The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Opposition’s deputy leader is upset that the Government team determining Freeport’s future will be led by non-Grand Bahamians, while warning: “It’s never good to negotiate with the proverbial gun at your head.”

K P Turnquest, the east Grand Bahama MP, confirmed that he made his views on the issue known to Prime Minister Perry Christie last week at the opening of a new Freeport-based insurance broker.

“I made mention of the fact that I was disappointed personally that the negotiations for Freeport’s future, with respect to the exemptions, is being led in the majority by non-Grand Bahama residents,” Mr Turnquest told Tribune Business.

“While the two gentleman, James Smith and Sir Baltron Bethel, are two very qualified, distinguished gentlemen, I believe there are equally qualified people here on Grand Bahama that are capable of leading that discussion.

“I made the point that at some point we have to let these islands have a stake in determining their own destiny.”

Mr Turnquest was reacting after Mr Christie last week confirmed that he wanted Mr Smith, a former state minister for finance, and Sir Baltron, his senior policy advisor, to be part of a three-man committee that will consult Freeport stakeholders on the city’s immediate and long-term future.

They will join Dr Marcus Bethel, a Grand Bahama resident and ex-Cabinet Minister, on the committee that will accompany the Government’s hired consultants, McKinsey & Co, in these meetings.

McKinsey&Co has already produced a draft report and recommendations on Freeport’s and the Hawksbill Creek Agreement’s future, and the options for possible change. The Government has indicated that it is likely to be heavily influenced by this, and the outcome of the consultations.

Tribune Business understands that key players in the Freeport private sector and civic life have already been contacted by Dr Bethel, with the first consultation meetings scheduled to begin as early as this week.

Yet Mr Turnquest, while appreciating the consultation with Freeport stakeholders, stuck to his guns, asking again: “Why couldn’t locals lead that discussion?”

And he questioned why the Government had taken so long to start this process, given that the date on which Freeport’s real property tax and Business Licence exemptions will ‘sun set’ had long been known to all.

It is now less than six months until the August 4 date when that happens, and Mr Turnquest said the “wait until the last minute” to begin consultations had increased the prospect of a less than desirable outcome.

“It is very unfortunate that the Government took so long to get this going, and there’s no excuse for it,” he told Tribune Business. “We knew this prior to the last election, and have taken two-and-a-half to three years to get this done.

“It’s never good to have negotiations with the figurative gun at your head. We’re coming to the point where this is a more significant concern for businesses and residents of Grand Bahama.”

With August 4 looming, the concern is that this will force ‘rushed’ negotiations that fail to deliver the necessary reforms to the Hawksbill Creek Agreement and the relationships between the Government, Grand Bahama Port Authority (GBPA) and the latter’s 3,500 licensees.

And the lingering uncertainty over whether Freeport’s expiring investment incentives/exemptions will be renewed continues to harm the city’s investment prospects among both existing and potential investors.

Until they know with certainty the ‘rules of the game’, and what Freeport’s post-August 2015 investment climate will look like, few are likely to take the plunge, thus prolonging the city’s economic recovery.

“There is an opportunity to negotiate some amendments to the agreement with the Port Authority and get some more commitments,” Mr Turnquest told Tribune Business, “greater participation by licensees, commitments to future development, and the creation of a dedicated marketing/promotion agency.

“We are not going to be able to do that if we wait until the last minute, because then it will be a matter of this or that. We’re running out of time, and it is again indicative of the way we’ve done negotiations in the past - always waiting until the last minute, and then we lose the advantage.”

Kevin Seymour, the Grand Bahama Chamber of Commerce’s president, previously called on the Government to clarify by early 2015 how it intended to approach the negotiations, but this now appears unlikely to happen.

He had called for the expiring real property tax, Business Licence fee and other exemptions to be extended until the Hawksbill Creek Agreement’s end in 2054, while acknowledging that Freeport had to deliver returns for the Government via other means.

This year is therefore critical to Freeport’s short and long-term economic viability, and Mr Turnquest warned that Grand Bahama was “going to have serious issues” without movement soon.

He emphasised that no matter what happened in the negotiations/consultations, the outcome had to maintain Freeport’s ‘free trade zone’ model as envisaged in 1955.

“We’ve got to ensure that the competitive advantages of Freeport, the model of Freeport, whatever tweaking it needs, that we don’t destroy the model,” Mr Turnquest told Tribune Business.

“The story of Freeport is a successful one, and to remove all the advantages at this point will be a mistake. We have to be smart about this and deliberate on it.”