Global Holdings Port Nassau development
By NEIL HARTNELL
Tribune Business Editor
The winning Nassau cruise port bidder’s chairman yesterday said he is “not worried one drop” about the rapid expansion of the industry’s private destinations, adding: “We’ll see who wins.”
Mehmet Kutman, unveiling Global Ports Holding’s ambition to increase annual cruise passenger visitors to Nassau to 5m within five years, promised Dionisio D’Aguilar, minister of tourism, that the port’s $250m transformation will make newspaper headlines “from Cape Town to Europe”.
Asked by Tribune Business whether he was concerned about the competitive threat posed to Nassau by the rapid expansion of the cruise industry’s private islands and ports within The Bahamas, Mr Kutman pledged that Prince George Wharf will be upgraded to an “iconic” destination that the industry cannot afford to ignore.
“I’m not worried one drop,” he said. “By the time we get through with this iconic, transformative, catalyst of a development, we’ll see who wins. I intend to win.... This will be more iconic than anywhere in the world.”
Global Ports Holding’s unveiling as the preferred bidder to take over Prince George Wharf’s management and operations, and oversee its redevelopment, comes amid rapid expansion of the cruise lines’ private locations in The Bahamas - and their investment in them.
Besides the just-revealed $100m Carnival cruise port in Grand Bahama, the Mexican cruise port developer, ITM, has teamed with Royal Caribbean to propose Freeport harbour’s transformation into a water-based adventure theme park destination that also includes the Grand Lucayan resort’s acquisition,.
Elsewhere, the Government has approved Disney Cruise Line’s Lighthouse Point project for south Eleuthera; Mediterranean Shipping Company (MSC) is developing its own private island destination on Ocean Cay; and Royal Caribbean is pumping a $250m investment into its Coco Cay private island.
Sir Richard Branson’s Virgin group has also just become a major player in the cruise industry with the announcement of sailings from New York to Bimini, all of which suggests that Nassau faces fierce competition from the industry’s wholly-owned destinations where the economics heavily favour the lines.
And, with the Government rejecting a cruise-line backed bid for an independent Nassau port manager, in the shape of Global Ports Holding, there are fears that the industry may retaliate by diverting voyage itineraries from Nassau to its own islands and deprive Bahamian-owned businesses of much-needed commerce.
Mr D’Aguilar, though, yesterday echoed Mr Kutman’s line, adding that the Government, too, was “not worried” about any cruise line desertion of Nassau given the industry’s demand for more and more destinations as a result of its rapid expansion.
Pointing to the 80-90 new cruise ships currently under construction, he said: “I think there’s lots of business to go around for everyone in The Bahamas. We have to do something with the port of Nassau. There are four to five ports in the Caribbean under renovation right now. For us to remain relevant we have to bring about this transformation.”
Mr D’Aguilar said he “gets goose bumps” from watching a video of Global Ports Holding’s plans for Nassau, which are centred on transforming the cruise port into such a must-see destination for cruise passengers that the lines will have no choice but to respond to customer demand and visit - even overnight.
“The minute they arrive they’ll know this is a port unlike any other,” Global Ports Holding’s video shows. All retail, restaurant and other vendors in the port area will be Bahamian-owned, and it will feature a Junkanoo museum to showcase this nation’s culture and history.
An “open air amphitheatre” will feature local and international concerts, shows and special events, which will “create an incentive” for cruise ships to stop in port. Laser-light shows will be one feature at night, while taxi drivers and tour operators will have better access to passengers.
Mr D’Aguilar said the Government was eyeing a 25-year lease concession deal with Global Ports Holding, although the commercial terms and other details will have to be negotiated between the two sides during a period expected to last between 60-120 days.
The UK-listed, Turkish headquarter port operator is proposing to add two new berths to accommodate the world’s largest cruise ships, while also filling in the space between the harbourfront and existing first cruise berth to create land for its amphitheatre events destination.
Construction is likely to take two years from when the management agreement is sealed, and Mr Kutman yesterday pledged that “not a single [cruise ship] call will be cancelled or changed” as a result of Prince George Wharf’s physical transformation.
The Global Ports Holding chairman said the necessary financing for the $250m project was already in place with the company’s US banks, and added that it planned to proceed with the necessary environmental and geotechnical studies on the port’s redevelopment before the agreement with the Government is sealed.
“We’re just beginning the negotiating process, and there will be twists and turns and changes along the way,” Mr D’Aguilar said. “What you saw was the dream. You have to start with a dream.”
Nassau Cruise Port Ltd will be formed as a special purpose vehicle (SPV) to manage the port, with Global Ports Holding possessing 49 percent of its equity under the current model. A further 49 percent will be owned by the Bahamas Investment Fund, a vehicle that will pool investments from thousands of Bahamians, with the remaining 2 percent controlled by the YES Foundation that will be established to fund youth, educational and sporting activities.
Anthony Ferguson, CFAL’s president, said the Bahamas Investment Fund would be distributed via a “bottom up” approach favouring small, ordinary Bahamian retail investors. Minimum investments will be $1,000, with Global Ports Holding making available a $10m loan facility to help Bahamians purchase shares.
Mr Ferguson explained the Fund was being structured to avoid ownership being concentrated in the hands of a few, with ambitions for it to become “the largest investment available to Bahamians to-date” by attracting 20,000 to 30,000 investors.
He added that Global Ports Holding’s funding was, at present, split 70/30 between debt and equity, although that mix could change. The majority of the funding is to be raised in The Bahamas.
A further $5m facility will be made to finance Bahamian small businesses who “meet the underwriting criteria”, with the YES Foundation financed by an initial $3m grant.