The Tribune

By NEIL HARTNELL

TRIBUNE Business Editor

nhartnell@tribunemedia.net

THE OPPOSITION’S leader yesterday asserted it is “highly unlikely” a newly-unveiled policy will resolve his party’s concerns that public-private partnership (PPPs) deals are really off-the-books loans designed to keep debt off the Government’s balance sheet.

Michael Pintard told Tribune Business he is still waiting for “evidence” that the Davis administration will be “open and transparent” about the agreements entered into during its first term in office, including the $437m worth of road projects identified as PPPs in the 2026-2027 Budget, as the Government tabled a revised policy governing such investments in the House of Assembly.

He spoke out as Michael Halkitis, minister of finance, signalled that the Government accepted a key fiscal watchdog’s call for greater disclosure, transparency and improved reporting of such deals where private sector capital, developers and managers are engaged to deliver infrastructure and public services for the Bahamian people’s benefit.

Addressing the House of Assembly just prior to tabling proposed revisions to the Government’s first-ever PPP policy, which was unveiled in 2018, plus a “private sector first policy” that pledges to give private companies first go at “commercially viable” projects, Mr Halkitis said the Davis administration views recent Fiscal Responsibility Council reports on the topic as “constructive recommendations” rather than “criticism to be resisted”.

The Council, in its report reviewing the 2026-2027 Budget, had called for more disclosure on the $437m worth of road improvement projects as fiscal documents “provide only a basic description of PPPs, including project name, the name of the private sector partner, project cost and the designated project location”.

To address this, it urged: “As the Government has moved increasingly towards PPPs for delivery of major infrastructure projects, the Fiscal Responsibility Council views publication and implementation of this assessment framework as an urgent and necessary priority in the interests of providing a platform that will allow for comprehensive disclosure, and the assessment and management of risk.”

Apart from roadworks projects on Eleuthera and Exuma by Bahamas Striping and its affiliates, valued at $180m and $62m, respectively, the $437m worth of PPPs identified in the Budget 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 at Mangrove Cay, Andros, by GDA Paving and Construction and Ambi's Paving.

Mr Halkitis, asserting that the revised PPP policy aims to address such concerns, told the House of Assembly: “The Fiscal Responsibility Council also raised observations regarding PPPs and the need for enhanced disclosure and reporting of PPP-related obligations. The Government welcomes these observations, and views them as constructive recommendations that support our broader objective of strengthening fiscal transparency and fiscal risk management.

“It is important to note that PPPs are not undertaken outside the Government’s fiscal and legislative framework. These arrangements are considered as part of the Government’s broader planning and risk assessment process, and are subject to oversight under the Public Finance Management Act. The Government agrees that there is value in continuing to strengthen the policy and institutional framework governing PPPs.”

Mr Halkitis said yesterday’s tabling of the revised PPP policy delivered on his promise in the end-May Budget that this would be released, together with supporting documents including a “manual” that sets out how it is to be implemented, after Parliament returned from its summer recess.

He added that the Government has worked with Misca Advisors, a UK-based consultancy, to develop a “comprehensive PPP framework” that “is intended to build upon and modernise the existing PPP framework” developed in 2018 “by strengthening transparency, improving project identification and application processes, refinancing risk allocation and enhancing project approval procedures”.

“The new framework incorporates internationally-recognised value for money assessments, fiscal affordability analysis and fiscal risk assessment mechanisms,” Mr Halkitis said. “In that regard, the observations made by the Fiscal Responsibility Council are not regarded as criticisms to be resisted but, rather, as recommendations that complement the Government’s efforts to modernise and strengthen the PPP framework.”

A comparison of the 2018 PPP policy with the revised version, which is dated April 2, 2026, but was only tabled in the House of Assembly, shows the Government has retained much of what its Minnis administration predecessor left in place albeit with some new clauses added. The most noticeable change is the addition of a brand-new section that sets out the Government’s “vision” for PPPs, and what they are supposed to deliver for The Bahamas and Bahamian people.

Other alterations include two new responsibilties for the PPP steering committee, which has seen these increased from six to eight through the addition of obligations to affirm that projects comply with the new policy and assess the broader impact they may have on the Government’s financial position.

“Review PPP projects at key stages, prior to submission for approval, to confirm that the requirements of this policy and the PPP policy manual and assessment framework have been met,” the revised policy now charges the PPP steering committee. “Consider the fiscal implications of PPP projects, including affordability and contingent liabilities, in consultation with the Ministry of Finance.”

The fiscal safeguards are also confirmed in a new later section in the revised policy, which states: “The Ministry of Finance will be responsible for reviewing the fiscal implications of PPP projects and confirming that these are consistent with fiscal priorities and the Government’s fiscal framework, including the requirements of the Public Finance Management Act.

“PPP projects will not proceed to procurement without confirmation from the Ministry of Finance that the fiscal implications of the project are acceptable.” However, one observer, with experience of working in government, described the revised PPP policy as “much ado about nothing” given that the modifications appeared to be relatively limited and most of what the Minnis administration left has been retained.

And they further challenged whether the Davis administration will “follow it” given that the $437m worth of existing road project PPPs appear neither to conform with the 2018 policy nor the updated version which, according to Mr Halkitis yesterday, will “favour private sector involvement for infrastructure projects that are commercially”.

None of these road projects will generate investment returns, or any income, for the contractors/developers unless they are intended as toll roads - highly unlikely given the sparse populations of the Family Islands. “How are they going to retroactively assess the PPPs they’ve done?” the source challenged. “The current PPPs do not fit into the policies and model they are proposing for PPPs unless they go and revise them.

“Why haven’t they kept up with the present policy? It’s not like they have a major problem with it. Why not abide by the policy in place given that you have no philosophical difference with it?”

Mr Pintard, the Opposition’s leader, yesterday echoed these concerns by urging the Government to apply its new PPP policy “retrospectively” or retroactively to its existing deals and “open the books” on projects that his party has charged are really “off the books” loans designed to keep debt and liabilities off the Government’s balance sheet even though Bahamian taxpayers still have to repay them.

“What happened to the PPP policy that already existed?” Mr Pintard asked. “The real problem confronting The Bahamas is not that there was no PPP policy. The real problem is that the Government has never demonstrated that it complied with the existing 2018 PPP policy when advancing many of the PPP arrangements entered into or expanded since it took office……

“Seeing that the Government didn’t follow the 2018 framework, why are we to believe they will pay any attention to their 2026 version? The Government has increasingly promoted PPPs as a key vehicle for infrastructure delivery across airports, roads, energy and public facilities. Budget documents identify a PPP portfolio valued at approximately $437m.

“Yet their own Fiscal Responsibility Council has had to point out that there is no adequate mechanism for disclosing critical PPP information, including contract dates, contract duration, whether projects are revenue generating, and the nature and extent of debt obligations associated with those projects. In other words, the Bahamian taxpayer has been kept in the dark.”

PPPs are typically designed to reduce the financial stress on cash-strapped governments by contracting the private sector to provide the funding, development and expertise to construct much-needed infrastructure or run public services.

The Government’s cash flow pressures are eased by requiring the private sector to finance the up-front capital costs, with the latter earning a return on investment - and paying back any lender - from the revenue streams generated by infrastructure assets they develop or services provided.

The Opposition, as reiterated by Mr Pintard yesterday, is arguing that many of the projects touted by the Davis administration as PPPs do not fit this model or meet this criteria. Mr Halkitis previously said the Government’s position, though, is that PPPs need not be income generating for the private sector partner.

However, the Fiscal Strategy Report 2026 previously disclosed that some of these PPP liabilities have “crystallised” on the Government’s books as a debt that has to be repaid by Bahamian taxpayers.

The document, released alongside the 2026-2027 Budget, revealed that some $43.1m of the $140m PPP funding that the Africa Export-Import Bank has provided for road infrastructure upgrades on Eleuthera and Cat Island has now become a liability that the Government has to repay from the Public Treasury.

“The Government faces a potential contingent liability of $140m arising from financing arrangements with the African Export-Import Bank in respect of public-private partnership transactions with Bahamas Striping and Cat Island Infrastructure Company. At the time of preparation of this report, approximately $43.1m of this liability has crystallised in respect of these arrangements,” the Fiscal Strategy Report said.

The 2026-2027 Budget shows that the Bahamian Government is already making interest payments to Africa Export-Import Bank. Some $316,751 worth of interest was paid to the African lender during the 2024-2025 fiscal year, with a further $308,137 expended during the first nine months of 2025-2026 despite no provision having been made for the latter when the previous Budget was passed in June 2025.

Moving forward, the Government is shown as making six-figure interest payments to the Africa Export-Import Bank for the next three years, with some $532,362 due in the upcoming 2026-2027 fiscal year. And, starting this year and continuing for each of the subsequent two Budget years, the Government will be repaying the African lender some $1.67m in principal as well.