The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Cabinet minister has acknowledged growing concerns over the fate of Abaco’s two commercial shipping ports amid fears this could be “crippling” for the island’s economy if unresolved.

JoBeth Coleby-Davis, minister of transport and energy, in a messaged reply to Tribune Business inquiries said she hopes to reveal more about the future for both the Marsh Harbour and Cooper’s Town ports “in short order” with the island’s private sector asserting it is “beyond critical” to address the devastation that Hurricane Dorian inflicted on the former facility exactly five years ago.

The lack of repairs and improvements to the Marsh Harbour port since the Category Five storm struck were described by Abaco businesses as “the sword of Damocles hanging over our heads”, given that this could result in it being declared non-compliant with international shipping regulations.

Should this occur, vessels leaving the US would no longer be able to sail directly to Abaco, and instead would have to unload their cargos in either Nassau or Freeport for onward shipping to the island. This would lead to massive disruption for Abaco’s heavily import-dependent economy, increasing costs, time and inconvenience associated with logistics and the supply chain.

Speaking as both Abaco and Grand Bahama, as well as the entire Bahamas, marked Dorian’s fifth anniversary, Mrs Coleby-Davis acknowledged the future of both ports was important to Abaconians “and rightly so”. Bids from private sector operators to invest in, and take over the management and operations of each, were submitted in August 2023 but little has been heard of any progress since.

In her response to this newspaper, the minister voiced optimism that she would soon be able to provide greater clarity and details on what will happen with Abaco’s key commercial shipping infrastructure. She added that the bidding process for the Cooper’s Town port is being reviewed by the Bahamas Investment Authority (BIA) and directed further questions to that agency.

As for Marsh Harbour, Mrs Coleby-Davis said her ministry is holding talks with the US Embassy in Nassau “to have some security upgrades completed” while further consultation takes place over the bidding process and request for proposal (RFP) with the Prime Minister’s Office, Ministry of Finance and Attorney General’s Office.

“With respect to the RFP for Cooper’s Town, the required due diligence and reviews are ongoing by the Bahamas Investment Authority (BIA). Based on this status, the ministry will direct further questions to the BIA,” Mrs Coleby-Davis told Tribune Business.

“With respect to the RFP for Marsh Harbour, further consultations are required with the Office of the Prime Minister, Ministry of Finance and Attorney General’s Office. However, the Ministry of Energy and Transport is in discussions with the US Embassy to have some security upgrades completed.

“I am advised that the upgrades should include perimeter fencing, installation of CCTV cameras, paving, erection of a security booth and an office space. These issues are important to the people of Abaco and rightly so. I understand the concerns. However, in short order it is my expectation that I will be able to share greater details.”

Daphne DeGregory-Miaoulis, Abaco’s Chamber of Commerce president, voiced concerns to Tribune Business that “nothing has been done” to fully resolve dismal operating conditions at Marsh Harbour, the island’s main port of entry, since Dorian hit some five years ago. And little to nothing has been heard of the RFP process, and its outcome, for some 12 months.

“I’ve expressed concern that nothing has been said, nothing has been stated,” she said. “We’re having the Abaco Business Outlook coming up on September 19, and that’s [the ports] definitely one of the things we’re going to be addressing and, hopefully, get some assurance on. Not that this government is forthcoming on giving answers to anything. We’re very concerned about the fact nothing has been done.”

While Tropical Shipping has constructed its own facility outside the Marsh Harbour port, where customers can pick up containers and imports free from the facility’s hassles, Mrs DeGregory-Miaoulis conceded that not all shipping companies are able to do this.

She added that Marsh Harbour was “pretty much” in the same condition it attained following the temporary repairs and fixes made post-Dorian, with the only recent improvement being the installation of bathrooms for Customs agents.

The Marsh Harbour faced challenges meeting international shipping regulations and standards even before Dorian, with the Government-owned and managed port failing its International Ship and Port Security (ISPS) “mock” inspection on June 18, 2019.

This sparked hasty action to ensure it passed the requirements of the subsequent “actual” assessment, but Mrs DeGregory-Miaoulis said it was a constant worry that the failure to remedy post-Dorian damage could result in Marsh Harbour failing a new ISPS inspection. This assesses whether a commercial shipping port is compliant with the global security standards introduced in the wake of September 11.

Failure would result in US cargo vessels being barred from bringing goods directly to Abaco, and the Chamber of Commerce president told Tribune Business: “That’s always been the fear. The last I heard was that the US embassy had people here, and their input towards the awarding of the contract was being considered.

“It’s as if we are waiting for them to say ‘we are going to clamp down on you and stop vessels from the US going to the port’, and for our officials to then scurry around and make the provisions necessary. That seems to be the norm. It’s unfortunate, but that seems to be the way we operate.”

As for the economic consequences should such a scenario occur, Mrs DeGregory-Miaoulis said: “That would just cripple us because that would an increased cost and, at this point, our expenses are already too high. We definitely could not handle any further increase; the consumer cannot bear it. It would all boil down to the consumer having to pay the additional cost, and it’s hard enough as it is. It could be crippling.”

She added that while addressing Marsh Harbour’s deficiencies is now “beyond critical”, the Government “are certainly not treating it with any urgency” based on the relative silence since bids were submitted more than a year ago.

“I think the Abaco community deserves some announcement or update as to where we stand with the rebuild of the port,” Mrs DeGregory-Miaoulis said. “It’s a major asset. If they shut us down it could be crippling. It’s as simple as that. I don’t think there’s anything more I can say that would be printable.”

Asked whether she believed Abaco is being neglected by Nassau-based policymakers, she replied: “It certainly is. They are certainly not making us a priority on their list. I’m not quite sure what their priorities are at the moment.”

Both the Abaco Chamber president and other sources said it is difficult to quantify how badly the port’s condition is impacting Abaco’s economy. “I don’t think it has had any negative impact per se because we are just making do and putting up with it,” Mrs DeGregory-Miaoulis said.

Another contact, speaking on condition of anonymity, added of the ISPS threat: “It’s like the sword of Damocles hanging over our heads. It would destroy the economy here without a doubt. At this point the impact’s been difficult to tell because we’ve been operating for five years like this. We don’t know how much better it could have been. At the same time, the port is still non-compliant.”

The Government has also, at the same time as the Marsh Harbour port RFP, initiated a bidding process for the Cooper’s Town facility in north Abaco that was constructed for $41m by China Harbour Engineering Company (CHEC). Little further has been heard on that process, too.

“That port is just sitting there deteriorating,” Mrs DeGregory-Miaoulis said. “It’s a lot of money spent and it’s not doing anything to really help the island’s development. We thought it was going to help to promote commerce to increase in the north, but it’s non-functioning. If Treasure Cay gets sold and open it will certainly help to increase the need for imports on the northern end of the island.”

Tribune Business previously revealed that the Government was eyeing a combined $100m investment to transform Abaco’s two commercial shipping ports into facilities that meet global best practices and standards.

The public-private partnership (PPP) tender documents for both the Marsh Harbour and Cooper’s Town ports revealed that bidders on the former must show they have combined equal capital and access to debt financing of “at least $60m” on the former. For Cooper’s Town, the figure was slightly less at $40m in collective equity and debt funding.

The tender documents revealed that the Government wanted the ownership structure for both Abaco port PPPs to mirror that which was put in place for BISX-listed Arawak Port Development Company (APD), operator of the Nassau Container Port, and which bid on the Marsh Harbour RFP.

For both the Marsh Harbour and Cooper’s Town ports, the RFPs stipulated that a combined 20 percent equity ownership will be “offered for sale to the general public” although it did not specify whether this will be via an initial public offering (IPO) or other method.

The remaining 80 percent ownership interest was to be split evenly between the Government and winning PPP bidder, with each holding 40 percent. This split matches APD’s structure, where the Government and shipping industry each hold a 40 percent stake.

Meanwhile, among the expansion opportunities identified at the Cooper’s Town port was a 120-slip marina together with international and domestic warehouses, although no such opportunities were identified at Marsh Harbour.

Both RFP documents stated that each port will be leased to the winning bidder for a 25-year period, in an attempt to ensure they get a return on their upfront capital investment, with the Government wanting them to employ a workforce that is 80 percent Bahamian at a minimum.