The Tribune

• Attorney: Report ‘highly unlikely’ to get govt backing

• No sign owners putting ‘meaningful skin in game’

• Argues report effort to ‘deflect criticism’ from GBPA

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Grand Bahama Port Authority-commissioned report on Freeport’s revival is “all take and no give” and is “highly unlikely” to be supported by the government, an attorney blasted yesterday.

Carey Leonard, a former GBPA in-house counsel, told Tribune Business that the Vision 2025 document, which was released earlier this week by the Revitalization and Economic Expansion of Freeport (REEF) committee, gave no indication that Freeport’s quasi-governmental authority and its owners were prepared to put “meaningful skin in the game” in return for all the concessions being sought from the government.

Now an attorney at Callenders & Co, Mr Leonard argued that the report was an effort to “deflect” criticism away from the Hayward and St George families over responsibility for Freeport’s decline and the failure to live up to their governance and developmental obligations - especially as there was no indication the Port Authority is planning major investments to upgrade the city’s infrastructure or other improvements.

Contrasting the present situation with what happened in 1955 at the Hawksbill Creek Agreement’s signing, Mr Leonard said: “I think, bottom line, I do not see any major commitment by the Port Authority itself to do major investments as was done in 1955 but they’re asking the government for all sorts of things.

“The major difference between now and then is that, in 1955, the GBPA committed to do an awful lot. Now, it’s not keeping up with its own obligations. Wallace Groves went out to raise money so that the Port Authority would meet its obligations to develop Freeport. 

“The current owners are not doing anything to raise money as Wallace Groves did to improve Grand Bahama, and contrary to what the report says the roads are deteriorating rapidly.” Mr Leonard cited the failure to make Grand Bahama International Airport hurricane-ready pre-Dorian, as storms had frequently impacted the facility since Hurricane Floyd in 1999, as well as rebuild the facility prior to its recent sale to the Government, as a prime example of the GBPA failing to meet its obligations.

“What the Port Authority is now trying to do is deflect attention from themselves by saying they need everything from government,” Mr Leonard blasted. “I’m saying I think it will be highly unlikely the Government will do anything unless they get something in return. What the Government is looking to do is protect the Bahamian public, and for there to be benefits to the Bahamian public, as there were majorly in 1955.”

Pointing out that the GBPA had now exited ownership of Grand Bahama’s major airport, along with its electricity provider, he argued that it is also failing to maintain the roads and restore potable water to all residents more than 18 months after Hurricane Dorian’s passage.

“Yet the Port Authority wants all sorts of things and concessions given to them. For what?” Mr Leonard queried. “I think it’s a very good public relations exercise deflecting from criticism of the Port. They want all give from the Government. It’s all take and no give. They need to put some meaningful skin in the game, not just spend a couple million dollars here and a couple of million dollars there.

“If the Port is showing where tens of millions of dollars are going to be invested, I’d understand the Government doing everything it possibly could but there’s nothing concrete in the proposals. I was looking for some benefit to come to the country in return for giving the Port these concessions.

“It seems to me these proposals will increase the Port’s licence fees but there’s nothing to say the Port will invest $500m in maintaining infrastructure and improving facilities. To improve the economy you have to have the best infrastructure you possibly can. The most important item of infrastructure for us was the airport, yet the Port Authority failed us. They have failed the people, and now they want ‘give me’.”

Multiple ‘ease of doing business’ and other reforms proposed by the REEF committee can only be implemented with government action and consent. These proposals include allowing companies in sectors reserved for Bahamian ownership only “to sell minority stakes in those businesses to foreign equity partners, or joint venture with such partners” should they so wish.

The REEF committee argues that doing so will “enhance their access to capital and skills” and “optimise their return on their investments”, while also calling on the Government to address “regulatory anomalies”, duplication and overlaps involving itself and the GBPA.

Arguing that this will bring “clarity and certainty” to areas that have restricted private sector development in Freeport, the proposal calls for real property tax exemptions to be extended to all in the Port area. The REEF committee also calls for the Government to repeal provisions in electricity and communications sector legislation, and the Environmental Planning and Protection Act, that give it “conflicting regulatory powers” with those of the GBPA.

This conflict has already generated litigation involving the Utilities Regulation and Competition Authority’s (URCA) ability to regulate Grand Bahama Power Company and Cable Bahamas in the Port area, but the committee does not suggest how this should be resolved. It also calls for the Government to “reframe transient expatriate workers as valued revenue sources, as opposed to threats to Bahamian jobs.

The report called for “reframing transient expatriate workers as valued revenue sources, as opposed to threats to Bahamian jobs”, along with the introduction of “new immigration regulations and policies that are at least as attractive as those of other options available to investors” if Freeport’s economy is to be revived post-COVID and Hurricane Dorian.

It warned that “rival destinations, whose tourism industries have also been decimated, are looking to enhance their efforts to attract expatriates, so Freeport’s offering needs to consider planned new rival inducements, too”.

The REEF committee’s proposal calls for businesses in the Port area to be permitted to hire expatriate workers “as they deem necessary where Bahamian expertise is not readily available”, with approval decisions taken within five days of completed applications being received.

Its proposals call for work permits lasting up to five years to be issued, and made renewable, with fees “competitive” against rival free trade zones in the Caribbean and elsewhere. The work permit holder’s benefits would be extended to spouses, dependent children up to 25 years old and dependent parents aged 62 years-old and over, giving them “full rights to live, work and study”.

The REEF committee also recommended that foreign workers and personnel be allowed to enter Freeport for short-term visits, of a maximum seven days, to work on board foreign-flagged vessels without the need for work permits.

Other proposals call for the creation of a secure digital Know Your Customer (KYC) vetting system that would “make it significantly easier for customers to open and operate banks accounts”, along with a review of the 1 percent Customs processing fee “to make Freeport more competitive as a transhipment centre”.

The creation of a ‘one-stop shop’ agency dedicated to promoting Freeport to international investors, as well as “a transparent and fair Customs regime” involving standardised inspections and fees, are other components detailed by the REEF committee.