The Tribune

By Neil Hartnell

Tribune Business Editor

nhartnell@tribunemedia.net

An ex-prime minister yesterday argued the Government should have exploited $3bn-plus in surplus banking system assets to entice Bahamian investors to finance New Providence’s new hospital rather than the Chinese state, asserting: “The time has come to encourage our own”.

Dr Hubert Minnis, speaking in the wake of debate on the Parliamentary resolution authorising the Government to borrow $201.2m from the Beijing-owned China Export-Import Bank to fund the project, challenged why the Davis administration had decided not to seek the financing from local banks and institutional investors instead.

With $3.117bn in excess liquid assets, representing funding available for lending/borrowing purposes, clogging the Bahamian commercial banking system at end-October 2025, the Killarney MP said there was more than sufficient capital available for banks - as well as the likes of pension funds, investment funds and insurance companies - to deploy in financing the new 50-acre hospital to be located at Perpall Tract.

“I’m arguing that the time has come,” Dr Minnis told this newspaper, while reiterating his fears that the new hospital will become “a white elephant”. He added: “We have got $3bn in liquidity. The time has come to encourage investment in our country by our own. Why can’t the Government utilise that?

“We have pension money, insurance money, investors who want to invest. Create opportunities for investors and our own to make investments.” Dr Minnis said Bahamian capital, via the Bahamas Investment Fund’s initial public offering (IPO), had helped to finance the Nassau Cruise Port redevelopment and argued that it could have played a similar role for New Providence’s second hospital.

However, it is unclear whether Bahamian capital could have financed all, or much of, the new hospital’s total projected $267m cost let alone the equal of the China Export-Import Bank’s 70 percent contribution towards this. Both sums significantly exceed previous record raises in the Bahamian capital markets, but Dr Minnis reiterated that the Government should “lead the charge” in creating investment opportunities in their own country for local investors.

Asserting that Bahamians should fund “whatever portion can be financed locally”, he added: “Don’t take all from the Chinese. There are many Bahamians who want to invest and are anxiously looking for investment opportunities. If the Government is interested, it can lead the charge.”

However, Dr Minnis conceded that a portion of the new hospital’s financing would have to be sourced in US dollars “because we have to purchase some things from away. We would not want to use up all our reserves” by converting local investors’ Bahamian dollars into foreign currency.

Dr Michael Darville, minister of health and wellness, told the House of Assembly on Wednesday that around $70m, or 30 percent, of the required financing for the new New Providence hospital will be sourced either locally or internationally, or via a combination of both. However, he gave no details on how this will be structured.

Suggesting that securing the China Export-Import Bank financing is “in the closing stages”, with parliamentary approval of the borrowing resolution a key step in the process, Dr Darville disclosed that the Beijing-owned lender - which also financed the $4.25bn Baha Mar resort project - has selected China Railway Construction Corporation as the hospital’s primary contractor.

China Railway Construction Corporation, which is listed on both the Shanghai and Hong Kong stock exchanges, is nevertheless described ad a Chinese state-owned entity that was the world’s second largest construction and engineering company by revenue in 2014. However, research by Tribune Business found suggestions that it may have been caught in the 2020 net cast by US president, Donald Trump’s executive order forbidding US companies and individuals investing in entities that have links - past or present - to China’s People’s Liberation Army (PLA).

Dr Darville reiterated that China Export-Import Bank is offering a “favourable interest rate” with the loan’s repayment spread over a 20-year period. He added that it was also providing “a rider of an additional five-year grace period”, although he did not distinguish between whether this involves interest as well as principal repayments.

And, noting that the decision to use reinforced concrete instead of “more expensive steel coating” has produced “significant construction savings of $22m”, cutting the total cost from an initially projected $290m to $268m, the minister added: “Sixty-seven million dollars is to be sourced locally, or locally and internationally, by foreign lenders.

“The final financing structure provides approximately 70 percent of the project being financed directly by China Export-Import Bank, and the remaining 30 percent to be financed locally and/or in the international market.”

Aside from the financing, Dr Minnis told Tribune Business that the Princess Margaret Hospital (PMH), New Providence’s legacy public tertiary care facility, has gone backwards on bed capacity despite studies from 17 years ago - when he was minister of health under the last Ingraham administration - projecting that this needed to be expanded by at least 50 percent to keep pace with population growth.

“In 2007, when I was a doctor in the hospital, we had 425 beds. We were a 425-bed hospital,” the ex-prime minister asserted. “In 2008, a survey done by the Public Hospitals Authority found that to cope with the rate of population growth and disease spread we would need 600-650 beds by 2020.

“In 2007, we had 425. Today, we have less than 300. So, obviously, you see where the problem is: The lack of beds.” And building a new hospital, Dr Minnis said, will not solve the medications, supplies, staff and equipment shortages plaguing the Bahamian public heath system.

“The hospital is not the problem,” he said. “The problem is we don’t have supplies, we don’t have the staff, we don’t have the equipment. We’re not correcting the problems that we have. There are three examples that exist today.

“The mini-hospital in Abaco, we cannot staff if. There’s some equipment purchased years ago that is still in the plastic. Abaco, Exuma and Inagua - we don’t have the supplies, staff and equipment to run them properly. We have three perfect examples today, and now you want to create another ‘white elephant’ where you know we don’t have the staff.”

Dr Darville on Wednesday asserted that New Providence’s population and, by extension, The Bahamas, has “outgrown” PMH for decades and pointed to such conclusions reached in the “Dawson Report” dating from 1999. He added that the public health system’s tertiary care challenges stemmed from an “outdated facility we have outgrown”, while other studies had suggested existing “congestion” at PMH means the location cannot support expansion or upgrades without disrupting patient care.

Hence the case for the second New Providence hospital. However, Dr Minnis yesterday asserted that he was surprised that Dr Darville was unable to reveal the likely ratio of Bahamian workers to Chinese in the construction workforce given that this would be a key part of the loan terms.

If they were not known, he suggested that loan negotiations are not concluded or as far advanced as the minister suggested, adding that the normal ratio for any Beijing government-funded project is 80 percent Chinese and 20 percent local (Bahamian). Dr Darville, though, pledged that this information and all documents related to the new New Providence hospital project will be tabled in the House of Assembly at the “appropriate time”.

The Minnis administration has secured $115m in financing, provided by Banco Santander and underwritten by the World Bank’s Multilateral Investment Guarantee Agency (MIGA), with around $85m of this sum dedicated to construction of a four-storey tower at the existing PMH site similar to the Critical Care Block.

This would have included an accident and emergency (A&E) unit on the ground floor, with additional beds on the third and fourth levels to address the hospital’s capacity challenges. The World Bank-guaranteed loan also had an interest rate of just 1.879 percent - similar to the 2 percent rate obtained from the China Export-Import Bank for the hew hospital.

However, following the 2021 general election, the Davis administration elected not to proceed with the PMH plans and returned the funding back to the lender. Dr Michael Darville, minister of health and wellness, explained that the Government was uncomfortable that $20m of the financing had been allocated to funding the start-up and expansion of micro, small and medium-sized enterprises (MSMEs).