By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The proposed ‘one-stop shop’ for investors will “starve the Port Authority of municipal income” vital to Freeport’s maintenance, a well-known QC has warned.

Fred Smith QC, the Callenders & Co attorney and partner, told Tribune Business that the Government’s seeming ‘takeover’ of business licensing in Freeport would likely see associated fee income diverted to the Public Treasury.

This, in turn, would deprive the Grand Bahama Port Authority (GBPA) of a valuable revenue source that it has traditionally used to finance upgrades to Freeport’s infrastructure.

The Memorandum of Understanding (MoU) agreed recently between the Christie administration and the GBPA promised that the two would collaborate on the creation of a so-called ‘one-stop shop’ to address the needs of all investors in Freeport.

Well-placed Tribune Business sources, speaking on condition of anonymity, confirmed that from the Government’s perspective this ‘one-stop shop’ means Nassau taking over all business licensing and investor approvals in Freeport.

“The Ministry of Grand Bahama is going to administer all licensing on a one-stop shop basis,” one source told Tribune Business. “All work permits and approvals will come through the Ministry. The Port Authority, and the ‘Pink Building’, will become a rubber stamp.”

This newspaper understands that the Christie administration is moving rapidly to translate the MoU’s many vague promises into binding commitments via statute laws, which are now being drafted.

Traditionally, while the GBPA has had the power to license Freeport-based businesses as the city’s quasi-governmental authority, a ‘nod’ from Nassau has often been required - especially in the case of foreign direct investment (FDI) or controversial projects.

It is unclear whether the ‘one-stop shop’ plans will result in the complete loss of licensing income to the GBPA, but it is likely that at least some of this revenue stream will be diverted to Nassau.

That possibility, though, did not sit well with Mr Smith, who described it as “a complete abrogation of the Hawksbill Creek Agreement”.

One of the most outspoken defenders of Freeport’s founding agreement, he told Tribune Business: “Every new application for exemption from real property taxes, and any new development, the Government are going to extract or prevent the GBPA from getting a licensing fee.

“The income stream that the GBPA derives here is going to be diverted to the Public Treasury. The Government is going to bleed the Port Authority of income to finance the cost of maintenance and upkeep of infrastructure in Freeport.”

Expressing concern that political considerations would infect the investment approval process in Freeport, Mr Smith added: “Now, every time a non-Bahamian investor acquires five acres or more and wants to get these tax exemptions, or any new developer wants to invest, they will have to agree to pay the Government some type of concession fee.

“The Public Treasury is going to get that, and not the Port Authority..... The Port Authority is going to be starved of municipal income for the administration, upkeep and management of the Port area.”

Some observers may question whether the GBPA has always applied business licence fee income to Freeport’s maintenance in the past, and the Hawksbill Creek Agreement Review Committee’s report acknowledged the uncertainties over who was responsible for what in Freeport’s governance.

“Multiple stakeholders perceive that the current process by which businesses interact with each either central government or the GBPA is cumbersome and inefficient,” the report said.

“For approval of business licences, the committee heard that even when the GBPA quickly grants initial licenses, central government can be slow to act on license applications for non-Bahamians, which are sent to central government for approval.”

Despite GBPA licensees praising the timely approvals process, the Committee’s report said its business licensing criteria “was unclear and applied inconsistently”, creating perceptions of unfairness.

“Potential investors and existing businesses also expressed that they were not clear as to who could answer any questions on license fees, tax concessions, work permit processes and other considerations of importance when deciding to make a new investment,” the report added, setting out the rationale for the ‘one-stop shop’.

The Committee’s report also noted the calls for greater transparency over the GBPA’s sources, and uses, of funds, and for “clearer roles and responsibilities between GBPA, local government and central government”.