The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Taxpayer subsidies to loss-making state-owned enterprises (SOEs) are set to increase by more than $103m to $655m during the upcoming 2026-2027 fiscal year, driven largely by expanded healthcare spending, with other efforts focused on boosting transparency and efficiency for public-private partnerships (PPPs).

Documents released during yesterday’s unveiling of the 2026-2027 Budget reveal that total subventions to the likes of Bahamasair, the Water & Sewerage Corporation, University of the Bahamas (UoB) and Straw Market Authority are forecast to increase by 18.8 percent from the $551.015m projected for the current fiscal year.

The bulk of the increase, around $64m, comes from increased taxpayer and Public Treasury support for the Government’s drive to invest in healthcare infrastructure throughout The Bahamas and thus improve access to critical treatment for Bahamians. The Public Hospitals Authority (PHA) is set to enjoy a near-$40m subsidy increase, growing from a forecast $247.855m in the present fiscal year to $286.056m in 2026-2027.

And the National Health Insurance Authority (NHIA), which oversees the Government-run and financed healthcare scheme bearing the same name, is set to receive a 50 percent increase in its subsidy from $48.2m to $72.7m. This could provide sufficient funding to finally cure long-standing complaints by NHI doctor providers, who have asserted that the scheme has been two months behind in paying them for services rendered for up to two years now.

Questions, though, are likely to be asked over whether some subsidy estimates are realistic. The Bahamas Public Parks and Beaches Authority, a source of pre-election controversy over its spending, has only been allocated $29m in taxpayer subventions for 2026-2027 - the same as the current fiscal year - even though this budget had been exhausted, and over-spent, at end-March after just nine months with $29.525m used.

There is also a new $18m allocation for the Bahamas Air Navigation Services Authority (BANSA), which only received $3m of taxpayer support during the previous three fiscal years combined through 2025-2026, while the Davis administration’s Afro-Caribbean Marketplace, located at the former International Bazaar in Freeport, is set to enjoy a $2m annual injection for each of the next three years.

The Golden Yolk Authority, which oversees the Government’s domestic egg production initiative, is in line to receive a $2.5m taxpayer subsidy, too, for each of the next three fiscal and Budget periods.

Meanwhile, Michael Halkitis, minister of finance, during the Budget communication told the House of Assembly that the Government has hired international advisors to develop what he described as a ‘PPP Assessment Framework’ by end-summer to govern such structures with the Budget documents showing some $417m worth of such deals as either active or proposed.

Apart from Bahamas Striping’s roadworks projects on Eleuthera and Exuma, valued at $180m and $62m, respectively, these also include Cat Island Development Company’s $124m road upgrade and pipeline works on Cat Island, plus similar $52m and $19m works on San Salvador and Mangrove Cay, Andros, respectively.

These deals have frequently been targeted by the FNM, which has branded them as “off the books” loans designed to keep debt off the Government’s balance sheet and from adding to the annual deficit, and have also been flagged by Fitch, the credit rating agency, and the International Monetary Fund (IMF), the latter of which called for “stronger governance” of PPPs and warned they must generate “public value without creating hidden fiscal liabilities”.

Mr Halkitis, signalling that the Government has heeded the IMF’s advice, said: “We are committed to building greater economic capacity and strengthening the nation’s finances without increasing taxes or placing additional burdens on Bahamian citizens.

“Public private partnerships, or PPPs, remain an important vehicle for delivering major infrastructure projects in a timely manner, while combining public oversight with private sector financing and expertise. They offer a practical means of advancing critical public services and infrastructure in a way that is both strategic and efficient.

“In keeping with the recommendations of the IMF, the Government of The Bahamas has continued to prioritise PPPs as a means of supporting additional investment in critical infrastructure, including airport upgrades and further improvements to the electrical grid. This approach allows the Government to accelerate development in key areas while maintaining appropriate oversight and fiscal discipline.”

He added: “To support this work, the Ministry of Finance engaged Misca Advisors to develop a PPP assessment framework that will strengthen transparency, efficiency, project identification, appraisal and approval.

“This initiative is helping to refine the existing PPP framework, improve risk allocation and incorporate value-for-money and fiscal affordability assessments so that future projects are pursued on a sound and responsible basis. This framework is being refined for publication by the end of the summer.”

Michael Pintard, the Opposition’s leader, reiterated his concerns over the Government’s PPP deals post-Budget yesterday, arguing that large infrastructure projects are “presented as progress but structured in ways that obscure their true cost”.

“Major road projects in places like Exuma and Eleuthera together commit hundreds of millions of dollars in public resources. Yet the Bahamian people have not been shown the full contracts, the long-term payment schedules, the financing costs or the risks taxpayers will bear if things go wrong,” he said.

“These are not minor details. They are essential to understanding whether these projects represent value for money or simply deferred debt that will come due long after the political speeches are over.

“Both domestic and international oversight bodies have warned that these arrangements can quietly load obligations on to future generations. This Budget still is not recognising them for the long-term debts that they are. This careless administration continues to ignore those warnings.”