By NATARIO McKENZIE
Tribune Business Reporter
The Government's plan to introduce a "mandatory tug boat fee" has been met with furious opposition from commercial shippers and cruise lines, amid fears it will further undermine Nassau's competitiveness.
Michele Paige, the Florida-Caribbean Cruise Association's (FCCA) president, in an e-mail responding to Tribune Business inquiries said the industry was "fundamentally opposed" to paying for the service in Nassau harbour.
"The industry supports paying for services that it needs," Ms Paige wrote. "However, in this case, our member lines tell me that tug service requests are not needed in the Port of Nassau, and that the existing fleet of tugs was adequate for the exceptional use by the industry.
"The industry is fundamentally against paying for this service and, in fact, has gone on record as saying it did not need this new mandated service. This new mandatory fee will result in additional costs that are not warranted, which makes the 'Bahamas Cruise Product' more expensive."
Ms Paige added: "I note that mandatory fees of this sort are not at any other ports in the entire Caribbean, except one which has a very tricky maneuver to get into the port, which is not the case in the Port of Nassau."
Her concerns are especially ill-timed for the Bahamas' efforts to upgrade Nassau's cruise port, at Prince George Wharf, to enhance the visitor experience and reverse declining passenger spending yields. The FCCA member lines make up close to 100 per cent of Nassau's cruise business, including Carnival, Royal Caribbean and their affiliates.
One major importer, speaking on the condition of anonymity, told Tribune Business: "We're told that commercial vessels that are 1,000 gross tonnes are going to have to pay on every vessel coming in. They're looking at $700 in and out, so that's a total of $1,400.
"I'm told that, for the shipping companies, that could amount to an extra $500,000 a year, and obviously they're not going to absorb that; that is going to be passed on ultimately to the consumers. I have a lot of shipments coming in, so that's a major concern for me and my business." The fees are reportedly set to take effect on June 1.
Tribune Business understands that stakeholders in the shipping industry met with Port Controller, Captain Cyril Roker, on the matter last week. They are now seeking to take their concerns higher up to the ministerial level.
Captain Roker, when contacted by Tribune Business, declined to discuss the matter in detail. "I can't speak to that matter at this time. I believe the Government will be issuing a statement on that shortly," he said.
The Government is keen to recover the cost of all services it provides as it bids to slash its current $323 million fiscal deficit, and reduce subsidies to state corporations.
A government source with knowledge of the issue acknowledged the concerns within the shipping and cruise industry over the fees, with one industry stakeholder describing the matter to Tribune Business as "non-negotiable".
"There are some concerns about these tug boats and paying these fees. The Government has two aged tugboats, and they didn't see the need to repair them or purchase new ones so the Government has outsourced that service," the source said.
"There was a public tender exercise that took place three-and-a-half years ago, and it was decided that the Government would outsource the tugboat service to a local company, Tug Service Ltd.
All the funds that will be collected from these tugboats would go to the Consolidated Fund, and the Government would pay a daily rate for leasing these tugboats. That would apply to all commercial ships that are 1,000 gross tonnes. The cruise and cargo ships would be affected by this tugboat fee. This does not include yachters or local boats."
The move to outsource the tugboat service falls in line with recommendations by Auditor General, Terrance Bastian, who in an examination of the Port Department's accounts for the two-year period to end-June 2016 suggested that it either purchase new vessels or outsource tug boat services to the private sector.
At the time he branded the over $600,000 spent on repairs as "exorbitant" and not necessarily providing taxpayers with 'value for money'.