The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government’s explanation for why the Prime Minister intervened to place a $183m west Grand Bahama roadworks contract on hold “doesn’t cut the mustard”, the Opposition’s chairman argued yesterday.

Dr Duane Sands, speaking out after the Government confirmed a controversial contract destined for Bahamas Striping was never awarded or approved, told Tribune Business that “the story doesn’t add up” given that the Inter-American Development Bank’s (IDB) private sector financing arm was due to discuss at Board level providing $22m in financing for the project on April 29, 2025.

The Prime Minister’s Office, in a statement issued yesterday, asserted that the contract’s inclusion in a list of government procurement deals awarded in December 2024 was an “administrative error” because it had neither been awarded nor approved. Instead, the award to Abaco Caribbean Holdings, a Bahamas Striping group subsidiary, had already been “paused by the Prime Minister” prior to the list’s publication.

In a somewhat opaque explanation of events, which included no names, the Prime Minister’s Office said there remains “an urgent need for public works in Grand Bahama” which the roadworks contract was seemingly designed to help address. However, the procurement list identified it as a “direct award”, meaning it never went out to tender or was subject to competitive bidding where multiple firms submitted offers.

“An international financial organisation (IDB Invest) had settled a pre-qualification amount with a particular vendor (Bahamas Striping/Abaco Caribbean Holdings), and the matter proceeded from there toward a conclusion,” the Prime Minister’s Office said. 

“Upon this being brought to the Prime Minister’s attention, he instructed that the matter be set aside for further review. Unfortunately, that instruction was not reflected in the list that was subsequently published, which has led to regrettable confusion.

“The model of the vendor in question is that of a project manager. As such, the allocated funding would not have gone to a single contractor but rather to several contractors operating in Grand Bahama.” A website closely associated with Fred Mitchell, minister of foreign affairs, suggested that as many as 33 contractors would have enjoyed a share of the $183m contract.

However, several sources speaking on condition of anonymity said a procurement contract of such size would have had to be approved at ministerial level before a Cabinet paper can be drawn up and it is placed on the Cabinet agenda. They suggested the Abaco Caribbean Holdings award made it to Cabinet, where questions and concerns were raised over the size of the award and other issues.

And questions were also raised as to why IDB Invest, the multilateral lender’s private sector finance arm, would progress the potential $22m revolving credit facility for Abaco Caribbean Holdings so far - completing both an environmental and social review as well as placing it on the Board’s agenda for April 29, 2025, - if had not received government assurances that the project was approved.

“Let me say that I was not impressed with the explanation,” Dr Sands told Tribune Business. “I was not convinced that it is a plausible explanation because you cannot have all these things co-existing. This was a ‘no bid’, ‘direct award’ contract, and there has to be extenuating circumstances according to their rules where these qualify for such status.

“The story doesn’t add up. There are so many things that, in order for them to co-exist and be correct... This comment about an administrative error doesn’t cut the mustard. We have the IDB involved, which requires dotting the ‘i’s’ and crossing the ‘t’s.

“All of us who have experience working with the IDB requirements know they are sticklers for details, and will require a huge amount of supporting information that is double-checked, triple-checked and quadruple-checked before they give approval,” he added.

“You’re not talking about $183, you’re not talking about $183,000, you’re talking about $183m. This would not have been something even a permanent secretary would have published without the minister’s approval. It’s a pretty lame excuse they are using. Why don’t they come clean and tell us what happened, when it happened, and when they found out what the administrative error is?”

Going so far as to suggest the controversy was another “Bahamas Moorings moment”, where the Government is back tracking after being inadvertently caught out, Dr Sands also questioned how much of a profit margin Abaco Caribbean Holdings and Bahamas Striping would have made acting as project managers, dividing and supervising the work of other contractors.

Latrae Rahming, the Prime Minister’s communications director, yesterday reiterated to Tribune Business that “the matter was stopped for review” by Mr Davis himself. “He has the ability as minister of finance to stop any project that he has questions about and stopped it for review,” he added. “The Prime Minister paused it for internal review.”

Observers, though, have  challenged whether the ‘direct award’ of such a large $183m contract can be justified based on the law set by the Public Procurement Act. The last version of this Act, passed by Parliament under the Davis administration, sets out the grounds under which this procurement method can be used.

These include that the contract value is less than $100,000; that no suitable bids were received in a competitive tendering process; “reasons of extreme urgency”, such as a natural disaster; and other factors that do not necessarily appear to apply to such a project.

Mr Rahming, addressing all the media yesterday, said the contract review is ongoing and, once completed, a new statement will be issued to the public. “We remain committed to transparency and to correcting the record when errors are identified,” he added, while not identifying who was responsible for the “administrative error”.

“I’m not sure. I mean, obviously there was some breakdown in the communication. It could be either between the decision being made at the Cabinet level and the administrator itself. But these things happen,” said Mr Rahming. “Internal communication is something that we all have to seek to improve, but the right thing to do is when there is something that needs to be corrected that we publicly say that there was an error.”

He added that while he is unsure of when the Prime Minister decided to pause the contract “it could have been earlier this year”. Mr Rahming said: “My understanding is that this matter was intervened at the Cabinet level by The Prime Minister. It may have been earlier this year, but I will reach out for full clarity in so far as the date.”

Michael Pintard, the Opposition’s leader, yesterday also voiced scepticism over the Government’s explanation on the Abaco Caribbean Holdings/Bahamas Striping contract. “How did the vendor make it this far within the IDB approval processes without the full support and endorsement of the Davis administration? We know better,” he asserted.

“Did the Prime Minister only become aware of this project after it made it all the way to the IDB? Was the project ever put forward at any time for Cabinet consideration? As the project is listed under the Ministry of Finance, is it the Prime Minister who brought the matter to Cabinet?

“And even now, if these works are so badly needed, as the Prime Minister states, why exactly is the project being paused? Was something done wrong? Or is it only because the public is now rightly outraged to discover that this government has, in a 14-month period, given out some $396.8m in ‘no bid’ contracts?”

IDB Invest, in documents released publicly in February 2025, said: “IDB Invest is looking to finance approximately $22m through a working capital facility to support Abaco Caribbean Holdings, a Bahamian company, and its shareholders, the Bahamas Striping Group of Companies.

“This financing will be directed towards the West Grand Bahama Road Improvement project, which seeks to enhance connectivity, safety and the overall travel experience across Grand Bahama. The project involves the rehabilitation of asphalt paving of 51 miles of highway and 47 miles of settlement roads, with an estimated cost of $185m.”

Other IDB documents, seen by this newspaper and giving more detail on the project, state: “These improved roadways will unlock economic opportunities, facilitate smoother transportation of goods and services, and bolster the tourism sector, which is vital for the island’s economy....

“Abaco Caribbean Holdings, founded in 2016 as a turnkey service provider, has gained experience through the planning, designing and construction of parks and community centres, and implementing smart technology systems. Most recently, with the support of other companies of Bahamas Striping, it has expanded its services into road paving and construction, land clearing and site development.

“The project consists of the reconstruction and rehabilitation of a stretch of approximately 51 miles of the Queen’s Highway, a main asphalt paved arterial road on the West End of Grand Bahama, about 47 miles of minor roads - collectors and settlement roads - various other capital and infrastructure works, and other road and infrastructure safety enhancements.”

The latter is set to include “the installation of guard rails where required; the placing of traffic signs and road striping; the adoption of traffic calming measures; the placement of reflective road studs; and the construction of sidewalks in selected areas.

“To achieve the required production of asphalt for the road pavement, the company will install a new asphalt plant, which will be located approximately at the midpoint between Eight Mile Rock and the West End, within a rural environment, without any neighbours living nearby, and its main access is by the Queen’s Highway,” the IDB Invest report added.