The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Grand Bahama Port Authority (GBPA) was yesterday branded “a shadow of its former self” by its ex-attorney, who urged Freeport’s 3,500 licensees to take the lead in defending their rights.

Carey Leonard, now at Callender’s & Co, told the Rotary Club of Grand Bahama Sunrise that the GBPA lacked the means to secure Freeport’s investment climate, and future development direction, by itself.

He argued that much had changed since the last negotiations with the Government in 1991-1993, with the GBPA relinquishing much of its negotiating leverage by selling off “substantial” economic and other assets in Freeport.

“In 2016, we have a very different situation to the one we had in 1991-1993,” Mr Leonard said. “2016 finds the GBPA and its owners a shadow of what they were in 1991-1993.”

Apart from giving up any ownership interest in Grand Bahama Power Company, Mr Leonard said the Hayward and St George families had also sold-off 50 per cent stakes, and management control, in both the Grand Bahama Development Company (DevCo) and Freeport Harbour Company to Hutchison Whampoa.

A similar arrangement has been reached with Veolia for Sanitation Services, while Freeport Commercial and Industrial has sold most of its real estate holdings. Assets such as the Port Lucaya Marketplace and Port Lucaya Marina have also been sold.

As a result, Mr Leonard said the responsibility to agitate for a rapid long-term extension of Freeport’s expiring real property tax, capital gains and income tax exemptions lies with the GBPA’s licensees, rather than the Port.

“The 2016 reality is that we cannot, and ought not, rely on the GBPA to do this on their own because, put quite simply, they can’t do this on their own,” he explained.

“The 2016 reality is that GBPA licensees have a very vested interest in seeing that we get an extension, and that we get it very soon. The 2016 reality is that the GBPA licensees must take an active role, and they must do this by pooling their talents and resources. We can.”

Mr Leonard told Tribune Business last week that there was no need for the Government to delay the long-term renewal of Freeport’s expiring investment incentives.

He argued that the Hawksbill Creek Agreement contained provisions to facilitate immediate action, providing existing businesses and potential investors with the confidence to undertake job-creating investments, while longer term reforms were negotiated with Nassau.

Mr Leonard argued that unlike the present, the GBPA’s licensees had been heavily involved with charting Freeport’s way forward during the 1991-1993 negotiations.

“Yes, I know that the GBPA licensees, except for a few exceptions, have in the past sat back and done nothing,” he conceded, calling on Rotary to help organise the business community in Freeport.

“Never in the entire existence of Rotary is there a more important time to get its members to pull together,” Mr Leonard said.

“Indeed, if Freeport does not get going, Rotary in Freeport will become extinct because there will be no business persons to become members and no money to support your worthy causes.

“I am a commercial lawyer, and if things don’t pick up soon, I will be forced to go back to Nassau, and I am not the only one,” he added.

“But be assured, I like Freeport. I like the quality of life that we have here, I like the fact that our streets are not overcrowded. I like the fact that my garbage gets collected with clockwork precision, I like my clean verges and better maintained roads. But all of this can disappear overnight if something is not done.”

Mr Leonard said Freeport, and the Hawksbill Creek Agreement, currently benefit between 15,000-17,000 Grand Bahama residents who do not live within the Port area.

Describing Eight Mile Rock as the third largest population centre in the Bahamas, Mr Leonard said other nearby communities such as Lewis Yard, Smith’s Point, Pinder’s Point, Hunters and Williams Town had also benefited from Freeport’s existence.

“Smith Point residents have used the population in the Port area to establish and develop the now very successful Wednesday night ‘Fish Fry’, and have a thriving business off the tourists attracted by the hotels and resorts in the Lucaya area,” he added.

“Eight Mile Rock’s residents provide all sorts of services to the Port area. I would venture to say that the bulk of the Eight Mile Rock economy is now tied to the success of the Port area economy. The same can be said of Pinder’s Point, Williams and Russell Towns; all are now an integral part of the Hawksbill Creek Agreement economy.”

Mr Leonard argued that the impact of extending Freeport’s expiring tax breaks extends well beyond the city to other communities, and the economic livelihoods of their people.

He added that their renewal could also aid the Government’s bid to stave off a further credit rating downgrade by Standard & Poor’s, which threatens to drop the Bahamas to ‘junk’ status and undermine investor confidence in this nation.

“The impact of a down grade to ‘junk bond’ status would have far-reaching consequences,” Mr Leonard warned. “Sadly, few businessmen, even in this room, appreciate the potential for disaster.

“But if we put Freeport back to work, indeed if we are seen to be putting Freeport back to work in a way that indicates a strong economic resurgence, then it is possible, just possible for us to play a major part in the prevention of a downgrade.”

Describing the Government’s proposed Freeport reforms as “wish list”, Mr Leonard focused on just two - the creation of an independent marketing and promotions agency, and improving workforce skills.

He added that he had drafted a potential Articles of Association for the promotions agency, and said: “The key to the success of such an organisation is going to be the necessity for transparency, especially as to where money is spent, and accountability.

“Some of you may say that promotion is the duty of the GBPA but, as I mentioned before, the GBPA of today is a shadow of its former self, and that has been born out by the fact that the GBPA has done no realistic and serious promotion for many, many years.

“So if the Port area is to survive and grow, it will need the assistance and involvement of its residents and licensees.”

Mr Leonard said the agency would require support and input from Freeport’s major industrial companies in its creation, particularly in terms of businesses and industries that could be targeted.

He added that the Government, GBPA, Immigration Department, real estate development, GB Power and large industrial companies needed to be represented on its marketing team.

“This is not rocket science, but it does require us to take some responsibility for our lives, our future,” Mr Leonard said.

“All too often we say that we are waiting for government, and then complain when we don’t get what we want. Governments throughout the world have shown that they don’t understand business.

“One of the reasons the United States is so successful is that their businesses, unlike ours, are proactive and push an agenda that favours business. We need to start to do the same if we are to survive. The effect of doing nothing is what we have today.”