Thursday, May 18, 2017
`By NEIL HARTNELL
Tribune Business Editor
The Nassau Container Port’s operator yesterday said it plans to re-submit to the new government a request for 14 acres of extra land at Arawak Cay, in a bid to crackdown on fraud and boost the Public Treasury.
Michael Maura, Arawak Port Development Company’s (APD) chief executive, told Tribune Business that the BISX-listed port operator had first submitted the proposal to the former Christie administration four years ago, but received no reply.
Disclosing that APD now planned to approach the newly-elected Minnis government with the idea, Mr Maura said the 14 acres of land would be used to expand the Nassau Container Port and assist the Government.
He revealed that APD’s plans for the site included a Road Traffic Department (RTD) licensing and inspection facility specifically to deal with imported vehicles entering the Bahamas.
Its thinking also involved a dedicated container examination facility for Bahamas Customs, enabling it inspect twenty-foot equivalent (TEU) units and larger containers at the port rather than off-site, enabling it to better crackdown on fraud, smuggling and contraband.
“We had submitted a request for additional land, and this goes back four years ago,” Mr Maura revealed to Tribune Business. “We submitted the same request a few times, the last one going in three-and-a-half months ago.
“We had hoped to expand the port, improve services to customers, and assist the Ministry of Finance in improving collections and controls.”
He added: “We will be sending this request to this government, and hope to get a favourable response.
“If the Government replies to us and gives us additional land, we will be making additional investments in properties and facilities, which will assist in improving the fiscal performance.”
The Government holds a 40 per cent equity stake in BISX-listed APD, which is almost a public-private partnership (PPP), and it is likely to welcome any efforts to enhance tax collection with the Public Treasury desperate for every possible cent of revenue.
Mr Maura said the targeted land was adjacent to the Nassau Container Port’s southern boundary, running from just west of its existing entrance all the way along the perimeter to its western boundary in the shape of “a skinny rectangle”.
“What we have contemplated [for that land] is that we’re having conversations with the Road Traffic Department about actually putting an inspection and licensing facility at the Container Port,” Mr Maura told Tribune Business.
“As you import your vehicle from abroad, and pay VAT and Customs duties, you would be able to get your vehicle licensed.”
Mr Maura said APD’s plan was to construct offices for RTD and Customs personnel on the sought land to facilitate vehicle inspection, registration and associated revenue collection, along with other amenities to aid the latter’s revenue collection efforts.
“We were looking at a container examination facility to support Bahamas Customs’ efforts to stop fraud,” he told Tribune Business.
“They have their risk analysis, and if they determine someone is importing from a questionable shipper, or an importer was previously guilty of making a false declaration, they will have a facility to go to when they pull a container off the ship.
“It will allow Customs to conduct examinations on property, rather than let it [the container] leave the site. That begins to create a culture of compliance that helps the Public Treasury, which is so desperate to collect the taxes.”
Mr Maura said APD also planned to construct further commercial offices and facilities on the 14 acres, which it will rent out to generate further income streams for itself and its shareholders.
Mr Maura’s comments came as APD revealed it has blown past its 2017 full-year profit projections in just nine months, with total comprehensive income at end-March standing at $8.074 million - 60 per cent ahead of the $5.044 million forecast for the 12 months.
Year-to-date, APD’s bottom line is 141 per cent up on 2016’s comparative of $3.349 million, which Mr Maura attributed to the boost in TEU and import volume produced by Baha Mar and Hurricane Matthew rebuilding.
He acknowledged that APD had budgeted “conservatively” for the 12 months to end-June 2017, but said the resumption of Baha Mar construction, together with the increase in building material imports as a result of Matthew-related insurance payouts, had driven TEU volumes “about 8.5 per cent” higher.
APD set TEU volume records for five of the six months that immediately followed Matthew’s passage in early October 2016, and Mr Maura said the port operator also benefited from the collection of rental payments from Baha Mar that had been outstanding for more than a year following the Chapter 11 bankruptcy filing.
Storage income from containers was also up, as a result of Tropical Shipping and Mediterranean Shipping Company (MSC) leaving shipping containers on APD’s premises for an extended period of time.
Mr Maura said Baha Mar’s phased opening, which will take place over the next six to nine months, would ensure an anticipated “improvement in [TEU] volumes” lasts into APD’s next financial year.
“We would expect, through the fiscal year-end of June 30, to get the benefits of the impact of Baha Mar, and expect some of that to continue through till the next fiscal year,” he told Tribune Business.
But, with Matthew-related imports set to soon taper off, Mr Maura warned that APD was unlikely to enjoy the growth seen this year during its 2018 financial year.
“We would not anticipate that kind of growth next year,” he explained.