By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Abaco’s Chamber of Commerce president yesterday called for the island’s Chinese-constructed new port to be designated as a “free trade zone” to make its $39m price tag “pay off”.

Ken Hutton told Tribune Business that the north Abaco port, built by China Harbour Engineering Company (CHEC), would likely require more investment - possibly as much as $8m - if the facility was to exploit multiple commercial opportunities that could turn that part of the island into “a viable commercial hub”.

He was speaking after Desmond Bannister, minister of works, yesterday confirmed to this newspaper that the Ministry of Works had turned the north Abaco port over to the Port Department after certifying that all previously-identified construction defects had been satisfactorily addressed by the Chinese state-owned contractor.

Asked how important an economic asset it will prove to be for Abaco, Mr Bannister said it was “going to be critical for the port to be managed in a way” that attracts the necessary volume of commercial business to sustain it.

“The ministry has turned the port over to the Port Department. Everything is good for them to do what they are supposed to do in relation to it,” Mr Bannister said, although he was unable to recall the exact hand-over date.

The Government’s taking possession had been delayed by construction issues, but the minister confirmed they had been remedied. “One was a challenge with respect to potential flooding, and one had to do with the fit-out of the interior walls,” Mr Bannister added.

“I can’t remember all of them. I knew that there were three things that had to be dealt with, and they were dealt with satisfactorily.” The minister, though, was more circumspect when asked about the new port’s potential impact and importance to the overall Abaco economy.

“I don’t know, quite frankly,” he replied. “It’s going to be critical for the port to be managed in a way that attracts the type of commercial business that Abaco is capable of attracting. Only time is going to tell what kind of success it is going to have.”

Mr Bannister said no construction cost overruns were seen with the north Abaco port project, whose total price tag came within the high $30 millions to low $40 millions range specified at the outset.

Bahamian groups have already expressed interest in operating the CHEC-constructed port via a management agreement, but Mr Hutton yesterday argued that significantly more investment may be required if the facility is to yield any returns on what has been spent already.

The Abaco Chamber chief, who has worked in the shipping industry, said he had been unaware that the port’s handover had taken place but knew it was “imminent”.

Describing its economic potential as an “interesting question”, Mr Hutton told Tribune Business: “There’s a lot of opportunity there. However, there would have to be additional investment made, in my opinion, to see most of those opportunities come to light.

“Specifically, a deeper channel would have to be made, dredged, and most likely the harbour - the basin itself - would have to be deepened..... I suspect the dredging of an approach channel would cost in the area of $7m, and the turning basin will cost another $1m... That would probably be the cost of dredging the channel and basin to a more workable depth.”

Mr Hutton said “most of the opportunities” related to the north Abaco port were “in the area of a free trade zone. It would have to be a free trade zone if the port is to easily service the island.

“The population centres around north Abaco are not sufficient to allow for a second major port of entry. A free trade zone would attract all sorts of ancillary businesses and really turn north Abaco into a viable commercial hub on its own”.

Free trade zones typically allow goods to be imported tax-free at the border, while offering other incentives and concessions to attract businesses to locate within their boundaries. The Bahamas already possesses such a zone in Freeport, and it is unclear whether another, much smaller facility could exist in such close proximity and be sustainable.

Still, Mr Hutton said the north Abaco port had potential uses as a marina and “another boat yard”. While describing the facility as “a beautiful property”, complete with secured entry and warehouses, he added: “In terms of making it work, the $39m investment, to make it pay-off long-term it needs more investment to make it more attractive”.

The Abaco Chamber chief said he suspected The Bahamas would have to turn to foreign direct investment (FDI) for this on the basis that sufficient “appetite” and capital was not readily available locally.

“The issue is going to be, I don’t think the country, I don’t think there’s available capital to do anything with it,” he added. “We’re going to have to look at some FDI to bring any kind of development to that site. I think the appetite locally in The Bahamas is not there, so it will definitely require some FDI.”

Reading between the lines, both Mr Bannister and Mr Hutton seem less than sure about the economic justification and need for the north Abaco port and multi-million dollar outlay on its construction.

Questions have been raised previously about the strategy of locating such a facility in the Cooper’s Town area, given the extra distance from population centres such as Marsh Harbour and the additional logistics and trucking costs that will be incurred.

However, the new port’s handover coincides with the recent threat of an international freight shutdown at Marsh Harbour, the island’s main shipping port, after the Government-owned and managed facility failed its ISPS “mock” inspection on June 18, 2019. That threat seemed to have been averted following the subsequent July 17 inspection.