By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
The Grand Bahama Port Authority’s (GBPA) investment promotion strategy has been slammed as “ineffective”, with just 10 new businesses enticed to spend more than $1 million in Freeport since 2009.
The Hawksbill Creek Agreement Review Committee’s report also revealed that the GBPA had failed to execute its investment strategy, with less than half of the 25 new companies attracted to the city involved in its target industries.
The report, which was submitted to the Christie administration last June but only released this week, justifies the Government’s demands for a new investment promotion agency (IPA) that will properly market Freeport to international and Bahamian investors.
The GBPA agreed to such a commitment in the April 26, 2016, Memorandum of Understanding (MoU) it signed with the Government. It has promised to “collaborate” in creating “a world class investment promotional entity to attract domestic and foreign direct investment to the Port area”.
This commitment clearly follows from the Committee’s findings, which were highly critical of the GBPA’s efforts to promote Freeport, the most recent of which has been its ‘Invest Grand Bahama’ initiative.
“To succeed in growing the economy, Grand Bahama will need to significantly improve its approach to investment promotion to target and persuade large corporations to relocate to Grand Bahama,” the Committee said.
“According to multiple stakeholders and the Committee’s analysis, the current investment promotion activities under GBPA have been ineffective at executing against strategy, with less than half of the approximately 25 companies brought to Grand Bahama since 2009 aligning with GBPA’s target sectors.”
The report said the GBPA had targeted five sectors, namely value-added assembly, tourism, real estate, logistics and information technology.
But, using statistics provided by the GBPA itself, the Committee, led by former PLP Cabinet minister, Dr Marcus Bethel, concluded that its strategy and execution had met with “limited success”.
“Additionally, the [GBPA’s] IPA has not been as active as a fully-dedicated promotion agency should; only attending 30 showcases since 2009,” the Committee concluded.
“Of the companies attracted since 2009, the majority have been very small, investing less than $250,000 in Freeport, with only 10 investing more than $1 million. Industrial investment, in particular, has struggled; Sands Brewery is the only new investment since 2008.”
The GBPA, perhaps recognising the Government’s direction, has become very keen in recent months to publicise the investment-related conferences that its Invest Grand Bahama team have attended.
However, the Committee’s conclusion that the GBPA has not properly promoted Freeport is likely to have further exercised the Christie administration, and have been viewed as another reason for why the Bahamas has failed to capitalise on its unique infrastructure, investment incentives and governance regime.
Thus it obtained the GBPA’s commitment for a new, dedicated investment promotion agency that will “operate in a targeted, professional manner, led by international experts with experience in attracting large, sustainable companies and according to a clear, performance-based mandate with sufficient lending”.
However, the Committee’s report acknowledged that the creation of such an agency had been among the terms agreed to by the GBPA in 1993, as part of the Freeport, Grand Bahama Act negotiations with the Ingraham administration.
Rather than abide fully with this obligation, the GBPA elected to carry out this function internally, something that led the Hawksbill Creek Agreement Review Committee to deem it ‘partially compliant’ in this area.
The Committee’s report bemoaned the fact that no mechanism existed to enforce, and hold the GBPA accountable, for meeting the 21 commitments it signed up to in 1993, and its development and governance obligations generally.
“Of the list of 21 commitments, many were partially fulfilled or not completed in the spirit of the agreement,” the Committee found.
“Though GBPA maintains that it met its commitments under the 1993 Act, the Committee’s view is that many commitments were met in name only, with the true intention of the agreement remaining unfulfilled.”
As examples, it said that rather than constructing a separate children’s library, the GBPA merely subdivided the existing one and changed the signage.
And rather than build a complex for fruit, vegetable and fish vendors, the Committee said the GBPA only added a restroom at the existing complex and water spigots in the adjacent parking lot.
The report said the Ministry of Grand Bahama had been forced to ‘step into the breach’ by tendering a contract for a new facility. And the Government also had to inject $500,000 to complete the Arts and Crafts Centre, after the GBPA invested only $350,000.
“Commitments that were left wholly unmet include carrying out measures to address erosion of public beaches and upgrading Freeport to a ‘garden city’,” the report said.
“Today, we now have roads and verges in disrepair and deterioration of the inner city of Freeport.”
The Committee added that by incorporating numerous social and community needs into the 1993 agreement, the then-Ingraham administration “left considerable value on the table, given the size of the investments and action required”.
“The 1993 agreement did not contain provisions for transparency or oversight,” the report added, “making an accurate recording of compliance with the agreement difficult.
“Lastly, the nature of the commitments made, and their financial value, paled in comparison to the value of the benefits received by the GBPA and its licensees....
“The Ministry of Grand Bahama has estimated the value of the 21-22 commitments to be $21 million, whereas the value of tax concessions over 22 years within the Port area is many times that amount.”
Comments
The_Oracle 7 years, 10 months ago
Here they go, attacking what they themselves could never accomplish, could never understand, and must get their grubby hands on at all cost. Even if a few roads are in disrepair, they do fix them, and even un-repaired are better than Nassau or out island streets. This is nothing more than an effort to dismantle and erase, gain control.
birdiestrachan 7 years, 10 months ago
You can rest assured that the share holders received much more than they gave. Freeport is still in the Bahamas. grubby hands or not.
Economist 7 years, 10 months ago
Birdie, why do you always try to bring everything down to the 'lowest common denominator'.
If you have the best interests at heart you would want the best.
I agree with Oracle, the Port Area is much better off under the current holdings than it would be under government control.
So, he asks what are they (gov.) trying to achieve?
The_Oracle 7 years, 10 months ago
The stupidity of the whole thing is we will never know what lies behind and buried in their "amendments" One thing is for certain: more Government BS and stagnation, variances in concessions for this one or that, Annual applications for various Government crap, back door deals, 80% not paying their bills, All that we have been able to "count on" from Government since Independence.
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