The Tribune

BY FAY SIMMONS

TRIBUNE BUSINESS REPORTER

jsimmons@tribunemedia.net

OPPOSITION finance spokesman Kwasi Thompson is warning that Bahamian taxpayers could ultimately be left carrying a $140m public-private partnership exposure after the Fiscal Responsibility Council reported that $43.1m of the potential liability has already crystallised.

Mr Thompson, in a statement responding to the FRC's latest reports, said the liability raises concerns about how Government obligations are being disclosed and accounted for, particularly since the FRC found that the $140m exposure is not included among the Government guarantees listed in its Fiscal Strategy Report.

“More troubling, this is no longer entirely a potential problem,” said Mr Thompson. “The FRC reports that $43.1m of the $140m has already crystallised.”

He said the FRC had also raised questions about how the $43.1m would be treated in the Government's accounts.

The FRC's assessment identified the $140m potential contingent liability in connection with financing arrangements involving Bahamas Stripping and Cat Island Infrastructure Company Limited. It said the exposure was separate from the Government's listed guarantees and called for greater public disclosure of PPP arrangements.

The council said there was currently no mechanism for publicly disclosing key information on PPPs, including contract dates, duration, whether projects generate revenue and the nature and extent of associated debt obligations.

Mr Thompson argued that the issue should concern taxpayers because obligations that are not properly explained or accounted for could ultimately fall on the Treasury.

“When Government takes on obligations that are not properly explained or accounted for, it is taxpayers who can ultimately be left with the bill,” he said.

His comments come as the FRC separately warned that Government-backed guarantees are projected to more than double from $315.1m at end-March 2026 to $718.1m during FY2026/27 and are expected to rise further to $730.7m by the end of FY2028/29, adding to the broader fiscal risks identified across Government's accounts.

Mr Thompson said the $140m PPP exposure was among several issues raised by the FRC that require a response from the Davis administration.

“These are not Opposition reports,” he said. “They come from the independent Fiscal Responsibility Council, established by law to scrutinize the Government's fiscal performance.”

He added that the Opposition agreed with the council's concerns and would have more to say on Government debt, arrears, State-Owned Enterprises, guarantees, contingent liabilities and the wider credibility of its fiscal strategy.

The FRC report also questioned how Government is assessing the likelihood that guaranteed obligations could ultimately fall back on the Treasury, saying that rather than determining risk based on the absence of recent guarantee calls, “the financial health of the entities for which these loans are guaranteed should be used as a determinant.”

The projected increase in guarantees is linked in the Fiscal Strategy Report to approvals involving the Grand Bahama Energy Company, the Public Hospitals Authority and Bahamas LNG Partners.

The FRC also noted that the Government's Draft Estimates point to guarantees for the Bahamas Mortgage Authority, the Bridge Authority and the Education Loan Authority and said clarification was needed on the timing of the various disbursements.

The council assessed PPP risks as having a medium fiscal impact and possible likelihood.

The FY2026/27 Budget lists PPP projects representing $437m in investment, but the Annual Budget FRC Report said the Budget provides only basic information on those projects.

It stressed the need for Government to finalise and publish its PPP Assessment Framework, describing publication and implementation as “an urgent and necessary priority” for comprehensive disclosure and the assessment and management of PPP risk.

The FRC's findings come as the Government pursues a broader strategy of reducing Central Government debt, but the council's assessment indicates that the headline debt position does not capture all of the potential obligations that could ultimately affect the Treasury.