The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government’s decision yesterday to release the long-withheld McKinsey report could prove “pivotal to Freeport’s future”, a well-known QC argued, and help to end “the infighting” that has obstructed the city’s economic development.

Fred Smith QC, the Callenders & Co attorney and partner, said the Christie administration’s pledge to finally release the international consultancy firm’s study could prove ‘a win-win” for all parties with a stake in Freeport’s growth.

He was speaking after the Attorney General’s Office, on the Government’s behalf, agreed yesterday before the Court of Appeal to finally publish the McKinsey report in response to the Judicial Review action initiated by Mr Smith and his fellow Callenders & Co attorney, Carey Leonard.

The outspoken QC told Tribune Business that the improved “transparency and accountability” suggested by the Government’s approach could benefit all Freeport stakeholders, enabling them to reach a consensus on both the city’s expiring tax incentives and long-term reforms to the Hawksbill Creek Agreement.

Mr Smith said the promise to publish the McKinsey report meant that the Callenders & Co duo’s appeal against an earlier Supreme Court ruling, which refused to prevent the Government from acting on the recommendations in that document and a subsequent report from its Hawksbill Creek Review Committee, had been adjourned.

This, he added, was “on the basis that the Government has agreed to produce the McKinsey report, either in its entirety or in a redacted form if they consider there’s some confidential or proprietary information on a licensee they may not wish to disclose to the public”.

This raises the possibility that some parts of the McKinsey report may be ‘blacked out’, and Mr Smith conceded that “no timeline has been stipulated” for its public release.

However, given that negotiations between the Attorney General’s Office, and himself and Mr Leonard, had been conducted “in good faith”, Mr Smith added: “I anticipate they will produce it in short order.”

He then praised the improved “transparency and co-operation” from the Government, which would benefit negotiations over the best development model for Freeport’s future growth and expansion.

“I think it signals an appreciation by the Government that working with the [Grand Bahama Port Authority] licensees will be a lot more constructive and productive, and sharing the information will help to inform them in very transparent and accountable way of the information the Government has obtained,” Mr Smith told Tribune Business.

“This is fundamental to help the licensees help the Government. I think it demonstrates a fundamental appreciation of the need for co-operation, and this could be a first step towards co-operation in Freeport.”

The QC added that Freeport’s development hinged on “a partnership” between the Government, Grand Bahama Port Authority (GBPA), Grand Bahama Development Company (Hutchison Whampoa), the GBPA’s 3,500 licensees and the city’s land and property owners.

Yet Mr Smith argued that too often, two or more of these parties had been at odds with one another, undermining Freeport’s progress and ability to attract Bahamian and foreign investment.

“The more we can understand each other’s issues, the more we can come together to form a workable partnership,” he added. “The infighting has to be brought to an end. That is when we will see a rebirth of the Freeport economy.

“It is pivotally important that the Government has taken a decision to share the [McKinsey] report.... I’d like to now see what the professionals are recommending so I can take their suggestions into account in formulating my views on Freeport’s future.”

Mr Smith continued: “We may want to add restrictions on the Port Authority and Devco in return for extending the tax incentives, but we may also wish to add incentives to incentivise the potential for investment by Bahamians and foreigners.

“This could be a win-win situation, and I’m glad the Government is appreciative of this argument now.”

Messrs Smith and Leonard had been seeking a temporary Order preventing Prime Minister Perry Christie and his government from acting on the recommendations made over Freeport’s expiring tax incentives until their full Judicial Review case is heard.

They also wanted an Order ‘staying’ the “decision-making process regarding potential changes to the provisions of the Hawksbill Creek Agreement, and the “economic and fiscal governance of Freeport”, which stem from the report produced by the Government-appointed consultation committee led by Dr Marcus Bethel.

This had been denied by the Supreme Court, and was the subject of the duo’s Court of Appeal action until yesterday’s moves and subsequent adjournment.

For the Government’s failure to publish the report on Freeport’s future by McKinsey was central to the Judicial Review.

Messrs Smith and Leonard were alleging that the consultation process, on which the report by Dr Bethel’s committee is based, was “fundamentally flawed and a sham” because key documents - especially the McKinsey report - were not released to those it interviewed.

The McKinsey report is seen as especially important because previous statements by Prime Minister Perry Christie suggest it influenced the Hawksbill Creek Agreement Review Committee’s terms of reference, while also playing a vital role in determining the Government’s thinking on Freeport’s short and long-term future.

Messrs Smith and Leonard were ultimately seeking Supreme Court Orders that prevent any decisions being made on the basis of the committee’s report; that require the McKinsey report to be made publicly available; and require that a new consultation process be undertaken with Freeport stakeholders.