The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Port Department has been blasted for failing to collect almost $5 million in due revenues, with some of the Bahamas’ largest investors owing unpaid bills dating back to the last century.

A newly-released Auditor General’s report, which examined the agency’s accounts over a two-year period to end-June 2016, expressed “great concern” over “weak internal controls” and its failure to enforce the law.

The report, which has been obtained by Tribune Business, revealed that at end-June 2016 some $3.868 million in annual fees and tariffs for services provided by the Port Department had not been collected in New Providence or the Family Islands.

And a further $921,390 in due revenues was outstanding at Potter’s Cay, with the monies due including pierage fees for mailboats and fishing vessels, plus water provided by the Port Department.

The Auditor General’s report also disclosed that some of the Bahamas’ largest, and wealthiest, foreign investors were among the Port Department’s greatest debtors.

The Atlantis marina was shown as owing some $363,837 in annual fees, with part of this debt dating back almost two decades to 1998 - when Kerzner International still owned the property.

And the world’s two leading cruise lines, Carnival and Royal Caribbean, owe the Port Department some $628,284 for water supplied to them at Prince George Wharf.

Some of these debts date back to 2010, with the cruise lines’ accounting for 86.5 per cent of the total $725,535 owed for water usage at the Bahamas’ main cruise port.

“As a result of our examination of the accounting record, we noted that outstanding amounts continue to increase,” the Auditor General’s report said.

“We were advised by the accounts personnel that letters of outstanding balances have been forwarded to the cruise line operators. However, large amounts are still pending.”

The report disclosed that the largest ‘water debtors’ are the two Carnival vessels, the Sensation and the Fascination, which are said to owe the Port Department $194,838 and $138,765, respectively. Some 11 cruise ships were shown as having outstanding balances worth more than $10,000.

The Auditor General urged the Port Department to “vigorously pursue the collection of the amounts outstanding”, and either establish a collections centre or enforce penalties against defaulters.

Adding that financial sanctions could be levied via the 2003 amendments to the Ports Authorities Act, the report warned: “There is a great concern in regards to the large amount of revenue that remains outstanding on an annual basis for services provided by the Port Department.

“The Port Department is not enforcing the laws (penalties) as prescribed by the Act. They are allowing persons/companies to utilise Port services without paying the required fees. As a result, the Government continues to lose revenue, and has to bear the cost of these services.”

The Auditor General’s report, tabled in the House of Assembly late on Wednesday night, also revealed that Carnival’s cruise vessels were taking “an inordinate time” to pay their Prince George water bills - some requiring up to five years to pay.

And a further $569,417 was owed to the Port Department in tug boat fees, with the cruise lines again among the major culprits.

The Majesty of the Sea and Monarch of the Sea vessels were said to owe $24,892 and $38,354, respectively, with a further $17,009 due from the Orient Spirit.

The failure to collect due revenue, weak internal controls and inability to enforce the law is a familiar story across most government department, especially those charged with collection by the Public Treasury. It leaves the government with insufficient revenues to fund public services and infrastructure.

The near-$5 million sum owed to the Port Department also highlights how revenue enforcement and collection failures continue to place an ever-increasing burden on legitimate, compliant Bahamian taxpayers - a trend that ultimately led to Value-Added Tax (VAT).

And the Government is having to finance the provision of services to some of the Bahamas’ largest, wealthiest investors, who are effectively getting a ‘free ride’ through the Bahamian taxpayer.

The Auditor General, meanwhile, found that the Port Department was owed a further $705,638 in uncollected licence fees for New Providence, with 80 per cent of this sum due from just five entities.

More than 50 per cent, or some $363,837, was said to be owed by the Atlantis marina, with a portion of the bill dating back to 1998. The second largest bill was due from George Mosko, and totalled $127,186, with some of these monies dating from 1997.

Rounding out the five were TPA Ltd, Union Wharf Development and Caribbean Maritime Management, all of whom owed a five-figure sum.

The Auditor General’s report found that the situation was even worse in the Family Islands, again highlighting how lax enforcement and collection becomes the further persons travel from Nassau.

Some $1.841 million in uncollected fees are owed across the Family Islands, with 63 per cent of the outstanding balance said to be owed nine marinas and other entities. Again, some of the debts date from 1993.

The largest Family Island balance, according to the Auditor General’s report, is the $274,813 owed by Great Harbour Cay Marina, some of which dates from 2001.

Other six-figure debtors are the Old Bahama Bay resort at $157,061; Sampson Cay Club, which owes $122,753; and the Chub Cay Club marina, at $103,703.

The Emerald Bay Resort in Exuma was said to owe the Port Department some $98,080, with another $98,484 due from the Staniel Cay Yacht Club. Milton Mosko and Eran Levin were said to owe $99,737 and $141,177, respectively, with these sums dating from 1994 and 1993.

The T Carter Williams Enterprise in San Salvador owes $60,471, dating from 2012.

As for Potter’s Cay, the Auditor General’s report found that the Port Department had failed to collect $921,390 in revenues due “for the period June 30, 2016”.

While outstanding pierage fees owed by fishing vessels totalled $589,222, a further $237,237 in such fees were due from mailboats and freight vessels.

The report said five vessels were responsible for 42 per cent, or $101,960, of the fees. These included the Mia Dean, Lady Rosalind, Lady Rosalind 1, Lady Rosalind 2, and Trans Cargo 2.

The Auditor General’s report said it had “determined that the risk at the [Port] Department is high with regard to revenue collection, as internal controls are weak”.