The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

A CABINET Minister said yesterday that the government was by no means “sleeping on” Freeport’s expiring investment incentives, confirming that the Ministry of Grand Bahama had completed two position papers on the issue.

The Minister for Grand Bahama, Dr Michael Darville, told Tribune Business yesterday that his ministry had been researching the issue for roughly a year and a half and had completed two position papers. He added that a consultancy group would be brought in to “substantiate” his ministry’s findings.

“We are ploughing forward and I am convinced that by October all that is necessary for us to begin to present our case to the Grand Bahama Port Authority, the Hutchison Group and the business community would be completed,” said Dr Darville.

Among the exemptions that are provided for under the Hawksbill Creek Agreement (HCA), which are due to expire on August 4, 2015, are exemptions from various forms of taxation, including real property tax and business licence fees. The HCA exemptions were originally established in 1955.

“It’s common knowledge that in early August 2015 the real property aspect of the Hawksbill Creek Agreement will expire. The government for the last year and a half has been working diligently with the private sector partners as well as the Grand Bahama Port Authority as well as the Ministry of Grand Bahama to get the various research aspects of what should be done when that comes closer to the end,” said Dr Darville.

“We at the Ministry of Grand Bahama have done a substantial amount of research. At the end of the day there are really only two alternatives, should you extend or not extend. For us that research element is done and we are now looking to get a group in who will further substantiate the research that we have done at the Ministry for Grand Bahama. Once that is complete and we get all the facts in place, hopefully within a few months, then we will begin to speak directly with the various stakeholders.”

“I’m not trying to state for either one but for the research that we have done in the last year it is for us to find out that information and present these two position papers. The decision itself is a complicated one that involves a lot of stakeholders. The government is mindful of that and the government is working diligently to solve it. You can be assured that we are not going to wait until the last moment to deal with it.”

Dr Darville noted that a consultant had not yet been secured to analyse his Ministry’s research but once that is substantiated the government would move to the second phase, which is consultation with the relevant stakeholders. “If you look at Grand Bahama and then you look at what duty free concessions has done for Freeport itself and you move on the outskirts you can see that the whole concept of duty free concessions for Freeport was one of the stimulus that allowed the economy to grow to what it is today.

“These incentives are very important for the business sector to know. You don’t want to wait for the last minute and then the business sector cannot prepare themselves for what is about to take place,” said Dr Darville.

“We are ploughing forward and I am convinced that by October all that is necessary for us to begin to present our case to the GBPA, the Hutchinson Group and the business community would be completed. We certainly will not be caught scrambling to do something at the last minute because a year and a half worth of work had been done. It’s very tedious because the reality is that it has to do with the exemption of real property tax so it’s important to get the full inventory of land.

“That is a very time-consuming process that we have been undergoing for the last year and a half. That is the first step to know whether you should extend or not; if you extend what would be the benefits and if you don’t what are the benefits you could potentially collect. The process really doesn’t affect the common land. It mainly revolves around inventory owned by expats and large tracts of land by developers.

“All of these things we have to take into consideration. We are moving step by step. It’s not something we are sleeping on by any means. The Ministry of Grand Bahama was actually created with that being one of its mandates, to look at that and do the research required to advise Cabinet and the government going forward,” said Dr Darville.