The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A former Port Authority attorney has slammed the “aimless” and “most amateurish manner” in which Freeport has been promoted, blaming this as a key factor in the city’s failure to attract major investments over the past decade.

Carey Leonard called for the newly-appointed government committee on Freeport to adopt a “stern” approach to developing new marketing and promotional strategies for the city, one of the main remits it has been given.

It what will likely be perceived as a swipe at both the Grand Bahama Port Authority (GBPA) and its main partner, Hutchison Whampoa, Mr Leonard told the Grand Bahama Business Outlook conference: “In the last 20 years and certainly during the 16 years I have been here, there has been no serious promotion of the Port area.

“Sure, we send a few people away to trade shows. However, these approaches are aimless, and are done in a most amateurish manner. The proof is in the fact that they have achieved no substantial investments in the last 10 years. This has contributed to the lacklustre job market that the Port area has had to endure during that period.”

Mr Leonard’s comments are unlikely to go down well at the GBPA, and not just because he is its former in-house attorney. The Port Authority regularly touts the overseas promotional trips and efforts it makes, yet it appears he is writing off these efforts.

Mr Leonard’s comments also tap into a belief widely held by many in Freeport’s private sector, namely that the GBPA and Hutchison have both failed to live up to their 1993 commitments to jointly promote the city to domestic and foreign investors.

Several prominent Freeport stakeholders, including attorney Terence Gape, have urged that the Government force the creation of a structured marketing/promotional body that would have the attraction of increased investment as its sole aim.

Mr Leonard, meanwhile, said the committee, chaired by Dr Marcus Bethel, which will lead the consultations on Freeport’s short and long-term future, had to be “even sterner about the outcomes” from a revised promotional/marketing approach.

He also called for it to focus on the GBPA’s governance, backing plans first articulated in the Grand Bahama Chamber of Commerce’s ‘Vision 2015’ document for it to become a non-profit body run by its 3,500 licensees and other Freeport stakeholders.

“Transparency needs to be enshrined, especially with respect to the money received and how it is spent,” Mr Leonard said. “The people running it must be held accountable for their actions.

“This can easily be achieved through proper corporate governance. This would eliminate the conflict of interest that currently exists with Port Group Ltd and companies in which it has interests, such as the Harbour or GB Devco, and allow the GBPA to act solely in the interests of the Port area.”

Mr Leonard then urged that the Hawksbill Creek Agreement be amended to require the Government to reply within 60 days to any GBPA request to amend Freeport’s by-laws.

“The GBPA is in the business of running a city, and has the responsibility to doing the best it can for the benefit of 50 to 60,000 residents,” he added. “Non responsiveness for years at a time was not contemplated in the Agreement but, sadly, experience has taught us that non-timely responses have occurred all too often.”

Mr Leonard suggested that the Government committee give “serious consideration to a limitation time for any monopolies. “Who has ever heard of giving someone a 30, 50 or 99 year monopoly,” he asked, again in reference to the GBPA and its ownership.

Mr Leonard said such monopolies were disliked by bodies such as the World Trade Organisation (WTO), which the Bahamas is attempting to become a full member of.

With trade agreement negotiations also ongoing with Canada and the US, Mr Leonard echoed former financial services minister, Ryan Pinder, in suggesting the Bahamas exploit this and Freeport’s ‘logistics hub’ potential to position itself as a ‘value added’ manufacturing assembly hub for international trade.

“It may well mean that certain components are manufactured here and then combined with components manufactured by an assembly process,” Mr Leonard said, suggesting they could exploit any preferential export tariffs the Bahamas has with other nations.

“To date, the Port area has not taken advantage of the proximity of Freeport Harbour to the international airport, or their proximity to the North American market.

“As Hutchison Whampoa controls both these facilities as well as the 740 acre SeaAir Business Centre, the [government] committee should put a very clear and concise obligation, including a timeline, on Hutchison Whampoa to put in the infrastructure that would be required to sustain the development of a sterile industrial park. I understand that Hutchison’s people know what is required.”

Mr Leonard acknowledged that Freeport’s expiring real property tax exemption was going to be “a hot topic”, and urged the government’s committee to “leverage” this in negotiations with the GBPA and Hutchison.

“With one breath I hear that Hutchison says that the GB Devco Lucaya property is worth hundreds of millions, and with another that it is only worth tens of millions,” he said.

“If they take the position that it really is not worth much, then we the people should look to make a compulsory purchase for tens of millions. If they take the position that it is worth hundreds of millions, then we the people should look to them to pay substantial sums of service charges to the newly-independent GBPA.... Hutchison should not be able to have it both ways.”

Mr Leonard called on Port Group Ltd, and its Freeport Commercial & Industrial affiliate, to start paying services charges to the GBPA. Together with Hutchison’s charges, he suggested this would create a pool of financing to support investment promotions for Freeport.

“Anyone who is subject to service charges should not be subject to real property tax,” Mr Leonard said. “GB Devco, Port Group Ltd and its subsidiaries don’t pay service charges, so they will have to pay real property tax or, as I suggest, service charges until they develop or sell the property to someone who pays service charges.

“At the moment they are the only ones who are getting a free ride, and this is not fair on the rest of us in the Port area who have to pay. The rest of us, are the ones who contribute to that profit to the Public Treasury.”

Mr Leonard added that “with some tweaking” the Hawksbill Creek Agreement could provide the basis for an economic and jobs expansion “not seen since the 1960s and early 1970s”.