How to make Freeport successful again
The administration of Freeport is in urgent need of re-examination.
The needs of Freeport have grown beyond both the interest and ability of its present private sector owners.
Following the deaths of Edward St. George and Sir Jack Hayward, the Grand Bahama Port Authority (GBPA) has become a shell of its former self.
St. George was a visionary. He recognized that the GBPA, with he and Sir Jack as the sole shareholders, could no longer be what was required for Freeport. He set out to identify a new strategic partner with financial muscle and international reputation to provide the needed stimulus to economic growth in Freeport. He found Hutchison Whampoa.
He persuaded that wealthy conglomerate to enter Freeport and to construct the transshipment port, the long deferred plan of the original developers of Freeport. Then, he persuaded them to become the GBPA’s 50% partner in the Development Company which held all the undeveloped land in the Port Area, in the Freeport Harbour Company and Grand Bahama International Airport (GBIA). He then convinced them to enter the tourism and hotel sector.
Hutchison purchased the government’s run-down properties in Freeport and the privately-owned Atlantik Beach Hotel, built the Our Lucaya Hotel, redeveloped the old Holiday Inn property, the Lucaya Beach Hotel and the golf courses and constructed a new casino.
Between 2002 and 2008, GBIA received some $45 million worth of upgrades and repairs including the construction of a new international terminal and air traffic control tower. The investment was funded by Hutchison Port Holdings.
Dorian swept away the international terminal, leaving only the frighteningly flood-vulnerable runways intact.
Last year, Hutchison Port Holdings sold its troubled Freeport hotel properties to the government.
Without the persuasive St. George, Hutchison is not likely to have the appetite to fund still another renovation and reconstruction of a poorly-located airport. Perhaps it may be persuaded to accept its portion of the hurricane insurance payout and transfer its interest in the Airport Company to the government, making the government GBPA’s partner in the Airport Company.
The proposed joint venture between Royal Caribbean Cruise Line (RCL) and ITM, a Mexican travel giant enterprise, meant to cause the revitalization of the former Hutchison hotel properties, has not progressed beyond the signing of a letter of intent last March – diminishing prospects of hotels creating increased demand for international airport services.
These circumstances make it urgent for the government to take an active role in causing the restoration of Freeport’s airport and its return to full international service in the shortest possible time.
We previously noted how the GBPA has gradually shed its many obligations under the Hawksbill Creek Agreement.
Its failure to modernize Freeport’s water and sewerage services is symptomatic of its inability to provide the appropriate support for Freeport’s further development.
With a small staff and great profitably, the Grand Bahama Utility Company extracts water from the ground and has done so for more than half a century. It is only now, following the compromise of its well fields by surging sea water during and after Dorian, discussing the possibility of investing in reverse osmosis systems.
At a time when the early impacts of climate change and sea level rise are so visibly damaging Grand Bahama’s built environment and threatening and degrading its natural environs, greater foresight is required of the company’s owners.
The government needs to determine the shape that Freeport’s future will take. The present ownership of the GBPA is not it. Still, Edward St. George’s idea of identifying private sector partners with deep pockets continues to offer a workable solution.
Some time ago, former Prime Minister Hubert Ingraham suggested that the government give consideration to the purchase of the GBPA, the transfer of the licensing and regulatory responsibilities of the GBPA to local government authorities on Grand Bahama and the formation of a new entity with heavy private sector ownership and professional management to assume its quasi-governmental responsibilities. We endorse the idea.