The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government was yesterday urged to “negotiate harder” to ensure the $290m hospital’s lead contractor is Bahamian amid fears that reliance on Chinese financing “always puts locals at a disadvantage”.

Leonard Sands, the Bahamian Contractors Association’s (BCA) president, speaking ahead of last night’s first Town Hall meeting on the proposed 50-acre facility to be built at Perpall Tract, challenged whether the necessary financing could have been sourced elsewhere given that Chinese contractors and labour are always a condition attached to loans provided by Beijing.

Asserting that The Bahamas has “very capable, large contractors” able to take the lead on this project, he argued that this nation must become “more creative” in how it funds major infrastructure projects so as to develop alternatives to the “concessional” low-rate financing offered by China.

“Officially, it really underscores two things,” Mr Sands told this newspaper of the Government’s decision to accept Chinese funding. “One, the fact we do not see any commitment by the Government of The Bahamas to invest more in local manpower and contracting because, as you know, when we get monies from the Chinese state in this fashion it comes with a labour component and that always puts Bahamian contractors at a disadvantage.

“While we need a new hospital, we’re delighted it is on the drawing board and it’s proposed, we still wonder if we could have found financing from somewhere else or negotiated harder to ensure the primary contractor is Bahamian.”

Dr Michael Darville, minister of health and wellness, confirmed to Tribune Business earlier this week that a “Chinese contractor will be the lead contractor” and acknowledged that Chinese labour always follows where Beijing’s capital goes - as it has done on Baha Mar, The Pointe, British Colonial, and Thomas A Robinson national stadium and a host of other developments locally and internationally.

However, he pledged that the Government will seek to ensure Bahamians “get the best end of the stick” and that local workers outnumber their foreign counterparts on the project. “What happens with Chinese concessional loans and the China Export-Import Bank is that there’s a Chinese contractor directly tied in,” he told Tribune Business.

“In our negotiating process, I can assure you the Bahamian people will get the best end of the stick with more Bahamian manpower numbers on the project than Chinese. The [loan] details have not been finalised. It’s not completed yet. The terms of the labour component will be completely transparent to the Bahamian people like the Gateway [airport road] project.

“We’re going to negotiate in the interests of Bahamian workers to ensure we have more Bahamian workers on the project that Chinese workers. You’re right. Typically these concessional loans from China come with a labour component, and we’re going to do our best to ensure Bahamians benefit financially from this project.”

While The Bahamas has received major resorts and hotels, plus several thousand permanent jobs, in return for these investments, the stipulation that they are built primarily by Chinese contractors and labour deprives their Bahamian counterparts of critical earnings and experience. Much of the construction spend also leaks out of The Bahamas as the Chinese seek to maximise use of their own materials.

Mr Sands, in a nod to these concerns, told this newspaper: “We need a new hospital, good. We’ve identified the site, good. We’re happy for that, but we think we have contractors locally who are very capable contractors, large contractors very capable of taking on this project.

“The funding challenge.... $300m is a small amount. We could get half of it from local banks, and half of it from US institutions or the likes of the Inter-American Development Bank (IDB). I don’t know why we have to get it from the Chinese state. It comes with Chinese labour. We have to be more creative because we put the Bahamian in a less advantageous position when dealing with Chinese financing. It is what it is.”

Dr Darville earlier this week noted the “political” sensitivities of accepting financing from a Chinese-government owned bank, namely the China Export-Import Bank, but said The Bahamas had reached out to the US equivalent - the Export-Import Bank of the US - and other government-owned development banks and multilateral institutions but there was little to no “appetite” by others to take the hospital project.

He pointed out that multiple other Caribbean nations, such as Barbados, Trinidad and Guyana, were already exploiting low-cost Chinese loans to finance major healthcare and other infrastructure projects throughout the region so The Bahamas’ decision has not been taken in isolation.

“This doesn’t happen by chance,” Dr Darville said of the loan. “I went throughout the Caribbean. I went to Guyana, I went to Trinidad. The Chinese are building and funding many healthcare facilities throughout the Caribbean.

“I’ve spoken to my counterparts in the Caribbean. It’s very interesting. The entire region is using Chinese financing for major infrastructure works. Barbados is, Trinidad is, Guyana is. Everybody is dealing with Chinese financing. We looked at the political implications. We reached out to the US Export-Import Bank, we reached out to others. The majority didn’t have the appetite in the early stages.”

The Government’s squeezed fiscal position will doubtless have been another factor driving the Davis administration towards “concessional financing” from China given that the annual debt servicing burden will likely be much lower than other funding options. The China Export-Import Bank, which financed Baha Mar’s multi-billion resort, has agreed to fund the hospital via a 20-year loan with interest at just 2 percent.

Contractors, though, are not the only group of Bahamian professionals voicing concern over the hospital plan. Tribune Business last night obtained a 12-question strong survey that the Medical Association of The Bahamas (MAB) has sent out to its members to obtain “physician views and concerns” on the “proposed New Providence hospital”.

Among the questions posed are those that seek to obtain doctors’ views on constructing a new hospital when there is “urgent need for improvement at the current public hospital”, namely the Princess Margaret, and whether the new $290m facility cab “address the challenges and shortcomings of the current public hospital” that they have experienced.

Doctors are also asked to forecast if the new hospital will cause “changes in work dynamics, patient load and resources”, and whether they and other physicians should have a role in “shaping the policies, practices and procedures of the new hospital”. Other questions involve whether building a new hospital is “fiscally sound”, whether an alternative location would be better, and if a new hospital is needed now.

Issues of “physician burnout”, workload and “resource shortages” also feature among the questions. Well-placed Tribune Business sources, speaking on condition of anonymity, confirmed that the MAB has invited doctors and members to a virtual meeting to discuss the proposed hospital plan.

Dr Duane Sands, former minister of health and current FNM chairman, yesterday said of the new hospital: “I am not convinced this is much more than a PR exercise.” He added: “I know the MAB has a significant number of questions about the planned redevelopment and are requesting an audience with the minister.

“Some of the issues raised about the duplication of services and fragmentation of resources are at the top of that list.” One doctor, speaking on condition of anonymity, said: “There are definitely concerns with the funding of it, and also it’s location. Location and funding are certainly a part of it, and lack of consultation as usual.

“The Government is not engaging healthcare professionals, and is making arbitrary decisions about where physicians work and what they’ll do and how they’ll do it. Most of the physicians have created their practices around the hospital. Logistically, with moving the hospital it will obviously create quite a bit of movement for physicians moving back and forth as it relates to travel distance and the congestion we currently have on the streets of Nassau.”