The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Grand Bahama Port Authority (GBPA) and its leading private sector partner, Hutchison Whampoa, have failed to meet their statutory commitments to market/develop Freeport, a senior attorney arguing their inaction had resulted in it becoming “the forgotten island”.

Terence Gape, the Freeport-based attorney and partner at Dupuch & Turnquest, is now urging the GBPA and Hong Kong-headquartered conglomerate, through the Grand Bahama Development Company (Devco), to finally fulfill the obligations they signed up to under the 1993 Grand Bahama Act by creating - and financing to the tune of $2 million annually - a “marketing organisation” to promote the island.

Urging Bahamians “not to waste a crisis” caused by Freeport’s eight-year economic stagnation and slow-burning collapse, Mr Gape, writing in today’s Insight section, also calls on the Government to drive the “immediate action” required to revive Grand Bahama and its sustained marketing to potential international investors.

To deliver a short-term boost for the island’s economy, the Dupuch & Turnquest partner calls for the formation of two ‘Action Task Forces’ to bring the long-mooted $100 million cruise port and $200 million World Mart projects to fruition. He suggests that one be chaired by the Minister of Tourism, and the latter by PLP Marco City MP, Gregory Moss, and include as members the Government, Devco, the GBPA and the latter’s licensees.

And alarm bells are also likely to ring over Mr Gape’s suggestion that there is “evidence of bad blood” between Hutchison Whampoa and the GBPA’s two owners, the Hayward and St George families. This would be especially worrisome for Freeport, given that the two sides are 50/50 joint venture equity partners in not only Devco, but Freeport Harbour Company and Grand Bahama International Airport Company.

The nature of Mr Gape’s comments, especially coming from a highly experienced attorney and long-term Freeport resident, are likely to cause a stir in Grand Bahama - particularly in GBPA and Hutchison Whampoa circles. They are also likely to give the Government food for thought, and the timing is judicious, given that the Cabinet is due to meet in Freeport on Thursday.

Noting that Freeport’s tourism base had been reduced “to less than 25 per cent” of pre-2004 and Royal Oasis closure levels, Mr Gape said no “planned, concerted action” to stimulate a turnaround had been undertaken by the GBPA, the Government, Hutchison Whampoa or any other sector players.

While the industrial sector had kept Freeport’s economy afloat over the past eight years, Mr Gape said no new players had arrived on Grand Bahama since PharmaChem in 2003.

He added: “Again, where is the sustained, concerted effort to market/attract such players? Despite the covenants by the GBPA in the Hawksbill Creek Agreement, 1955 and 1960, to use their best endeavours to promote and encourage factories and industries, there has never been a professional, established and sustained effort in this regard.”

The original Act, and its 1960 amendment, led into the 1993 Freeport, Grand Bahama Act, where the Government entered into an agreement with the GBPA and Devco to extend Freeport’s real property tax exemption until 2015. Devco, as the largest real estate owner in Grand Bahama - and potentially the whole Bahamas - was thus made “a direct party” to the Act.

Yet Mr Gape noted that as part of the agreement, the GBPA and Devco (Hutchison Whampoa) signed a covenant to “establish an organisation to promote Grand Bahama internationally”.

“So far as I am aware, such an organisation has not been established, or certainly not established within the meaning and intent of the covenant,” Mr Gape writes. “ Thus the need, I believe, to establish such an organisation now and to link the establishment of such to a public/private enterprise with Government and the licensees, to be financed by the GBPA and Devco to a specified figure.

“What if this organisation had been in place for the five years before the economic boom of 2002 - 2007? We would not have been the forgotten island.”

The end result, Mr Gape argued, was that it seemed the GBPA had “not lived up to its mandate”, while together with Devco they had failed to meet “their statutory covenants to promote Freeport”.

To remedy the situation, he said that given” the absence of any dynamic leadership in the GBPA and/or Hutchison enabling them to act productively in promoting and bringing investment to the Port Area”, the Government had to force them to form the marketing organisation promised in 1993. It needed financing of at least $2 million per annum, and the Government and GBPA licensees should also sit on its Board.

To kickstart Freeport’s economy, Mr Gape urged that the $100 million cruise port project - for which the Government acquired some 80 acres of beachfront land three years ago - be revived.

This, he argued, could be financed by a bond issue, backed by cruise line financial support and usage commitments, together with revenue streams from the likes of departure taxes.

Mr Gape said it was imperative that Freeport’s dead-last 37th cruise destination ranking for the Caribbean be improved, adding that a new cruise port could help 2,000 tourists per day visit Grand Bahama and help “restore the ‘money on the street’, which we desperately need”.

Of the present cruise situation, he added: “While the Government has been able to triple potential cruise ship visitors to Freeport in the past three years, with five ships each of 2,500 passengers visiting per week (up from one per week), because of the ‘ugly’ (Industrial) look and isolated location of the Harbour, and the lack of activities offered to the one-day visitor, approximately only 10 per cent of the passengers disembark on Grand Bahama to enjoy what we have.”

As for World Mart, the proposed buyers/merchant market where suppliers from Asia and elsewhere would show their products to Western Hemisphere buyers, Mr Gape urged the Government and GBPA to “take a proactive stance and embrace this project”, determining whether it was feasible.

“The difference is that this project, if feasible, would be a game-changer for Freeport, attracting thousands of jobs, visitors (business travellers), with the compounding positive effect on air-lift and restaurant, real estate and business,” Mr Gape wrote.

Suggesting that both projects, plus the marketing organisation, could be started and formed within six months, Mr Gape also looked beyond those proposals.

He added: “I consider we also need to have Devco working with the newly-created marketing organisation to go out and convince a world-class developer to create a golf course, gated/beachfront/residential community next to the hotel district, or to include a boutique hotel [like] Albany or Bakers Bay.”