By NEIL HARTNELL
Tribune Business Editor
Abaco’s Chamber of Commerce president yesterday voiced optimism that $1.5bn in Hurricane Dorian relief pledges will “come to fruition”, but warned: “The proof of the pudding is in the eating.”
Ken Hutton told Tribune Business that the donations pledged at Monday’s conference would have “a significant and immediate” impact on the island’s recovery effort if they all materialised as he urged the National Disaster and Reconstruction Authority to use all monies for “the purpose for which they were given”.
Almost two-thirds, or $975m, of the $1.5bn pledged came from The P3 Group, a US-based commercial real estate and public-private partnership (PPP) specialist, and Mr Hutton said it was “unclear” whether this was a donation or something else that was being proposed.
Dee Brown, The P3 Group’s president, indicated that it was seeking a PPP-type structure where it would provide funding upfront for various infrastructure and public services projects but expect to ultimately be repaid its money.
That is typically done via a build, own, operate, transfer (BOOT) arrangement where a private developer finances development of a property or other infrastructure asset, charges users rent or a fee to make its money back, and then transfers it to the government after a 20-30 year period.
The sum that The P3 Group is proposing would, if fully accepted, also potentially give the group dominance in the PPP sector and a lock on major infrastructure assets - something that the government might see as unhealthy long-term. It could nevertheless negotiate an agreement for a lesser sum and fewer projects.
“The thing that was unclear to me is: Is it actually a donation?” Mr Hutton said of The P3 Group’s offer. “I wasn’t sure. Maybe I didn’t get all the information.” However, he described the overall outcome of Monday’s pledging conference as “very encouraging” for both the pace and extent of post-Dorian restoration in Abaco and Grand Bahama.
“It’s very heart-warming to see the amount of support internationally that there still is for The Bahamas and Abaco,” the chamber president said. “In terms of the actual amounts, obviously it’s incredible. I’m hoping the amounts pledged will actually come to fruition and I’m hopeful that the monies put forward into the reconstruction fund will be used for the purposes for which they were donated under the authority.
“If the funds are not allowed to be used by the Authority as they were meant to be then I don’t think it’s going to be a successful experiment. It’s incumbent on the Authority to make sure those funds go where they are targeted.”
The National Recovery and Reconstruction Fund (BNRRF) is being created to receive all pledged Dorian donations and those that may be submitted in the aftermath of future storms, with the government and United Nations Development Programme (UNDP) taking responsibility for its governance oversight.
“If these funds come in, a lot can be done immediately and have a very significant impact on bringing people back home and getting the economy pumped up again,” Mr Hutton added. “There seems to be a little more sense of optimism in Abaco right now, but we need to get things rolling. Things seem to be going forward; we just need to pick up the pace.
“If the funds pan out the way they’re supposed to, this will be a big help, but the proof will be in the pudding. Construction has definitely picked up here. A lot of insurance funds have hit the market and people have started to rebuild. Construction has gone up.”
Mr Hutton, though, reiterated previous concerns that persons needed to have their existing properties inspected by the Ministry of Works to determine it was safe to rebuild them. He added that building location, the manner of reconstruction, and who was responsible for it were also questions that needed urgent answers.
“Otherwise you replace what was built with something more dangerous,” the Abaco Chamber chief warned. “Everyone with a hammer considers himself a contractor. I would encourage everyone, as I have, to make sure there’s an inspection of the property by the Ministry of Works and that everything is done to the proper code.”
Mr Hutton said that “by law any property deemed to be damaged more than 25 percent” cannot be rebuilt, and a new structure is required. However, he urged the Government not to require persons in this position to go through the process of hiring an architect and/or draftsman, and instead find ways to make the approvals process “faster, easier and not expensive to rebuild”.