NASSAU, Bahamas, CMC – The Bahamas government says it is seeking US$357 million from the Grand Bahama Port Authority (GBPA) after indicating that “distinct obligations” under the Hawksbill Creek agreement have not been met, resulting in “widespread” suffering for the residents of Freeport.
“The people of The Bahamas have been paying the bill for services that are legally the responsibility of the Port Authority. Acting under the law, the government is seeking reimbursement on behalf of the Bahamian people,” Prime Minister Phillip Davis said in a statement.
However, the GBPA has refuted the claim that it owes the government US$357 million.
“The Grand Bahama Port Authority disagrees that it owes the sum of $357 million as claimed by the Government of The Bahamas. We reject and will robustly defend against this claim, which we firmly believe will be defeated,” it said in a statement.
Prime Minister Davis said that the government is working with the international accounting firm PriceWaterhouseCoopers and has prepared and presented a detailed review of the amounts owed, which totaled US$357 million for the financial years 2018 to 2022.
Davis said that clause 1(5)(c ) of the Hawksbill Creek Agreement requires the Port Authority to reimburse the government within 30 days of presenting a detailed account of the costs associated with providing services and infrastructure that are GBPA’s legal responsibility.
The GBPA has told the “City of Freeport, our licensees, and the people of Grand Bahama” that they “can rest assured that the Port Authority is determined to protect our mutual interests,” adding that “in the 70 years of the Hawksbill Creek Agreement – through six government administrations – no claim of this kind has ever been brought against the Port Authority, and for excellent reason.
“As such, we believe it is important that the public understands why this is happening. This claim followed a recent proposal by the government to purchase the whole Port group (which owns the Port Authority) from its current shareholders at a considerable discount. This proposal was carefully considered in good faith but ultimately declined.”
GBPA said that having been disappointed in its attempt to purchase the Port group outright, “it appears the government is attempting to force its desired outcome by other means.”
The GBPA is warning of the detrimental effects of these events on the Freeport economy and investor confidence, especially amid the island’s resurgence with two billion US dollars in new investments.
“Meanwhile, the Port Authority has been systematically handcuffed by central government policies and legislation over decades, preventing it from being the one-stop-shop that the Hawksbill Creek Agreement intended and which other international ‘free port’ areas around the world enjoy.
“As a result, ease of doing business in the Port Area has been severely eroded, which has reduced its competitive advantage, and the continuing loss of opportunity for The Bahamas has been enormous,” the GBPA said, adding that its shareholders have found it necessary to regularly subsidize the Port Authority’s management of the city from their own pockets.
“Central government’s co-operation is required. Continued hostility towards the shareholders of the Port Authority is counter-productive and unnecessary. Again, we urge the central government to withdraw its unjustified claim and let us jointly resolve the issues in good faith. This is what the residents, licensees, and investors in the Port Area deserve,” the GBPA said in its statement.
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