The Tribune

• Generated up to 40% of hotelier’s revenues

• Island must work to avoid room shortages

• Infrastructure prep to start on GB in Q4 ‘23

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A hotelier yesterday hailed confirmation that Grand Bahama Shipyard’s $600m dry docks investment is to proceed as “fantastic news” given that the company previously generated up to 40 percent of his annual revenues.

Magnus Alnebeck, the Pelican Bay resort’s general manager, told Tribune Business that the Shipyard’s expansion in a bid to status its position as the world’s largest cruise ship repair facility will have “a tremendous impact” on Grand Bahama’s still-struggling economy.

Explaining that the effects will not just be felt through the creation of Bahamian jobs, but the spin-off effects from housing, food and other spending by expatriate workers, he added that the go-ahead for a project to replace the two floating dry docks lost to a combination of Hurricane Dorian and industrial accident will be “huge in Grand Bahama”.

Speaking after the Shipyard and its shareholders confirmed the project’s approval, Mr Alnebeck told this newspaper: “That’s fantastic news. It will have a tremendous impact. It’s significant. When the Shipyard was up and running, I don’t have the exact numbers on the economic impact, but it was huge in Grand Bahama, huge in Grand Bahama.

“Our challenge now is our economy is a lot smaller than in those days when the Shipyard was really working. We now have two big dry docks coming in and there is a shortage of rooms. We now have to step up and make sure we have more hotel rooms available, more short-term accommodation and are able to deal with it, but it is fantastic news.

“Before the dry dock split, in some years close to 40 percent of our revenue came from the Shipyard,” Mr Alnebeck added. “It was a very material business. It had dropped since then, but is still significant overall. I would think 20 percent of our business at present is related to the Shipyard, but 20 percent now compared to a few years ago is a lot less.

“This is indeed significant, especially as they seem prepared to start work in the last quarter of this year. It has an incredible impact.” An April 2019 accident involving Royal Caribbean’s Oasis of the Sea cruise ship destroyed one of the Shipyard’s dry docks, while another was damaged several months later through the passage of Hurricane Dorian.

These accidents meant the 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. They also left the company functioning at just 25 percent capacity for the past four years until the $600m investment in the two replacement floating dry docks was confirmed.

Carnival and Royal Caribbean each own 40 percent of the Shipyard, with the remaining 20 percent held by Port Group Ltd, the Grand Bahama Port Authority (GBPA) affiliate. The two cruise lines’ ability to finance the required investment was both delayed and severely impaired by the COVID-19 pandemic, which shut the cruise industry down worldwide for some 16 months until summer 2021.

Mr Alnebeck, meanwhile, said the Shipyard’s investment and expansion should “also be a great thing for our airlift” given the number of workers that will have to fly in. He also voiced hope that the move could spark progress in efforts to sell the Grand Lucayan resort given the need for extra hotel rooms, but added that Grand Bahama tended not to value the economic spin-offs from expatriate workers as much as it did tourist spending.

Terence Gape, a Freeport-based partner with the Dupuch & Turnquest law firm, yesterday described the Shipyard’s announcement as “wonderful” but added that Grand Bahama needs its airport’s and the Grand Lucayan’s transformation even more.

“I think it’s wonderful news, and will certainly form a very major part of what we hope is going to be the transformation of Freeport when the full harbour, hotel and airport projects come together,” he told Tribune Business. “The hotel and airport itself are the two critical components of a turnaround in our economy. We need these projects to start post-haste.”

The Shipyard’s two new floating dry docks are already under construction at CSSC Qingdao Beihai Shipbuilding Company in Qingdao, China, and are expected to arrive in 2025 and 2026, respectively. However, the project also includes supporting marine works and infrastructure construction in Grand Bahama, which is set to begin in 2023’s final quarter and finish in 2025.

Dollar figures for the Grand Bahama investment, and details on how many Bahamian and expatriate jobs will be created, were not provided in the Shipyard’s statement. No replies were received to Tribune Business queries on these issues, and the likely business boost from the dry docks’ arrival, before press time last night, although it was suggested the project will create “billions of dollars in economic impact” over a 25-year period. 

However, the Shipyard added that the duo will be “among the largest floating docks in the Western Hemisphere”. One was described as “a mega dock that will have the largest lifting capacity in the world”, and be capable of servicing all existing and currently planned cruise ships worldwide, as well as multiple other commercial vessel types.

The Shipyard said it is also expanding its apprenticeship programme, with a goal to take on 16-20 new apprentices per year. Designed to develop needed technical skills, the four-year apprentice initiative will be further enhanced through partnerships with technical colleges.

Prime Minister Philip Davis KC described the expansion project as “a new and promising chapter in the story of Grand Bahama”. Chester Cooper, deputy prime minister and minister of tourism, investments and aviation, said: “The timing of the Grand Bahama Shipyard expansion project coincides beautifully with our efforts to revitalise Grand Bahama’s tourism industry.

“This project is just the impetus that Grand Bahama needs to further boost the island’s economic growth. It is a strong show of confidence that Grand Bahama Shipyard is establishing the world’s largest ship repair facility in The Bahamas.”

Ginger Moxey, minister for Grand Bahama, said: “The $600m transformation of Grand Bahama Shipyard marks a monumental investment for Grand Bahama. The Shipyard has always been an important contributor to Grand Bahama’s economy, and this ambitious project will continue the revitalisation of our local economy.

“As the Shipyard undergoes this remarkable evolution, it will serve as a beacon of progress, bringing jobs, entrepreneurial spin-off opportunities and a renewed sense of pride to the people of Grand Bahama. Together, we embark on a journey toward a brighter and more prosperous future.”

The Shipyard was described as the “largest private non-tourism employer in The Bahamas”, with its expanded operations will creating opportunities for Bahamians, local businesses and contractors, “including hundreds of full-time jobs.... once it is in full operation”.

“For half a century, we have worked side-by-side with The Bahamas and Bahamian businesses and contributed to the growth of the Bahamian economy while delivering unforgettable cruise vacations to millions of people,” said Josh Weinstein, chief executive and chief climate officer of Carnival Corporation.

“The success of our enduring partnership is built on our shared conviction that people must always be at the forefront of our thinking. That mindset is evident in the Grand Bahama Shipyard transformation project, which invests significantly in local businesses, creates jobs and contributes to a legacy of economic vitality in the country.”

“For more than 50 years we have partnered with The Bahamas to deliver exceptional vacations to millions of guests and create opportunities for local Bahamian communities,” said Jason Liberty, president and chief executive, Royal Caribbean.

“We are proud to expand our long-standing partnership and see establishing Grand Bahama, as a premier maritime destination for repair and revitalisation of all kinds of vessels, as a project that will drive economic growth for the Bahamian industry and create a positive impact for the people of The Bahamas for generations to come.”

Sarah St. George, the Grand Bahama Port Authority acting chairman, added: “We join our partners in celebrating this historic achievement, and congratulate Carnival Corporation and Royal Caribbean Group for their commitment to Grand Bahama and Grand Bahama Shipyard.

“We also thank the Government for their close collaboration on this transformational project. For the past four years, re-establishing Grand Bahama Shipyard as a premier global ship repair facility has been the single-minded focus of all parties. We’re tremendously excited for this huge expansion.”