By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
A SENIOR tax official yesterday said complaints that visiting yachts are struggling to pay VAT on charter contracts is “definitely news to me”.
Dexter Fernander, the Department of Inland Revenue’s operations chief, told Tribune Business he is “baffled” at assertions by Peter Maury, the Association of Bahamas Marinas (ABM) president, that yacht and boat charters are facing significant delays in
Sir Franklyn: Oil majors to seek own margin rise
By NEIL HARTNELL Tribune Business Editor
FOCOL Holdings chairman last night signalled that the three oil majors will likely now push to increase their own gasoline and diesel margins “that have not changed in decades”.
Sir Franklyn Wilson, who heads the petroleum products supplier that operates under the Shell brand, told Tribune Business it was “worthy to note” that both his company as well as Esso and Rubis have not enjoyed an increase in their own gross profit margins for some 20 years.
Speaking after the Prime Minister confirmed his administration has granted petroleum retailers their long sought-after margin increase, he voiced optimism that “the Government will recognise” similar action is required further upstream in the industry’s supply chain.
And, in remarks that suggest Bahamian motorists and businesses may ultimately have to brace for further pump price rises, Sir Franklyn said it was only “fit and proper that there be some discussion” over petroleum wholesale margins although he gave no indication of what increase the oil majors may seek.
SIR FRANKLYN WILSON
“I think the industry is having some conversations with the Government around that matter,” he confirmed to this newspaper. “It’s worthy to note that I don’t think wholesalers have had an increase in 20 years. On the diesel side I don’t think there’s been an increase for a very, very long time, and on the gasoline side.
obtaining Taxpayer Identification Numbers (TINs) because there is a “fast track process” for their issuance.
Calling on the ABM chief to provide evidence to support his concerns, he added that the Department of Inland Revenue typically issues TIN numbers within “30 minutes” of the Port Department sending it a copy of the charter contract because it knows this is “easy money” for the cash-strapped Public Treasury to collect.
Mr Fernander spoke out after Mr Maury complained to this
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
NASSAU Cruise Port’s top executive yesterday asserted that the project to supply cruise vessels with 60 mega watts (MW) of shore power will generate multiple economic “wins” for The Bahamas. Michael Maura, revealing to Tribune Business that both Nassau Cruise Port and BISX-listed Arawak Port Development Company (APD) are members of the Island Power Producers consortium selected as the preferred bidder by the Government, said the project’s benefits will extend beyond simply boosting The Bahamas’ competitiveness as a cruise destination. Besides enhancing this country’s tourism lifeblood, he added that the liquefied natural gas (LNG) fuelled ‘shore power plant - which may ultimately also be capable of burning hydrogen - represents a back-up
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
newspaper that yacht charters are now facing delays of up to six to eight weeks to obtain a TIN number from the tax authorities.
Besides creating an obstacle to obtaining a charter licence, which requires a valid TIN, the ABM president asserted that this is also holding up tax payments that are badly needed by the Government.
Mr Maury said that, in some cases, Bahamasbased yacht agents and brokers are holding the VAT monies due from their boating clients and paying these on the latter’s behalf when the TIN number comes through. But, if the quarterly VAT filing deadline for payment is missed, he added that local companies were returning the tax payment to their clients and telling them to submit this sum in the next filing period.
Explaining that local agents feared being stuck with liabilities if they held the VAT payment, either to the Government or the client, Mr Maury told Tribune Business: “We can’t get TIN numbers to file for those boats. We have the VAT payments, but without the TIN numbers we don’t have a way to submit the payments when the boats are here.
“In some cases, three months ago, I had applied for it and can’t even get TIN numbers. I don’t know what it is. I know in my company, and heard from other companies, that they’re waiting for TINs. It takes forever to get a TIN number, and then you have to file the VAT and you can’t get a charter licence until you get the TIN number.”
Mr Maury, arguing that the delays in obtaining TIN
SEE PAGE A20
generation source that Bahamas Power & Light (BPL) can turn to when its own units go down so as to avoid the load shedding that has plagued New Providence in years past. Declining to provide further details on Island Power Producers’ plans, given that it is still negotiating terms and details with the Government, Mr Maura would only tell this newspaper that other
MORE than three-quarters of Bahamian petroleum retailers have gained sufficient “breathing room” from upcoming margin increases to settle their unpaid taxes, it was revealed yesterday.
Raymond Jones, the Bahamas Petroleum Retailers Association’s (BPRA) president, told Tribune Business that the gasoline and diesel margin increases unveiled by Prime Minister will “not go straight into our pockets” but also enable dealers to “live up to our responsibilities” as taxpayers.
Disclosing that “cash flow constraints” stemming from the industry’s inflexible, price-controlled fixed margins have left “the majority”
consortium members are international companies with a strong track record and expertise in doing what is required to provide ‘shore power’ to cruise vessels and other ships when docked in Nassau.
He added that the LNG fuel would arrive at Arawak Cay by ship, then be taken by an underground pipeline below APD’s property to the consortium’s power plant
owing VAT, Business Licence fees and other tax arrears to government, he hailed the Government’s “monumental” move in granting the retailers’ request and bringing more than two years of negotiations to an end.
While there has been no official confirmation on when the margin increase will take effect, Mr Jones told this newspaper “it should be fairly soon” with other petroleum retailers voicing optimism that it may be implemented as early as October 1 - less than two weeks away.
Confirming that today’s planned Bay Street protest in front of Parliament, in which petroleum dealers were set to be joined by Association of The Bahamas Marinas (ABM) members, will no longer take place, he reiterated that the margin rise will have a “minimal impact” for
located some 700-800 feet away from the berth outside the Nassau Container Port’s boundaries. Dr Hubert Minnis, the former prime minister, is among those to have challenged the ‘shore power’ deal. In particular, he questioned why no public offering of shares via an initial public offering (IPO) has been confirmed
SEE PAGE A20
motorists, businesses and the wider Bahamian economy.
Mr Jones said that, at current pump prices, someone paying $20 for regular gasoline will spend around $1 extra when the new margins take effect. And a driver purchasing $50 will pay an extra $2.25 based on the prices currently charged by the three oil majors.
And he revealed that the margin increase will enable gas station operators to “give something to our employees” who have endured amid the sector’s “struggle to survive”. Mr Jones said, for example, that the last minimum wage increase had left cashiers “making as much as” pump attendants whose earnings retailers could not adjust due to their financial plight.
Philip Davis KC, speaking on ZNS television on Monday, confirmed that his administration has approved a 25 cent increase in retailers’ gasoline margins while granting a 16 cents rise per gallon of diesel. This will take the margins to 79 cents per gallon of gasoline, as opposed to the current 54
Opposition attacks $203m ‘sinking funds’ draw
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
down THE OPPOSITION’S finance spokesman yesterday voiced concern that the Government used $203m set aside to cover future maturing foreign bonds to repay its
NASSAU CRUISE PORT
WATER CORP URGES ELEUTHERA: SPEAK UP OVER RUSTY WATER
By ANNELIA NIXON
THE Water & Sewerage Corporation is urging Eleuthera residents to voice their complaints over “brown water” incidents so that it can remediate these concerns
The state-owned water supplier urged consumers to speak up after several Eleuthera residents blamed stained clothing and bed sheets on its rusted pipes.
Business owners said they are suffering from “embarrassment” after tourists and local customers have these products ruined.
Karen Catalyn, owner of three Harbour Island vacation rentals and the Island Spa, said she has been plagued by ‘brown water’ for years. Resident Marvin Gibson added that the same problem occurs in Rock Sound.
“If there is a [water] outage, whenever service resumes the water comes out brown,” he explained. “In Rock Sound this is a constant issue as well as other areas of Eleuthera. In Palmetto Point there were some areas that, up to last week, were still not getting water.”
Ms Catalyn said she checked her water quality as recently as yesterday and it was brown. Not only has this forced her to throw out bed sheets used for massages at her spa, but many other residents have had to stop using Water & Sewerage Corporation supply for cooking, cleaning and drinking.
Keyshna Kemp, owner of Da Wash House in North Eleuthera, said she has suffered a few incidents of rusty-coloured water in the washing machines at her business. She told Tribune Business that she has had to reimburse or issue partial refunds to customers, including second home owners whose clothing and bed sheets were ruined. Ms Catalyn has had to do the same.
“I felt so bad that the water is ruining the white clothing and you have to keep on giving discounts,”
Ms Kemp said. “You have to pay to get people’s things replaced. So I got a water filter because the thing is, when the locals items are getting ruined, that’s their shirts, their clothing, and maybe one or two items for work, but when you deal with Airbnbs, that’s their sheets, their blankets.
“That’s things they’re using to make money. That’s not their old shirts. That’s their new cotton pillow cases and whatever. So you have to replace this. You have to replace that. Last week, yes, when the water was off, when it came back on, there was a ton of rust at the bottom, but no clothes got messed up because I saw it in advance and I was able to run it.
“Stuff like that I knew in advance. I was able to get on top of it for the fact my tank was basically empty, but had my tank been full and all that rust was in there, I was going to have a problem. That was just last week.”
Ms Kemp said she did not report the most recent incident because she caught it before it could ruin any items. Ms Catalyn, however, shared a screenshot of a Facebook exchange dated August 14, 2024, between herself and a Water & Sewerage Corporation employee.
After posting photos of brown water and ruined sheets on her Facebook page, the worker reached out and promised to “send a serviceman there shortly to check it out”. However, according to Ms Catalyn, no
one showed up. “I put the pictures on Facebook, and he answered my inbox and said somebody is coming to check it, but nobody ever came,” she added.
Nickolette Elden, the Water & Sewerage Corporation’s spokesperson, urged customers to reach out with their concerns. “I find in my time here at Water & Sewerage Corporation sometimes people just think that it will go unnoticed,” she said. “What’s the use of complaining? Who’s listening to me?
“Right. But if there’s nothing official, then you can’t blame Water & Sewerage Corporation if it’s not handled. Now, if it’s an isolated situation, the one that we dealt with this morning from the complaint we received yesterday, it’s not a one-size fits all approach, but we’d like the opportunity to address the concern. So, absolutely yes. Please reach out to us across the nation.”
“If you feel like you’re not getting the satisfaction that you need, escalate it to Nassau. We have social media pages that we respond to. Just use all of the resources that are available, I think, would be the
best suggestion.” We have our helpline. For Nassau inquiries, it’s 302- 5599. The toll free number is 300-0150.”
Ms Elden added: “We still don’t have any information because we’re not aware of any rusty water on Harbour Island. We had a change in management, I think late last year. I want to say mid-summer and I’m sure everyone is familiar with him, Carl Anderson. He’s the island manager, and he’s pretty responsive, and he also has a boss.” Ms Elden said the wait time for service depends on what the situation is but the Corporation will respond “within 24 hours”.
Carnival unveils more stops in The Bahamas
BAHAMIAN ports of call are set to feature prominently in Carnival Cruise Line’s schedules for ships sailing from US east coast ports in 2026 and 2027. The cruise line, in a statement, said voyages on its Carnival Horizon vessel will feature its new $600m Grand Bahama port, Celebration Key, after sailing across the Atlantic Ocean from Spain. Cruises from the ship’s Miami home port between summer 2026 and spring 2027 will offer both six and eight-day options that also include Celebration Key. The Carnival Vista will also feature six-day cruises with stops in The Bahamas at Celebration Key and Half Moon Cay when it sails from Port Canaveral. And the Carnival Sunshine will offer five and seven-day cruises to The Bahamas that include stops at Half Moon Cay, Bimini, Nassau and Celebration Key.
MARINE FORECAST
BPL CONFIRMS DOUBLE-DIGIT REDUCTION IN ITS FUEL CHARGE
By
BAHAMAS Power & Light (BPL) yesterday con-
firmed that consumers will enjoy a double-digit percentage reduction in the fuel charge for September’s bills to back the Prime Minister’s lower cost assertion.
The state-owned energy utility, in a statement, said the “rate adjustment” will reflect a decrease in the fuel charge on household and business bills for September when compared to July and August.
“Bahamas Power and Light Company Limited (BPL) wishes to inform its valued customers that we have made an adjustment to the fuel charge for the September 2024 billing cycle,” said BPL. “The adjustment will reflect a decrease in the fuel charge per kilowatt hour (KWh) compared to the previous months of July and August.
“This is consistent with the Government’s commitment to explore optimal alternatives to lower the
cost of electricity generally to BPL customers.” BPL will charge a $14.92 per KWh fuel charge for the first 800 units of electricity consumed by customers, and $18.92 per KWh above this threshold. This is a reduction from August’s fuel charge of $17.81 per KWh for up to 800 KWh and $21.92 per KWH above this benchmark. This represents a fuel charge reduction of 16.2 percent and 13.7 percent, respectively.
It is unclear if the fuel charge reduction is solely due to a decrease in global oil prices and the cost BPL paid for its fuel. A BPL spokesman did not respond to queries about the reasons for the fuel charge reduction up to press time.
Dr Leo Rolle, the Bahamas Chamber of Commerce and Employers Confederation (BCCEC) chief executive, yesterday said the reduction in the cost of electricity promised by Philip Davis KC will be “one less impediment” to the cost of doing business in The Bahamas. The Prime Minister on Monday night
said Bahamians will soon see the “fruits” of his administration’s efforts to reform the country’s electricity sector, adding that power bills should start to decline this month. His comments follow complaints about high electricity costs despite the new BPL rate structure which took effect on July 1.
“We are elated with the Prime Minister’s announcement and the subsequent
statement released by BPL relative to reduced energy costs as this will be one less impediment impacting the cost of doing business for the business community,” said Dr Rolle.
He added that the reduction in electricity costs will enable businesses to invest those funds into expanding their offerings and developing the skills of their employees.
Gas retailers: Margin increase
‘isn’t enough but we can float’
By ANNELIA NIXON
BAHAMIAN petroleum retailers yesterday said that while their upcoming margin increase “isn’t enough” they will be able to “float” and survive - so long as global oil prices either stabilise or decrease.
Peter Roker, owner of Roker’s gas station, told Tribune Business that while he is satisfied for now “the model must change” away from the industry’s inflexible, price-controlled fixed margins that are overseen
by the Government otherwise the dealers will at some point in future years again be forced to plead for an increase.
Warning that another margin rise will eventually be required to enable service stations to make a decent profit, he added: “It’s not enough, but what I’m saying is it will suffice as long as the prices continue to trend down. As long as the prices continue to trend down, we will be able to float.”
Prime Minister Philip Davis KC, on Monday
night, confirmed that his administration has approved a 25 cent increase in retailers’ gasoline margins while granting a 16 cents rise per gallon of diesel. This will take the margins to 79 cents per gallon of gasoline, as opposed to the current 54 cents, and 50 cents for diesel, representing 46.2 percent and 47 percent rises respectively.
Mr Roker said he is unsure when the margin increase will be implemented. “There’s a lot of things to work out going
forward in terms of a different formula but, for the time being, we are satisfied with what he [the Prime Minister] has promised, I believe, to have it to us by October 1. I do not want to give you a date, but I believe I’ve been hearing October 1.”
Bernard ‘Porky’ Dorsett, operator of Porky’s Rubis Service Station, told Tribune Business he does not want consumers to suffer from high gas prices. However, he pointed that costs have risen across-the-board as a result of the postCOVID cost of living crisis yet the only industry that has been unable to raise prices to compensate is petroleum retailing.
“I went in the store the other night for a quart of mayonnaise, and it’s almost $10 for a quart of mayonnaise. I buy a half gallon almond milk. It’s like $10. The only price that hasn’t rise as much is corned beef, but everything else has gone through the roof. What do we do? If you need it, you have to buy it. That’s the way the world is,” Mr Dorsett said.
“But, you know, what I’m saying is our increase in the fuel will be no more than a bag of peanuts. Peanuts are $2. It’s going be $2.50,
“We welcome pronouncements like these as they help to ensure that more of the revenue generated by businesses can be used in other areas like expansion, export opportunities, staff development and cost savings passed on to the consumer,” said Dr Rolle. He added that the Ministry of Energy and Transport will soon commence free energy audits, beginning in
based on the present fuel prices now. What I’m saying is if you buy in ten gallons of gas, so you spending $50$55 for gas right now, you’ll spend $57 a week.”
Mr Davis, in announcing the margin increase, noted that gas prices are currently on a downward trend and are expected to continue in that direction for the rest of 2024.
He added that this decline has provided breathing space for the margin adjustment, saying “the time is now right for us to do what we’re doing, because it will not have the kind of negative impact on the Bahamian people that it would have had if we had done it sooner.”
The Bahamas Chamber of Commerce and Employers Confederation (BCCEC), responding to the Prime Minister’s announcement, doubled down on its call for a reduction in government petroleum taxes. The Government, though, has steadfastly refused to consider this as it will have to make-up the revenue foregone from other taxes.
“We note the Prime Minister’s response subsequently providing the much sought-after increase of 25 cents on the gallon, but are deeply concerned that the cost is to be borne by the consumers like business owners, who already have to contend with a myriad of challenges including the increased cost of doing business in the country,” the BCCEC said.
Abaco, which will highlight energy inefficiencies and promote energy efficient appliances and renewable energy to businesses.
“We are also excited that the free energy audits as proposed by Minister Coleby-Davis are on schedule to begin with Abaco and hope that licensed Bahamian energy auditors will be used to provide the same,” said Dr Rolle.
“Additionally, the results of these energy audits that highlight the inefficiencies and business cost savings measures should have the allowance of concessions for energy efficient appliances, solar lighting, solar panels etc that can further decrease energy costs for businesses.” Dr Rolle said the Chamber also provides energy saving tips for businesses on its website. “The BCCEC is also doing its part by providing energy savings video tips that can be found on our website, which should be a complement to the rate adjustments and other measures of reform,” he added.
“While we support the increase for petroleum dealers, we strongly oppose the avenue taken to achieve the same. The BCCEC again calls on the Government to instead relax their taxes levied against the industry to ensure that the increase is not placed on the backs of the Bahamian people.”
Motorist Winifred Linden voiced similar views, adding: “If the Government take a little more loss on the VAT, then you would think that the merchants would give you a better price, right?” Another motorist voiced concern that volatile gas prices may not continue to decline.
“You speaking just for the rest of 2024, but what’s going to happen when - I could say when and not even, God forbid, when fuel charges rise because of lack of resources or another situation happen like a pandemic?” they said.
“Stuff like that affects the price of fuel. So it fluctuates. It’s unpredictable, and even if he said 2024 it’s going to happen some time in the near future, because these things happen at least every five years. There’s always a surge in gas prices at some point.”
Motorist Wilfred McKenzie posed the question: “If gas goes much higher, or there’s a time that we have a spike in gas prices, are they going to take a cut or are they going to just keep it where it is? And if it goes up to a much higher price - it is low now, but it could go up to a very high price depending on world conditions - and so if it does and it may actually increase, do they think that’s the right time? I don’t think it is.
“I think they should pick the time that they want to do these increases that it might be a little easier on the consumers. I understand where they coming from, but it’s just hard to swallow as a consumer that gas is going to go up.
BAHAMAS POWER & LIGHT (BPL)
GOV’T TO AGREE 400-ROOM HOTEL DEAL WITH BAHA MAR
By FAY SIMMONS Tribune Business Reporter
THE Government and Baha Mar’s owner will sign a Heads of Agreement as early as today for the development of a new 400-room resort on the demolished Melia hotel site.
Prime Minister Philip Davis KC, speaking during an interview with ZNS television, said 70 high-end condominiums and other amenities are also in the plans of Hong Kong-headquartered Chow Tai Fook Enterprises (CTFE) alongside the 400-room resort.
“Tomorrow [Tuesday], or very shortly, we’re going to be signing a Heads of Agreement with Baha Mar
where they’re going to be developing another 400room hotel where they have taken down Melia.
That’s going to be replaced with a 400-room hotel plus another 70 luxury condos with amenities,” Mr Davis said.
“I met with the owner last year Christmas because I was attempting to get them to open up Melia. He said: ‘I’ll do something better, Mr Davis, I’m going to break it down and build something new for you.’
And he kept that promise.”
Mr Davis said other investment projects are planned for New Providence and the Family Islands, which have resulted from the “trust” investors have in his administration and The Bahamas. “We
have on Paradise Island next to the One and Only. They’re going to be building and investing there as well,” he said.
The Prime Minister appeared to be referring to the proposed $400m Ocean Club expansion, which has already been touted as creating 200 full-time jobs once the development is fully completed in 2027.
Access Industries, the existing Ocean Club’s owner, is partnering with Florida-based real estate developer, Two Roads Development, and the highend Four Seasons resort brand to construct 67 private residences that will be priced between $6.5m and $23m.
Tribune Business understands that the The Ocean
Club, Four Seasons Residences will be developed at a 6.1-acre site located between the RIU Paradise Island resort and Sunrise Beach Villas on Paradise Island’s northern coast overlooking Cabbage Beach.
“Not to talk about what’s happening in the Family Islands, there’s investments there in Sampson Cay. Another Rosewood resort is going to be there,” Mr Davis said. “These are all new investments. Why? Because they have confidence in this government and their confidence in our partners.”
He maintained that investors are still attracted to Grand Bahama and, although previous administrations shied away from
confronting the Grand Bahama Port Authority (GBPA) for allegedly failing to live up to its governance and development obligations under the Hawksbill Creek Agreement, reputable developers will not be deterred by his administration’s confrontation with Freeport’s quasi-governmental authority.
“We are still attracting. The amount of inquiries we’re having on investing in Grand Bahama continues to abound, and we are investing in Grand Bahama and attracting other investors from abroad,” he said.
“If an investor will be disinclined to invest in Grand Bahama because The Bahamas government is insisting on the Port Authority living
Margin ‘breathing room’ for 75% of dealers owing taxes
FROM PAGE A24
cents, and 50 cents for diesel, representing 46.2 percent and 47 percent rises respectively.
These long sought-after increases, while not giving petroleum dealers all they want, are deemed vital to the industry’s survival - and ability for operators to earn sufficient profit - amid warnings that the existing margins have been “decimated” by post-COVID inflation and ever-increasing operating expenses that have plunged many into consistent losses.
Detailing the many benefits, Mr Jones told Tribune Business: “Retailers will be able to catch up on their outstanding Business Licence fees and VAT that the majority of them are unable to pay because of cash flow constraints.
“They can now meet with the Department of Inland Revenue and really look at how to settle the outstanding fees and taxes they owe. This will not go straight to our pockets. We have debts to pay and now have breathing room to do so. We can go now and say we want to make an agreement to settle outstanding VAT and Business Licence fees due to the Government.”
While unable to provide a figure for the collective sum owed to the Government, Mr Jones added: “I’ll tell
you the majority, more than 75 percent of our retailers, have money due to the Government for VAT, Business Licence fees or something of that nature.
“They are committed to paying. A lot of them have gone to develop payment plans to pay the fees and taxes to the Government. It’s a bill that’s due and has to be paid. We appreciate the Government’s effort for the increase, and this will allow us to live up to our responsibilities and make a living.”
The Government, during its two-year plus talks with the petroleum retailers, at one point provided the sector with a collective $6m to ease the financial strain but Mr Jones said much of this was immediately returned to pay past due taxes.
Many observers will likely view the timing of margin increase announcement as a bid by the Government to head-off tomorrow’s planned protest to mark Parliament’s re-opening, which it has successfully achieved. Mr Jones, though, said the Prime Minister’s confirmation - which came after he met with the Association and its members on Monday - “just happened to be timely”.
“We didn’t want to be at war with the Government,” he added. “It’s been a long road but, at the end of the
day, we believe the Government has reacted and done something. We demonstrated to them the price [of oil and gas] has gone down significantly over the last two years, and before it took an adverse turn again now was the time to provide us with relief. Thankfully, they reacted.
“I was surprised that after the meeting with yesterday [Monday] that the Prime Minister quickly announced it but that’s fine.” Asked when the margin increase will take effect, Mr Jones replied: “It should be fairly soon. We’re working to confirm with them exactly when it will take place. They have some things to do inside the Government with their processes but we expect it should be fairly soon. No need to wait now.”
Pointing out that it was a change in the margins, rather than a wholesale overhaul of the industry’s pricing structure, Mr Jones said he understood the margin change takes effect through simply being published in the Government’s gazzette and does not have to be approved by Parliament.
“I think that for gas retailers this will give breathing room and, with more rigorous management of operating expenses, allow us to earn a living,” the Association president told Tribune Business. “And,
most significantly, we will be able to give something to our employees also. We could not have done anything before this for them because we were struggling to survive.
“This will have a trickle down effect. With the increase in minimum wage, cashiers were making as much as pump attendants while we couldn’t adjust them. Now with this increase, which we expect to come soon, we will be able to look at what we can do for our employees.”
As for the impact on Bahamian motorists and transportation-reliant businesses, such as jitneys and taxi drivers, Mr Jones argued that the margin rise will have a minimal effect. He pointed out that global oil prices have reduced significantly over the past two months and are forecast to continue falling for the next six months.
“Someone spending $20 per week on gas will spend an extra dollar now,” the Association president said, based on the margin increases and current pump prices. “It’s a minimal impact on the motoring public. Someone spending $50 per week will spend an extra $2.25. If the price continues to decrease in the short-term that will be less.”
As of yesterday, gas prices in New Providence were
$5.45 per gallon at Rubis, $5.61 per gallon at Shell and $5.35 per gallon at Esso. Mr Jones said these were $1.80 to $1.90 less than around two years ago when pump prices peaked at $7.31 per gallon in 2022.
“This will also help reduce overdraft costs,” he added. “Purchasing costs for retailers will be less if the price has gone down and our bank fees will go down.” Given that the margin increases are VAT inclusive, Mr Jones explained that 2.5 cents of the 25 cent gasoline margin increase will go to the Government as will 1.6 cents of the diesel rise. Retailers will retain 22.5 cents and 14.4 cents, respectively.
“It’s a step in the right direction,” he reiterated of the margin increase. “It’s a monumental thing that the Government has done on our behalf and we thank them for that. There’s no need for a protest. If anything, we will go and shake their hands as they heard our pleas.”
Peter Maury, president of the Association of Bahamas Marinas (ABM), whose members were due to join today’s now-aborted protest, said that while the 16-cent diesel margin increase will enable marinas to better cover costs associated with providing fuel it represents a further expense hike for visiting boaters.
Opposition attacks $203m ‘sinking funds’ draw down
FROM PAGE A24
The just-released report further affirmed: “In financing activities, the balance under the net acquisition of financial assets shifted to a negative $185.8m from an increase of $226.5m as the Government drew down on sinking funds to assist with financing debt obligations and the value of loans to Government Business Enterprises was significantly less.”
The report effectively confirms that the Davis administration has been using ‘sinking fund’ assets, which were supposed to be set aside and built up to cover future international foreign currency bond issues as they mature, to help repay current debt obligations and cover its 2023-2024 fiscal deficit. In effect, it has been using assets held for future benefit to meet current needs.
“The report causes us to raise another matter we previously raised that has gone unanswered,” Mr Thompson said yesterday. “The report has indicated that the Davis administration has used over $200m of the sinking fund resources to pay debt obligations, This is inconsistent with the Government’s budgetary plan to add some $59m to the sinking fund.
“This was clearly an unplanned draw down and also inconsistent with the Government’s published Annual Borrowing Plan which made no mention of using the sinking funds to meet current debt obligations. Once again we find the Davis administration committing one thing to the Bahamian people and then turning around and doing the opposite.”
Simon Wilson, the Ministry of Finance’s financial secretary, could not be reached for comment
LEGAL NOTICE
Keywise Quantamental Limited
INTERNATIONAL BUSINESS COMPANIES ACT (No.45 of 2000) In Voluntary Liquidation
Notice is hereby given that in accordance with Section 138 (4) of the International Business Companies Act, (No.45 of 2000), that Keywise Quantamental Limited (Registration no. 196756 is in dissolution. The date of commencement of the dissolution is the 12th day of September, 2024
The Liquidator of the Company is Fang Zheng and can be contacted at 89 Pok Fu Lam Rd, The Belcher’s, Tower 6, 61/F Flat F, Hong Kong. All persons having claims against the above-named company are required to mail their names, addresses and particulars of their debts or claims to the Liquidator before the 15th day of October, 2024
Fang Zheng Liquidator
up to its contractual obligation, then I have to think what kind of investor that person will be. I would expect that any investor would want to applaud anyone or government who is insisting that the other party in a contractual arrangement would live up to those arrangements.” In April, the Davis administration sent a demand letter to the Grand Bahama Port Authority (GBPA) giving it 30 days to pay some $357m allegedly owed to the Government. It asserted that this sum represents government expenditures incurred in Freeport over and above tax revenues generated by the city during the period 2018-2022.
He reiterated his belief that it would have been better for the Government to cut its petroleum-related taxes, something it has repeatedly said it has no intention of doing because it will have to make up the foregone revenues elsewhere.
But Mr Maury pointed out that, with its $1.16 per gallon charge plus 10 percent VAT, the Government is the biggest financial beneficiary from the petroleum industry - with retail and wholesale margins minuscule compared to its take - while doing none of the work.
“It’s going to help us cover the cost but doesn’t do much for customers because now it just gets passed on to them,” Mr Maury said. “It just seems like the wholesaler makes 10 percent, the retailer makes 15 percent and the Government makes 50 percent. It’s crazy.
“It will definitely help cover our costs, but we just pass all that on to the consumer. It doesn’t do anything to promote the business... The wholesaler brings it in, delivers it to the retailer. We carry the inventory overhead as we have to pay for it when we get it, pay staff, pay higher utility costs and then sell it. They [the Government] do nothing.
“When they compare The Bahamas to, say, Key West where you can buy fuel for $3, it puts us as a higher cost destination and I don’t think they understand that.”
before press time yesterday despite numerous attempts. However, Mr Thompson added: “What is even more concerning is the Government once again is in breach of the law.
“Section 56 of the Public Finance Management Act states that the minister of finance shall disclose in the annual Budget the government securities and loans to be redeemed from the sinking funds. This means that it must be disclosed before the funds are used out of the sinking funds.
“The annual Budget disclosed the opposite - that funds would be added, not taken away, from the sinking funds. The Government must explain how their actions can be consistent with section 56.”
The Public Finance Management Act, which the Davis administration brought to the House of Assembly in 2023, stipulates in section 56’s clause
two that “the minister [of finance] shall, as part of the annual budget, disclose the particulars of government securities and loans to be redeemed from the sinking funds”.
This was not done in May 2023, and both the fullyear Budget and half-year report show the Government intended to expand the sinking funds’ collective asset base by $59.8m during the course of the 2023-2025 fiscal year.
That was to be accomplished via a $1.131m payment from the Clifton Heritage Authority; $3.7m and $1.7m in likely interest received on respective $200m and $100m US dollar bond issues; and the bulk - some $53.279m - generated from a $750m US dollar bond holding.
Mr Thompson, meanwhile, renewed Opposition concerns that the Government’s deficit reduction in 2023-2024 was achieved
LEGAL NOTICE
Blooming International Ltd.
INTERNATIONAL BUSINESS COMPANIES ACT
(No.45 of 2000)
In Voluntary Liquidation
Notice is hereby given that in accordance with Section 138 (4) of the International Business Companies Act, (No.45 of 2000), that Blooming International Ltd. (Registration no. 212796 B) is in dissolution. The date of commencement of the dissolution is the 23rd day of August, 2024. The Liquidator of the Company is WND LIMITED and can be contacted at Winterbotham Place, Marlborough & Queen Streets, Nassau, New Providence, N-3026, Bahamas. All persons having claims against the above-named company are required to send their names, addresses and particulars of their debts or claims to the Liquidator before 4th day of October, 2024.
only by deferring payments to vendors resulting in a build-up of arrears not shown by the public sector’s cash-based accounting.
“The Opposition is convinced that the constant complaints we receive from our constituents regarding late and no payments from government indicates that the fiscal hole may be even worse and government arrears seem to be building up,” he argued.
“How did the Government manage to spend approximately $20m less on utilities than last year?
Does this reflect nonpayment to BPL by the Government and a build up of payables? There is $111m less spent on goods and services. Does this reflect less goods and services, or non-payment or delayed payments for these goods and services?
“The Government’s fiscal performance for the year has been marked by a
significant shortfall in revenue compared to its target and an alarming increase in the overall national debt,” Mr Thompson added.
“The expected revenue targets have not been met, due to what we have warned the Government is a stagnating economy. Neither the overall revenue nor the VAT collections met their targets. This shortfall has compounded the fiscal deficit.”
Mr Thompson also returned to the Opposition’s theme of attacking the Government’s travel spending even though it accounts for a relatively modest portion of its $3bnplus total expenditure.
“The PLP has once again busted its travel budget by over 40 percent after committing to cutting spending on travel,” he blasted.
“True to form the PLP spent $30m less on healthcare and $7m less on education than the previous fiscal year and decided it was more important to go $5m over-budget on extravagant travelling.”
Sir Franklyn: Oil majors to seek own margin rise
“I myself have not been a part of industry discussions yet, but I’m sure our management team have. I’m sure at some point the Government will recognise that margins have not changed in decades. That’s a matter that will probably be discussed at some point.”
Wholesale petroleum margins presently stand at 33 cents per gallon of gasoline and around 18 cents on diesel. Asked about the impact of these inflexible, price-controlled margins remaining unchanged for so long, Sir Franklyn said: “Obviously, it’s not good news.” As for the industry’s sought-after increase, he added: “I have no idea but obviously it be fit and proper there be some discussion.”
Backing the upcoming margin increase for gas station operators, he added: “They’re business people, and we are pleased that they think they have a business that can be viable and continue. I think it’s in the interests of the country that all businesses operate for
commercial reasons not out of a sense of despair.” The three oil majors have made no secret of their desire for a margin increase as they are facing the same ever-escalating costs and profits squeeze that has impacted their retail customers post-COVID.
Raymond Samuels, Rubis’ managing director for The Bahamas and Turks and Caicos, last year said “the regulated margin for wholesalers has been around for over 20 years” without any increase while the cost of doing business has risen significantly over the same period.
Speaking at the 10th anniversary celebrations for Rubis’ entry into the Bahamian petroleum market, when it acquired Texaco’s downstream business and assets, he said: “We under wholesale haven’t had any adjustment in our margin for over probably 20 years.
“It has been 33 cents per gallon on the gasoline, and 18 cents roughly on the diesel. As you know, the cost of doing business has certainly escalated over the
years, not to mention the impact of COVID… The logistics costs we see, steel prices and so on going up, so our capital costs have gone up pretty significantly. So we hope at some stage there’ll be some kind of improvement to that margin.”
Mr Samuels added: “We certainly believe that the margin should keep pace with the cost of doing business, so it should be assessed and analysed over time to allow for investors like ourselves to really accomplish a reasonable return on investment.
“We really think that there needs to be a balance. Timing is important, of course, and we do understand the high price environment and customers certainly feeling the impact, so I think timing is going to be of the essence. But we do anticipate that at some stage we’ll have an assessment of the wholesale margin so we can have better alignment with the increase in the cost of doing business and return on investment.”
Meanwhile Raymond Jones, the Bahamas Petroleum Retailers Association’s (BPRA) president, yesterday told Tribune Business there are other industry-specific issues he and his members want to address beyond the forthcoming margin increases that they anticipate will take effect from October 1.
“There’s some other things we want to look at as an industry, look at rental and operating costs and things like that,” he explained. “That’s something we have to address with the wholesalers, looking at leases and the royalties we have to pay. That’s a topic for another ay.
“We’re working with the Government to make sure our employees, business operations and investors can survive. This [the margin increases] puts us in a position to be able to move forward, to be able to survive, cover our costs and go home.”
Mr Jones said the industry’s pricing structure, and moving away from
price-controlled fixed margins to a percentage of the landed fuel cost, remains on the Association’s radar for future talks with the Government. “That’s something we’ve addressed before and something we’ll look at in the future,” he added. “Going forward there’s a number of industry things that we have to look at, the audit for Business Licences, and things like that which affect our operating cost structure. We’ll continue to dialogue with the Government. They’ve been receptive to what we put on the table, and had that dialogue to find a mutually beneficial compromise to make an adjustment. It took a long time, but happy to say we got to that point.”
Michael Pintard, the Opposition’s leader, yesterday argued that the timing of the retail margin increase announcement was deliberately designed to head-off the industry’s planned protest before Parliament today - something the Government has succeeded in achieving. He argued that, instead, the
Cruise chief: Multiple ‘wins’ from 60MW shore power
to give Bahamians a chance to own part of the project or Island Power Producers and thereby increase their wealth.
Mr Maura, who is also APD chairman, declined to comment on this yesterday, but Tribune Business understands that an IPO structured similar to APD’s - where Bahamian investors purchased a combined 20 percent equity stake in the container port - has not been ruled out once an agreement has been sealed with the Government and construction is underway. This, in effect, de-risks the investment for Bahamians.
In the meantime, APD’s 12,000 investors and the 3,000 who acquired the 49 percent collective Bahamian ownership interest in Nassau Cruise Port, will have an indirect interest in the ‘shore power’ investment as will the Government via its own 40 percent APD stake.
Mr Maura, meanwhile, said cruise industry trends
and investments designed to deliver on the sector’s commitment to slash greenhouse gas emissions and reduce its carbon footprint mean there is a strong justification for The Bahamas to introduce ‘shore power’ itself.
Noting that the Port of Miami in June commissioned shore power berths that will be used by most of the cruise lines that visit The Bahamas, the Nassau Cruise Port chief disclosed that Royal Caribbean has already voiced interest in having its ships connect while docked in the Bahamian capital.
Miami’s berths will serve Carnival, Royal Caribbean, Virgin, Mediterranean Shipping Company (MSC) and Norwegian Cruise Line, and Mr Maura said two of the vessel to most frequently call on Nassauthe Carnival Conquest and Royal Caribbean’s Freedom of the Seas - have become the first to hook-up to its shore power.
“When we look at our Nassau calls, Carnival
Conquest and Freedom of the Seas are regular customers of Nassau Cruise Port,” he told Tribune Business
“As an example, in 2025, we will welcome the Carnival Conquest some 61 times and the Freedom of the Seas will visit 45 times. These are just two examples of ships connecting in Miami and there will be many more.
“These ships happen to be Nassau Cruise Port customers. They are shore power ready, and the expectation will be that if they can connect in Miami they will be able to connect here.... Royal has expressed interest in Nassau being shore power ready in conversations.”
Mr Maura said 67 percent of Carnival’s existing fleet is now shore power capable, while all Royal Caribbean’s new builds will also be able to hook up while in port, thus giving an indication of industry demand. He added that the industry is also retro-fitting all older vessels where it makes economic sense to do so in order for
them to be shore power capable.
“That helps to provide a strong case for the justification of the port investing in shore power,” Mr Maura said. “If you look at shore power we, too, within our small community of New Providence we must all - not just Nassau Cruise Port but Nassau Container Port and other operators throughout The Bahamas, creating and having businesses in The Bahamas - reduce our carbon footprint.
“We at Nassau Cruise Port have to compete with other destinations, and if we can support the efforts of the cruise industry - which has made a substantial commitment to reduce its carbon footprint - we want to do that.”
Mr Maura said cruise ships constantly analyse their fuel burn while in port, the need to run their generators, and the costs associated with their hotelstyle operations. “That’s a lot of energy consumption, and if we can help them reduce that energy burn on
Government should return more money to Bahamians and businesses by cutting its petroleum taxes.
“This has nothing to do with principle or a wellconsidered decision,” Mr Pintard argued. “The Government, in its typical way, has sought to avoid further embarrassment in its dealings with the business community and sought to head-off the protest by persons in the marina industry, because of the ill-advised taxes that the Government put on that sector, and the petroleum retailers.
“I think more Bahamians would rather see more money in the hands of residents and business persons rather than the Government... In our view, the Government should look very seriously at the composition of the revenue they are getting and give very strong consideration to a cut in that direction. At the end of the day, we want the money in the pockets of Bahamian consumers inclusive of struggling businesses.”
of a 60 MW power plant that provides shore power to cruise ships and ships in general, there’s two wins here.”
ship by plugging in while in port, that’s a win-win,” he told Tribune Business.
“We’re very committed to that and see it helping to support the very strong demand Nassau has enjoyed as a cruise destination. Tourism is the lifeblood of our economy so for us to make the effort with these ships supports the continuity of tourism and, more importantly, the economic impact of tourism.”
Besides the benefits for tourism, Mr Maura said the 60 MW shore power project will also aid BPL while boosting the energy industry and wider economy. “It also supports the diversification of the economy within the island of New Providence and the country of The Bahamas,” he added.
“Our reality is that our sate-owned enterprises struggle with efficiency and competition, and have always been troubled by political interference in that they are not run as efficiently as the private sector entities. I think the addition
The Nassau Cruise Port chief said the creation of a 60 MW plant fuelled by LNG and, eventually hydrogen also, “brings power resilience to BPL” by offering redundant generation when its own units fail.
“This is at a time when BPL continues to be dependent on rental units,” he added.
“The possibility of also being available to BPL, should BPL find itself in need of temporary power support of supply if it has an engine failure, BPL will be able to pull power on a temporary basis from Arawak Cay rather than consumers having to experience outages and load shedding.
“We see the power plant as being a very sustainable tool and resource for BPL and, by extension, the Government. The other point to realise is that it’s not costing the Government a penny as private sector monies are going into constructing the plant and operations of the plant but the Government and BPL will benefit from the plant.”
Yacht charter VAT woe ‘definitely news to me’
FROM PAGE A24
numbers represented a further deterrent to visiting boats and charters coming to The Bahamas, added:
“It just makes it difficult for the yachts to be compliant. The biggest thing is the yachts are owned by wealthy people. The last thing they want to do is do something wrong in the country and have a tax liability or anything else. They will choose other destinations.”
Confirming that yacht and charter agents/brokers are reluctant to hold on to VAT payments on behalf of clients, the ABM president said that if a filing period was missed the funds are being returned to the boats because “nobody wants that liability”. They then have to file and pay in the following quarterly reporting period.
“The Bahamas agents don’t want to have the funds in their account because the boats are going to say: ‘Where’s the receipt from the Government to cover their end?’ I’m not going to hold on to it. It’s money that has to be submitted. The Government is going to say where’s my money? It puts Bahamian businesses in a precarious position,” Mr Maury said.
After starting out well, he added that yacht charter requests for TIN numbers were now sometimes taking as long as six to eight weeks to come through. He added that the delays appeared to start around March this year, when the Department of Inland Revenue was facing the bulk of Business Licence fee payments, filings and related inquiries.
However, when informed by Tribune Business of Mr Maury’s complaint, Mr Fernander retorted: “That’s definitely news to me. Once the Port [Department] signs
off on a copy of the contract we fast track those. We don’t even let 30 minutes go. That’s very interesting. That’s very strange.”
Acknowledging that he was not directly responsible for dealing with yacht charter VAT, he added: “I can’t even see a reason for a delay. Thirty minutes after the Port gets a copy of the charter contract we regularise them. That’s easy money. The fast track process, we do not to my knowledge, we don’t have any delays. We try to get them because it’s easy, quick revenue.”
Mr Fernander then challenged M Maury: “Give us a reference to validate the claims you make so that we can check on this stuff. We don’t have any delay on this stuff. That’s easy turnover revenue for the Government and we have a special fast track process for them. I’m baffled by the comment.”
The Department of Inland Revenue chief said he would reach out to Shunda Strachan, its acting comptroller, and ask her to contact Tribune Business for further comment. No call, though, was received before press time last night.
Mr Maury, meanwhile, said he believed the TIN delays are due to Department of Inland Revenue staff being “swamped with all the work and requests” they have to deal with. He added: “I know we’ve sent in requests for TIN numbers as agents and sometimes don’t get a response.
“In my other businesses we’ve asked questions on the portal and sometimes it takes them two to three weeks to get back because of all the stuff they’re dealing with. The business are so overworked, and I’m sure they’re overworked.”
Wall Street stays stuck in place as it counts down to a rate cut
By STAN CHOE AP Business Writer
U.S. stock indexes remained stuck in place on Tuesday as Wall Street made few big moves ahead of what's expected to be the first cut to interest rates in more than four years.
The S&P 500 edged up by 1.49, or less than 0.1%, to 5,634.58. It remains 0.6% below its all-time closing high set in July, and it briefly rose above that mark during the morning.
The Dow Jones Industrial Average slipped 15.90 points, or less than 0.1%, to 41,606.18 from its own record set the day before, while the Nasdaq composite edged up by 35.93, or 0.2%, to 17,628.06.
Intel helped drive the market with a gain of 2.7% following a series of announcements, including an expansion of its partnership with Amazon Web Services to produce custom chips. Intel also detailed plans to build its foundry business.
That helped offset a 2.2% drop for Philip Morris International, which said it expects to record a loss of $220 million against its third-quarter results because of the sale of its Vectura Group inhaledtherapeutics subsidiary.
The calm movements for the U.S. stock market overall were a sharp departure from prior weeks, during which the S&P 500 briefly fell nearly 10% below its all-time high. At the time, global markets were reeling on worries that a slowing U.S. economy could fall
into a recession, along with some technical factors that forced hedge funds around the world to back out of a popular trade all at once. Since then, excitement has built about an announcement scheduled for Wednesday afternoon from the Federal Reserve. The unanimous expectation on Wall Street is that the Fed will cut the federal funds rate, which has been sitting in a range of 5.25% to 5.50% for more than a year.
Lower rates would make things easier for the economy, which has already begun to slow because it's become so expensive to borrow money for everything from houses to cars to corporate debt. The Fed has been keeping its main interest rate at a twodecade high in hopes of grinding down on the economy enough to stifle high inflation.
Now that inflation is down substantially from its peak two summers ago, the Fed believes it can shift its focus more toward protecting the job market and economy. The only question is how much the Fed will cut rates by, and that is a delicate balancing act. While lowering rates gives a boost to the overall economy and to financial markets, it can also give inflation more fuel. Some critics say the Fed is already moving too late to help the economy, while others warn of inflation staying stubbornly higher than it has in the past.
The general expectation on Wall Street is for
PUBLIC NOTICE
INTENT TO CHANGE NAME BY DEED POLL
The Public is hereby advised that we, PAIGE ULONDA FORBES of #27 Hollywood Subdivision, New Providence, Bahamas Parent of PARIS JORDYN DELANCEY A minor intend to change our child’s name to PAIGE FORBES If there are any objections to this change of name by Deed Poll, you may write such objections to the Deputy Chief Passport Offcer, P.O. Box N-742, Nassau, Bahamas no later than thirty (30) days after the date of publication of this notice.
NOTICE
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 11th day of September, 2024 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.
NOTICE
NOTICE is hereby given that MIGUEL BRIAN CAMPBELL of #41 Boatswain Hill, 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 11th day of September, 2024 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas.
NOTICE
NOTICE is hereby given that BRADLY AUGUSTIN of #7 Canterbury Close, Grand Bahama, 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 11th day of September, 2024 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.
the Fed to deliver a largerthan-usual cut of half of a percentage point on Wednesday, according to data from CME Group. But it's not a certainty. Traders are still betting on a 35% probability for a traditionalsized move of a quarter of a percentage point, Economic reports released Tuesday did little to change those expectations. One said U.S.
shoppers spent more at retailers last month than expected. That's an encouraging signal indicating strength for the heart of the U.S. economy, but details underneath the surface may have been more discouraging. After ignoring automobiles and fuel, sales at U.S. retailers last month were a touch weaker than economists expected.
NOTICE
NOTICE is hereby given that MICHAEL SERAFIN of Montgomery Avenue, New Providence, 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 18th day of September, 2024 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.
"This data isn't going to decide the issue for the Fed, one way or the other," Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley, said about the size of Wednesday's rate cut.
A separate report that came later in the morning said U.S. industrial production returned to growth in August and was stronger than economists expected.
In the bond market, the 10-year Treasury yield rose to 3.64% from 3.62% late Monday. The two-year yield, which more closely tracks expectations for the Fed's actions, rose to 3.59% from 3.56%.
In stock markets abroad, Japan's Nikkei 225 fell 1% after the value the Japanese yen ticked higher against the U.S. dollar.
THE NEW York Stock Exchange, with a banner for American Eagle Outfitters, is shown on Tuesday, Sept. 17, 2024,
RAILROADS AND REGULATORS MUST ADDRESS THE DANGERS OF LONG TRAINS, REPORT SAYS
By JOSH FUNK Associated Press
AS freight trains have grown longer, the U.S. has seen an increase in the number of a type of derailment caused by the forces of railcars pushing and pulling against each other, the National Academies of Sciences said Tuesday in a long-awaited report that urges regulators, Congress and the industry to reexamine their risks.
Railroads should take special care in the way they assemble trains that routinely measure more than a mile or two, especially those with a mix of different types of cars, the report said, echoing a warning the Federal Railroad Administration issued last year.
"Long trains aren't inherently dangerous. But if you don't have adequate planning on how to put the train together, they can be," said Peter Swan, a Penn State University professor who was one of the report's authors.
The increased use of long trains has allowed the major freight railroads — CSX,
Union Pacific, BNSF, Norfolk Southern, CPKC and Canadian National — to cut costs because they can employ fewer crews and maintain fewer locomotives. The average length of trains increased by about 25% from 2008 to 2017. By 2021, when the report was commissioned, some trains had grown to nearly 14,000 feet (4,267 meters), or more than 2 1/2 miles (4 kilometers) long.
The unions representing train crews have said that longer trains are harder to handle, especially when they travel across uneven territory, because of the way cars push and pull against each other. On a train that's more than a mile (1.6 kilometers) long, one section can be going uphill while another section is going downhill. Such trains are so long that the radios rail workers use might not work from the front to the back of them.
"Anybody and everybody that's in rail safety knows that this is a problem. It cannot be overstated," said Jared Cassity, the top safety expert at the SMART-TD
union that represents conductors. "Long trains absolutely are a risk to the public and a risk to the workers and anybody with common sense can see that."
Mark Wallace with the Brotherhood of Locomotive Engineers and Trainmen said Tuesday's report reinforces what engineers have long known: "Long trains have a greater risk of derailing, have communications issues, and pose a threat to the public due to blocked crossings, among other issues." The union urged Congress and regulators to act quickly.
The railroads say they work to ensure their trains are safe at any length. The president and CEO of the Association of American Railroads trade group, Ian Jefferies, said many railroads use software that helps them model train forces before railcars are hooked together.
"As operations continue to evolve, railroads are pulling on three key levers — technology, training and infrastructure — to further
KROGER AND ALBERTSONS MAKE A FINAL PITCH FOR THEIR MERGER BEFORE A JUDGE DECIDES WHETHER TO BLOCK IT
By DEE-ANN DURBIN and CLAIRE RUSH Associated Press Writers
THE federal government urged a U.S. District Court judge on Tuesday to temporarily prevent a proposed merger between Kroger and Albertsons, saying in closing arguments the combination would "almost certainly" benefit shareholders and not everyday shoppers.
Lawyers for the Federal Trade Commission and for the supermarket chains gave their closing arguments at the end of a three-week hearing on the commission's request for a preliminary injunction to block the $24.6 billion deal.
Kroger and Albertsons argued their merger would preserve consumer choice by allowing them to better compete against growing
rivals like Walmart, Costco and Amazon.
"If we don't do something, the corner grocery store is in real danger," Kroger attorney Matt Wolf said.
U.S. District Judge Adrienne Nelson must now decide whether to grant the injunction while the FTC's anti-trust complaint goes goes before an in-house administrative law judge. Nelson said she would work "expeditiously" on her decision, but she didn't say when she would rule.
Kroger and Albertsons proposed what would be the largest supermarket merger in U.S. history in 2022. The FTC alleged the merger would eliminate competition and lead to higher food prices for already struggling customers.
Susan Musser, the FTC's chief trial counsel, argued
enhance safety and reliability," Jefferies said.
But Cassity said countless derailments over the years have shown that software and the cruise control systems that help engineers operate a train are imperfect. The number of derailments in the U.S. has held steady at more than 1,000 a year, or more than three a day, even as rail traffic decreased. Railroads say two-thirds of those are minor. Derailments have gotten increased attention since a disastrous one in East Palestine, Ohio, in February 2023 in which
hazardous chemicals leaked and burned for days. That Norfolk Southern train had more than 149 cars and was 9,300 -feet-long.
(1.76 miles long) But the National Transportation Safety Board determined that derailment was caused by an overheating bearing that wasn't caught in time by trackside sensors — not its length.
The biggest concern with long trains is related to derailments caused by the forces that can tear a train apart as it crosses the countryside. Tuesday's report said Congress should make sure the FRA has the
power to address the dangers of those trains, and that agency should require railroads to plan carefully on how they handle them.
Railroads can make long trains easier to control by including locomotives in the middle and back of them to help pull and stop them, which is a common tactic.
The report said it's also important for railroads to take great care in where they place heavy tank cars, empty cars and specialized cars like automotive carriers that are equipped with shock absorbers.
Tuesday that Kroger and Albertsons primarily compete with each other and not places like Amazon or Costco, where consumers do other kinds of shopping.
"It's this local competition, in these local communities, that this merger will eliminate," Musser said.
But Wolf pushed back, saying Kroger and Albertsons were competing for the same customers as retailers that have lower labor costs because their workers aren't unionized.
"Supermarkets are losing this food fight, and we pay the price for that fact," Wolf said.
Kroger has said it plans to invest $1 billion in lower prices, if the merger goes through. Wolf said the company would focus on lowering prices "from day one."
But Musser said the judge should be skeptical about the companies' promises, which aren't legally binding. Kroger and Albertsons' executives might be wellintentioned, she said, but
they will face pressure to report profits and keep prices high.
"Executives have a fiduciary duty not to shoppers, but to shareholders," Musser said. "Experience tells us that promises can be broken."
Albertsons CEO Vivek Sankaran, who testified earlier in the hearing, attended the closing arguments Tuesday but didn't speak.
FTC attorneys have noted that the two supermarket chains currently compete in 22 states, closely
matching each other on price, quality, private label products and services like store pickup. Shoppers benefit from that competition and would lose those benefits if the merger is allowed to proceed, they said.
Under the deal, Kroger and Albertsons would sell 579 stores in places where their locations overlap to C&S Wholesale Grocers, a New Hampshire-based supplier to independent supermarkets that also owns the Grand Union and Piggly Wiggly store brands.
The FTC maintains C&S is ill-prepared to take on the stores now owned by Albertsons and Kroger.
Earlier in the hearing, Laura Hall, the FTC's senior trial counsel, cited internal documents that indicated C&S executives were skeptical about the quality of the stores they would get and may want the option to sell or close them.
But Wolf said Tuesday that C&S has the experience and national scale to handle the divestiture. "We picked the party that could get the job done," he said.
Kroger, based in Cincinnati, Ohio, operates 2,800 stores in 35 states, including brands like Ralphs, Smith's and Harris Teeter. Albertsons, based in Boise, Idaho, operates 2,273 stores in 34 states, including brands like Safeway, Jewel Osco and Shaw's. Together, the companies employ around 710,000 people.
Six local chapters of the United Food and Commercial Workers International Union, which together represent 100,000 Kroger and Albertsons workers in 12 states, said in a joint statement Tuesday that the companies can't be trusted.
"The corporations admitted under oath, despite repeated comments to the public and media to the contrary, that some stores may close after a merger, prices may not actually go down after a merger and claims they have made to protect union jobs are not legally enforceable," the group said in a statement.
The attorneys general of Arizona, California, the District of Columbia, Illinois, Maryland, Nevada, New Mexico, Oregon and Wyoming all joined the FTC's lawsuit on the commission's side. Washington and Colorado filed separate cases in state courts seeking to block the merger. Washington's case opened in Seattle on Monday.
If Nelson agrees to issue the injunction, the FTC plans to hold the in-house hearings starting Oct. 1. Kroger sued the FTC last month, however, alleging the agency's internal proceedings are unconstitutional and saying it wants the merger's merits decided in federal court. That lawsuit is being considered by a federal court in Ohio.
Shares in both Kroger and Albertsons fell 2% in trading Tuesday.
In seeking to stop the merger, the FTC and labor union leaders have argued that workers' wages and benefits would decline if Kroger and Albertsons no longer competed with each other. They also expressed concern that potential store closures could create socalled food and pharmacy "deserts" for consumers.
LOS Angeles skyline is seen above the Union Pacific LATC Intermodal Terminal is seen on Tuesday, April 25, 2023 in Los Angeles.
Photo:Damian Dovarganes/AP
THE EXTERIOR of Kroger’s fulfillment center is shown on July 27, 2022 in Dallas, Tex.
Photo:Rebecca Slezak/AP
Instagram makes teen accounts private as pressure mounts on the app to protect children
By BARBARA ORTUTAY AP Technology Writer
INSTAGRAM is making teen accounts private by default as it tries to make the platform safer for children amid a growing backlash against how social media affects young people's lives.
Beginning Tuesday in the U.S., U.K., Canada and Australia, anyone under under 18 who signs up for Instagram will be placed into restrictive teen accounts and those with existing accounts will be migrated over the next 60 days. Teens in the European Union will see their accounts adjusted later this year.
Parent company Meta acknowledges that teenagers may lie about their age and says it will require them to verify their ages in more instances, like if they try to create a new account with an adult birthday. The Menlo Park, California company also said it is building technology that proactively finds teen accounts that pretend to be grownups and automatically places them into the restricted teen accounts.
The teen accounts will be private by default. Private messages are restricted so teens can only receive them from people they follow or are already connected to. "Sensitive content," such as videos of people fighting or those promoting cosmetic procedures, will be limited, Meta said. Teens will also get notifications if they are on Instagram for more than 60 minutes and a "sleep mode" will be enabled that turns off notifications and sends auto-replies to direct messages from 10 p.m. until 7 a.m.
While these settings will be turned on for all teens, 16 and 17-year-olds will be able to turn them off. Kids
under 16 will need their parents' permission to do so.
"The three concerns we're hearing from parents are that their teens are seeing content that they don't want to see or that they're getting contacted by people they don't want to be contacted by or that they're spending too much time on the app," said Naomi Gleit, head of product at Meta. "So teen accounts is really focused on addressing those three concerns."
The announcement comes as the company faces lawsuits from dozens of U.S. states that accuse it of harming young people and contributing to the youth mental health crisis by knowingly and deliberately designing features on Instagram and Facebook that addict children to its platforms.
While Meta didn't give specifics on how the changes might affect its business, the company said the changes may mean that teens will use Instagram less in the short term.
Emarketer analyst Jasmine Enberg said the revenue impact of the changes "will likely be minimal."
"Even as Meta continues to prioritize teen safety, it's unlikely that it's going to make sweeping changes that would cause a major financial hit," she said, adding that the teen accounts are unlikely to significantly affect how engaged teens are with Instagram "not in the least because there are still plenty of ways to circumvent the rules, and could even make them more motivated to work around the age limits."
New York Attorney General Letitia James said Meta's announcement was "an important first step,
but much more needs to be done to ensure our kids are protected from the harms of social media." James' office is working with other New York officials on how
Accountable Tech, called Instagram's announcement the "latest attempt to avoid actual independent oversight and regulation and instead continue to self-
“The three concerns we’re hearing from parents are that their teens are seeing content that they don’t want to see or that they’re getting contacted by people they don’t want to be contacted by or that they’re spending too much time on the app. So teen accounts is really focused on addressing those three concerns.”
Naomi Gleit
to implement a new state law intended to curb children's access to what critics call addictive social media feeds.
Others were more critical. Nicole Gil, the co-founder and executive director of the nonprofit
regulate, jeopardizing the health, safety, and privacy of young people."
"Today's PR exercise falls short of the safety by design and accountability that young people and their parents deserve and only meaningful policy action
can guarantee," she said. "Meta's business model is built on addicting its users and mining their data for profit; no amount of parental and teen controls Meta is proposing will change that."
Sen. Marsha Blackburn (R-Tenn.), the co-author of the Kids Online Safety Act that recently passed the Senate, questioned the timing of the announcement "on the eve of a House markup" of the bill.
"Just like clockwork, the Kids Online Safety Act moves forward and industry comes out with a new set of self-enforcing guidelines," she said.
In the past, Meta's efforts at addressing teen safety and mental health on its platforms have also been met with criticism that the changes don't go far enough. For instance, while kids will get a notification when they've spent 60 minutes on the app, they will be
able to bypass it and continue scrolling.
That's unless the child's parents turn on "parental supervision" mode, where parents can limit teens' time on Instagram to a specific amount of time, such as 15 minutes.
With the latest changes, Meta is giving parents more options to oversee their kids' accounts. Those under 16 will need a parent or guardian's permission to change their settings to less restrictive ones. They can do this by setting up "parental supervision" on their accounts and connecting them to a parent or guardian.
Nick Clegg, Meta's president of global affairs, said last week that parents don't use the parental controls the company has introduced in recent years.
Meta's Gleit said she thinks the teen accounts will incentivize parents to start using them.
THE INSTAGRAM logo is seen on a cell phone in Boston, Oct. 14, 2022.
