Abaco in ‘catch 22’ over Marsh Harbour port plan

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Abaco faces “a catch 22” between further fee and cost of living increases and the need to fully restore its main Dorian-devastated commercial shipping port, it was argued yesterday.

Roscoe Thompson, chairman of the Marsh Harbour/Spring City Township, told Tribune Business he feared that plans to transform the Marsh Harbour port through a public-private partnership (PPP) will impose a further “burden on the backs of the Bahamian people” after one of the leading bidders warned shipping and cargo-related fees have to rise, or be imposed, to finance the project.

Yet he also conceded that the facility needs to be “back up and running as a true port”. Mr Thompson said the Government, and whoever was selected as the port’s financing and management partner, must be fully transparent with Abaconians about the nature and size of any shipping-related fee increases and their overall development plans to ensure community buy-in.

Calling for a Town Hall meeting with the public to address these issues, once the winning bidder is chosen, he spoke out after Michael Maura, chairman of BISX-listed Arawak Port Development Company (APD), wrote in that company’s annual report that fee increases are inevitable to finance the project and ensure the private sector partner and its investors earn a reasonable return on their investment.

APD previously revealed to Tribune Business that it has bid on the Marsh Harbour port PPP, and Mr Maura wrote: “The Government has invited qualified and interested port operators to submit proposals for the redevelopment and operation of Marsh Harbour port.

“APD has responded to this invitation and is presently reviewing this opportunity to determine if the fit is right for APD, our shareholders and the community of Marsh Harbour. While we are confident that APD can bring operational and development expertise to Marsh Harbour port, we continue to study the opportunity carefully.

“This analysis will also include determining if the good people of Marsh Harbour, Abaco, have a real interest in partnering with APD. The reality is the redevelopment of the port comes at a cost and fees will need to be introduced to provide a return to the investor.”

Mr Thompson described the PPP’s likely impact as “a catch 22”. He said of the fees: “That’s going to be a burden on the backs of the Bahamian people right now... The fees are going to hurt the people with the price of goods going up. That’s a given.

“The second is what impact will it have over here. It would be nice to see the port back up and running with all the buildings. But what does that bid include? Are they getting all the land including the Mudd? I would have mixed emotions on that site. Some of that land needs to be made into a memorial or park because that’s where a lot of people died” during Hurricane Dorian.

“This affects not just Marsh Harbour but the whole of Abaco and the shipping companies,” Mr Thompson added. “It would be nice to see them back up and running as a true port, but at what cost? How much is the increase in those fees going to be? Is it a 3 percent increase? How much is it going to be in shipping and freight fees compared to what they are now?

“We know they are not coming in to lose money. I think it will affect this community greatly. I just think it would be a burden on the average Bahamian. That’s going to hit everybody. It’s going to have a trickle down effect. The cost of living is so high now with Bahamas Power & Light. Boat licences have gone up. How much more can the Bahamian people take?

“At the same time, what do we do with our port? It’s fenced in, and has light and security, but it still needs plenty of work. It needs to be done. It’s in the same condition it was [after Dorian]. It’s piled with containers and there are a lot of people going in and out of there. It needs to be addressed.”

Calling for full transparency and disclosure whenever a winning bidder is selected, Mr Thompson added: “I think the Government needs to have, and I’ll be honest with you, a big Town Hall meeting on something like that so the public are aware. Not just the Arawak Port and government ministers.

“It needs to be a proper Town Hall meeting. What are they investing in? That would be the first question. You have the port. What are they investing in over here - buildings, security, lights? What fees are going to be implemented? What are the increases going to be? Do government have a percentage of this? What’s government got to do? These are things we need to know.”

Dion Bethell, APD’s president and chief financial officer, confirmed to Tribune Business earlier this week that the BISX-listed operator submitted a formal proposal to manage and operate Marsh Harbour to the Government on August 7 this year.

It subsequently met with Jobeth Coleby-Davis, minister of transport and energy, and officials from her ministry in the third week of August 2023 to give a presentation on its plans, and is now awaiting a response from the Government on whether its offer has been accepted.

However, Mr Bethell disclosed that APD did not bid on the tender to manage/operate the North Abaco port at Cooper’s Town, with the Request for Proposal (RFP) involving that facility released at the same time as the separate process for Marsh Harbour.

Mrs Coleby-Davis, in a messaged reply to Tribune Business inquiries back in May, said then that the Attorney General’s Office was reviewing draft tender documents for bidding processes that will seek qualified groups to redevelop, operate and manage both the Marsh Harbour and North Abaco ports under a private-public partnership (PPP) arrangement.

She spoke just as the North Abaco Pastors Association, an alliance of pastors from the area between Treasure Cay and Crown Haven, served notice of their intent to launch a petition requesting that the Government ensure the $41m North Abaco port is fully opened and operational.

As for Marsh Harbour, the Government has been promising to seek a PPP arrangement for the port, which has never fully recovered or been rebuilt from Hurricane Dorian’s devastation, since the Minnis administration was in office in 2021.

Mrs Coleby-Davis and her ministry, shortly after the Davis administration was elected to office on September 16, 2021, issued an expression of interest (EOI) seeking to gain an understanding of the appetite financiers, developers and port managers have for taking over and reconstructing/operating the Marsh Harbour port.

Under a PPP model, private capital would be responsible for financing the Marsh Harbour port’s transformation and upgrade. The facility would likely remain in the Government’s ownership, but be leased to a private sector operator for a long-term period, with the fees and charges levied on areas such as container throughput and storage helping to repay the earlier reconstruction financing while also generating an investment return for the manager and its shareholders.

Comments

bcitizen says...

So when the private company takes over with its fees where will the port charges and government taxes now collected to maintain the "port" go?

Posted 10 November 2023, 4:24 p.m. Suggest removal

lovingbahamas says...

First of all, who would ever partner with the government in a PPP without getting a substantial return on their investment? Because, if/when the next hurricane hits and their is no shipping,port destroyed, how is the private investor going to get his return. Is the government "guaranteeing" this? Secondly, with duties at 50-60%, how can it be possible that the government can't pay to have the port fixed and operate it without the extra burden of additional costs. As I recall, after the PPP at Pindling airport in Nassau, each ticket has something like $175 in additional fees to pay for the PPP. This is ludicrous.

Posted 10 November 2023, 9:37 p.m. Suggest removal

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