06062023 BUSINESS

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Budget deals marinas ‘another slap in face’

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

A FORMER Association of Bahamas Marinas (ABM) president yesterday asserted that the Budget has dealt the industry “another slap in the face” through multiple fee increases for dockage and vessel registration.

Peter Maury, who operates Bay Street Marina, told Tribune Business the hikes contained in legislative reforms accompanying the 2023-2024 Budget will not fall solely on wealthy foreign boat owners and charter guests as the Davis administration likely intended.

He explained that, with dock rental contracts and associated

terms already agreed with clients in advance, Bahamian marina operators throughout the country will have little choice but to “eat” at least a portion of the 20 percent dock fee increase imposed on their commercial clients.

As a result, Mr Maury said there could be “a direct loss of revenue” to locally-owned companies. He also voiced consternation over the fee increases, and the way they have been structured, in the Boat Registration (Yacht) (Amendment) Rules 2023 which were also tabled in the House of Assembly with the 2023-2024 Budget.

Noting seven and ten-fold increases in first-time registration fees for particular classes of vessel, the former ABM president argued that the gulf between

these and the new annual registration fees set out in the rules “makes no sense” given that the former are far higher.

Arguing that the first-time vessel registration fees are “prohibitive”, and will deter vessel owners from bringing their boats to The Bahamas to be registers, he asserted that it sent the signal of “don’t come in the door” to a high-spending tourism industry segment that the country has been seeking to grow and develop following the key role it played in driving the post-COVID rebound.

Pointing out that the marina and boating industry had to contend with the imposition of 10 percent VAT on yacht charter fees in the prior year’s Budget, on top of the already-existing 4

Haywards ready for GBPA ‘sell down’ to right partner

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

THE Hayward family is willing to part with some of its Grand Bahama Port Authority (GBPA) ownership interest to aid Freeport’s revival, it was revealed yesterday, but does not believe the Government should take “majority” control.

Rupert Hayward, grandson of former GBPA co-chair, Sir Jack Hayward, told Tribune Business his family is “here to stay”and ready to sell a portion of its 50 percent GBPA equity ownership “to the right partners at the right price” - so that Freeport can attract the investment and skills it needs to drive the city’s transformation.

• Not in favour of Gov’t ‘majority’ Freeport control

• Sir Jack’s grandson says family is ‘here to stay’

• Warns fight over Port is ‘only to GB’s detriment’

Speaking after Prime Minister Philip Davis KC last week placed the GBPA and its owners, the Hayward and St George families, on notice that he plans to take “decisive action” to reverse Freeport’s near two-decade decline, he said himself and “blue chip” partners have already presented the

Government with a plan to do just that.

Warning that “fighting between key stakeholders will only be to the detriment of the people of Grand Bahama”, Mr Hayward told this newspaper he hopes Mr Davis will “actively support” his proposal given that the Government plays a major

percent Port Department fee, Mr Maury queried whether the Government’s “intention is to kill the marinas”.

The Ports Authorities (Amendment) Bill 2023 stipulates in its “objects and reasons” section that the purpose is “to increase the fee payable for the use of various marine structures” such as docks, jetties, groins, moorings, causeways and pipelines. And the “pierage rate”, based on a vessel’s registered length, is to increase by one cent per foot to eight cents.

“It’s a 20 percent increase on the docks,” Mr Maury told Tribune Business of the per foot fee to be paid by marinas’ commercial vessel customers with effect from

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• Ex-ABM chief singles out 20% dock fee hike

• Warns Bahamian operators may absorb rise

• Also fears ‘prohibitive’ registration fee jump

‘Can’t tax Bahamas into better health’

By NEIL HARTNELL and YOURI KEMP Tribune Business Reporters ykemp@tribunemedia.net

role in it, with collaboration between Nassau and the GBPA is critical to driving Freeport forward.

“We are long-term stakeholders in Grand Bahama, long-term shareholders in the Grand Bahama Port Authority (GBPA) and its group of companies,” Mr Hayward said. “We recognise change needs to happen, and we recognise a very powerful shareholder base needs to be created.

“We think the Hayward family, given its 70 years’ of experience, have a unique

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Gov’t eyes air freight terminal outsourcing

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

THE Government is eyeing a proposal to outsource Lynden Pindling International Airport’s (LPIA) freight terminal to private sector developers and operators, it has been revealed.

Documents accompanying the 2023-2024 Budget, in an annex detailing private-public partnerships

(PPP), lay out the “justification to design, finance, build and operate a new air freight terminal”.

“The purpose of this proposal is for the Government to transfer the property consisting of the Air Freight Terminal to a special purpose vehicle (SPV) owned by the Government, and then to lease that property to JDL in order to design, finance, build and operate a new

BPL set for a ‘maturity audit’

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

REGULATORS are searching for consultants to conduct a “maturity audit” of Bahamas Power & Light (BPL) in a bid to assess the energy monopoly’s performance and develop better regulatory oversight.

The Utilities Regulation and Competition Authority (URCA), in the tender document, said it

has a duty to ensure BPL’s electricity tariff rates are “reasonable, reflect efficiently incurred costs and are not inconsistent with, or in contravention of, the Electricity Act and allow an opportunity for public input”.

It added: “URCA has taken the decision to perform a consultancy services for an audit of the performance and organisational maturity of the Bahamas Power & Light Company

(BPL). This to establish baseline performance indicators to guide URCA oversight on how to assess its regulatory impact on price controls and tariffs, accounts separation guidelines and other regulatory matters;

“The objective is to have effective regulatory oversights of BPL that will be efficient and proportionate to their purpose, and without imposing unnecessary regulatory burden.... A

air freight terminal,” the Budget documents state. No further details are provided, and “JDL” is not identified. The closest matches, based on Internet searches conducted by this newspaper, are a Taiwan-headquartered company, JD Logistics, and a Wisconsin outfit with a similar name. Chester Cooper, deputy prime minister and minister of

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performance and organisational maturity audit of BPL is best viewed as a diagnostic examination of the status quo of the organisation. The proposed audit will therefore seek to independently evaluate the company’s performance status and to establish a baseline for its performance going forward.

“A baseline study of the company’s performance will allow URCA to have effective regulatory oversights of BPL that will be efficient and proportionate

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CARIBBEAN Bottling Company’s top executive yesterday warned “you cannot tax a country into good health” amid private sector fears that a so-called ‘sugar tax’ will be a “poison pill” for small business.

Walter Wells, the local Coca-Cola producer’s chief executive and president, told Tribune Business he was “encouraged” by the Prime Minister’s confirmation that such ‘sin taxes’ will not be introduced in the near future.

Noting that the introduction of such a levy has been oft-debated for many years, he added: “It’s nothing new to us in terms of being a possibility.” Reforms to the Customs Management Act, tabled with the 20232024 Budget, enable the minister of finance to make regulations “providing for the payment of a health and wellness levy on the importation of specified goods,

and domestically manufactured goods, deemed to have a negative impact on health and wellness”.

Mr Wells said this merely gives the Government “a greater degree of flexibility as to when it happens. I cannot say that, in and of itself, alarms me. The Government always has the ability to do it when it wants to do it, but it normally happens in the Budget process.

“I cannot really debate whether it’s a good thing or a bad thing. My position is that I would prefer to have no tax. If this is to be a tax, to what extent it would compromise our business from an industry standpoint, right now it’s an open question. I’m certainly encouraged by the fact it’s not something stuck in the Budget; take it or leave it,” Mr Wells added.

The Caribbean Bottling chief, though, said sugary drinks are only part of the health and wellness issues facing Bahamians. “The debate makes it sound like sugary drinks are the cause

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RUPERT HAYWARD

CHESTER COOPER

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BAHAMAS CAN’T AFFORD FOR FISCAL FORECAST MISS

The Davis administration has delivered a Budget which, while leaving room for discussion and debate on many fronts, gives numbers which are very positive and welcoming news from a fiscal and debt management perspective. The projections suggest that The Bahamas is on the path to a turnaround in its fortunes, providing international and domestic investors with a level of certainty that would not have been anticipated two years ago. But every aspect of this turns on what the final outturn of the 2022-23 fiscal year will be.

Positive numbers

In 2021, shortly after the election, I had the privilege of attending a meeting with the Prime Minister as part of a team paying a courtesy call. At a point in the meeting he turned unexpectedly to me and asked how things were going, and what my views were. My response was that he had been elected at a very critical point in the history of the country. I then went on to indicate that the importance of the moment lies in the fact that, if his administration failed to get the next five years right, the cost could be very high. As a result, we must all be fully aligned and supportive of the need for his administration’s success.

Having regard for the then-prevailing COVID pandemic, and the destructive effects of Hurricane Dorian, such a statement could have easily been uttered by anyone without much thought. My position remains the same, and it is against this backdrop that I view the 2023-2024 Budget presentation. The signals so far, where the numbers are concerned, create some level of optimism.

The high point of the presentation in my view was the fact that the projections outlined in the earlier Fiscal Strategy Report 2022 were clearly followed almost to the penny. I previously took the view that it would have been “a big ask” to secure a 79 percent reduction in the fiscal deficit in 2023-2024, as was then projected. The trends suggested that while the economy was rebounding well from COVID, and at a faster pace than initially anticipated, there was the likelihood of an early plateauing and, with the administration’s early declaration of no desire for new and/or increased taxes, achieving this target would

Hubert

edwards

have been challenging.

The reality is that revenue is projected at $3.3bn for 2023-2024, increasing steadily to 2026-2027, where it will hit $4bn and drive a fiscal surplus. The current fiscal year is anticipated to generate $2.9bn in revenue, with a projected deficit of $520m.

Despite the Prime Minister stating that there are no new taxes in the Budget, it is evident that there has been increases in a number of areas. The administration has found ways to stretch the current tax base to meet its objectives. It is my view that the Davis administration should be commended for seeing the need, acknowledging the challenges and taking the bold steps to secure the revenue needed. One cannot, however, get past the fact that the 2022-2023 performance which was reported is only for the first nine months, and the language used in predicting the full year outturn by the Prime Minister is extremely conservative and hedging in some regards.

That said, should these numbers hold true, it would represent a major and important accomplishment. It remains no secret that The Bahamas can ill afford another credit rating downgrade in light of the current struggles with its debt circumstances. It is imperative that the final quarter of 2022-2023 perform as projected or closely thereto. The implications of it being otherwise have adverse implications.

When Simon Wilson, the financial secretary, recently said the Government has launched “the most coordinated tax collection and enforcement effort ever”, and that “the country must realise its targets for 20222023”, and that “a lot of fiscal pressure is alleviated

by SEE PAGE B3

PM'S GBPA WARNING LEAVES INVESTORS 'HANGING OUT THERE'

By YOURI KEMP Tribune

PRIVATE sector executives yesterday voiced concern that the Prime Minister's "decisive action" warning to the Grand Bahama Port Authority (GBPA) and its principals will deter potential investment in Freeport.

James Carey, the Grand Bahama Chamber of Commerce's president, told Tribune Business that Philip Davis KC's Budget address has left existing businesses and possible investors "just hanging out there" because of the uncertainty it has created over Freeport's future governance and control.

By FAY SIMMONS Tribune Business Reporter jsimmons@tribunemedia.net

A CABINET minister yesterday said the Government "feels inclined" to expand price controls on food and medicines, after previous such initiatives ended earlier this year, as it takes a "stand for consumer rights".

Michael Halkitis, minister of economic affairs, speaking at the opening of the new Tonique Williams Highway offices for the Government's Consumer Affairs and Consumer

“If they are going to do something they should let us know, because things are just hanging out there now,"

Mr Carey said. “The GBPA said they have secured $1.5bn in investments. The Prime Minister then said to the GBPA to show him the investments because he said it was the Government who got those investments.”

Mr Davis used the platform provided by the 2023-2024 Budget address to assert that Freeport's founding treaty, the Hawksbill Creek Agreement, "does not work" and that the GBPA's governance model "must change" if the city is to "realise the promise, growth and prosperity" it aspires to. However, he provided no specifics as to the Government's actual plans

Protection units, said the administration is constantly seeking to balance the need for businesses to earn a profit with protecting consumers from price gouging.

“A strong consumer protection regime ensures that the rights of consumers are firstly known, and secondly respected and adhered to, by all local businesses," he said. "What we want is to ensure that buyers of goods and services are safeguarded against unfair practices in the marketplace.

"It is critical that the ecosystem of supply and demand, price and

and intentions, creating a vacuum that has since been filled with speculation and uncertainty - neither of which are beneficial to economic growth and business/ investor confidence. Mr Davis said he would clarify the Government's next steps soon, possibly as early as the upcoming Budget debate that begins tomorrow, but until then Freeport residents are none the wiser as to the next move.

Mr Carey, meanwhile, yesterday called on all sides to work together and agree on a plan for Freeport and the GBPA. “Something is not right, and it may be time for them to sit around at the table," he added. "The Government is the Government, and they are at the top of the pile and they should invite

profitability, works for both businesses and consumers to achieve economic growth, inclusivity and sustainable national development. There are also key areas, such as pharmaceuticals and food, where the Government feels inclined to offer protection against inflated prices for the good of the nation.”

Mr Halkitis maintained that price controls do not prohibit companies from making a profit but, rather, curtail how much profit can be made. “Price controls in The Bahamas do not stop a merchant from making a profit; they simply dictate

the GPBA to sit down and have a discussion. Invite is a kind and generous term, and they can do a lot more if they wish, but we need them to have a discussion.

“I believe, after all of this back and forth, the only thing this would cause is for investors to look at this and say: 'Whoa! What’s going on here? Let’s wait and see what happens before we make any decisions on any investments because things may change'.

"The GBPA said that they are responsible for the $1.5bn worth of investments, and I can only go by what they have said, and they have continued to say that they have brought these investments, but they are not here yet," the Chamber chief added. “Some have started

how much of a profit can be made on a particular item. Where businesses infringe upon the allowed mark-ups there are avenues for effective dispute resolution and potential redress for consumers and providers," he added.

Prime Minister Philip Davis KC, meanwhile, said his administration is committed to ensuring all Bahamians have access to basic goods and services as he aims to balance corporate profitability with consumer affordability.

He added: “As we inaugurate the consumer affairs building today, we are making a clear statement. We stand for consumer rights. We envision this building as a pillar of consumer protection, casting a shadow of security across every corner of our beloved

BAHAMAS CAN’T AFFORD FOR FISCAL FORECAST MISS

FROM PAGE B2

when everyone pays taxes due”, among other things, he was effectively laying out and rationalising what the potential cost of getting it wrong may look like. He said: “We don’t want to raise tax rates... We always have a choice from a broad range of options, but by far the most palatable option we have is improving our compliance”. At face value, a clear and unequivocal statement, and on analysis one that goes fundamentally to the root of a very complex set of circumstances facing policymakers. Get 2022-2023 wrong and the shifts could be potentially seismic.

The expected outturn for the current fiscal year is presented with greater precision than is evident in the current Budget. The Prime Minister, in declaring the revenue performance, said: “I am confident the revenue outturn at the end of the fiscal year 2022-2023 will near $2.9bn”. With respect to expenditure, the statement was even less precise “...Expenditure at the end of fiscal year 2022-2023 will almost reach the target of $3.1bn set in the supplementary Budget.”

Having followed and analysed budgets for over a decade, my preference would be to have seen the normal approach, which sends a clear signal that there is a narrow room for differences. In analysing, it must be assumed that they did their homework well and therefore the numbers are likely to be as stated.

Beyond the numbers Hawksbill Creek Agreement - The Budget presentation has drawn attention to a very important issue - that being general concern for the performance of the Hawksbill Creek arrangement in Freeport. The Prime Minister was unequivocal that there is dissatisfaction with how that is currently working. Subsequent commentary suggests that the matter could be differently argued. It remains, though, maybe one of the most significant pronouncements which, though important, is unlikely to have any near term impact on the fortunes of the country.

The importance of this arrangement must be acknowledged, and the extent to which it fails to meet objectives must be addressed in the interests of The Bahamas, based on full factual analysis

and expert participation. Respecting the complexity of the issues, commentary on this is better left to subsequent developments and the intervention of more knowledgeable and closely associated parties. Government Financing –The numbers augur well for the financing needs of the Government, which is projected to decline over the next four years. With the cost of debt averaging 5.5 percent, and a growth rate of well upwards of 4 percent, needed to achieve the $16bn economy by 2027, the country is operating in interesting circumstances. What is most critical, though, from the Budget communication is the means by which the Government will seek to access lower cost funding. As was done recently, it intends to leverage institutions such as the Inter-American Development Bank

but they are in the pipeline. I can only go by what the GBPA has said, and they have not just begun saying these things but they have been saying these things for quite some time.”

Fred Mitchell, the Progressive Liberal Party's (PLP) chairman, and minister for foreign affairs and the public service, has repeatedly countered in his daily voice notes to party supporters that it is the Government - and not the GBPA - which is responsible for bringing the $1.5bn worth of investments to Grand Bahama. These include the Carnival cruise port, redevelopment of Freeport Harbour and proposed $350m Grand Bahama Shipyard investment.

nation, especially our cherished Family Islands.

“We are committed to enforcing our social protection safety nets and ensuring that all Bahamians have access to basic goods and services. We believe in a thriving business environment where profitability and affordability co-exists. Our ongoing dialogue with retailers aims to create a balance that fosters business growth while preserving consumer affordability.”

Mr Davis said reforms to the Consumer Protection Act, already tabled in the House of Assembly for their first reading, will give consumers more rights, while deceptive business practices will be dealt with assiduously. He added: “We are enhancing the Consumer Protection Act.

Mr Carey added: “This is the first time the Government is denying the GBPA’s claims, and instead saying they are responsible for bringing in the $1.5bn in investments.” Included in this figure is the $250m Weller Group Six Senses project. “I know they particularly mentioned a solar farm, and they have mentioned Xquisite Yachts, which is certainly in progress, so the GBPA has mentioned certain things over the recent past," Mr Carey added.

“It’s interesting that the GBPA has consistently talked about these investments, and this is the first time the Government has taken issue with it saying that they did these things.”

Amendments are coming and they are about giving the consumers a louder voice and stronger rights.

"For example, Bahamians living abroad can now lodge a complaint. The Consumer Commission will be empowered to alert you to harmful practices. Businesses will be required to be licensed and registered, and deceptive conduct, harassment and coercive selling practices will be addressed more comprehensively.

“These, and further steps, are taken to ensure a more organised framework, clearer definitions and stronger protection for consumers. We are championing the importance of customer service because we believe it can stimulate economic growth and

SEE PAGE B6

(IDB) to secure credit risk enhancement.

Therefore, while the numbers are indicative of a march in the right direction, it is clear that The Bahamas is still not out of the woods from a credit perspective. With still seemingly limited options in the domestic market, it is important to pay attention to this policy position and be clearly informed by the realities given the recent struggle to seamlessly secure funding for known borrowing needs. Next year’s projected Budget performance could represent a watershed moment, and an important turning point for the country’s debt management. This desired

outcome must be viewed against the fact that 20 percent of total expenditure goes towards payment of interest on debt. The ability of the country to reduce the cost of borrowing holds serious implications for social and infrastructure advancement. When a fifth of all spending is on debt, domestic or external, and with slippage in performance that amount would grow, everyone committed to the success of the country must have a desire for a fundamental turnaround. In this regard the numbers must hold and projections be achieved. In Part II, I will take a look at some of the major policy statements emerging from the Budget and suggest what might have been missing from the presentation.

• NB: Hubert Edwards is the principal of Next Level Solutions (NLS), a management consultancy firm. He is currently a student at the Eugene Dupuch Law School. He can be reached at info@nlsolustionsbahamas.com. Hubert specialises in governance, risk and compliance (GRC), accounting and finance. NLS provides services in the areas of enterprise risk management, internal audit and policy and procedures development, regulatory consulting, anti-money laundering, accounting and strategic planning. He also chairs the Organisation for Responsible Governance’s (ORG) economic development committee. This and other articles are available at www.nlsolutionsbahamas.com

READY FOR GBPA ‘SELL DOWN’ TO RIGHT PARTNER

role in protecting Grand Bahama and have a track record of bringing significant investment to the island. The Government needs to be involved but, should government have a majority stake?

No.”

Besides creating a shareholder base “with the requisite skills to take Freeport forward”, and address issues such as large-scale masterplanning, sustainable infrastructure and climate change resilience, Mr Hayward agreed that an updated and modernised Hawksbill Creek Agreement is critical to the city’s reawakening.

The Prime Minister last week complained that the model bequeathed by Freeport’s founding treaty “doesn’t work”, especially when it comes to attracting fresh investment to Grand Bahama. “A critical component is a 21st century Hawksbill Creek Agreement and regulatory framework, which provides benefits to the people of Grand Bahama, businesses and licensees, and so we can solicit large-scale investment for the benefit of all the island,” Mr Hayward said. “That will come through real partnership with the Government. Fighting between key stakeholders will only be to the detriment

of the people in Grand Bahama. We have put a plan to the Prime Minister, with best-in-class investors who are blue chip and well-capitalised to do it, and we hope he actively supports it....

“We have a plan, we have the people to help us execute it, and the Government are a part of that plan. We hope they embrace the plan. We are happy to sell down some shares to the right partners, at the right price, to make this happen. Government needs to play their part. We should be working together to put a world-class framework together, and the GPBA should evolve into a world-class entity,

which it can do with the right partners.”

Mr Hayward again did not identify the “partners” he was referring to, or who his family might be willing to sell a portion of their 50 percent equity stake in the GBPA and Port Group Ltd to. However, he has been heavily involved with the multi-party deal to develop a Six Senses resort at the 30-acre Barbary Beach site previously owned by Marriott. That agreement features Weller Development, which is spearheading the largest US urban regeneration in Baltimore via the 235-acre Port Covington site, and Pegasus Capital Advisors,

the $10.6bn private equity group focused on investing in sustainable projects and the only such group accredited as a fund manager by the Green Climate Fund. Multiple Freeport-based sources have previously suggested this partnership could lead to bigger things beyond Six Senses.

“We’re here to stay, will do what is in the best interests of Grand Bahama, have the right people and are willing to work with the Government. They’re a part of it,” Mr Hayward reiterated yesterday. “We will continue to fight for the best possible future for Grand Bahama, and continue to fight for the people of Grand Bahama’s best interests.

“We continue to offer partnership and collaboration with this government, and any government, as long as they intend to do right by Grand Bahama.” Mr Davis, though, last week used the platform provided by the 2023-2024 Budget address to assert that Freeport’s founding treaty, the Hawksbill Creek Agreement, “does not work” and that the GBPA’s governance model “must change” if the city is to “realise the promise, growth and prosperity” it aspires to.

Using Grand Bahama’s contracting economy as his launch pad, Mr Davis told the House of Assembly: “Grand Bahama contributes 12 percent of the overall GDP of The Bahamas, yet its economy declined by 9 percent compared to the previous year. There was a silver lining as the tourism sector witnessed a slight increase in 2022, which was evident in the growth of the accommodation and food service industries.

“Unfortunately, the statistics show a prolonged decline in the Grand Bahamian economy. The evidence confirms the view of my government that the Hawksbill Creek Agreement economic model, which was meant to attract foreign direct investment, does not work.

“Furthermore, in our view, the governance model of the Grand Bahama Port Authority must change. The Hawksbill Creek Agreement does not work, the Port Authority must change, in order to realise the promise, growth and prosperity which we all desire,” the Prime Minister continued.

“Additionally, The Government of The Bahamas has serious concerns regarding the compliance of the GBPA and its related companies with the terms and conditions of the Hawksbill Creek Act [Agreement] and its subsequent amendments.

“Previous administrations have made efforts to tackle the situation, but the issue is clearly systemic and fundamental. We believe the time has come for decisive action. In due course, we will make a

separate, detailed announcement. That may be during the course of the debate.” Tribune Business revealed earlier this year that the Government has been examining whether change at the GBPA is best achieved through either a private buyer acquiring the Hayward and St George families’ ownership interests, the Government doing itself or the regulatory and quasigovernmental powers being devolved back to Nassau.

However, given the Prime Minister’s vague warning and lack of specifics, the main impact of his address thus far has been to undermine certainty and business/investor confidence when it comes to Freeport given the lack of clarity surrounding who will ultimately be in control of the city.

It is understood the Hayward and St George families are confident their position is legally sound, and that the Government will struggle to force them to sell using what they perceive as bullying tactics. However, the GBPA owners, in a 2016 Memorandum of Understanding (MoU) signed with the Christie administration, committed to masterplan the development of their landholdings and seek a buyer for their interests within specified timelines. None of these conditions appear to have been fulfilled.

The GBPA, while described by some as a ‘regulatory shell’, still possesses considerable powers that include business licensing, building code and environmental enforcement, city management, and the power to levy fees and service charges together with the operation of a free trade zone that offers multiple forms of tax relief to investors.

However, its incomeearning assets have been transferred to Port Group Ltd. These include the 50 percent equity stakes in Grand Bahama Development Company (DevCO) and the Freeport Harbour Company, likely to be the two families’ most valuable assets, together with interests in multiple other companies such as Freeport Commercial & Industrial, another major landowner. Should the Government seek to take over the GBPA’s regulatory powers, one source said it would amount to an “abrogation” of the Hawksbill Creek Agreement and raise multiple legal issues that would have to be addressed. Among these, they added, would be the provision that requires four-fifths (80 percent) of licensees to approve the devolution of quasi-governmental authority to a local government-type entity.

NOTICE is hereby given that BRITNEES JOSEPH of Manton Lane, Grand Bahama, The Bahamas, is applying to the Minister responsible for Nationality and Citizenship, for registration/naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/ naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 30th day of May, 2023 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas.

tourism, investments and aviation, did not return Tribune Business messages seeking comment before press time last night.

Dr Kenneth Romer, the Ministry of Tourism’s deputy director-general and acting director of aviation, said he was unable to comment but promised to look into the matter. Tribune Business aviation industry sources, and those with contacts at LPIA’s operator, the Nassau Airport Development Company (NAD), said they, too, were unaware of the project and did not believe it has been put out to competitive tender or bid.

Meanwhile, the 20232024 Budget shows that Bahamian taxpayers will once again start subsidising the Civil Aviation Authority of the Bahamas (CAAB) again from the next fiscal period onwards to the tune of $8m per year. Wellplaced sources, speaking on condition of anonymity, suggested this was directly related to US airlines withholding due payment of air navigation services fees to The Bahamas amid the ongoing dispute with this nation.

Mr Cooper told the House of Assembly earlier this year that American

Airlines was paying its fees into an escrow account as it awaits the outcome of talks between The Bahamas and US Department of Transportation over the latter’s concerns that this nation’s charges are excessive and too high in comparison to the services being provided.

Detailing how The Bahamas’ arrived at this point, the deputy prime minister previously the global aviation industry began to pressure this nation over the level of fees just over one year after the structure was implemented in May 2021. This followed a period of consultation with the airlines and sufficient notice being given of their imposition.

Mr Cooper revealed that The Bahamas is forecast to generate $42.93m from its air space fees during the 2022-2023 fiscal year, although the outcome is “expected to be higher based on the fasterthan-expected recovery in air traffic movements” post-COVID.

“Between May 2021 and November 2022, fees invoiced under the air space scheme totaled $49.693m, of which $44.69m represented air navigation services fees; $4.45m origin/ destination fees, and $1.3m was for the passenger levy,” he added. “Total fees

collected through November 2022 are $42.68m, with receivables at $6.46m.”

The air navigation services fees and origin/ destination fees are split between the Bahamas Civil Aviation Authority (BCAA) and Bahamas Air Navigation Services Authority (BANSA), while the former is the sole recipient of the passenger levy. The fee structure was created to provide a financing mechanism for civil aviation regulation and oversight in The Bahamas, so that the sector no longer has to rely on the Bahamian taxpayer.

And the funding stream it generates is also intended to enable this nation to build the necessary human capital and infrastructure capacity so that it can ultimately take control of, and manage, all its air space rather than outsource control of 75 percent to the Federal Aviation Administration (FAA) for an annual $80,000 fee. FAA control only applies above 6,000 feet.

However, US airlines especially have given The Bahamas a hard time over efforts to exercise its sovereignty. “Shortly after the fee charging scheme’s one-year anniversary, The Bahamas was invited to a follow-up meeting in June 2022 by IATA (the International

tax Bahamas into better health’

of obesity in the country, and you and I know that’s not true,” he added. “It’s calories in, calories out. If you eat more on a daily basis than you burn up, you gain weight. You cannot tax a country into good health, you need to educate the country into good health.”

Kendrick Delaney, owner/operator of the New Duff, told Tribune Business that the Government would be better off implementing a national lottery rather than trying to implement a sugar tax that will not be effective in the long run.

“I believe that sugar taxes work extremely well as a revenue generator, but it’s a poison pill for businesses, small businesses in particular, because the costs are really passed on to consumers, therefore making our products more expensive.

I don’t believe it’s the best way to have the same outcome as reducing chronic care illnesses overall,” he said.

“A better way to achieve that would be to be brave enough to ask the number houses to be nationalised and use those funds to train kids from a young age to learn the effects of sugar, fat and salt on their diets, as opposed to trying to fix this after the fact. Because if people are already addicted to sugar, how are we going to change that behaviour by increasing the cost of it on the business? It’s not the best solution.”

Prime Minister Philip Davis, KC yesterday said

there will be “no new taxes” on sugar products or otherwise. “We are attempting to cause Bahamians to understand what sugar is to their health. We have put a framework in place to determine whether or not it will be done, but nothing is happening in that regard and nothing is happening any time soon,” he added. “We’re talking to industry to see how they’re able to lessen sugar in the ingredients for sodas, etc, because the stats have shown it is one of the significant contributors to the noncommunicable diseases, something that this country is struggling with as I speak. So know that that is not going to be done this year. I don’t see it coming very soon either.”

Mexico implemented a sugar tax on soft drinks in 2014, and results have shown in a study in Health Affairs that purchases of taxed drinks have dropped by an average of 7.6 percent between 2012 and 2015. Additionally, purchases of untaxed beverages increased by 2.1 percent in the same study period.

Karla Wells-Lisgaris, director at Caribbean Bottling Company, added: “We are naturally reluctant to see any tax introduced that could compromise the viability of local manufacturing of such products, although we fully understand and agree that health and wellness of our people is of vital importance.

“We are not clear on what type of tax is being considered, and so it is

Air Transport Association), in Miami, Florida, to provide its members with an update on the new charging scheme,” Mr Cooper said.

“It was during this meeting that the IATA members expressed strong concerns over The Bahamas’ charging scheme, basically characterising it as prohibitive with no new or incremental services provided for the additional cost imposed, and that the cross-subsidisation of lower air space operations by the overflight fees was at variance with the ICAO (International Civil Aviation Organisation) cross-relatedness principle.”

The Bahamas subsequently pushed back against this criticism, including during a Nassau meeting between IATA’s regional vice-president for the Americas and Mr Cooper’s office. However, the differences quickly escalated when American Airlines made a formal protest over having to pay The Bahamas some $4.2m in fees for the six-month period June to November 2022.

“On November 29, 2022, The Bahamas was advised by the IATA Clearing House (ICH), where the bulk of the airline payments

are cleared, that American Airlines lodged a formal protest on its payments for the last six months (June to November 2022), which totalled $4.2m,” Mr Cooper asserted.

“Following the rules of the ICH, BANSA presented a formal response on December 8, 2022, justifying the validity of The Bahamas’ fee charging scheme, and how it was considered to be consistent with ICAO principles. On December 15, 2022, The Bahamas was advised by the ICH that, having reviewed the position of American Airlines and The Bahamas, it concluded that a substantive dispute existed between the two parties.

“Under the ICH rules, therefore, the ICH notified that the $4.2m in dispute would be held in an escrow account until the matter is resolved.” The dispute was then widened when the Airlines4America group, which includes American Airlines, Jet Blue, FedEx, Delta, Southwest Airlines, United Airlines, and the United Parcel Service, filed their complaint that The Bahamas’ air navigation services fee regime was “unjust and discriminatory”.

“This acceleration in the dispute presented huge consequences for the stability of funding our air navigation services and the continuity of operations of our domestic carriers into the US,” Mr Cooper said. However, as previously reported by Tribune Business, the US Department of Transportation dismissed the airlines’ allegations, asserting: “We cannot conclude in those circumstances that the fee structure constitutes unjustifiable or unreasonable discrimination.”

With the dispute now having moved from the airline industry to the inter-government level, the deputy prime minister added: “The Government remains committed to achieving a successful resolution of all continuing concerns with the cost basis analysis for our overflight fees.

“We are keen to protect The Bahamas’ sovereign rights to recover the level of fees necessary to provide air navigational services to our air space users, which should include building out both the human and infrastructure capital necessary to eventually take control of the management of our airspace. Our intention is also to ensure that The Bahamas’ fee charging scheme is compliant with ICAO principles.”

premature to second guess the Government and we are pleased that dialogue and consultation will take place. Ultimately it is in everyone’s interest to see improvement in our country’s health profile. However, this will not happen without ongoing education.”

Nevette Cooper-Missick, owner/operator of Cake my Day, added: “I don’t know how I should feel about his.

I’m going to be honest with you, cakes are not healthy, but cakes are not something you are supposed to be eating every day anyway. They are supposed to be for celebrations and special events.

“Too much of anything can be a bad thing for you. But I believe that anything that tries to take away personal freedoms, I have a problem with that because at the end of the day if someone wants to eat cake ten times a day that’s their free will. They can do that. I don’t think a tax would necessarily deter people from buying something that they want because if they want it they would spend the money to get it.”

A snack-food wholesaler, speaking under the condition of anonymity, said that as a new business implementing a tax just as they are starting off will make things difficult for them. “Right now 100 percent juices are duty free, but if they go up on it it won’t be good for me. But it’s the Government and they can do what they want to do,” they added.

‘Can’t

BUDGET DEALS MARINAS ‘ANOTHER SLAP IN FACE’

July 1. “It’s basically a 20 percent increase on the fees we pay for commercial vessels to dock. It looks like everything’s getting an increase - the private, industrial.

“Nassau and the Family Islands will see it. For the marinas it’s an operating cost that we can pass on the customer, but at some point the customer’s going to break and say: ‘We’re not going to absorb or pay this’. And it might not necessarily be something that we can pass on. It might be a direct loss to revenue for us.

A lot of us have set terms, monthly and weekly rentals, and we can’t just increase somebody’s dockage by 20 percent. It would be a direct loss to the business....

“There’s no good news here. Last year was a killer for us. This is just another slap in the face as far as I’m concerned. It definitely doesn’t help us with our operating expenses because now we have to pay more. I’m wondering what they [the Government] did do for us. Increased dock tax,

increased charter fees, increased harbour fees. This is not going to help the industry or Bahamians.”

As for the revised boat registration fees, Mr Maury said those for first-time registrants of vessels between 40 to 49 feet in length, and 50 to 59 feet, are set to increase from the previous $1,000 to $7,000 and $10,000 respectively. Yet for non-first timers, paying the annual registration permit, the fees for the samelength vessels are being set at $1,650 and $2,300, respectively.

The former ABM president questioned why access to The Bahamas was seemingly being hiked to such an extent in comparison to the fees paid by renewing vessel owners. This, he argued, seemingly ran counter to the Government’s desire to develop a yacht registry given that the higher firsttime fees - a 200-foot yacht will have to pay $35,000 compared to the current $4,000 - could be viewed by owners as cost prohibitive and deter them from coming to The Bahamas.

“These are the boats we want here,” Mr Maury said. “It makes no sense making the first-year fee so prohibitive. It’s like the first time you walk in the restaurant, and they say: ‘Don’t come in the door’. It’s like totally backwards. This is where we kill ourselves. We have one rate for this, one rate for that.

“We got VAT on the charter fee last year. We still have the charter fee and VAT. Now the registration fee has gone up and, even more than that, the dockage tax marinas pay. There’s nothing in there for Bahamians. We’re all fighting to keep boats in the marina. We can’t hit our customers with a 20 percent dockage fee; we have to eat that. It makes it less profitable to be a marina.”

Asked whether the industry has informed its boating clients of the impending fee increases, he added: “We’ve not shown this to the customer right now. We’re all fighting to keep our summers. Oh boy. I don’t think it’s going to be good either way. We have some serious messaging to do. When the

GOV’T STILL FOCUSED ON FOOD AND MEDICINE PRICE CONTROL

Government puts out the message, it’s a little abrupt. I think we have to soften the message.”

Mr Maury said marinas were still trying to determine if the Harbour Dues Amendment Bill 2023, which provides for “increased lending rates and pierage charges”, and expands the definition of “declared ports”, applies to the sector. The Customs Management Act reforms also enable Customs to seize a vessel if the owner has not submitted an inbound declaration, and “is not duly entered in The Bahamas”, or has failed to renew an expired cruising permit.

The Government will likely argue that most boats are owned by wealthy foreigners who can afford to pay the fee increases detailed in the legislative reforms that accompany all Budgets. However, as industries and executives begin to read and assess these Bills, it is only now that the scope of the Budget rises are becoming apparent to many in the private sector.

BPL SET FOR A ‘MATURITY AUDIT’

to their purpose and without imposing unnecessary regulatory burden. This will include assessing BPL’s performance using financial, operational and quality of service indicators, and comparing BPL’s performance with similar utilities in the Caribbean and around the world,” URCA added.

“Additionally, the consultancy is also required to

conduct a two-day workshop for URCA staff on technical knowledge as it relates to the appropriate regulatory mandate based on the organisation’s maturity.” Setting out the background to the consultancy, URCA added: “BPL accounts for 83 percent or 535 mega watts (MW) of the total generating capacity (643 MW) on the national grid.

“The remaining 17 percent of the generating capacity is provided by one other public electricity licensed power producer and three authorised public electricity supplier licence (APESL) power producers. BPL provides power to more than 100,000 customers in New Providence and the Family Islands.

“The Corporation serves approximately 85 percent

of all electricity consumers in the nation. In January 2015, The Bahamas passed a new Electricity Act simultaneously repealing the Out Islands Electric Lighting Act, the Electricity Frequency Conversion Act and the Electricity Development Act. The Electricity Act was updated to clarify the roles and responsibilities of the main actors in the sector, including the Government, the regulator, the utilities and the independent power producers.”

FROM PAGE B3

provide better experiences for consumers.”

Mr Halikitis said the Consumer Affairs Unit ensures that the Price Control and Rent Control Acts are enforced, while the Consumer Protection Commission ensures the Consumer Protection Act is enforced. He added: “Consumer affairs officers are authorised by the minister to enter and inspect any premises where goods are sold, or services are rendered.

“The Consumer Protection Commission is charged with policing and enforcing the Consumer Protection Act, which facilitates an avenue for consumers to receive fair settlement of claims, including compensation for misrepresentation, shoddy goods, or unfair and unsatisfactory services and or goods. In addition, the Consumer Protection Commission serves as the main voice for consumer advocacy and education.”

Mr Halkitis said the Commission is going digital, and staff training has already started. He added that this will allow personnel to access records quickly, and allow merchants to submit price adjustments digitally.

He added: “We are also digitising the inspection process. Our e-Bahamas promotion has commenced with the Department of Transformation and Digitisation, and a private entity, having embarked on the acquisition of new technology with software and tablet training given to all

consumer affairs inspectorate staff.

“Applications and software, developed to enhance and modernise the consumer affairs inspectorate, were field tested in March 2023 by the consumer affairs inspectorate and the department of digitisation. These advancements will allow inspectors to analyse digital records in real time and allow merchants to submit price adjustments digitally.”

“We are expanding our presence on social media and other digital spaces to improve consumer education and awareness as we fully embrace what it means to have a robust consumer resource centre. Our goal is to strengthen partnerships with NGOs (non-governmental organisations) and government agencies,” the minister added.

“In tandem, we are seeking to develop relationships with consumer advocacy groups, providers of goods and services and business associations to assist with resolution and to bolster the ecosystem for better consumer protection.”

Mr Halkitis said consumer protection offices are on five Family Islands, in addition to New Providence and Grand Bahama, and services are set to expand throughout the Family Islands. He added that community outreach activities and public service announcements are planned to allow consumers to voice concerns.

NOTICE

NOTICE is hereby given that PAUL DACEUS of P.O. Box EE-15806, Soldier Road, New Providence, Bahamas, is applying to the Minister responsible for Nationality and Citizenship, for registration/naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 6th day of June, 2023 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas.

NOTICE

NOTICE is hereby given that DARIEN COBOURNE of P.O. Box CR-56864, Murphyville Road, New Providence, The Bahamas, is applying to the Minister responsible for Nationality and Citizenship, for registration/naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/ naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 6th day of June, 2023 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas.

NOTICE

NOTICE is hereby given that LUCSON CHARLES, P.O Box N-3844 #80 Washington Street, New Providence, The Bahamas applying to the Minister responsible for Nationality and Citizenship, for Registration Naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 6th day of June 2023 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.

NOTICE

NOTICE is hereby given that JOS CARLYN PIERRE, Pinedale, Eight Mile Rock, Grand Bahama, The Bahamas applying to the Minister responsible for Nationality and Citizenship, for Registration Naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/ naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 6th day of June 2023 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.

BAHAMAS POWER & LIGHT (BPL)