The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

THE Prime Minster personally told the Grand Bahama Port Authority’s (GBPA) owners that he has “no confidence” in their ability to “realise the promise and potential of” Freeport.

Philip Davis KC revealed his blunt verdict on the Hayward and St George families’ capabilities, and those of the GBPA’s executive management, during a Progressive Liberal Party (PLP) branch meeting on Grand Bahama on Saturday night where he asserted: “Enough is enough.”

Tribune Business was sent an audio recording of the meeting, later widely circulated on social media, during which the Prime Minister said the “rubber has hit the road” in relation to the Government’s move to formally demand that the GBPA pay $357m to reimburse it for providing public services in Freeport whose costs exceed tax revenues generated by the city.

Twice denying that his administration was attempting a “hostile takeover” of Freeport’s quasi-governmental authority, Mr Davis signalled his frustration that the two families had dragged out negotiations over the Government’s offer to acquire their GBPA interests by adding that he was “not going to be held back no more”.

He said he had warned the Haywards and St Georges, and the trustees for their respective estates, that the Government would act if certain “timelines” he had set were not met, hence the submission of the formal payment demand. The GBPA is now in the 30-day period during which it must either meet the payment demand or the two sides otherwise head to arbitration in a bid to resolve the dispute.

Mr Davis, lamenting that Freeport’s economy continues to lag while other Bahamian islands continue to thrive, told PLP members that “it is intolerable to let the status quo continue” while effectively pinning all the blame for the city’s demise on the GBPA, its owners and management failing to fulfill their development, governance and investment promotion obligations under the Hawksbill Creek Agreement.

Implying that the GBPA, rather than the Government, should have taken responsibility for financing the $200m redevelopment of Freeport’s Rand Memorial hospital, the Prime Minister said the fact that the Public Treasury has spent far more in the city than it has earned - an assertion heavily disputed by the GBPA - means Bahamian taxpayers have been “subsidising the profits” of the Hayward and St George families.

Arguing that he has “been on the roller coaster before”, Mr Davis said Freeport, its residents and, by extension, wider Grand Bahama have suffered multiple false dawns when it comes to fulfilling the city’s economic and development potential. He added that it was common to get “expectations going, and say what is going to happen and then, all of a sudden, it slides right back into the abyss”.

“You know when you can see Freeport doing well, hopes and aspirations rise, only to be dashed,” he added. “I’ve been through that and done that. Been here and seen it.” Mr Davis said that, when his administration took office in September 2021, it was determined to reverse Freeport and Grand Bahama’s economic decline and get it moving forward.

Then, delivering his withering assessment of the two families, who each own 50 percent of the GBPA’s equity via a complex, multi- layered corporate web, the Prime Minister added: “The present ownership structure or the present owners don’t have the capacity to realise the promise and potential of Grand Bahama.”

Mr Davis said he met with the Haywards and St Georges “to invite them to exit the ownership”, but implied that they “danced along with that” request and strung negotiations along without any real commitment or desire to sell. “I met with them personally and expressed my personal lack of confidence in their ability to” fulfill the GBPA’s Hawksbill Creek Agreement obligations and get Freeport moving, he added.

Reiterating this stance, the Prime Minister added: “This is what this is about because I called a meeting with the shareholders, trustees and the minister for Grand Bahama [Ginger Moxey] was present, [and] I said to them I have no confidence in their ability to continue..

“I gave them some timelines. I indicated then that if I didn’t have the timelines what will happen. They didn’t meet my timelines. That’s what’s happening. That’s where we are. It ain’t personal. It’s the people of Grand Bahama. I know that we have the ability to turn Grand Bahama around.

“We have the ability to ensure that the promise of Grand Bahama, the Port Authority, as was originally envisaged by the ‘Bend or Break’ speech [by Sir Lynden Pindling] can be realised, will be realised. And it’s not a hostile takeover. This will be a negotiated process with an end that will all work for the benefit of Grand Bahamians.”

Tribune Business revealed back in November 2023 that the Government had been speaking to both the St George and Hayward families, and their representatives, about its willingness to acquire the GBPA for months. Talks were said to have focused on a price in the $150m-$175m range for the entire concern.

This newspaper was told the St George estate was united in its willingness to exit, and sell, its 50 percent interest in the GBPA and its Port Group Ltd affiliate if the terms and price were right. However, the intentions of the Hayward side were understood to be less clear.

Mr Davis, meanwhile, said he had noticed a “recent anxiety” on the part of the GBPA’s owners and management to give the appearance of being proactive, pointing to the recent opening of its Nassau office and a potential trade and investment promotion mis- sion to Atlanta. However, he questioned why no such activities have occurred “in the last ten years”.

The Prime Minister then turned to Carnival’s private cruise port project, which has morphed into the $600m Celebration Key, bemoaning the fact it was moved from outside the Freeport area to within it under the former Minnis administration. This, he signalled, meant the GBPA would enjoy a greater share of the project’s benefits and the Government a lesser portion.

“If you want to appreciate what this is all about, just take the Carnival port,” he added. “The Carnival port was an initiative under the Christie administration, of which I was part. It was to develop a port in eastern Grand Bahama.

“Understand it. What’s the benefit of east Grand Bahama? Part of the agreement we struck was to ensure local vendors were operating in that port... Who’s going to benefit from it being over there? The Bahamian people and Carnival. Carnival was all for it. Next thing you know, we lost the election. This port deal is now in the Port area.”

Now, Mr Davis said, Carnival is paying licence and other fees to the GBPA, which was against the Christie administration’s original plan. And the Prime Minister also blasted the former Minnis administration for failing to enforce the Grand Bahama (Port Area) Investment Incentives Act 2016 which made the renewal/ extension of certain tax breaks conditional on the GBPA fulfilling certain commitments.

“First of all, the concessions in the Hawksbill Creek Agreement were never intended to be for ever,” Mr Davis said. He said they were extended for 30 years, then another 20 years, with the Ingraham government doing this in return for the GBPA under- taking and meeting certain terms and conditions.

While there was some controversy over whether the GBPA fulfilled its side of the bargain in the 1990s, the Prime Minister added: “What I want to point out is when they expired in 2015, we said we’re not going to extend the concessions or the incentives you get.”

The GBPA argued that their renewal was essential for Freeport’s economy, and Mr Davis, who was then serving as deputy prime minister, said of the Chris- tie administration’s attitude: “OK, I tell you what. From time immemorial you have been promising to do ABCD and not done it.

“Come up with a plan for what you’re going to do, come up with a masterplan and once you get it done you will get the concessions, and for various big industries you get commitments from them and you’ll get the concessions. They were granted, but granted conditionally. If you do this you will get them, if you don’t they will get clawed back.

“They signed an MoU (Memorandum of Under- standing) agreeing to do all these things and, yes, you can claw it back if we don’t do all these things.” However, the PLP lost the 2017 general election, and Mr Davis said the Minnis administration “came with a Bill to reverse everything we’d done, and not just reverse it but carry it back to 1955” when the Hawksbill Creek Agreement was first signed.

However, the Prime Minister said his predecessors “got cold feet” and, while the Bill to revoke and replace the Grand Bahama (Port Area) Investment Incentives Act 2016 remained on the House of Assembly agenda from 2017 to 2021, it was never brought up for debate. Instead, the Minnis administration renewed the incentives on an annual basis, but they are now expired.

Mr Davis sought to reassure the GBPA’s 3,000-plus licensees that their real property, income and capital gains tax breaks are safe. “The licensees need not worry. I’m not coming after them,” he asserted. “I’m not coming after anybody. I’m just trying to help everybody, help people in Freeport. It’s not a hostile takeover but enough is enough.

“I’m here not because I want to be here. I gave them [the Haywards and St Georges, and their trustees] a timeline, told them what would happen... and can’t have you holding me back.” Mr Davis said he was not going to wait for the next general election to interrupt action he feels it necessary for the Government to take, as the GBPA and its owners “don’t see it as their responsibility to look after the city” any more.