Gold Rock ‘setback’ for Gov’t GB revival

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

The Prime Minister yesterday admitted that the Gold Rock group’s decision to shutter all its businesses, and exit the country entirely, is a “setback” to his administration’s efforts to revive Grand Bahama’s economy.

Philip Davis QC, speaking to the media, confirmed he had sought to persuade the Florida-based Del Zotto family, Gold Rock’s owners, to resolve their bitter dispute with the Grand Bahama Port Authority (GBPA) and its Grand Bahama Development Company (DevCO) affiliate, and retain the 130 Bahamian jobs that will now be lost.

He added: “I’m always concerned when investors in the country find it impossible to continue with their investment, not because there is no prospect of success in that business, but rather they feel they’re being hindered in the process by persons who have the authority to allow them to prosper.

“Any closure of business will have a deleterious effect on the economy. We are assiduously moving to revive Grand Bahama’s economy. We think we are well on the way. This will be a setback to our revitalisation efforts. What we are hoping to be able to move to is some how find another initiative to fill that gap until this matter is resolved.”

The Del Zottos believe their relationship with Freeport’s quasi-governmental authority and DevCo has broken down to the point where it is likely irretrievable. As a result, they have announced the closures of their concrete manufacturing, hardware and home furnishings and accessories businesses.

A successful intervention by the Government could also be extremely difficult to achieve given that relations between the parties appear to have completely broken down with little prospect of reconciliation given the hostility exhibited to each other in their respective statements.

The spark that triggered the conflict appears to have been Gold Rock’s negotiations with DevCO over access to aggregate/fill in the latter’s Devonshire subdivision that was critical for its ready mix, block and pre-cast concrete products. DevCO, though, has argued that Gold Rock’s continued monopoly over this source cannot be justified because it had under-performed the previous contract by not taking the stipulated tonnage.

Unable to make headway over the terms they want, Gold Rock and the Del Zottos branded the GBPA as “the leaders of the most grossly underperforming island in The Bahamas” as they unveiled the shuttering of not just their concrete-making business but also their Grand Bahama-based hardware store and furniture and home centre.

The GBPA, though, said DevCO wanted to “right size” the deal such that Gold Rock would still have access to the same level of aggregate it previously mined, and be able to sustain its operations, but give up its exclusivity to let other Bahamian contractors have access to the same fill and thus create a “more equitable” arrangement for all industry players.

Arguing that the Home Design Center and Do It Center closures are “unnecessary”, because they are not impacted by the aggregate talks, the GBPA said: “DevCO’s new contract was seeking to do two things: Provide the Del Zotto family with exactly what they have been using to run their operations so they would not be disadvantaged, and free up unused resources so that prospective investors, including local Bahamians, would not continue to be disenfranchised and would have the same entrepreneurial opportunity as the Del Zottos of Florida.

“Contractors, the construction sector and the wider community in Grand Bahama are well aware of the above and may have raised the issue of a more equitable arrangement under the circumstances. This is exactly what DevCO sought to provide. That the Del Zotto family does not appear to share this perspective says more at the end of the day about their attitude to Grand Bahama than it does DevCO or the GBPA.

“Regardless of their stance on the mining contract, there is no need to shut down the other businesses in Freeport, including a much-needed hardware store and furniture and home centre, which were totally unaffected by the Gold Rock negotiations. This move, seemingly motivated by nothing but spite, will cost yet more hardworking families their livelihoods and further shrink the options available to consumers in a struggling economy.”

However, Gold Rock and the Del Zottos blasted back: “The decision to withdraw our investment in its entirety comes from years of witnessing the blatant disregard for the growth of this island by the GBPA. Our operations have never ran to their fullest production capability because of the economic decline and stagnation that Freeport has been forced to endure.

“That is not to say we have not prospered. We have reinvested every dollar back into these operations with the hope of the island reaching its true potential, and to match the rest of The Bahamas’ growing economy. We see this through infrastructure products we sell to the Family Islands. Sadly, Grand Bahama’s youthful and ambitious leave to find careers elsewhere because of the perpetual wilting economy.

“Gold Rock will no longer contribute under the jurisdiction of the ‘Pink Building’ after the way we have been treated and disregarded. We have no confidence in continuing our 30-year investment. We are not alone; many large companies before us have left for these same reasons.”