The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

THE GRAND Bahama Chamber of Commerce’s president yesterday warned that the Government must pay attention to how its actions are perceived by potential investors as it strives for major in Freeport’s governance.

James Carey told Tribune Business that the Davis administration’s ambitions for a change of ownership at the Grand Bahama Port Authority (GBPA), either through a private buyer buying out the Hayward and St George families, the Government doing itself or the regulatory and quasi-governmental powers being devolved back to Nassau, may be well intentioned but they “have to be careful of how the world looks at” it.

He added that while he was “shocked and surprised” to learn of the Government’s intentions, he is not yet satisfied that such an intervention is the correct solution or will send the right signal to international investors. Mr Carey said: “I’m waiting to talk to the powers that be so I can understand what their position is before I make any further comment.”

The GB Chamber chief spoke out after Tribune Business revealed the Government is exploring its options over how to bring about Freeport’s revival through what some believe could be the greatest transformation in the city’s management since its founding treaty, the Hawksbill Creek Agreement, was signed in 1955 with ambitions of creating a free trade zone in the northern Bahamas.

Multiple Tribune Business sources, speaking on condition of anonymity, confirmed that the Prime Minister and his administration last year effectively gave the Hayward and St George families an ultimatum to either find a private buyer for their GBPA ownership interests (split 50 percent each) or the Government would find one for them.

Philip Davis KC and his advisers are understood to have become convinced that drastic change is needed to break the status quo and revive Freeport after a near two-decade decline, given that it is potentially the best source of higher economic growth for The Bahamas due to its available land, location and tax-free zone status.

However, this newspaper understands that, while moderating its stance somewhat since the ultimatum, the Government has not given upon on its Freeport ambitions. There is talk that the Government itself may now seek to acquire the GBPA or, more likely due to the Public Treasury’s cash-strapped state, seek to gain control of Freeport’s regulatory and quasi-governmental functions.

The GBPA, while described by some as a ‘regulatory shell’, still possesses considerable powers that include business licensing, building code and environmental enforcement, city management, and the power to levy fees and service charges together with the operation of a free trade zone that offers multiple forms of tax relief.

However, its income-earning assets have been transferred to Port Group Ltd. These include the 50 percent equity stakes in DevCO and the Freeport Harbour Company, likely to be the two families’ most valuable assets, together with interests in multiple other companies.

Should the Government seek to take over the GBPA’s regulatory powers, one source said it would amount to an “abrogation” of the Hawksbill Creek Agreement and raise multiple legal issues that would have to be addressed. Among these, they added, would be the provision that requires four-fifths (80 percent) of licensees to approve the devolution of quasi-governmental authority to a local government-type entity.