The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A top hotelier yesterday hailed the planned $350m investment in the Grand Bahama Shipyard as “a really big deal” that could result in the facility generating up to 30 percent of the island’s economic output.

Magnus Alnebeck, Pelican Bay’s general manager, while acknowledging that his property is among the businesses likely to benefit from the arrival of two new dry docks, said the impact will be felt in multiple ways across Freeport’s private sector.

“The announcement that the Shipyard is to get new dry docks and the investment, that’s fantastic news for Grand Bahama and Freeport,” he told Tribune Business. “I think it is a really big deal.

“We used to say at the Grand Bahama Tourist Board, when Memories and Sunwing were here, that there were three major anchors in Grand Bahama that were almost equal. The Shipyard was one, Sunwing’s Vacation Express airlift was another, and one was a mix of everything else.

“I wouldn’t be surprised if Grand Bahama Shipyard, when fully operational, generates at least 25 percent if not 30 percent of economic activity in Grand Bahama and everything feeds from that,” Mr Alnebeck continued. “That is a big industry, that is a lot of activity, that is a lot of people and all sorts of side businesses.

“I’m sure that if you ask some of the car rental companies in Freeport they will say they rent out many more cars to the Shipyard workers than tourists. When these cruise ships come in for renovation it is a big deal.

“We under-estimate it because we don’t see these people running around in the Port Lucaya Marketplace for three hours wearing a tropical shirt, straw hat and drink in hand. They go to restaurants and spend three times’ as much as the tourist in the Marketplace.”

The Prime Minister, in unveiling the planned Shipyard investment by its two cruise line owners, Carnival and Royal Caribbean, earlier this week, said it will exceed their combined capital injection into the Shipyard to-date by $100m.

“I am pleased to announce that Carnival and Royal Caribbean have agreed to a new combined investment of approximately $350m in the Grand Bahama Shipyard,” Dr Minnis said. “To understand the scale of this investment, the House may recall that the original investment - and other investments to-date in the Shipyard - have totalled approximately $250m.

“The new investment will match this and exceed it by $100m. The proposed infrastructure works will replace the two damaged docks with even larger ones. The new docks will be capable of handling and servicing the largest ships in the world. This will result in a notable increase in employment and economic activity on Grand Bahama, and for local businesses throughout Freeport and Grand Bahama.”

Dr Minnis said details on the “partnership agreement” have yet to be worked out, and details will be forthcoming at an unspecified date, but added that construction work will begin at the Grand Bahama Shipyard by October 2021.

Tribune Business understands that this work is to accommodate the two new dry docks, which are being constructed in Asia and will likely be delivered to the Grand Bahama Shipyard in the 2022 second half.

Giora Israel, Carnival Corporation’s senior vice-president for port and destination development, told Tribune Business earlier this year that Grand Bahama Shipyard will become “the biggest industrial concern in the Caribbean by far” if it proceeds with the investment to build the world’s largest floating dock.

He added that the Shipyard and its owners were currently exploring the “options and opportunities” to build such a dock in China to replace the one that was lost in April 2019’s accident.

Acknowledging that the COVID-19 pandemic’s devastating fall-out has impacted the ability of the Shipyard’s cruise line shareholders to fund this investment directly, he added that some financing may be raised in The Bahamas to help cover the costs of associated land-based infrastructure work that would accompany the new dock.

Mr Israel, who sits on the Shipyard’s Board representing Carnival as a 40 percent shareholder, with the remaining ownership split 40/20 between Royal Caribbean and the Grand Bahama Port Authority’s Port Group Ltd, said investing in a larger dock was under consideration prior to the April 2019 accident involving the Oasis of the Seas cruise liner.

“Royal Caribbean’s ship was being taken only partially out of the water because the dry dock could not carry such a big ship,” he recalled. “The manoevere had been done before, but this time something went wrong and the dock was destroyed. It was a total loss and had to be cut to pieces and taken out.

“That incident causes a lot of setbacks as we were unable to operate on other ships. The shareholders started the process of recovering the wreck and claiming the insurance proceeds. That process has not been completed.”

The accident meant GB Shipyard lost its status as the world’s busiest cruise ship repair facility, having serviced three-and-a-half times the number of vessels seen by any rival yard. The accident left the company functioning at just 25 percent capacity, especially after Hurricane Dorian damaged another dry dock in late 2019.

Mr Israel, though, said its shareholders had been anticipating “building a larger dock” in response to the increasing size of cruise ships that would have been “the biggest floating dock in the Americas”. Subsequent inquiries confirmed that such a dock has to be built in Asia rather than Europe, but the cruise industry’s enforced COVID-19 closure and billions of dollars in losses has disrupted financing plans.

“We are looking at our options and opportunities to build such a dock in China,” Mr Israel said at the time. “The COVID-19 situation put a strain on the ability of the shareholders to directly fund it. We’re looking at various options and opportunities as to how to build it and fund it. We’re looking at this process.

“We have to talk to the Government in due course as we get more advanced in this process. It [the dock] will definitely be the biggest in the world; by far the biggest in the world. We have a lot of engineers working on it. We have to bring it over from China.”