By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian-led investor group says its revised $25m proposal to transform the Road Traffic Department and "bring The Bahamas up to international standards" will create 300 new jobs if approved.

Franklyn Robinson and Charles Beneby, principals in Bahamas Automobile Safety and Inspection Centre Ltd (BASIC), told Tribune Business they had "never stopped pursuing" their offer of a comprehensive 20-year public-private partnership (PPP) solution for the "headache" created by the Department's multiple woes.

Shrugging off rejections by previous administrations, the duo said they and their international partners were now awaiting the Government's response to submissions showing the financial benefits of a proposal that pledges to overhaul the vehicle inspection and licensing process, secure the issuance of driver's licences and plates, and ensure revenue integrity by eliminating fraud and leakage.

BASIC is offering to constructing a new, purpose-built Road Traffic Department headquarters building in central New Providence and replicate this solution, albeit on a smaller scale, on Grand Bahama and the larger Family Islands such as Abaco, Exuma, Eleuthera and Andros. Smaller islands will be served by a mobile complex that will be responsible for the inspection of vehicles.

It would take over responsibility for overseeing an 18-step vehicle inspection process, including testing of suspensions, brakes, shock absorbers, tyres, gas tanks and under the hood, introducing a far more rigorous system than the current rudimentary checks overseen by the Department itself.

Pledging to introduce the latest technology and "industry best practices", BASIC's November 18, 2019, proposal - which has been seen by Tribune Business - would also provide the required equipment and necessary maintenance with help from its partners. These include MAHA, the inspection gear supplier, and Toennjes, which is a vehicle identification specialist.

The consortium would also, over the project's life, take over responsibility for supplying and securing the Road Traffic Department's "consumables" via a Service Bureau Agreement. This would mean that BASIC and its partners will provide all licence plates, driver's licence cards, vehicle title documents and decal documents while maintaining their security and integrity.

Mr Robinson told Tribune Business that the group was optimistic it could increase the Department's revenues by 2-3 percent per year, in line with driver and vehicle population growth and the introduction of new services such as digital driver's licences.

Revealing that the Government had set it a $50m annual revenue base line, he and Mr Beneby said it would receive 90 percent of the income generated by their PPP model with BASIC and its partners taking just 10 percent.

BASIC's business plan states: "Government's contribution to the PPP would be as low as 10 percent of annual revenue to include an annual services and administrative fee for services to deliver consumables under the Service Bureau Agreement. At current estimates this will amount to a total of approximately $5m."

Arguing that the financial benefits would favour the Public Treasury, Mr Robinson said BASIC had already obtained commitments from a Bahamas-based commercial bank - which he declined to name -and international investors interested in financing the Road Traffic Department PPP if it gained traction with the Government.

He revealed, though, that all wanted to ensure their investment was protected through the Government giving statutory legal effect to the PPP. BASIC also requires the administration's co-operation in obtaining the necessary land for the project both in New Providence and elsewhere.

Mr Robinson said BASIC was eyeing a 10-acre site north-west of Government High School, on the connecting corridor that runs between Millennium Gardens and the national sports complex, as the site for the Road Traffic Department's new headquarters.

Besides having to negotiate the purchase/lease of land from the Government for this and the inspection/office facilities on other islands, BASIC's business plan is also seeking a memorandum of understanding (MoU) with the Crown to indicate to potential financiers and investors that the project is real.

Finally, it wants the PPP and its investment to be given legislative protection by enacting new and amended laws via Parliament. This is designed to guard against political risk, and the possibility that a new government will cancel the contract and award it to a rival - something that could leave BASIC with a multi-million dollar financial exposure and significant revenue/profits loss.

"We already have commitments from a local commercial bank, who has pledged they will fund is based on government's approval; legislated approval," Mr Robinson told Tribune Business. "They said they'll fund it up to 70 percent, and we'll raise the remaining percent through private and public sources.

"We have an international entity that's interested in funding the whole thing once the Government signs off on it and does legislation for it. It has to be legislated." Mr Beneby argued that such safeguards were necessary should there be a change in administration, and the incoming government decided to cancel the project in mid-flight.

"What if the next administration changes their mind?" he asked. "You're stuck with all those commitments and outstanding bills. For the system to work there has to be longer-term commitment."

Mr Robinson added: "Part of how we're approaching this is political interference, we're eliminating that, as it's our responsibility to maintain the testing, the service, the experience, the quality, so it's not dependent on the Budget cycle and attitude of political parties. The interest will be in serving the Bahamian people, and giving them the safest and most reliable service we can provide."

PPPs typically involve private sector investors raising the necessary capital, thereby alleviating the upfront financial burden on the Government, to develop public infrastructure or deliver public services. The latter then leases or rents the properties/assets involved, ensuring the investors recover their money and make a profit, before ownership is turned over to the state - usually after a 10 to 25-year period.

BASIC first submitted its proposal Government in 2014, in response to the bidding process for modernising the vehicle licensing process that was ultimately won by the New Zealand-based company, Data Torque.

It also bid on the vehicle licence plate manufacturing contract that was handed to the Department of Correctional Services (Fox Hill prison) in 2016, in partnership with US firm John R. Wald Company.

Mr Robinson, though, argued that BASIC's offer was the only proposal that sought to tackle all the Road Traffic Department's woes rather than just one component of the services it provides. He revealed that the group had seemingly begun to make progress when Renward Wells took over from Frankie Campbell as minister of transport.

"Our last meeting with the minister [Mr Wells] was late August this year," he revealed. "It was a very successful meeting. At this point the concept of what we are presenting is understood and appreciated, and at the meeting we asked to produce a financial comparison report proving our solution to it wouldn't increase the Government's expenditure in that area and wouldn't increase costs to the public.

"Our response is that request is this document that proves, through our programme, we can put ourselves in position to say that in the first year we will be able to increase government revenue at that department. Along with additional services we will secure revenue, make the whole process secure, reliable, traceable and accountable, as well as introduce technology that is the industry norm.

"This present minister and this present government have been most amenable and open to the presentation. He's [Mr Wells] really been open to hearing, understanding and making the necessary corrections. Yes, what we have doesn't work. There are many issues that cannot be addressed with this system," Mr Robinson continued.

"The Government will not have this headache to find capital to do projects with this approach. Road Traffic needs a building; everyone realises that. The exposure over the years is that the technology is changing, and that will not be an issue for the Government for the next 20 years. The only thing they will have to worry about is what the revenues will be for next year."

BASIC's business plan said the Road Traffic Department generated $47.98m in total revenues for the 2018-2019 fiscal year, down more than $2m from the prior year. It added that Ministry of Finance data showed some $9.82m was collected for the first quarter of the 2019-2020 fiscal year, putting its annual revenues at $39.3m - well off the pace of its $52.93m full-year target.

"The Government said to us not to go under $50m as a base line," Mr Robinson said. Mr Beneby added: "For all we're providing we're taking 10 percent of the revenue from this PPP. It's a deal you will never get.... the accountability to the Bahamian people. We're not gong anywhere; this is home. We want to start the model for PPPs. This has to be a win-win for the PPP to survive."

BASIC's proposed new Road Traffic Department headquarters is modelled on the layout employed by Virginia's Department of Motor Vehicles (DMV) building, and aims to end the frustration and queuing currently endured by Bahamians and residents through the use of digital call-up systems.

"It's the same thing everyone is doing in the rest of the world," Mr Robinson said. "It ain't nothing new, it's just bringing The Bahamas up to international standard. Why is it so hard and difficult in The Bahamas?"

Mr Beneby added: "This technology is not day dreaming. It's what everyone in the free world has been doing for the last 20 years. This is not pie in the sky. It's something that's looked at in every other jurisdiction."

The duo said their proposal would result in no job losses at the Road Traffic Department, with the 300 new posts created by BASIC. "It's direct employment and full-time, high-paying jobs," Mr Beneby told Tribune Business. "This is new technology, testing facilities and that's new talent that will learn how to operate an emissions tester, brace calibrating machine...."

The Government has received numerous proposals for the Road Traffic Department's overhaul stretching back several decades and administrations. The current administration has yet to issue a formal Request for Proposal (RFP), but the closest the Government has come to outsourcing the Department's major functions, as BASIC is proposing, was under the former Christie administration.

It entered into a similar PPP arrangement to develop a new $24.5 million Road Traffic Department headquarters with a group featuring now-Progressive Liberal Party (PLP) deputy leader, Chester Cooper.

The BFG group's proposed Road Traffic Department headquarters would have been located off Tonique Williams-Darling Highway on land near the Penn building, Tribune Business understands.

BFG's business plan, according to details presented in the media, seemingly called for the Government to finance the venture through the issuance of $24.5 million in bonds. The Government was also to advance a $2.45 million interest payment to cover acquisition and other 'soft' costs related to the project.

Two of BFG's three named directors, Peter T. Carey and Julian J. Rolle, are also a Board director and senior management executive, respectively, at Mr Cooper's BAF Financial.