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$250m Transformation From 'Break Even' Port

By YOURI KEMP

A Cabinet minister yesterday described Nassau's cruise port as a "break even operation" as Parliament debated legislation to facilitate its $250m transformation.

Renward Wells, minister for transport and local government, said the Harbour Dues Amendment Bill would enable the transition to the public-private partnership (PPP) between the government and Global Ports Holding for the overhaul of Prince George Wharf.

He told the House of Assembly that, through the government's current ownership and management of the facility via the Port Department, annual tax and fee income just about covers operational costs.

"About $2.6m in revenue is derived from various taxes at Prince George Wharf," Mr Wells said. "As it relates to annual expenditure, the Port Department and the Ministry of Tourism spends approximately $2.5m a year for port security, operations for their facility, capital expenditure and for repairs. As a result of this, operations at the Prince George Wharf break even every year."

The Bill identifies three revenue/income streams that will enable Nassau Cruise Port Ltd, the Global Ports Holding subsidiary that will manage and operate Nassau's cruise port for 25 years under the terms of the deal with the government, to recoup and earn a return on its $250m investment.

"The amendment to the Harbour Dues Act will accommodate a public-private partnership that the government promised as a part of its mandate," Mr Wells said. "The amendment will create a designated cruise ship port area, where the operator will be able to levy and collect three types of charges.

"One, a port facility charge for costs to ships and services to ships that does not attract value-added tax (VAT). Secondly, a passenger facility charge which covers the services provided to passengers while in the port area that does attract VAT, and other services charges for utility usage such as water, electricity and garbage collection and so on."

Mr Wells recalled that the government had selected Global Ports Holding as the top bidder for the redevelopment of Prince George Wharf, but reiterated: "The government will retain ownership of the port."

He added: "With the takeover by Nassau Cruise Port Ltd, the operator will collect a rental fee from Global Ports Holding each year as a part of its operating contract. Under this arrangement the government will net $2m a year during construction, and a minimum of $2.5m when the port becomes operational."

"While Nassau Cruise Port Ltd pays, we will be a subsidiary of Global Ports Holding's $250m investment that will transform the Wharf into a state-of-the-art port and water front destination."

"Under the 25-year lease agreement, Global Ports Holding will own 49 percent of the Nassau Cruise Port Ltd, and another 49 percent will be owned by the Bahamas Investment Fund (BIF) for the fund to serve as an investment vehicle to allow Bahamians to become shareholders in the project. The final two percent will start the YES Foundation, with YES standing for Youth, Education and Sports."

Mr Wells outlined how Prince George Wharf's transformation will also allow for partnerships with Bahamian stakeholders, development of an entertainment venue and initiatives to improve the ambience and appearance of downtown Nassau to improve the passenger experience.

He added that the cruise port's proposed new terminal building will facilitate upgraded retail and food and beverage facilities, and will further integrate the port into the downtown area by acting as a catalyst for the entire area's redevelopment.

The new terminal will also include an electric tram service transporting passengers from cruise ship to terminal, as well as the use of renewable energy. Nassau Cruise Port is expected to complete construction of the new cruise port within 24 months of starting construction.

Comments

Well_mudda_take_sic 11 months, 3 weeks ago

Whenever you hear public-private-partnership (P-P-P) coming out of the mouth of a politician it means only one thing: The taxpayers pick up all of the costs and the private investors take all of the profits.

You can be rest assured that if such a P-P-P ever came to fruition, certain muck-a-mucks closely connected to the highest levels of the Minnis-led FNM government will eventually be among the profiteering investors.

The legal structure of this Prince George Wharf deal as outlined here is clearly designed to rob the Bahamian people of the lion's share of the true value that would be unleashed from one of our country's most valuable assets.

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