By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Opposition’s leader is voicing concern that multiple public-private partnerships (PPPs) agreed by the Davis administration are really “off-the-books” loans that further increase the $11.7bn national debt.

Michael Pintard told Tribune Business that the Government is “not obeying the rules” set out in the PPP policy left in place by its Minnis predecessor as he renewed Opposition concerns that it plans to “bypass Parliament and the budgetary framework” through placing $300m raised in The Bahamas’ recent sovereign bond issue directly into the National Investment Fund.

Asserting that such a move would run afoul of both the Bahamian constitution and statute law, he also called on Prime Minister Philip Davis KC to explain what impact the borrowing of $300m would have on the Government’s forecast $75.5m Budget surplus for the now-started 2025-2026 fiscal year.

The just-released 2025-2026 annual borrowing plan makes no mention of the $300m generated by last month’s $1.067bn sovereign bond issue, and Mr Pintard told this newspaper that using it as seed capital for the National Investment Fund - as well as previous PPP deals - appeared designed to keep borrowings and spending off the Government’s balance sheet and from adding to the national debt.

Latrae Rahming, communications director in the Prime Minister’s Office, yesterday declined to respond to the National Investment Fund concerns laid out by Mr Pintard in a July 8, 2025, letter to Mr Davis. Asserting that he “cannot respond to a leaked letter”, he added that he was unsure if the Prime Minster had reviewed it given his attendance at the recent CARICOM summit and Independence celebrations.

However, Mr Pintard said the unanswered queries over whether the $300n bond proceeds are destined for the National Investment Fund are part of wider Opposition concerns that the Government has “saddled the Bahamian people with off-the-books debt disguised as so-called PPPs”.

“In a broad sense, all of the PPPs we have been consistently characterising as off-the-books loans,” he told this newspaper. “Their failure to report this as means they have not factored into government’s final determination about a whole range of things, including the debt.

“It’s important, at a minimum, that they categorise them correctly and categorise properly the exposure they create in terms of loan arrangements.” PPPs are typically designed to reduce the financial stress on cash-strapped governments by contracting the private sector to provide the funding, development and expertise to construct much-needed infrastructure or run public services.

The Government’s cash flow pressures are eased by requiring the private sector to finance the up-front capital costs, with the latter earning a return on investment - and paying back any lender - from the revenue streams generated by infrastructure assets they develop or services provided.

The Opposition is arguing, though, that several projects touted by the Davis administration as PPPs do not fit this model or meet this criteria. In particular, several sources have pointed to the sudden appearance in the Government’s 2025-2026 Budget, under ‘public debt servicing - interest and other charges - of a $33.93m, ten-year loan due to PPP Investments & Construction Company.

Tribune Business records confirm this is the company that secured a deal with the last Christie administration to construct the Eight Mile Rock government administrative complex in Grand Bahama. The agreement was signed off on May 9, 2017, one day before the general election that brought the Minnis administration and FNM to office.

The arrangement was touted as a PPP, and this newspaper’s archives show PPP Investments & Construction Company sought to raise the necessary financing via a $25m bond placement. A further $9m was obtained from Sygnus Capital, the Jamaican investment house, and the deal was structured as a lease-to-own where the Government would pay back the company and lenders via rental payments.

However, it has now appeared in the Government’s books as a “loan” that has to be repaid by Bahamian taxpayers. Some $2.308m is due to be paid in 2025-2026, with payments of $2.094m and $1.874m due in 2026-2027 and 2027-2028, respectively.

Opposition sources, though, are suggesting that the PPP Investments & Construction Company deal - and its sudden appearance in the Budget - represent a “smoking gun” showing that many projects touted by the Government as PPPs are really “off-the-books” loans designed to keep borrowings, spending and debt from showing up in the public finances for as long as possible.

Mr Pintard, arguing that “the PPPs, they are all loans”, said it was especially “worrisome” that the terms and conditions for such projects and their financing - especially the interest rates and debt servicing costs that have to be paid by Bahamian taxpayers - have not been disclosed.

“In a modern society, in an era if openness, and with a government that claims it’s open, how is it possible they could continue to do this deal after deal?” the FNM leader asserted. “We support PPPs, but it should be governed by the policy that we left in place and, if the Government has a problem with that, they should state what their PPP policy is.

“In the absence of introducing one, and they have admitted in the past that there is a policy, we support PPPs but the way the Government is doing it it is not obeying the rules, the guidelines of a PPP, and it is adding to the debt. It is doing the exact opposite of what this government claims to be accomplishing; lowering the debt when they are not.”

Mr Pintard also challenged why the Ministry of Finance’s annual borrowing plan for the 2025-2026 fiscal year makes no mention of the $300m in net new borrowings, or debt, generated by the recent $1.067bn sovereign bond issue. In his letter to Mr Davis, he argued that there is no “legal mechanism” for spending or using these funds without going through Parliament first.

Although the Government obtained parliamentary approval to borrow the $300m during the mid-year Budget in March, the FNM leader is arguing that the law and constitution require it to now bring a supplementary appropriations Bill to Parliament and get the latter’s permission on how these funds are to be used. In other words, it cannot simply drop them into the National Investment Fund.

Asking Mr Davis to clarify how much of the $300m will be used as seed capital for the National Investment Fund (NIF), Mr Pintard also challenged him to identify where this has been provided for in the 2025-2026 Budget.

“Both the Bahamas constitution and Bahamian law limit public spending to statutory expenditure and parliamentary appropriated expenditure only,” he wrote in his letter to the Prime Minister. “Thus, if there is no related Budget allocation, does the Government intend to bring a supplementary appropriations Bill to Parliament to get the necessary approval to spend the $300m (or portion thereof) to invest in the NIF?

“What will be the effect of this yet unbudgeted spending to seed the NIF on the planned Budget surplus once invested into the NIF? Clearly, when the $300m is appropriated and invested in full into the NIF then the related budgetary expenditure would have a significant impact on the projected fiscal surplus for this fiscal year.

“Please note that we are unaware of any legal mechanism by which the Government can take the proceeds of sovereign debt and spend, lend or invest it for any purpose (other than debt repayment) without the sum being appropriated by Parliament through the legally-established budgetary framework,” Mr Pintard continued.

“Just as importantly, the related would have to be treated as a budgetary expenditure and recorded accordingly. Put simply, the Government cannot simply decide to bypass Parliament and the budgetary framework and place $300m into the NIF.” He challenged Mr Davis to ensure the $300m borrowing stays within “the limits and parameters of the laws and constitution of The Bahamas”.

Mr Pintard, subsequently voicing concern that there was no mention of the $300m in the annual borrowing plan, told Tribune Business: “The Government continues to operate outside of the law and, again, it is going to cause us reputational damage.

“It undermines the credibility of this administration, and it has real life consequences for the Bahamian people. And so we call on the Government to be transparent, to operate within the law in terms of fully disclosing the obligations they are taking on, and following the law in terms of expenditure. This is, again, definitely a pattern of behaviour that is not a sign of good governance and which has consequences for the Bahamian people.”