The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Opposition’s chairman yesterday strongly signalled that the Free National Movement (FNM) will not proceed with the $268m project for a second New Providence hospital if it wins the upcoming general election - provided the Chinese financing deal contains no “poison pill”.

Dr Duane Sands, the ex-health minister who is the FNM’s Bamboo Town candidate, reiterated to Tribune Business his party’s view that the proposed Perpall Tract healthcare facility is a “white elephant” and that the Bahamian people would receive better value for money from public healthcare improvements by upgrading the existing Princesss Margaret Hospital (PMH) site.

Arguing that the Davis administration has provided “no good reason” for “deviating” from long-standing plans for PMH’s enhancement, which had been in progress under successive Progressive Liberal Party (PLP) and FNM governments, he branded the new hospital a “hare-brained scheme” that was rejected by all healthcare stakeholders, including Bahamian doctors and nurses.

However, voicing concern that the “devil is in the details”, Dr Sands told this newspaper that he and the FNM fear the Government will have inserted a “poison pill” into both the $195m financing deal with the China Export-Import Bank - plus the new hospital’s construction contract with China Railway Construction Corporation - that would make it impossible for a Michael Pintard-led administration to exit the deal without incurring significant penalties and exposure for Bahamian taxpayers.

The FNM chairman’s concerns may be well-founded, because clause 5.5 of the December 30, 2025, loan agreement signed between the Government and China Export-Import Bank appears to commit The Bahamas to not withdrawing from either the loan or the hospital project itself. “The borrower [the Government] shall ensure and hereby undertake that the commercial contract shall not be terminated or cancelled,” this part of the agreement states.

The Opposition, in launching its general election campaign last Saturday, was careful to avoid mentioning the second New Providence hospital project in a three-page release containing candidate statements on healthcare, including from Dr Sands.

“We will redevelop the Princess Margaret Hospital on its current campus and upgrade the Rand Memorial Hospital. We listened to Bahamian doctors who warned that the hospital upgrades are needed,” Dr Sands was quoted as saying. “We will deliver on the long-promised multi-storey medical, surgical, maternal and child health facility at the Princess Margaret Hospital, and the expansion and modernisation of the Rand Memorial Hospital in Freeport, Grand Bahama.”

The Opposition’s chairman was also guarded when contacted by Tribune Business yesterday about the party’s plans for the Perpall Tract hospital, for which a formal ground-breaking ceremony has yet to be held, but all but signalled the party would not proceed with the project provided it is not “locked in” to the agreements with both Chinese state-owned entities.

“Let me put it this way,” Dr Sands told this newspaper. “What we have said, and I have said, is that our focus would be on the redevelopment of acute care in New Providence at the PMH campus. Now, you can read into that whatever you wish, but it was deliberately [worded], and we believe that any investment is best spent if we improve what we have before we go on developing some white elephant elsewhere.”

Asserting that the Davis administration has abandoned plans “under the Minnis, Christie and Ingraham administrations” to modernise, improve and expand PMH’s healthcare infrastructure and service delivery. “This administration can give no good reason as to why they have decided to deviate from these carefully considered plans that were paid for by the Bahamian people and developed in consultation with multiple stakeholders,” Dr Sands said.

“Now, they have come up with this hare-brained scheme and cannot say where it’s come from in direct opposition to physicians and doctors who say this is a bad idea, not to mention people living in the area who are concerned about the environmental impact. We have not been impressed that they have done an adequate environmental impact assessment (EIA), assessed the human resources impact and equipment and supplies impact. You have heard me and us say it repeatedly: It makes no sense.”

The Minnis administration had obtained $115m in financing for its planned PMH upgrades from Banco Santander, which was guaranteed and underwritten by the World Bank’s Multilateral Investment Guarantee Agency (MIGA). This carried just a 1.8 percent interest rate that was lower than the 2 percent now-offered by the China Export-Import Bank for the second New Providence hospital project.

However, this financing was ultimately rejected by the Davis administration and returned to the lender. Dr Michael Darville, minister of health and wellness, previously explained that the Government was uncomfortable that a $20m portion of the World Bank-guaranteed funding had been allocated to funding the start-up and expansion of micro, small and medium-sized enterprises (MSMEs).

Dr Hubert Minnis, though, previously told this newspaper that the $115m financing would have constructed at PMH what the Davis administration is now seeking to develop at Perpall Tract. He said it would have funded a “four-storey wing for exactly what they are trying to do now - maternal and child care, and additional wards, while some monies were for repairs and equipment for the hospital.

“That would have been far better than what they are doing now,” the ex-prime minister added. “The recommendation from the professionals was that should be done at the PMH site where all the infrastructure was already as opposed to a new site where they would have to put that infrastructure in and double the price. If they had done that, none of this [the Chinese loan] would be an issue.”

Dr Darvile could not be reached for comment before press time last night. However, he previously told the House of Assembly that studies dating back to the 20th century had shown that a growing Bahamian population as well as the rise in non-communicable diseases, coupled with the limited size of the PMH campus, had recommended a new hospital would be required.

The proposed 200-bed Perpall Tract hospital will focus on maternal, newborn and child care, the minister said, providing increased bed and care capacity while also leaving The Bahamas better prepared to deal with future COVID-19 style pandemics by incorporating facilities better able to cope with mass casualty events.

Yet Dr Gemma Rolle, the then-Medical Association of The Bahamas (MAB) president, in 2024 revealed that a survey of her members found more than half felt the second New Providence hospital is not “fiscally sound”, adding: “There’s no hospital without the physicians.”

She asserted that there were multiple unanswered questions over the proposed project, including why the Government was investing hundreds of millions of dollars into “a brand new, state-of-the-art hospital “when we cannot even utilise what we have now”.

Pointing to staff shortages at PMH, which at that time meant only four of its seven combined operations and endoscopy rooms could be used at any one time, she challenged why the focus was being placed on the Perpall Tract plans when the public healthcare system was struggling to “optimise the time and space” it presently has for surgeries and operations. The new hospital is forecast to require some 650 staff on top of the existing labour shortages within the Bahamian public healthcare system.

Meanwhile, the deal agreed between the Government and China Export-Import Bank and China Railway Construction Company also pledges that the use of Chinese goods, technology and services in the new hospital’s construction will be given “preference”.

In a clause that does not seem made for Bahamian vendors, section 2.5 of the loan agreement stipulates: “The goods, technologies and services purchased by using the proceeds of [the loan] facility shall be purchased from China preferentially.”

And the construction contract also exempts China Railway Construction Company from paying Business Licence fees on the value of the project, as well as providing the usual VAT and Customs duties tax breaks on equipment, machinery and supplies imported into The Bahamas for the project.

“The employer [the Government] agrees to exempt the contractor from any Business Licence fees due on the value of the project, VAT, Customs and import duties, and any other applicable taxes to the goods, materials, equipment and machinery procured for the execution of the project,” the construction contract adds.

“The rmployer shall providet the necessary documentation and approvals required to facilitate these exemptions, ensuring compliance with the relevant laws and regulations of The Bahamas. The employer shall obtain all necessary approvals, permits, and documentation from the relevant authorities to ensure the aforementioned exemptions.”

This is in addition to clause 5.5 that seemingly commits the Government to not abandoning either the construction contract or loan agreement. Dr Sands, anticipating this, told Tribune Business: “To be very clear, without us seeing the actual contractual obligations they [the Government] have signed on to, we don’t know what poison pill may have been used.

“It may be the type of thing where the Bahamian people are locked into a bad deal by this administration. We need to see the devil in the detail. Let’s see what’s written there to determine what course of action is possible.”

Dr Sands asserted that the Government is making “wonderful expensive promises”, such as the $280m borrowing to buy Grand Bahama Power Company, when it does “not have the financial headroom to meet its bills” now. He also pointed to the lack of progress on long-promised projects such as Grand Bahama International Airport.