- development of a new framework for
performance-based development concessions that will replace the expiring tax
concessions of the Hawksbill Creek Agreement;
- a focused and collaborative strategy to
reshape the approach to attracting, retaining, and expanding investment in Grand
Bahama;
- and a commitment to resolve longstanding issues related to Government deficits
in Freeport in a way that protects the
Government’s rights but creates a path
forward in Freeport.
In the short term, these arrangements will
drive new investment projects that will retain and expand key industries in Grand
Bahama. There is indeed now a clear path
to the expansion of the Freeport Container Port through Phase V and VI, with Phase
V scheduled to commence in the second
half of 2016. $260 million is being invested
in the Container Port Phase V expansion.
The Freeport Airport runway is being resurfaced at a cost of $13 million. Freeport
Harbour Company is spending $14 million
on the refurbishment of berths 3, 8 and 9.
Mr. Speaker,
PharmaChem has already broken ground
on a $150 million extension. The MOU
and Waiver of Exclusivity Agreement
with the Freeport Harbour Company has
cleared the way for completion of negotiations with Carnival Cruise Lines for the
creation of a major cruise port with compelling attractions in East Grand Bahama.
When coupled with ongoing discussions
with MSC to consider home porting, a
container repair facility, a logistics center,
creating a maritime training center, and
opening up employment for large numbers of Bahamians on their ships, Grand
Bahama is poised for significant expansion
as a hub for cruise operations.
Most significantly the MOU contains an
overall Public Private sector Partnership
commitment to recruitment and training
of Bahamians to meet present and future
diverse manpower skills.
Mr. Speaker,
Beyond specific short-term investments,
we have secured historic commitments to
change the governance paradigm in Grand
Bahama, and a mechanism to enhance
transparency into the GBPA’s financial
affairs. The MOU provides a mechanism
for the Government to play a meaningful
role in steering and overseeing critical infrastructure and development via seats on
the Boards of the GBPA and land development companies.
The MOU also provides the licensees
with the opportunity to participate in
governance by nominating a member to
the GBPA Board. We have also come to
agreement in principle to align the regulatory functions of the GBPA with the
national regulatory framework and policies of The Bahamas Government, and to
establish a process for licensee appeals.
These changes will allow increased public
understanding of and dialogue about the
inner workings of Freeport that have long
been opaque and inaccessible to Freeport
stakeholders.
The changes will also help to mitigate conflicts associated with GBPA and its affiliates operating simultaneously as licensor,
licensee, and regulator as well as participation in governance at the Board level.
By having equity participation, and Board
level transparency into the affairs of the
prime landholding companies, the Government can play an active role in accelerating development in Freeport. Among
other things, this new structure opens up
significant new opportunities for public /
private partnerships to facilitate larger development projects.
The MOU very significantly provides a
commitment to social and infrastructure
investmen ts in Grand Bahama that will deliver tangible contributions to the quality
of life for the residents of Freeport. We
intend to seek to work with the GBPA to
create an ongoing “Grand Bahama Development Fund,” which would make investments that can help to carry Grand
Bahama forward. Measures to be undertaken could include, reopening important
portions of West Sunrise Highway, upgrading airport facilities, making available residential lots to expand affordable housing,
construction of modern medical facilities,
refurbishing and expanding athletic facilities, and making contributions to support
critical social services. I will more fully address this in my closing remarks to the
budget debate. Suffice it to say, rather than
a “one shot deal”, we will seek to create
an ongoing mechanism for infrastructure
investments that are aligned with our development strategy, and can evolve as the
economy grows and the needs of the population of Freeport change.
Mr. Speaker,
A new regime with a new framework is
contemplated for the Port area with respect to the tax concessions which expired
on 5th May, 2016. The same tax concessions will be granted by the Government
for a period of 20 years commencing on
the 4th of May, 2016 to existing licensees of
the GBPA on an individual basis, subject to
certain conditions and under a framework
that would provide for the maintaining of
performance through periodic reviews
every five years. The Government would
collaborate with GBPA on the design of
the framework. The same framework will
apply to new licensees once they submit
and obtain approval of their development
plans. In return for the undertakings and
assurance by GBPA, Freeport Harbour
Company, Grand Bahama Development
Company and Freeport Commercial & In-
[27]
2016/2017
DRAFT
ESTIMATES
OF REVENUE &
EXPENDITURE