Bahamas News

Some GSM and TDMA vendors expressed concern on Tuesday over a scam designed to rob customers by issuing false phone cards.

On Sunday, police warned retailers and customers to be aware of a phone card scam that police have been able to detect.

According to Assistant Superintendent Walter Evans, the perpetrators were taking used phone cards and placing black or grey duct tape over the used pin numbers of those cards.

“They ask for a certain amount, generally more than two cards and what they do is take the card and place it at the bottom and they take the good phone card and say to the shop owner or operator that they no longer wish to have the phone card,” he said.

On Tuesday, BTC marketing executives sent out a similar warning to consumers.

Vice President of Marketing Sales and Business Development Marlon Johnson of the Bahamas Telecommunications Company said that the company has already taken all the necessary measures to protect its customers from fraud.

“It came to our attention on Monday that there were persons who were selling fraudulent phone cards,” he said. “When we did our investigation we found that the pins that the operator were using were illegally obtained from BTC. So whereas persons were buying the pins and they probably would have been working, it would have been authorized without our consent.

So what we have done in the interim, we have deactivated all of those pins that we believe have been obtained fraudulently.”

Mr. Johnson warned consumers to protect themselves when purchasing a card.

“We are warning our customers to properly check the card when they get them to make sure that their cards have the proper BTC logo,” Mr. Johnson warned. “Secondly they should check to see if the cards has little white marks because we have added them as a security feature and thirdly they should load their cards before they leave the vendor just to make sure.”

Mr. Johnson said in the case of people purchasing cards that have already been deactivated, all they have to do is go to BTC on John F. Kennedy Drive to be reimbursed.

“What we cannot entertain is persons who have not purchased an authentic BTC card, so we ask those people to exercise care and those who do will be safe,” he said.

On Tuesday, vendors were expressing concern over fraudulent phone cards.

Wilca Deleveaux, a vendor of Bethel Avenue said he learnt about the scam, a week ago.

“People have been saying that there are people selling fake cards but I don’t know where they get them from. People should know a real card from a fake one,” he said.

Sherice Mollie, a vendor on Faith Avenue said that she was not aware of the warning but said she would be on the lookout.

“Some persons have told me that they have received cards with duct tape on them,” she said. “I know that when my customers come to me I usually tell them to try the card a number of times and if it does not work I would give them another card.”

Sheniqua Williams, a vendor on Carmichael Road said that she disagrees with the measures that BTC is taking

“Well it could be that they turn off cards that I already have and then what I am I supposed to do?” she asked.

She gave a suggestion on what she thinks BTC should do.

“I think they should go out to as many vendors as they can and try to find the ones that don’t work.”

Mr. Evans warned on Sunday that anyone found involved with the selling of false cards will be persecuted to the fullest extent of the law.

Source: Bahama Journal

Telecommunications regulators have issued a pivotal directive in what some have labeled as the highly contentious matter of interconnection between the dominant telecommunications provider the Bahamas Telecommunications Company and its rival the Systems Resource Group.

The PUC has determined that BTC must provide trunks and an interconnection link to enable SRG to link its network with BTC’s in Marsh Harbor, Abaco.

In a set of instructions issued to the two companies, dated October 8 and signed by Chairman Anthony Rolle, the PUC gave a three week deadline for the two to come to some arrangement about the interconnection point.

The decision stems from a dispute filed by SRG – whose trade name is IndiGO Networks – in March 2005. In that dispute, SRG alleged that BTC refused to interconnect the networks by providing circuits between its network in Marsh Harbour, Abaco and SRG’s network at its ‘Alta Vista’ location on the island.

“Systems Resource Group Limited is required, within 21 days from the date of this instruction to mutually agree a site with Bahamas Telecommunications Company Limited to interconnect with Bahamas Telecommunications Company’s network at a Point of Interconnection determined by Systems Resource Group either (i) at Alta Vista, or (ii) at a two storey building located 50 feet south of Bahamas Telecommunications Company’s Exchange in Marsh Harbour or (iii) at any other technically feasible Point of Interconnection in Abaco,” said the document.

“Bahamas Telecommunications Company Limited and Systems Resource Group Limited are each required to be responsible for its own costs of providing a terminal to its network and they are each required to be equally responsible for its share of the costs of a common interconnecting link with their respective networks in Marsh Harbour,” it added.

The PUC had given BTC 21 days from the date of the ruling to give SRG an estimate of the cost of the provision of the interconnection link, with a copy to be forwarded to the PUC.

That estimate was to have included a full breakdown of the equipment, labour and material costs as well as a full description of the technical characteristics of that link.

Both companies are to be responsible for the cost of providing a terminal to their respective networks.

The instructions given by the PUC to the two companies are in accordance with the interconnection guidelines for domestic and international voice services between fixed and mobile operators.

Those guidelines specifically relate to the provision of competitive services being offered like intra-island and inter-island voice telephony and international voice telephony (using BTC’s infrastructure).

IndiGO Networks has filed several complaints about BTC allegedly not facilitating interconnection, complaining that the company has essentially been frustrating the development of competition.

In BTC’s arguments to the PUC, it contended that in facilitating its interconnection with SRG, it would have affected the companies ‘dominance’ in the telecommunications market, contradicting the conditions under which BTC was formed under the Telecommunications Act. Citing specifically proposed interconnection in Abaco, SRG’s head Paul Hutton Ashkenny noted that his company made the request a long time ago and “to date, despite the fact that BTC is required under its license to provide interconnection to other operators at any technically feasible point, BTC has refused all efforts to bring about interconnection.”

Mr. Ashkenny also claimed that efforts to move forward on the provision of additional interconnection circuits have proven fruitless. He also lamented that had BTC failed to accommodate the routing of emergency service calls originating on IndiGO’s network saying it creates a significant breach in public safety.

Source: Bahama Journal

Minister of State for Finance Zhivargo Laing says the Ingraham Administration will tread cautiously as they seek to abolish exchange controls in The Bahamas within the next five years, and explained why his government believes the system needs an overhaul.

Minister of State for Finance Zhivargo Laing says the Ingraham Administration will tread cautiously as they seek to abolish exchange controls in The Bahamas within the next five years, and explained why his government believes the system needs an overhaul.

Exchange controls, whose regulations were relaxed by the previous administration, and periodically over the years, have been under close scrutiny for some time.

Economists within the country have noted the drawbacks the controls pose in terms of discouraging investors who operate within the Bahamian economy from taking part in the world economies outside The Bahamas.

While the FNM is confident the abolition of those controls – put in place by the Central Bank of The Bahamas in 1974 – will occur within this political term, Mr. Laing said recently that no specific schedule has been set.

In an interview with The Bahama Journal, Mr. Laing clarified why his government feels it is time to reform the long-standing economic system.

“You have to agree that all of the economic opportunities that exist for your citizens and for people who operate from within your economy – are not within your economy – and they exist elsewhere,” said Mr. Laing.

“So the extent to which you discourage them from taking advantage of that opportunity because you put a penalty on that outward flow is the extent to which you deny them that economic opportunity.”

“So there are opportunities to be had by a more liberal exchange rate policy for outward investment and seizing the returns that those investments could have,” the minister said.

Exchange controls are typically various forms of restrictions imposed by a government on the purchase or sale of foreign currencies by residents or on the purchase or sale of local currency by nonresidents.

Mr. Laing said there could also be opportunities in the way of accessing foreign currency at a lower interest rate for Bahamians and those that operate within the Bahamian economy.

He added that the government must tread carefully as they go about changing economic systems that have been in place for decades.

“You cannot do something like that without having regard for the fact that the exchange control that you have in place today exists for a reason and has served you well. So only when you no longer need it to serve you in that way would you consider doing this so that you could benefit these opportunities that people might have,” he said.

“It serves a purpose, there’s no question about that. That parity between our dollar and with the United States dollar is an important parity for us today. We have kept in a place for a very long time, but we have had liberalizations on exchange control over the years.”

Mr. Laing added that the reason the government has been taking steps to liberalize exchange controls is because it believed relaxing them would have beneficial effects on the economy.

He added that the question now is how much further can the government go in protecting and preserving the value of Bahamian currency, and allowing Bahamians to have opportunity to take advantage of those opportunities for returns on international economic investments that exist outside the Bahamas.

“It’s a balancing act along those lines, but it’s not one that we haven’t broached before,” Mr. Laing said.

“Certainly we haven’t gone to the extent of elimination, but we will continue to review the circumstances to see the extent to which further relaxation and perhaps one day eventual elimination can take place.”

Source: Bahama Journal

More than a month after Senior Justice Anita Allen ruled that Sir Jack Hayward is not a 75 percent owner of the Grand Bahama Port Authority and related companies as he has claimed, Sir Jack has launched an appeal of her decision.

Justice Allen ruled on August 30 that the family of Edward St. George is a 50 percent owner of the companies as the relationship between Sir Jack and his late business partner, Mr. St. George, had always been a 50-50 one.

Sir Jack is asking for Justice Allen’s decision to be set aside and a new trial ordered. Alternatively, he is asking that the order for costs be set aside and any other relief the Court of Appeal may think fit.

In his notice of appeal, Sir Jack says the judge erred in refusing his application for an adjournment of the matter on July 31.

He also submits that Justice Allen gave insufficient weight to the injustice that would be caused to him by proceeding with “a one-sided trial” without key evidence from him.

Sir Jack says the judge gave insufficient weight as well to the medical evidence indicating that he was medically unfit to attend the trial, to give evidence and to give instructions.

The notice of appeal also says, “The learned judge gave insufficient weight to the fact that discovery had only just taken place and that a reasonable time was required for Sir Jack to be ready for the trial.”

Sir Jack further submits that Justice Allen gave insufficient weight to the fact that the St. Georges would suffer no substantial prejudice that could not be remedied by an order for costs.

He goes on to say that Justice Allen gave insufficient weight to the evidence before her that established that Sir Jack had not had a reasonable opportunity to prepare for trial and was not fit to attend.

“…The learned judge ought to have granted the adjournment and/or granted the application to reopen the trial in the interests of justice, and ought [to] have granted an adjournment for a reasonable time in order to allow [Sir Jack] to prepare his case,” the notice of appeal says.

In her written ruling, Justice Allen noted that Sir Jack alleged that his shareholding was increased by 25 percent by the transfer by former Port Authority chief financial controller Don De La Rue in November 2006 of one share in Fiduciary Management Services (a Cayman Islands company incorporated in 1982 and used by Sir Jack and Mr. St. George as a nominee company.)

But the judge rejected that allegation and accepted that Mr. De La Rue did not have the authority to transfer the share.

In his notice of appeal, Sir Jack says Justice Allen erred in finding that Mr. De La Rue did not have authority to transfer that one share.

“This issue was not before the learned judge at the trial and did not impact on the issue that was before her,” Sir Jack asserts in the court document, adding that the issue was decided without notice to him.

In her ruling, Justice Allen said she is convinced that the plan to take over control of the Grand Bahama Port Authority and Port Group Limited was hatched in someone’s fertile imagination in late 2006.

“Alas, however, there was too much water under the bridge, too long a paper trail and too many persons with intimate knowledge of the relationship for the plan to be successful,” the judge said.

Sir Jack made the surprising claim to 75 percent ownership last October, triggering another round of legal action by the St. George estate.

Justice Allen said in her ruling, “The figures don’t add up. They don’t support a 75-25 shareholding - neither does the paper trail. There is no evidence of any such assertion prior to 2006 and, indeed on one occasion after 2006, [Sir Jack] contradicted that assertion.”

The judge said the preponderance of evidence points to a shareholding of 50-50 between Sir Jack and Mr. St. George.

“Having heard and considered the evidence of the plaintiffs’ witnesses, having observed their demeanor as they gave their evidence, having read and considered the numerous documents adduced by the plaintiffs (the St. George estate) and there being no evidence challenging the credibility of the witnesses or the substance of their evidence and no attempt on behalf of the first defendant (Sir Jack) to challenge the documentary evidence adduced by the plaintiffs, I find that the plaintiffs have proven their case,” she wrote.

Source: Bahama Journal

The Bahamas Softball Federation will host its 2007 National Championship this weekend beginning on Thursday October 18th to Sunday October 21st at the Blue Hills Sporting Complex.

Championship teams from Andros, Long Island, Eleuthera, Abaco, Grand Bahama, New Providence will slug it out for the national fast pitch crown.

The weekend of the 2006 men’s nationals held in Eleuthera was marred by relentless rainstorms, but through it all Eleuthera defeated New Providence for the title.

The women’s tournament was held in Grand Bahama and was also hampered by heavy continuous rain, however, the women were not able to complete the tournament that saw Grand Bahama’s Triple Play Pearls and the New Providence based Electro Telecom Wildcats reach the final. The National title was eventually awarded to the Wildcats.

The federation, coaches and players are hoping for much better weather this year. Friday’s weather is predicted to be perfect with partly sunny skies and winds up to 14 km/h.

On Saturday the forecast reads clouds and sun with possible thunderstorms, and on Sunday the things are expected to improve with a mixed bag of sun and clouds with winds up to 12 km/h.

The defending men’s national champions are from Savannah Sound, Eleuthera. On the women’s side a national championship was supposed to be decided between the Electro Telecom Wildcats and the Grand Bahamian champions, the Triple Play Pearls

The 2007 tournament robin is being held in honour of Arthur Thompson a member of the International Softball Hall of Fame. He is also the rules interpreter for the local federation and he is an internationally certified softball instructor.

Thompson will share his honour with Beulah Kelley, a long time veteran pitcher with the women’s national team.

According to the Tournament Director, Burkette Dorsett, the tournament will take the format that is used in international play, which allows the top four teams from the men and ladies division to play in a sudden championship series the same week.

The round robin portion of the tournament will end on the morning of Saturday October 20. The Sudden death round would begin on Saturday.

Some of the teams that will compete at the Nationals include the D’s Truckers who defeated the New Breed for the New Providence men’s title.

After both the men and women’s championship series in the Grand Bahama Amateur Softball Association became entangled in a controversy, the BSF stepped in and determined that the BTC Rockets men and women’s teams would represent Grand Bahama at the Nationals.

The BTC Lady Rockets were leading The Bahamasair Flyers in their best of seven series three games to two, while the Bommer George Swingers trailed the BTC men’s squad three games to none after they refused to play because one of their coaches was “unfairly” suspended for three games.

Source: Bahama Journal

Major cruise lines are rejecting Grand Bahama as a port of call because it has little to offer tourists, according to Minister of Tourism Neko Grant, who met recently with officials of major cruise lines.

Tourism Minister Neko Grant says many cruise lines are saying “no thanks” to Grand Bahama as a port of call.
At a town meeting held at the Foster B. Pestaina Centre on Monday night, Minister Grant told local stakeholders in the tourism industry that after trying to convince cruise lines to make Grand Bahama one of their ports of call, their response was “no thanks”.

He hit local taxi drivers, tour operators, vendors, business persons and artisans with the cold, bitter truth that major cruise lines like Disney said they would never even consider Grand Bahama because their customers feel harassed, ripped off, and say they have nowhere to go.

Minister Grant said the cruise business has declined in The Bahamas and other parts of the Caribbean by three to five percent, while it has increased in Europe by 25 percent.

“Disney…they said ‘Grand Bahama [isn’t] for us. Your ground transportation is a mess. You’ve got to remember that people who sail on our ship go to Disney Land before or after, and Grand Bahama is not a place where we want our passengers to go because if they’ve been to Disney Land, we take them into Nassau, and we’ve got work to do there; we take them to our private island, and we come into Grand Bahama Island. It doesn’t matter what happened before they left Orlando, what they experience in Grand Bahama ruins everything’,” Minister Grant said.

Minister Grant said hundreds of destinations offer the same thing The Bahamas offers and Grand Bahama must do things differently to not only make people want to come here, but to make them want to come back.

He said cruise lines were told about the things the government will be doing to correct the problems in Grand Bahama, especially with regard to ground transportation and tours.

“They said ‘good. Call us when you fix it. Save yourselves the embarrassment and call us when you fix it’,” Minister Grant said.

He said that recently, Carnival Cruise Lines had to refund thousands of dollars to disgruntled passengers who visited Grand Bahama and had an horrific experience.

“The question is, if we continue our nonsense, will they continue to come?” he asked.

Director General of Tourism Vernice Walkine told tourism stakeholders Grand Bahama has the best potential of any island, but she said most tourists aren’t getting good service.

“Disney Cruise Lines has said to me, ‘I’m not coming back to Grand Bahama ever, ever, ever, full stop’. How do you respond to that? What am I supposed to say to them? They aren’t wrong. They are absolutely right because their guests have the worst experience on their entire itinerary. Carnival has said the same thing,” Ms. Walkine said.

“We rank lowest in terms of satisfaction out of all of their ports of call. Why? What’s wrong with us?” she asked.

Ms. Walkine said The Bahamas must take note of the Western Hemisphere Travel Initiative put in place by the United States because this put a different twist on the local tourism market.

Under the new rules, Americans traveling from the region by air must present passports upon their re-entry into the United States.

Ms. Walkine noted that for many years tourists did not need a passport in order to re-enter the United States from the Bahamas.

“So, for years we have had the very good fortune to be the destination that Americans would think of first when they want a quick get-away,” Ms. Walkine said.

“They could get up on a Friday morning, pack a couple of things in a bag, grab their driver’s license and hop on a plane with no problem. Well, that changed. They now have to have passports and this has had a dramatic impact on our business, and in particular Grand Bahama.”

She said that now that they have passports to travel, the Americans can now travel anywhere in the world.

“So all of a sudden our competitors are not just the Caribbean, it’s the world. Americans are exploring all over the place. The Caribbean has been popular for many, many years but it’s like ‘been there, and done that’,” Ms. Walkine said.

Source: Bahama Journal

Upcoming release of a new Securities Act is raising questions about the way BISX handles its current obligations — especially as the new legislation may add to its burden.

“We welcome a fair and equitable regulatory environment,” said Anthony Ferguson, President of Colina Financial Advisors Ltd, a registered broker-dealer for the Bahamas International Securities Exchange. “We believe BISX would have to add additional resources to effectively implement and regulate the industry.

“Still, we welcome any changes that provide additional transparency and will provide accountability.”

The comments echo those of other professionals working closely with the exchange. Their concerns appear to center on BISX’s staffing levels and how those may impinge on its ability to oversee trading for its listed companies.

“It needs to look at tightening up its regulatory control,” said Reece Chipman, founder of the Bahamas Association of Securities Dealers. “I don’t know if they do have the capacity to regulate as closely as they need to in order to protect investor interests.”

Formed the same year as the act regulating it, the domestic exchange successfully launched its listing and trading of local companies a year later. It now counts 19 public organizations as its issuers, ranging from the relatively dormant Premier Commercial Real Estate to actively traded players like Fidelity Bank and Colina Holdings. Ferguson, a principal with the latter, also serves as president of The Nassau Guardian. BISX makes its money by charging

those companies listing fees and taking a cut every time shares trade hands. That billing power, however, comes with some strings attached. They’re obligations of which BISX seems well aware.

“As a securities exchange, BISX is vested with the authority and responsibility to regulate its members and listed companies in accordance with BISX Rules,” according to a statement on the BISX Website. “The BISX rules operate to ensure fairness and transparency as it relates to the enforcement of regulatory responsibilities, membership, listing procedures, continuing obligations and pursuing disciplinary action.

“The organizational structure has been designed to ensure that BISX has both a commercial and a regulatory focus.”

But the privately held company, has only three employees to do that heavy lifting.

They include its CEO Keith Davies, who did not return Guardian calls yesterday or those from earlier in the month.

That apparent lack of transparency has concerned others in the securities industry who point to past interruptions and changes to trading procedure, which appear to have been downplayed or were never, in fact reported on the company’s Website.

Others have expressed growing impatience with the time it has taken BISX to share the results of consultation it sought from issuers early this year. Ironically, those publicly traded companies were canvassed on proposed listing changes, among them a shortened deadline for filing their financial statements.

The BISX site says that consultation concluded in May — more than six months ago.

Again, the exchange may simply lack the resources to move faster.

But the country’s Securities Commission may be looking to heap more work onto the shoulders of Davies and his small team.

While a draft legislation, a replacement to the current Securities Industry act, isn’t due to be released for another couple weeks, speculation grows that BISX will be granted regulatory power to police the growing profession of securities traders and brokers dealing in stocks outside of the domestic exchange.

It’s a job that Chipman would prefer to see go to his association of traders — a role now held in the U.S. and other mature markets by its direct counterparts.

“Basically we intend to provide checks and balances for investors that are not so savvy and to provide some standardization for how we trade in securities in this country,” he said, suggesting his group would like to help BISX shoulder the burdens associated with policing trading.

“They (BISX) would probably want to consider meeting with the association to discuss the way forward with regards to bylaw policy and industry infrastructure.”

But a manager with Providence Advisors — another recognized broker-dealer on the exchange — is suggesting BISX will overcome any challenges it may now face.

“Clearly as a market participant, I’m certain going forward there will be consideration given by the BISX board to address any market-related issues, whether staffing, oversight or enforcement,” said Ken Kerr. He also serves as a director on that board.

Source: Nassau Guardian

It’s the latest strand in the growing web of litigation entangling the Grand Bahama Port Authority and its related entities.

While Sir Jack has not appealed the recent ruling of Justice Allen declaring that he is not a 75 percent owner of the Grand Bahama Port Authority and affiliated companies, last month he caused an old writ to be served on Lady Henrietta St. George in London, which points to his alleged controlling interest in the companies.

Lady Henrietta is the widow of Edward St. George, Sir Jack’s longtime business partner. Last year, the longstanding relationship between Sir Jack and the St. Georges imploded after he made his 75 percent ownership claim.

During the recent action heard before Justice Allen, Sir Jack alleged that his shareholding was increased by 25 percent by the transfer by Don De La Rue (a director of the Port’s parent company) in November 2006 of one share in Fiduciary Management Services Limited (FMS).

But Justice Allen rejected that allegation and accepted that Mr. De La Rue did not have the authority to transfer the share.

The writ served on Lady Henrietta last month says Sir Jack is the beneficial owner of the one share in FMS registered in the name of Campbell Securities Limited and seeks a declaration in that regard.

Alternatively, Sir Jack is seeking a declaration as to who is/are the beneficial owner(s) of the said one share.

FMS is a private trust company that was created by Sir Jack, Mr. St. George and Mr. De La Rue to administer the families’ investment.

On Tuesday, Fred Smith, attorney for the St. George Estate, called the Cayman Islands action “perverse”.

“It is perverse because it was initiated after Justice Allen’s judgment declaring 50 percent ownership and in that judgment she also found that Don De La Rue did not have any share to transfer to Sir Jack in Fiduciary Management Services, which is the company that Sir Jack used to gain control of the board of Intercontinental Diversified Corporation, the company that holds the Haywards and St. Georges shares in the Port Group,” Mr. Smith said.

He asserted that Sir Jack is basically saying, “I don’t care if the judge in The Bahamas says you own 50 percent. I still have control of IDC.”

The injunction was obtained by Harvey Tynes, QC, and Damian Gomez on behalf of the estate.

Mr. Smith said, “The estate has been forced to apply and Justice Allen granted an injunction to restrain Sir Jack from continuing to sue the estate in the Cayman Islands. The estate continues to try to force Sir Jack to accept that in accordance with Justice Allen’s judgment that the estate is a 50 percent shareholder. Sir Jack appears to be snubbing his nose at the Bahamian judicial system by pretending as if no judgment has been made against him in the Bahamas.”

He said the estate also wants to put to rest the persistent rumors that it has sold its interest to the Fleming Group.

“The estate has not sold the shares and has not even received an offer,” Mr. Smith told the Bahama Journal.

The parties return to court on October 19. At that time, Justice Allen is expected to decide whether to strike out the estate’s action on Sir Jack’s trust company’s application.

Seashell (the trust company) contends that the estate has no case and the court does not have to decide if there was any oppression against the estate by Sir Jack because Seashell has offered to buy out the estate’s interest in the Port Group of Companies.

However, the St. Georges maintain that in this divorce Sir Jack is the one who needs to leave the matrimonial home, not the estate.

The St. George estate is accusing Sir Jack of “fraudulently” gaining or purporting to gain control of companies, which hold shares in the Grand Bahama Port Authority and Port Group Limited.

The plaintiffs in this particular matter include Lady Henrietta St. George, Mr. St. George’s widow; James Fitzroy, her brother and Christopher Cafferata, an attorney based in Freeport. They are all executors of the estate.

In their statement of claim, the plaintiffs allege that Hannes Babak, chairman of the Port Authority, induced Sir Jack or alternatively assisted him in breaching a partnership agreement entered into by Sir Jack and Mr. St. George in 1982.

The statement of claim says that at all material times, Sir Jack was fully aware of the agreement and Mr. St. George’s entitlement to beneficial ownership of 50 percent of the shares.

When she ruled recently that Sir Jack is a 50 percent owner, Justice Allen said she is convinced that the plan to take over control of the Grand Bahama Port Authority and Port Group Limited was hatched in someone’s fertile imagination in late 2006.

Source: Bahama Journal

“The concessions that we gave will be returned ten fold to The Bahamas,” Mr. Christie predicted in an interview with the Bahama Journal at the Office of the Leader of the Opposition on Parliament Street.

In the House of Assembly a week ago, Prime Minister Hubert Ingraham questioned concessions the former administration agreed to give to the developers of the Albany resort in southwest New Providence.

Mr. Ingraham said because Albany is slated to be a private members club with its amenities made available only to its guests, it’s not eligible for some concessions.

“Concessions available under the Hotels Encouragement Act require that hotels and related facilities and amenities that benefit from concessions under the Act remain open to the paying public,” he told parliamentarians.

“The requirement is stipulated in all agreements concluded under the Act. By definition a private club is barred from receiving benefits under the Act.”

But Mr. Christie said under the agreement, Albany would not receive concessions for a private members club.

He said his government agreed to grant concessions only for the components of that project, which qualify as a hotel under the Hotels Encouragement Act and the Hotel Act.

No concessions would extend to private residences or other components of the project not included as part of the hotel, Mr. Christie noted.

The former prime minister pointed to section 5(1) of the Albany agreement, which stipulates that only components included in the definition of “hotel” under the legislation qualify for exemptions.

He noted that hotels include homes and residential units, which are placed in the hotel rental pool for at least nine months of the year.

“Therefore, if you have a $20 million home and the owner of that home is prepared to place that home in the hotel rental pool for at least nine months of the year, that constitutes hotel rooms,” Mr. Christie said.

He noted that the agreement provides for the luxury hotel to be available for bookings by Bahamian residents and guests from all over the world.

The agreement also mandates that members of the general public – when they are guests – would have access to the development’s amenities.

“In giving the concessions, we were trying to avoid giving concessions to a facility that would be exclusive to foreign persons and one that was based on a residential community,” said Mr. Christie, adding that what his government agreed to did not violate any laws.

“So again, we put in special negotiations to ensure from a public policy point of view we were giving Bahamians access even though they would have to be guests.”

He said The Bahamas will benefit from the concessions granted.

“We believe that Ingraham is tied to his criticisms prior to the election and he has to justify those criticisms by trying to change some of these agreements in some way. We’re told he wants to take away the Gaming Board premises and the Development Bank premises and have Baha Mar surrender them; Baha Mar would be delighted to surrender them because quite frankly it would be cheaper than building a new set of Gaming Board and Development Bank offices,” Mr. Christie said.

He said the opposition has to continue the discussion publicly and make sure Bahamians understand the various agreements with respect to the concessions.

“You would find therefore that you are giving the [developer] an incentive to go and build a type of property that has not succeeded in the past. Therefore, when you look at South Ocean and Albany together you see that there is a prescription for success. Success means that thousands of people will have jobs that can be sustained out there,” the former prime minister said.

Mr. Christie said in order to put the granting of concessions into context Bahamians ought to look at concessions given to Kerzner International for its various Atlantis phases.

“When the Ingraham government negotiated its first phase, the extent of the concessions amounted to 45 percent of the value of the investment; whey they did their second phase it was 38 percent and when we negotiated our third phase we reduced the percentage to 20 percent,” he said.

“But in the course of examining the issues of concessions my government discussed that extensively and employed a major company out of Denver, Colorado to come to The Bahamas to do an exhaustive examination on the subject of concessions to Kerzner.”

He said the consultants recommended that on the basis of the economy of The Bahamas the government could make a decision that the Kerzner development is entitled to no concessions.

“It was our considered opinion after we looked at that consultancy report that the development would not take place under those circumstances or we could not risk the development not taking place,” Mr. Christie said.

“Therefore, we shared our concerns with Kerzner and we used it to negotiate the concessions downwards to assure that we ensured progress after [phase one and phase two].”

He said an economic impact assessment study was done before his government signed off on any agreement.

Mr. Christie said each study clearly outlines the impact the inflows of capital would have on the Bahamian economy.

“In making decisions on concessions, all of those things were taken into consideration,” he told the Journal.

“We did not give away too much.”

Source: Bahama Journal

Minister of State for Finance Zhivargo Laing has questioned whether the granting of concessions in the manner currently employed ought to continue – he says that’s “a matter for review”.

“As a country we need international capital to flow in here to catalyze our development, because our local savings and investment is certainly not enough to grow and further develop this economy. We’d love to get there one day, but we’re not there today,” he said.

“So I can’t make a unilateral decision that I’m going to stop doing something without knowing how the community that I target will respond to it. So a part of the review has got to be anticipating, assessing, analyzing how the community of investors would respond to that.”

Speaking on the Love 97 talk show “Issues of The Day” on Monday, Mr. Laing conceded that the concessions granted to developers under the Hotels Encouragement Act and other incentive legislation are unquestionably significant.

“As to whether or not we need to do so in the same fashion, that is a matter that is certainly up for review – certainly, no question about it. Certainly the [International Monetary Fund] and others have been suggesting that it may be time to curtail the amount of concessions and the extent of the liberal concessions that we have been giving,” he said.

Mr. Laing noted that the governor of Florida and other governors in the United States have themselves questioned whether they are in effect getting bang for the buck in terms of concessions.

“It is a legitimate question for consideration,” he said.

Using the projected 4,000 jobs to be created at the ‘Ginn sur mer’ development in West End, Grand Bahama, Mr. Laing pointed out that the development has a 20-year build-out, which is of necessity full of uncertainty.

“I think it’s a legitimate question to ask how we actually come to agree these benefits that we say we will get from any particular development, and if you say 4,000 jobs etc., what do you mean? What kinds of jobs? We oftentimes say they’re construction jobs in the first instance and then they’re permanent jobs,” the minister said. “Well, permanent jobs related to what?

“We know that there are going to be residences built in these communities. What employment does a residence produce? A maid and a gardener, pretty much.”

Mr. Laing posited that 1,000 homes could perhaps yield 1,000 maids, and maybe 1,000 or more gardeners, but he raised the question of whether those people would necessarily be Bahamian.

“We know what the circumstances are in the country today, so that becomes a legitimate question,” the minister said.

Noting the language in certain heads of agreements providing for some aspects of various projects to be termed “new hotels” or “condo-hotels,” Mr. Laing conceded that this is a way to allow certain items that might not necessarily qualify on the face of it to be eligible for concessions under the Hotels Encouragement Act.

He said it is a reality of the hospitality business that resorts are now becoming mixed-use resorts, where people buy condos in a resort, spend maybe three months there and then take the balance of that period and enter it into a hotel-room pool where they can get the benefit from renting out the condo.

“So it is possible to have a facility that really is, in a very real way, a hotel, even though it’s a condo. You might so structure events so that it falls within the ambit of the Hotels Encouragement Act, but it isn’t necessary, though, to stretch the definition to reach into areas that are clearly not resort, not hotel use,” Mr. Laing said.

“That would be contrary to law.”

Mr. Laing pointed out that concessions are governed by law; if the government feels the laws governing the granting of concessions are not adequate to do what is in the country’s best interests, he said, the government should come to Parliament and change the law.

“Concessions are granted under laws. The hotel concessions are granted under the Hotels Encouragement Act, industry concessions are provided under the Industries Encouragement Act. You have various provisions of the Tariff Act under which concessions may be granted, so you really only follow the law,” he said.

“In the case of hotel concessions – for instance – those concessions can only be granted under certain terms and conditions. So the idea in extending any concessions to anyone is to do so within the ambit of the law.”

Mr. Laing asserted that where an entity does not fall within the parameters of the laws governing the concessions sought, those concessions cannot be granted (at least not under that law).

The minister also pointed out that the laws governing concessions in The Bahamas are not new, nor are they surprises.

He also noted that the government couldn’t give a definitive answer to the question of whether the current concessions regime ought to change.

Mr. Laing said that successive governments have tried to grow and develop an economy that would benefit and prosper Bahamians.

“We therefore have to examine all of our decisions against the backdrop of furthering the economic prosperity, empowerment of Bahamians,” he said. “We have to also do that recognizing that the same Bahamians rely upon their government to provide certain public goods and services, and that those public goods and services have to be funded from tax revenues principally.

“Whatever decisions we make can’t impose a hardship on Bahamians at the same time by not allowing for the financing of the public goods and services that they require, and so you have to balance all of these objectives in making the determinations about what we do in the way of concessions.”

Source: Bahama Journal