The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian taxpayers are scheduled to pay more than $50m for the Government’s Eight Mile Rock administrative complex, built by a contractor and developer linked to the general election day plane crash drug suspect, due to a 48.8 percent surge in costs and a near-$17m interest bill.

Documents obtained by Tribune Business reveal that the price tag for the project, constructed by Top Notch Builders and its wholly-owned development vehicle, PPP Investments & Construction Company, ballooned from the $22.81m stipulated in the original deal - signed just one day before the 2017 general election - to $33.93m for a jump of more than $11m.

And, besides the almost-50 percent surge in construction costs that the Bahamian people now have to pay back via the Government’s lease-to-own arrangement, the papers also reveal that taxpayers are scheduled to fork out a further $16.678m in “interest” payments over what is forecast to be a ten-year period. Combined, the lease and interest payments take the Eight Mile Rock complex’s total cost to the public to $50.608m.

The total price tag, and increase in lease and interest payments to PPP Investments & Construction Company and Top Notch, are revealed by comparing the original 2017 deal with documents filed with the Supreme Court at end-March 2026. The 2017 version pegged the total cost to Bahamian taxpayers at $22.81m in lease payments and $11.279m in interest outlay for an all-in price tag of $34.089m, meaning that the latter has now risen by more than $16m or 48.5 percent increase.

This newspaper previously revealed how Jonathan Gardiner, who is now in custody after being charged with involvement in a long-running conspiracy to smuggle cocaine into the US, confirmed in a sworn affidavit that he was Top Notch’s president and director on February 13, 2017 - just months before the Eight Mile Rock deal was signed on May 9 that year - although he denied owning shares, or having any beneficial interest, in the Adelaide Road-based contractor that was formed in 2002.

The significant increase in the project’s cost and interest bill are revealed in Supreme Court submissions by PPP Investments on March 30, 2026, as part of the ongoing legal action launched by Leno Corporate Services, the Bahamian financial services provider, which is alleging that both it and the Government have defaulted on repayments due on the bond it placed to raise funding for the Eight Mile Rock construction.

Besides the jump in the burden imposed on Bahamian taxpayers, which has increased from an originally-projected $806,394 per quarter to $1.158m, a hike of 43.6 percent in combined lease-to-own and interest payments, the Supreme Court filings also reveal that:

* Leno was only able to raise $8.107m of the $25m targeted by the bond, meaning that investors purchased less than one-third of the offering to make it less than successful. The bond was placed in the 2018 first quarter, yet Leno only informed PPP Investments of the outcome months later on November 6, 2018.

* The Government allegedly defaulted on the rent and interest repayments within one year of the lease-to-own deal taking effect. Signed on August 8, 2023, this was made retroactive until November 29, 2022, and PPP Investments in its submissions alleged that the first missed payment occurred on December 31, 2023. This was just six weeks after Prime Minister Philip Davis KC officially opened the Eight Mile Rock complex, which is named after the late tourism minister and MP, Obie Wilchcombe.

* The default was not cured until Simon Wilson, the Ministry of Finance’s financial secretary, and who signed the original 2017 contract on the Government’s behalf, took action in July 2025 just after the start of the current fiscal year.

He told Alecia Bowe, managing partner of Bowe Partners and PPP Investments’ attorney, on July 9, 2025, that she should inform Leno that the Government would repay the entire $8.1m bond principal plus accrued interest owing to the Bahamian financial services provider within eight days by July 7. Payment happened much more swiftly, with the Government making full payment of $8.121m to Leno just two days later on July 11, 2025.

It is unclear whether the $8.1m bond’s early repayment will reduce the interest bill for Bahamian taxpayers, although this seems possible as the lease-to-own agreement between the Government and PPP Investments allows for “prepayment” that results in “interest payable on the [outstanding] balance” falling by a similar proportion.

Mrs Bowe, in an e-mail to Leno’s legal representatives last July, wrote that “the Government of The Bahamas has completed its buy-out process for the purchase of the Eight Mile Rock government complex building” although it is unclear whether that means the full $33.93m has been paid or if just the lease-to-own paperwork has been completed. Mrs Bowe did not reply to Tribune Business e-mails seeking comment before press time last night, but it is possible taxpayers may enjoy some savings.

PPP Investments, in its Supreme Court submissions, said that under the bond terms agreed with Leno it was supposed to make semi-annual payments of interest and principal on June 30 and December 31 every year for ten years until 2028. Interest on the bond was set at 8 percent, and failing to meet these payments was set to incur a “penalty interest rate” equal to 2 percent per year calculated daily.

However, PPP Investments’ ability to service the bond and make repayments to Leno was, in turn, dependent on the Government fulfilling its side of the bargain by making quarterly lease and interest payments to it under the lease-to-own deal. Combined, these payments were worth $1.158m every three months from the Public Treasury, and are spread over a ten-year period due to end on October 15, 2022, when “the purchase price [is to be] paid in full” and the Government’s obligations satisfied.

“On December 31, 2023, the second defendant [Ministry of Finance] failed to remit the payment due to the first defendant [PPP Investments] in accordance with the terms of the lease agreement,” PPP Investments asserted. “This failure resulted in the initial default and commenced the ensuing default period.

“As a direct consequence of this non-payment, the first defendant was unable to satisfy its corresponding repayment obligations to the claimant [Leno] under the financial agreement, resulting in a further default that resulted in penalty interest payments.”

Mr Wilson and the Ministry of Finance, more than 18 months later, moved into pay off Leno and the bond in full. “On July 11, 2025, the second defendant [Ministry of Finance] made a full payment of $8.121m, which included the principal amount and the interest accrued at the time, directly to the claimant. This payment satisfied all the sums owed under the financial agreement,” PPP Investments alleged.

If that is the case, it is unclear why Leno is continuing to pursue the Supreme Court action as indicated by the April 10, 2026, ruling by Adrienne Bellot, the Supreme Court’s acting assistant registrar, who determined that the case deserved a full hearing on the merits before a Supreme Court judge.

Mrs Bowe, in a July 9, 2025, e-mail to Devard Francis, the attorney for Leno, urged that the financial services provider discontinue its legal claim as the Ministry of Finance was settling the outstanding sum in full.

One explanation for why the action is seemingly continuing could be that Leno still believes monies are owed on the bond, especially the penalty interest payments for the default.

The failure to raise the full $25m via the bond, though, appears to have forced PPP Investments and Top Notch to revise their financing plans. Documents filed with the Registry of Records on March 12, 2019, show that the former obtained a $10m loan from National Commercial Bank of Jamaica, a Jamaican bank, via a mortgage that was secured on the 2.83-acre site at Eight Mile Rock.

The transaction was approved by the Minnis administration’s Investments Board even though the record shows several of its ministers had misgivings about the deal. Candia Ferguson, the then-administration’s Bahamas Investments Authority (BIA) director, and Investments Board secretary, signed off on the Investments Board permit for the Jamaican bank on December 3, 2018.

PPP Investments appears to have relied heavily on Jamaican, as opposed to Bahamian, financing sources for the Eight Mile Rock complex as it secured another $9m from Sygnus Capital, the Jamaican investment and alternative financing house. The disruption and changes to its financing plans may be one factor why a project, which was supposed to take two years to complete and be finished in 2019 according to the original 2017 contract, required another four and only officially opened in 2023.

One source, speaking on condition of anonymity, said of the Eight Mile Rock complex: “There were issues over whether the project was properly scoped, there were issues with monies that were obvious. It didn’t meet the requirements of the agencies, and it seemed as if the guys ran out of money. There were a bucket of issues. It seemed to be something stitched together for political reasons. It didn’t make sense.”

This newspaper also understands that construction work was halted temporarily by the regulatory authorities because the type of concrete being used was not appropriate for a building of that size. Meanwhile, the original 2017 PPP contract shows that PPP Investments and Top Notch also planned to profit from the interest payments by Government as well as the lease payments - in effect, enjoying two profit or earnings streams;

Documents studied by this newspaper show that PPP Investments’ original plan was to borrow $16.018m from CIBC Caribbean (Bahamas), secured on both the Eight Mile Rock complex and vacant properties that its 100 percent owner, Top Notch, had purchased in the Venice Bay subdivision in Nassau that were purportedly worth $4.436m. The interest rate on the bank loan was projected to be 6.5 percent.

However, under the terms of both the 2017 and existing lease-to-own agreements, the Government is paying PPP Investments an interest rate of 8.5 percent. That would have given PPP Investments an interest margin, or spread, of two percentage points representing pure profit on the deal over and above what was repaid to CIBC Caribbean but the terms with the Jamaican lenders are unknown.

PPP Investments’ ten-year projections showed the forecast interest margin, or profit, to range from an annual high of $805,521 to $80,375. In total, the developer was forecasting it would earn between $4.6m to $5m in interest-related profits from the Bahamian taxpayer over the lifetime of the deal. And its total profits over the first three years of the lease-to-own deal, based on the original timeline and 2019 completion, were forecast within a range from $2.173m to $2.551m.

One financial source, speaking on condition of anonymity, told Tribune Business that the interest payments add fuel to - and support - Free National Movement (FNM) accusations that the Eight Mile Rock complex and other public-private partnership (PPP) deals agreed under the Christie and first Davis administrations are, in effect, off-the-books loans designed to keep debt from adding to the annual fiscal deficit and national debt even though they still represent liabilities for the taxpayer.

They argued that the $16.778m interest bill showed that it was a loan, rather than a lease, as the latter does not attract interest payments. This, they added, ran contrary to the traditional PPP concept, where the private sector finances the up-front capital costs, and earns a return on investment while paying back any lender, from the revenue streams generated by public infrastructure assets they develop or services provided.

The source also questioned whether a similar structure has been used for other so-called PPP deals, such as the Bahamas Striping road development contracts, with the private sector partner charging both the Government and Bahamian taxpayers an interest ‘margin’ or profit. And they argued that it would have been cheaper, and less costly for Bahamian taxpayers, if the Government had borrowed the money itself rather than left it to PPP Investments.

“The question that has to be asked is what is the Government paying interest on?” the source said. “Is it really a lease? The only thing that accrues interest is debt. The entire purpose of these arrangements, on the face of it, is nothing more than off-the-books debt. They [PPP Investments] made money on the construction and money on the interest rate as well with arbitrage on the different rates they were looking to secure.

“This makes a mockery of any notion of it being a PPP. For what purpose is interest charged? Interest is paid on a debt. What are you paying interest on? That’s no lease. The Government is borrowing from the owner and paying it off over ten years. There’s no lease-to-own. The Government has borrowed from the builder. A lease doesn’t have any principal or interest. Principal applies to a loan.

“Why didn’t the Government go to the market and borrow the money itself when it could have got it for less?” the source added. “What’s the advantage to the Government of going with this approach and not borrowing the money itself? The only answer is you are taking on debt undetected. You are saddling the Bahamian people with millions of dollars in principal and interest payments. A PPP is to avoid this very thing - saddling the Bahamian people with debt.”

Tribune Business records show that, just over three months after Leno launched legal proceedings on the Eight Mile Rock administrative complex bond, the arrangement suddenly appeared in the Government’s 2025-2026 Budget - not as a rental payment but, rather, a loan debt.

The deal appeared under the ‘public debt servicing - interest and other charges’ heading, noting a $33.93m, ten-year loan due to PPP Investments & Construction Company even though this debt was supposed to have been serviced by rental payments. The PPP had been billed as a lease-to-own structure where the Government would pay back the company and its lenders via rental payments.

However, it has now appeared in the Government’s books as a “loan” that has to be repaid by Bahamian taxpayers. Some $2.308m is due to be paid in 2025-2026, with payments of $2.094m and $1.874m due in 2026-2027 and 2027-2028, respectively. One source said tomorrow’s 2027-2028 Budget should be scrutinised carefully to see if this is still included, and whether the $8.1m due to Leno has been recorded.

Prime Minister Philip Davis KC, speaking at the November 13, 2023, Eight Mile Rock complex’s opening one month before the Government defaulted, said: “Ground was first broken on this administrative complex in December 2016. 

“Then-prime minister Christie was instrumental in seeing this vision through – a vision which sought to do better by Grand Bahamians.  By signing a contract with Top Notch Builders, the PLP administration of the day embarked on a pioneering and fiscally prudent public-private partnership. This was ideal because such partnerships free the Government from the burden of borrowing while still allowing us to deliver important change.”