By NEIL HARTNELL
Tribune Business Editor
The Grand Bahama Port Authority (GBPA) sustains annual operating losses, and has to be subsidised by its two shareholder families, because the costs of maintaining Freeport exceed its revenue streams.
Ian Fair, the GBPA's chairman, responding to Tribune Business's report that the Port Authority receives $2 million per year from Grand Bahama Power Company, said a major part of this arrangement was executed in 1996, when the latter was privatised via its sale to Southern Electric (later Mirant).
Recogising that the GBPA would need income to maintain Freeport at the high standard residents and licencees had become accustomed to, and promote the city to other investors, Mr Fair said it was agreed that the Grand Bahama Power Company contribute $1 million per year for these purposes.
Its $500,000 licence fee goes towards “infrastucture maintenance” in Freeport, while another $500,000 is contributed to the GBPA to promote the city's economic development.
“Whilst the GBPA is a private business, it operates at a loss. In the execution of the city's development, maintenance and operation, it costs way more to maintain,” Mr Fair told Tribune Business.
Noting that there was no government “to pick up the tab” when it came to Freeport`s infrastructure development and maintenance, the Port Authority chairman added: “It costs a lot of money to maintain it at that level.
“The Port Authority is essentially subsidised on an annual basis by the shareholders (the Hayward and St George families). The fees collected are never sufficient to maintain the cost of operating a city as residents, businesses and investors have come to expect.”
As revealed by Tribune Business yesterday, K Peter Turnquest, the MP for eastern Grand Bahama, argued that the GBPA should not be requiring Grand Bahama Power to pay it an annual $500,000 for “economic development promotion" on the grounds that this ultimately came from consumers who could “ill afford” it.
He also questioned whether these funds, amounting to $8.5 million over some 17 years, had been used for promotional purposes.