The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Nassau Container Port’s operator yesterday said it has not given up on winning the bid to overhaul Marsh Harbour’s commercial shipping port despite assertions that all contenders had backed out.

Dion Bethell, BISX-listed Arawak Port Development Company’s (APD) president and chief financial officer, in a messaged reply to Tribune Business inquiries said it remained “fully committed” to the project and boosting Family Island infrastructure and was waiting for the Government to respond to its bid submitted 13 months ago.

“APD is fully committed to enhancing the infrastructure that serves as the lifeline for Family Island communities across The Bahamas,” he said. “In alignment with this commitment, we have responded (in August 2023) to the request for proposal (RFP) issued by the Government of The Bahamas for the port of Marsh Harbour.

“Our proposal draws on our successful public-private partnership (PPP) model implemented here at Arawak Cay in Nassau, tailored to meet the unique needs and opportunities of the Abaco community. Our proposal includes a design/build/train/handover approach which not only aims to enhance operational efficiencies but also ensures Bahamians, particularly Abaconians, have the opportunity to hold equity interests in their local port.

“This model is intended to foster local involvement and investment, strengthening the economic foundation of the community. We are awaiting feedback from the Government and are hopeful for a positive outcome that will allow us to contribute to the revitalisation of the Marsh Harbour port. Our goal is to ensure that these crucial infrastructural developments bring lasting benefits to the communities they serve.”

Mr Bethell’s position contradicted assertions by Daphne DeGregory-Miaoulis, the Abaco Chamber of Commerce president, that all bidders on the Marsh Harbour port deal had withdrawn their interest because they could not see how they could earn a return on their investment given the amount of capital expenditure required to bring the facility back up to standard.

“Nobody is interested, nobody is in the game,” she told Tribune Business, citing “reliable sources”. “Nobody wants to do it,” she added. “When they look at the return on investment, they have to put too much into it to make it make sense.

“I understand that everyone had withdrawn their interest. Of the three contenders I originally had been told were there, they weren’t even interested any more.” 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.

Mrs DeGregory-Miaoulis yesterday said she understood that the Government was relying on assistance, both financial and technical, from the US government via the Nassau embassy to make security-related improvements to the Marsh Harbour port that will ensure it does not fail its International Ship and Port Security (ISPS) inspection and other commitments that could result in it being closed to US shipping.

“I understand that the US government are coming to our aid to save us from getting shut down by meeting international security standards,” she added. “They are apparently putting money into it to keep us from being shut down. From what I understand that should be starting soon. It’s got to all be done before the end of the year. That’s all there is on the table at the moment. No contenders for doing anything more than that.”

US involvement was confirmed to Tribune Business earlier this month by JoBeth Coleby-Davis, minister of transport and energy, who said her ministry is holding talks with the US Embassy “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 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,” she added.

“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.”

Mrs DeGregory-Miaoulis yesterday said that, to earn a return on investment, a winning PPP bidder would likely have to implement a range of new fees - landing, terminal, storage and other charges - on the shipping companies and importers much like APD has in Nassau. These fees, she added, would inevitably be passed on to consumers through higher prices when the cost of living is already elevated.

“Any kind of tax or charge that comes back to the consumer and increases prices in this climate, and in this kind of time, will cause the Bahamian people to get up and protest,” she said. Therefore, it could be more palatable to all, including the Government, to let the US finance the necessary security upgrades and ensure Marsh Harbour continues to receive goods and vessels direct from the US.

“It’s extremely important because we can’t get shutdown,” Mrs DeGregory-Miaoulis told Tribune Business. “If we get shutdown that only puts a noose around our necks because then everything has to be shipped in from Nassau. That would add a tremendous amount of time, but cost most importantly. 

“That we cannot bear. We’re one of the most expensive places in the world to live. Prices in Abaco are already much higher than Nassau, which I don’t understand because we have freight direct from the US. It’s not being transferred through Nassau. We can’t take another increase to anything.”

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.