The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Nassau’s commercial port operator is waiting to learn if its bid to take over Marsh Harbour’s main shipping gateway has been successful as it eyes wider Family Island expansion.

Dion Bethell, Arawak Port Development Company’s (APD) president and chief financial officer, confirmed to Tribune Business that the BISX-listed operator submitted a formal proposal to manage and operate the Hurricane Dorian-ravaged facility to the Government on August 7 this year.

It subsequently met with Jobeth Coleby-Davis, minister of transport and energy, and officials from her ministry in the third week of August 2023 to give a presentation on its plans for the Marsh Harbour port, and APD is now awaiting a response from the Government on whether its offer has been accepted.

However, Mr Bethell disclosed that APD did not bid on the tender to manage/operate the North Abaco port at Cooper’s Town, with the Request for Proposal (RFP) involving that facility released at the same time as the separate process for Marsh Harbour.

“APD would have responded to that RFP,” he told this newspaper of Marsh Harbour. “We would have had a meeting with the Government agency responsible, Transport, and we would have done a formal presentation and response to the RFP.

“Since that presentation, we await the possibility for some response or if we would have been successful in the awarding of that RFP. Our response was for the Marsh Harbour port, not the Cooper’s Town port.” 

Mrs Coleby-Davis, in a messaged reply to Tribune Business inquiries back in May, said then that the Attorney General’s Office is reviewing draft tender documents for bidding processes that will seek qualified groups to redevelop, operate and manage both the Marsh Harbour and North Abaco ports under a private-public partnership (PPP) arrangement.

She spoke just as the North Abaco Pastors Association, an alliance of pastors from the area between Treasure Cay and Crown Haven, served notice of their intent to launch a petition requesting that the Government ensure the $41m North Abaco port is fully opened and operational.

Captain Scott Bootle, a member of the North Abaco Port Company that approached the former Minnis administration about taking over the location via a PPP arrangement, said then that the Bahamian people have received little to no return on their investment in a facility that was constructed by China Harbour Engineering Company (CHEC) and turned over to the Government in 2018.

While it was subsequently employed for the distribution of Hurricane Dorian relief, it is still today not used for commercial shipping purposes and has only a few Customs officers based there to deal with private shipments.

As for Marsh Harbour, the Government has been promising to seek a PPP arrangement for the port, which has never fully recovered or been rebuilt from Hurricane Dorian’s devastation, since the Minnis administration was in office in 2021.

Mrs Coleby-Davis and her ministry, shortly after the Davis administration was elected to office on September 16, 2021, issued an expression of interest (EOI) seeking to gain an understanding of the appetite financiers, developers and port managers have for taking over and reconstructing/operating the Marsh Harbour port.

Under a PPP model, private capital would be responsible for financing the Marsh Harbour port’s transformation and upgrade. The facility would likely remain in the Government’s ownership, but be leased to a private sector operator for a long-term period, with the fees and charges levied on areas such as container throughput and storage helping to repay the earlier reconstruction financing while also generating an investment return for the manager and its shareholders.

The Government could also opt to take an equity ownership interest in the port operator itself, as it has done with its 40 percent interest in APD. Mr Bethell, who signalled APD’s interest in the Marsh Harbour port at that time, also told Tribune Business that the BISX-listed operator’s ambitions extend beyond both Nassau and Abaco.

“We feel APD is well-positioned to provide and extend what we do here at Nassau Container Port to the Family Islands and not just Abaco,” he said. “We understand the ports are gateways to all our island communities where the majority of cargo moves by freight, whether international cargo by Bahamian carriers or mail boat service to the Family Islands.

“The model is to provide a tremendous amount of efficiency and security to be able to provide infrastructure to our Out Islands at a best-in-class, world class level with what we’re able to do. Whether it’s ISPS security or continuity in operation of a facility safely, that’s what we feel we’re able to offer to the Out Islands.”

Mr Bethell, meanwhile, said APD plans to “expand the solar array” at its Arawak Cay port facility by 150 kilowatts (KW) in a bid to help offset soaring electricity costs and increased fuel expenses associated with operating its cranes and heavy equipment.

“We’ve seen an increase in the price of fuel that’s reflected in the performance and the numbers,” he added. “We’ve seen an increase in utility bills and have seen higher bills in the summer months. As part of our mitigation and environmental, social and governance (ESG) initiatives we are expanding our solar array by 150 KW.

That should come on stream in February next year. We won’t see the full benefit of that in financial year 2024, but are moving in the right direction.” APD plans to finance its major capital and investment projects from its own balance sheet resources, possessing more than $16m in cash at end-June 2023, rather than take on loan or debt financing.

Mr Bethell also defended APD’s decision to increase the tariff rate for carriers needing to use a second crane as “not excessive”, adding that the new levies were in line with the average cost for “hiring and using a small crane” on New Providence.

The new tariffs are set to take effect on December 1, 2023, and more than double the existing rate for the first two hours from $800 to $2,000. Thereafter, the rate will be $1,000 per hour or $250 for every 15 minutes. Second crane overtime charges will jump from $450 per hour to $750 per hour, a 66.7 percent rise, with the rate for Sundays and public holidays doubling from $500 per hour to $1,000 per hour.

The APD chief said the tariff increase was the product of a “detailed analysis” that accounted for the cost of purchasing two new cranes over the past two years, plus the expenses incurred in operating the equipment - including fuel and labour - and repairs.

Noting that landing fees have not increased since APD began trading more than a decade ago, Mr Bethell said the port operator had to “double resources” when a carrier requested the use of a second crane to unload its cargo, and engage extra manpower and stevedores.

“It’s time to make sure we cover the investment in those cranes and human capital resources to provide labour to the equipment,” he added. “It’s not excessive, and is not designed to increase the cost of living from imports. No way.”