjoy” under the Hawksbill Creek Agreement, also sought to evoke comparisons between his administration’s stance on the GBPA and the late Sir Lynden Pindling’s famed “bend or be broken speech” in July 1969.

Suggesting that there are parallels between that era and Freeport’s condition today, the Prime Minister said efforts by subsequent administrations to hold the GBPA accountable for its governance and development responsibilities as set out under the Hawksbill Creek Agreement had frequently attracted the same negative reaction as Sir Lynden’s speech.

“In the decades that followed, it became conventional wisdom – an article of faith, especially among Bahamian elites – that it is too risky for the Bahamian government to insist that the Port Authority live up to its Hawksbill Creek obligations,” Mr Davis argued.

“Elected representatives of the people who have challenged the Port Authority to do more have been chastised for their impertinence, warned that they would be responsible for once again killing the magic and scaring away investors.”

Asserting that this mindset and attitude has been counter-productive, and failed to advance Freeport, the Prime Minister added: “Have decades of deference delivered you to the promised land? Where’s the magic? Where’s the prosperity that’s supposed to be the reward for submission?

“How many Bahamians have been enriched and empowered? Enough to justify the billions in concessions? Maybe the problem is not that successive governments have asked too much from the Port Authority, but rather that governments have asked for too little. I have had enough of the scare tactics.”

Mr Davis did not set out his full vision for Freeport and Grand Bahama, or a road map for how to bring it to reality, which many in attendance last night had been hoping to hear. Instead, he concentrated on justifying the Government’s demand for $357m to cover the costs of public spending and services in Freeport over and above the tax revenues generated by the city during the period 2018-2022.

The Prime Minister said he had not sought a fight or confrontation with the GBPA and its owners, the Hayward and St George families, but disclosed that as far back as July 2022 his administration was ready to enforce the Hawksbill Creek Agreement’s reimbursement clause as “we didn’t intend to let the stagnation and deterioration of Grand Bahama continue”.

The first reimbursement invoice was sent on October 3, 2022, after the GBPA was warned two months’ earlier it was coming. “I want to establish that the Port Authority had more than ample notice, and yet they still felt no compulsion to persuade us they intended to be true partners for progress,” Mr Davis said.

“Look at the breaches in the seawalls along the Grand Lucayan waterways, look at the unusable public ramps fisherman need to lower their boats into the water, look at the erosion of the public beaches. Look at the area some call ‘The Ghetto’ – just yards from the Pink Building [GBPA headquarters].

“Look at the bridge leading into East Grand Bahama, still not fully repaired. Downtown Freeport was dead for 20 years, with empty lots, the shuttered and derelict buildings. It is our administration that is bringing downtown back. We are addressing the dysfunction, and all the legacy issues they have neglected.” It is unclear whether these are all in the Port area or the GBPA’s responsibility.

Mr Davis also accused the GBPA’s demands for outstanding licence fees and service charges of blocking contractors from working on the Government’s small home repairs project in Freeport. “This is what happens when cities are treated like family heirlooms, passed down without a thought as to whether those inheriting are willing to serve the interests of our communities over their profits,” he argued.

“They’ve divested themselves of key assets; sold for private profits the very assets that would allow them to develop the economy in Freeport, as they are required by law to do. They sold the road building company, the harbour company, the utility company, the power company, even the sanitation company...

“They were happy to offload the airport to my predecessor [Dr Hubert Minnis], who somehow consented for the Bahamian taxpayer to take on the liability of rebuilding the airport.” The GBPA’s productive, for-profit assets have largely been transferred to its sister company and affiliate, Port Group Ltd.

“When the Port Authority owned all of these assets, they had a credible argument to make to investors. But now?,” Mr Davis asked. “Now they appear primarily to be in the licence fee-collecting business.

“I don’t know what they did with all the money they made from selling off all those companies, but I know what they didn’t do: They didn’t invest in the climate-resilient infrastructure Grand Bahama needs in this new climate era of intensifying hurricanes. And, speaking of selling off these critical subsidiaries, I don’t recall them asking those of you who are licensees for your consent.

“Yet any material change to the Hawksbill Creek Agreement requires four-fifths approval of licensees. They’re leaning on you, collecting your fees, but they’ve sold off the assets that would allow them to bring the kind of game-changing investments that are so overdue in Grand Bahama. They haven’t kept their obligations to you, and they haven’t kept them to Bahamian taxpayers more broadly, either.”

Mr Davis, asserting that his administration is no longer prepared to subsidise the profits of the GBPA and its owners, said: “The Port Authority’s position is that this provision has never before been enforced. Our position is that this unfortunate fact in no way removes their obligation under the law.

“On March 26, we sent the Port Authority an invoice covering the last five fiscal years. The invoice says they owe $357m. The Port Authority response: They owe nothing. The claim for $357m was supported by a detailed audit, prepared by international firm PriceWaterhouseCoopers. Their claim they owe nothing was supported by…nothing....

“We give the Port Authority extraordinary concessions. In return, we should get extraordinary growth. Instead, Grand Bahama’s economy has lagged behind other islands. The Port Authority collects your licence fees. But they long ago stopped earning them.”