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Minister: 'No Free Lunch' On Tug Boats

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

A Cabinet minister yesterday defended the imposition of a mandatory tug boat fee for cruise and commercial vessels using Nassau Harbour, saying: "There's no such thing as a free lunch."

Frankie Campbell, pictured, minister of transport, told Tribune Business that the Government has to "recoup" the $15m investment in the two tug boats that were christened on Monday.

"The rationale is there is no such things as a free lunch," he said. "They can debate whether or not it should cost that but they can't debate whether or not there should be a cost. You heard how much the tugs cost; $15m. That cost has to be recouped somewhere.

"We in the Ministry of Transport are ensuring that if there is a distress, if there is an emergency, it will not be said that the port of the Bahamas is not able to address it. For the purpose of safety, just like the fire engine; you have it there in case there is a fire and, just like insurance, you purchase it in case there is an incident."

Mr Campbell added: "I'm not overly concerned that we are not headed in the right direction. I am satisfied that we are doing what we need to do to ensure that, as the service provider, we have the necessary infrastructure in place."

Tribune Business reported on Monday that the Government's plan to introduce the "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." 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."

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'. The two new tug boats, named Tug Samson and Tug Rose, will be operated by Tug Services Ltd, a 100 per cent Bahamian-owned and operated company.

The Government has entered into a 15-year lease with Tug Services Limited, beginning on April 1, 2018, to use the vessels.

The agreement calls for Tug Services Ltd. to provide two 50-tonne bollard pull, Azimuth Stern Drive, tug boats, on a daily time charter. This includes: management services, crew, firefighting, oil spill recovery, salvage capabilities and vessel maintenance for tug services at Nassau Harbour and Clifton Pier. With its world class equipment and experienced Bahamian staff, Tug Services Limited has the task of providing tug boat services 24 hours per day, 365 days per year for the next 15 years to ensure the safety and enhance the competitiveness of Nassau Harbour and Clifton Pier. This includes reliable service during poor weather and in emergencies." The 15-year contract will cost tax payers $4m per year.

Comments

TalRussell 6 days, 6 hours ago

Ma Comrades, what happens if there are no Harbour Tugs in the event cruise ship becomes engine or electrical power crippled while in our Harbour? Maybe we can just charge cruise ships flying the Bahamaland flag to avoid U.S. taxes a little more in ship registration fees?

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proudloudandfnm 5 days, 22 hours ago

Then charge a harbor safety surcharge. 700 dollars in and 700 out is extortion. And illegal. You cannot charge for a service you did not provide.

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Socrates 5 days, 8 hours ago

you pay for a water meter whether you want it or not even if one gallon of water never enters the meter.. airport users pay fees for fire rescue services they may never use either, you pay insurance on your building every year even if you never claim... so what else is new?

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proudloudandfnm 4 days, 11 hours ago

Let me tell you why. Ship owners are going to sue. They are going to provide documented evidence that they did not use tugs. The court will then rule in their favor and the government will then be forced to pay back every dime after payung legal costs. Now instead of charging for tugs their best bet would be to establish a harbor safety surcharge (as is the industry norm) this way they cannot be challenged in court. Say .025 per GRT. But this? No court in the world would be ok with charging for services that were not provided.

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