The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A “very credible” candidate to take over Freeport’s management is said to have met with both government and Grand Bahama Port Authority (GBPA) ownership as the idea of the latter devolving its quasi-governmental powers gains traction.

Members of the Concerned Freeport Licensees Association (CFLA) were last week increasingly discussing a proposal, floated at Monday’s meeting, that would involve the GBPA’s owners - the Hayward and St George families - devolving its regulatory and other authorities into a trust structure that would be overseen by a five-person Board of trustees.

This Board would then be responsible for hiring a city manager to administer Freeport, and take over responsibility for its administration, development and infrastructure upkeep, as well as find and attract new investors and fresh capital to grow the city’s economy.

Tribune Business was told this plan, suggested at last Monday’s licensee meeting by Dillon Knowles, a former GBPA executive, is effectively a version or variant of the Hawksbill Creek Agreement’s clause 4b, which effectively provides an exit route for the Port Authority’s owners/developers by enabling them to devolve their quasi-governmental or regulatory powers to a local government or homeowners association-style authority with the agreement of 80 percent of licensees.

Such a move, if it meets the 80 percent threshold, cannot be changed or overridden by Parliament, Monday’s meeting is understood to have been told. Meanwhile, under this proposal, the Hayward and St George families will be allowed to retain ownership of the key Freeport assets they own, namely the half-shares in Freeport Harbour Company and Grand Bahama Development Company, which now come under Port Group Ltd, a GBPA affiliate.

Only the GBPA and its powers would be devolved, this newspaper was told, with the Board overseeing the trust featuring one representative each from the Government, Port Group Ltd, licensees and local government, plus one other person who will have a casting vote.

Kirk Antoni, the Cafferata & Company attorney and partner, and a prominent member of the licensee Association, confirmed the proposal was raised at last Monday’s meeting by Mr Knowles and further discussed since. He also disclosed that a “very credible” entity to take over Freeport’s management already exists, adding that the Association has now written to Ginger Moxey, minister of Grand Bahama, seeking a meeting on the way forward for Freeport.

However, other sources, speaking on condition of anonymity, voiced scepticism over the trust idea. They questioned whether the Hayward and St George families would ever relinquish control in Freeport, and pointed to the families’ failure to live up to their obligations and promises in the 2016 Memorandum of Understanding (MoU) with the Government, in which they pledged to seek a buyer for all or part of their Port holdings. Some suggested this would supersede the licensee proposal.

“That cannot work because it has to be led by an investor who is prepared to invest their capital,” one contact added, suggesting a city manager/administrator would not pan out.. “It wouldn’t work. It can’t. The question is where is the capital going to come from. You think anyone is going to come here and put money in where they don’t have a financial stake? They need a financial stake. Nobody is going to invest in something they do not own.”

Mr Antoni, though, indicated the idea is more than just a proposal. “We have a company we think can do this. They have talked to Sarah St. George [GBPA co-chair], they have talked to government. The Government knows of them, and we have to see what Sarah’s position is,” he told Tribune Business.

“It’s an elite company that has done this in other countries of the world. They’ll come in, enter a five-year contract and have to achieve certain metrics. If they achieve them, they gain another five years. They’ll bring in the right type of investor to make Freeport. The Prime Minister has met with them, and Sarah has met with them. They know who they are.”

Mr Antoni declined to identify the entity concerned, but said: “I think they’re credible, very credible, and they’re in with this charter city type of thing, consultation and development. I think they’re genuine and legitimate, but they have to convince the Port families this is the right way to go.

“In the meantime, we’re going to continue to develop our licensee base... We’re quite happy as licensees to extend the Hawksbill Creek Agreement from East End to West End. We’d have to rename Freeport as something else. I’m hoping we can meet Ginger Moxey next [this] week and hope she has something positive to say to us because she’s supposed to be in discussions with the GBPA about extending the concessions. We don’t know. We’re still in the dark.”

Licensees are seeking reassurances on key tax breaks they currently enjoy, and whether and for how long these incentives will continue. “These concessions have expired, and we’re really living in this period of uncertainty,” Mr Antoni added. “We don’t know what the current administration might do.”

This is related to the Grand Bahama (Port Area) Investment Incentives Act 2016, which mandated that all GBPA licensees - besides the Port Authority itself and Hutchison Whampoa - apply to Nassau for the renewal of real property tax, capital gains and income tax-related exemptions. The Act has never been implemented but the Minnis administration, which promised to repeal it, never did.

Mr Antoni, meanwhile, suggested it would be impossible to force the GBPA’s two families to sell the assets they own, although the 2016 MoU may provide the Government with such means. Fred Mitchell, minister of foreign affairs, who has been the Cabinet’s most outspoken member in supporting the Prime Minister, and attacking the GBPA and its owners, has sought to portray the licensee meeting as “based on a false premise” and as organised by the FNM.

“There was that so-called education meeting of the GBPA licensees on Monday evening in Freeport,” Mr Mitchell said in one of his voice notes. “The sad thing is, as a matter of law, the disposition of shares of the GBPA and the policy on the Hawksbill Creek Agreement, is a matter between the Government and the Port, not the licensees, so the entire meeting was simply based on a false premise. How sad.”

Mr Antoni, who has previously asserted that politics is not involved in the Association’s actions, declined to respond to Mr Mitchell. “I don’t know what false premise he’s talking about and am not going to get engaged in a debate with him,” he added.