Pie in the sky?
Storm victims might be tempted to get excited about the $1.5 billion “in recovery funding and in-kind services” pledged by companies and individuals on Monday at the Hurricane Dorian Private Sector Pledging Conference, but they should wait to hear the details before breathing any sigh of relief.
The bulk of that appears to be a loan/financing offer from U.S.-based The P3 Group, Inc., and according to Disaster Recovery Authority Managing Director Kay Forbes-Smith, the government has not yet determined whether it will enter any loan arrangement.
Asked yesterday whether any of that money represents low-interest loans, Forbes-Smith said, “Well, that’s a part of pledging. They said, when they stood up and made their presentation, they said that they would be offering $975 million in this kind of loan structure and that’s a pledge. So, if the authority was interested in looking at some kind of loan, this is something that has been brought forward.
“And I’m not saying that the authority is at this time because what the authority is doing at this time is making sure that we prioritize our projects and we have to look at what the cost is for those projects. That’s where we are right now.”
Forbes-Smith said the donor conference was her first time having any kind of engagement with P3.
In a press release after the conference on Monday, the Office of the Prime Minister did not indicate that the lion’s share of those “pledges” represented loans, but it did say, “The pledges included initiatives in homebuilding and repair; educational assistance; renewable energy partnerships; relief aid; grants; direct assistance to storm victims; parks restoration; loans and financing.”
The statement added, “As a follow up to the conference the UNDP (United Nations Development Programme) and the government will issue a detailed account of the commitments made disaggregated by sectors and stakeholders.”
Forbes-Smith said that breakdown should be published tomorrow. She assured that the authority will be accountable in every aspect.
P3 CEO Dee Brown told The Nassau Guardian yesterday that the $975 million was allocated to several different categories.
He added, “What we do, we look at projects that can actually pay for themselves. So, what would happen is the government would basically pledge the revenue from the project to repay the debt.
“And what we would do is really give concessional interest rates, so our rates would be lower than what you typically would see in the market. And also we don’t require the government to pledge a credit behind our obligation. Therefore, it doesn’t count against the national debt. You’re getting the project delivered without running up the national debt at the same time.”
According to Brown, the majority of that $975 million financing pledge is allocated for healthcare with a total of $675 million earmarked for that aspect.
Brown said the hope is that a “world class” healthcare facility would be built that would “essentially help pay for the project itself” and noted that the group would expect to have “ownership interest in the project in the interim” until the debt has been paid.
According to its website, The P3 Group, Inc. specializes in delivering high-quality projects through public-private partnerships.
“We offer a turn-key P3 solution which includes a design build contractor with more than $1 billion in bonding capacity, architects, engineers and a team of attorneys,” it states.
The site says P3 is a licensed real estate brokerage and leasing firm located in Memphis, Tennessee.
“The P3 Group offers government agencies a complete design/build/finance solution,” it adds.
Yesterday, Progressive Liberal Party (PLP) Chairman Fred Mitchell cautioned against getting too excited about the government’s $1.5 billion “pledge” announcement.
“It seems to us that there was a tendency at this donor conference — and it happens at all donor conferences — to engage in self congratulations,” said Mitchell, a former minister of foreign affairs.
He added, “The three Ps, the [public-private partnership] as they are called, is simply another example of lending money to the government and who knows at what price, and you can be sure that friends of the FNM will be at that trough. As for country donations, there was nothing really substantial there either.
“…So, you have to look behind the headlines as if you’re discerning. Large numbers of pledges, but what will it actually bring?
“The facts on the ground must be real; it must not be pie in the sky, and the history of donor conferences does not actually bode well for actual delivery particularly since this comes five months later when hearts and minds have shifted attention to other world problems. So to sound a note of caution, don’t get carried away.
“The Bahamas must really rely on finding its own resources, self-reliance. If the donations come, fine, but we ought to rely on our own management skills and resources…”
The Free National Movement (FNM) for its part praised the government after the conference.
As was stated by Finance Minister Peter Turnquest in Parliament during debate on a vote of confidence resolution in the prime minister last month, the FNM suggested that it is confidence in Minnis and the government that has had pledges coming in.
“A glaring difference between this administration’s management of disaster recovery versus the woeful PLP after Hurricane Matthew in 2016 is trust and accountability,” the party said in a press statement yesterday.
“One point five billion dollars in pledges were captured at yesterday’s Hurricane Dorian Pledge Conference, demonstrating the international community’s trust in the FNM government’s ability to manage donated funds appropriately.
“Such an event at this scale never took place while the incompetent and corrupt PLP were in office. In fact, it never could have occurred, as the woeful PLP made it impossible for the international community to trust their management or motives.”
The FNM added, “The difference now is that Prime Minister Minnis has built trust between The Bahamas and the international community through his proven commitment to putting people above politics while demanding higher expectations in accountability.”
The FNM’s statements are typically low on substance and high on political rhetoric. This one is no different. It is clear that not even the party’s chairman has a clue on the breakdown of these so-called “donations”.
While Minnis is busy demanding higher expectations in accountability, he should also be careful not to drive up the expectations of storm victims beyond what the government is capable of meeting.
Those impacted by the devastating hurricane rightfully expect their government to put in place initiatives to aid in the restoration of their lives. They are also right to expect their government to properly manage the handling of donations and the delivery of resources to their hurricane-ravaged communities.
If the government leaves the impression out there that there is now $1.5 billion in cash from donors, it would find that angst from the public — particularly those affected by Dorian — would grow considerably.
Some have already expressed surprise that the government has only received around $9 million in donations for hurricane relief efforts, and spent around $7 million of those funds already.
Minister for Disaster Preparedness, Management and Reconstruction Iram Lewis told the donor conference that the majority of that money was spent to purchase domes for the Family Relief Center on Abaco and on RVs to allow government services to get back up and running.
The prime minister has said the dome project was to encompass “250 dome structures that will include plumbing, drainage, a sewer system and electricity” near Spring City. The government has since said storm victims will be allowed to have domes on their properties.
On Sunday, Lewis said there was no deadline in place for the completion of the dome city.
Some residents who lost their homes in the storm have labeled the domes a waste of money.
While its management of the storm relief efforts has been subjected to criticisms — much of it justifiable — we believe the government understands that frustrations are growing among storm victims.
The need remains great.
“Bahamian people need to be assured first of all what the pledges look like and they come to understand that it’s not [just] cash; it’s a lot of other things we need help with moving forward with rebuilding this country,” Forbes-Smith said yesterday.
“We need money, but technical support is important as well.”
The government has a tremendous task of continuing to manage relief and rebuilding. What it must not do is pursue unrealistic options in its efforts to make more substantial progress.
We look forward to seeing the breakdown of the “pledges” from the donor conference and getting more details on what the government intends to pursue — if anything — with P3 and the other entities that participated on Monday.