The Tribune

The Grand Bahama Port Authority (GBPA) yesterday hit back at the Government’s financial demands as the Opposition’s leader warned his party will “vigorously resist” any bid to “supersede” Freeport’s founding treaty without consultation.

Michael Pintard told Tribune Business that, while the Free National Movement (FNM) is “not going to provide any comfort” to Freeport’s quasi-governmental authority and its owners when it comes fulfilling its developmental and governance obligations, the Government must consult widely with all stakeholders to determine the city’s future.

He spoke as the GBPA, pushing back against the Prime Minister’s accusation that it has failed to repay costs the Government has incurred in providing public services in Freeport despite being billed for these expenses, asserted that the sums in question are “contested”.

Suggesting that the Government’s long-standing claims are neither justified nor supported by “credible evidence”, Freeport’s quasi-governmental body argued that the city has always been a positive “net contributor” to the Public Treasury and effectively blasted Nassau for impeding the city’s development.

The GBPA, in a sign that relations between Nassau and Freeport continue to worsen, blamed “increased Government imposed bureaucracy and red tape” for hindering the city’s development, which it argued was a violation of the Hawksbill Creek Agreement.

And, in a pun on the Government’s election campaign slogan, it also asserted that Freeport’s residents and 3,500 GBPA business licensees “deserve a ‘New Day’” where the Government works with it to realise the Hawksbill Creek Agreement’s still-untapped “huge potential”.

Noting that the consistent attacks by the Prime Minister and several Cabinet ministers have caused “uncertainty” among investors and businesses related to Freeport’s future, the GBPA said none of the areas referred to by the Prime Minister - healthcare, education, Grand Bahama International Airport and the Grand Lucayan - are detailed as its obligations under the Hawksbill Creek Agreement.

While many will argue that the GBPA and its owners, the Hayward and St George families, walked away from their airport responsibilities, it added that all these assets are the Government’s responsibility. And, tackling the Government’s “reimbursement” call, the GBPA said: “Government’s claims under clause 1(5) of the Hawksbill Creek Agreement are contested.

“The GBPA is yet to be satisfied that the Government’s purported claims, which have lain dormant for more than 50 years, are justified and supported by credible evidence. They are, however, being reviewed and will be fully addressed. We would add, however, that the claims under this clause, which has not been amended since 1965, when Freeport was in its infancy, have little relevance today.

“At the time, government merely collected Excise Tax. Today, they extract a multitude of additional taxes which include, but are not limited to, cruise and airport passenger taxes, environmental taxes, road taxes, room taxes, as well as import / export duty and VAT, to name but a few.

“It is also an anomaly to ask the GBPA to fund the Ministry of Grand Bahama. The fact of the matter is, Freeport has always been, and continues to be, a net contributor to the Bahamas Treasury, despite the increased Government imposed bureaucracy and red tape, in breach of the Hawksbill Creek Agreement, which has held Freeport back,” the GBPA continued.

“GBPA remains focused on advancing the economic and social development of Freeport, despite these challenges. The licensees and residents of Freeport, however, also deserve a ‘New Day’, where government and GBPA are working together, positively, to propel Freeport’s economy forward and ensure a positive future for all residents and licensees. The Hawksbill Creek Agreement’s huge potential can only be achieved if Government is willing to work collaboratively with GBPA.”

Mr Davis, in closing the 2023-2024 Budget debate on Monday, told the House of Assembly as he wrapped up the 2023-2024 Budget debate that the Government has “begun to invoice” the GBPA for “reimbursement” of these unspecified costs.

He argued that the Government was justified in seeking repayment under section one, sub-clause five, of the Hawksbill Creek Agreement, Freeport’s founding treaty, which stipulates that it can seek payment from the GBPA for providing “certain activities and services” if the costs involved exceed certain tax revenue streams generated in the city.

“It’s important to note there’s a provision in the Hawksbill Creek Agreement that specifies that the cost borne by the Government for certain activities and services provided are to be reimbursed by the Grand Bahama Port Authority for amounts in excess of Customs duties and emergency taxes collected,” Mr Davis said.

“My government has begun to invoice the Port Authority for these reimbursable expenses, as calculated by an independent accounting firm. To date, the Port Authority has not provided reimbursement in connection with any of these invoices.”

A government spokesman subsequently declined to disclose how much the GBPA has been invoiced for to-date, and the total bill that the Davis administration believes has been incurred. “We prefer not to disclose that amount at the moment,” they said.

Tribune Business previously reported that these alleged costs, and the Government’s demands that they be repaid, are one tactic at the Davis administration’s disposal should it seek to financially squeeze the GBPA’s owners, the Hayward and St George families, in a bid to pressure them to sell their ownership interests.

Mr Pintard agreed with this interpretation, although he said the Prime Minister’s latest comments have merely extended and worsened the uncertainty surrounding Freeport’s future. “I would say I’m a bit clearer in terms of a party of his strategy based on the statement he made,” he told Tribune Business of Mr Davis.

“I don’t believe he has cleared up the uncertainty around the future of Freeport and what the Government will ultimately do. One piece of the puzzle he announced, which I was certainly not aware of, is that he intends to use the ‘balance of payments’ issue to apply, in my view, pressure to the GBPA.”

Mr Pintard, though, said the Opposition is “not going to provide any comfort” to the GBPA and its ownership when it comes to “discharging their responsibilities as per the Hawksbill Creek Agreement”, which include attracting investment to Grand Bahama and maintaining its infrastructure.

“We are still unclear as to what the Government’s intentions are,” he added, calling on the Davis administration to have “very frank conversations” with stakeholders that include the GBPA and its owners, the 3,500 licensees and Grand Bahama’s MPs, a majority of whom - three out of five - are FNM.

However, Mr Pintard warned that if the Government does not do this and simply chooses to steamroller ahead by itself, and seek “to supersede the Hawksbill Creek Agreement in the absence of these discussions, we are prepared to resist that and resist that vigorously”.

“The mandate given to the Port Authority is not being fulfilled and there is a need to reconfigure that relationship,” the Opposition leader added. “There is a need to look at Bahamian ownership in these companies, but the Government is not on very strong ground to convince Grand Bahamians and the people of Freeport that they’re in a position to do better, so we need to have a real conversation about the way forward.”