The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

The Prime Minister yesterday pledged that the Government will “accelerate” implementation of the long-promised sovereign wealth fund as part of efforts to kickstart $2bn in infrastructure upgrades.

Dr Hubert Minnis, addressing the Bahamas Business Outlook, said the fund - a vehicle that accumulates monies and other assets, and invests them to generate returns on behalf of a nation's people - will also "likely" manage an underlying National Infrastructure Fund.

“We intend to accelerate the implementation of a sovereign wealth fund, another recommendation of the Economic Recovery Committee," he said. "The Government has already executed in legal review of the Sovereign Wealth Fund Act 2016 with a view to enhancing the provisions of the legislation.

"The proposed legislative changes fully embrace the Santiago Principles, which are international best practices designed to address concerns by investors and regulators about transparency, accountability and the governance structure of such funds."

Dr Minnis, explaining that sovereign wealth funds typically manage and invest earnings generated by a country's budget surpluses and/or royalty payments for exploitation of their natural resources, said The Bahamas had not reached this income potential yet.

However, he added: "We also recognise that the country needs an independent, non-partisan, transparent, accountable entity to manage some of our most valuable land and our precious natural assets for the benefit of the Bahamian people. Such oversight may help to reduce corruption by public officials.

"This sovereign wealth fund will also likely manage a special sub-fund that will be dedicated to expanding critical infrastructure throughout The Bahamas, especially in our Family Islands. To maximise the potential of our Family Islands, critical transportation, health care, education, heritage, cultural, commercial and power infrastructure must be built, and built to world-class standards."

Dr Minnis said this "sub-fund", which will be called a National Infrastructure Fund, "will mobilise public and private capital, from local and international sources, to be deployed in the true spirit of public-private partnerships (PPPs) to meet the estimated $2bn in infrastructure development needs throughout our extensive archipelago.

"The sovereign wealth fund and the accompanying National Infrastructure Fund will transform the way in which we approach the development of our country. These funds will enshrine accountable and transparent means for Bahamians to ensure that our national assets are deployed and developed for the benefit of the entire country."

The Prime Minister added that the Government was already "aggressively" exploring PPP arrangements for $150m worth of infrastructure upgrades to Family Island airports, which includes planned works at Abaco, Exuma, North Eleuthera and Long Island's international airports.

Describing these structures as similar to the Lynden Pindling International Airport (LPIA, Dr Minnis said: "Such public-private partnership methods may include the use of passenger facility charges and other airport usage fees to fund the development of our Family Island infrastructure, as opposed to funding exclusively via the Public Treasury.

"While we must adapt the mode of financing for a number of key infrastructure projects, our commitment to develop Family Island infrastructure remains as strong as ever. Such significant investment in airport infrastructure will support increased airlift to our Family Islands as tourism rebounds."