The government is counting on several foreign direct investment (FDI) projects to underpin gains in economic growth through 2024 as a result of the negative economic impact of Hurricane Dorian, according to the recently released Fiscal Strategy Report, which explains that these projects will be key to economic growth and job creation.
“The government recognizes the important role played by both domestic and foreign investment in promoting economic growth and job creation opportunities in The Bahamas and continues to support the start of several sizeable FDI projects,” the report states.
“These are poised to underpin the expected gains in economic growth over the forecast years as well as provide new employment opportunities – especially in Grand Bahama and New Providence.”
Cruise line projects reflect the majority of those investments. The report outlines Disney’s $400 million Lighthouse Point Project, which it projects will yield $7.7 million in annual earnings, $13.8 million in annual economic output and an $11.6 million increase in gross domestic product.
The Disney project is expected to provide 190 jobs when it begins in earnest following the results of its environmental impact assessment.
“In March 2019, the government and Disney Island Development Ltd. signed a heads of agreement for a $250 million to $400 million cruise port and entertainment facility at Lighthouse Point Beach in Eleuthera, The Bahamas, which is anticipated to handle up to 20,000 passengers per week,” the report states.
“The agreement also allows for the conveyance of land valued at $6.3 million to the government for the establishment of a national park. The project is expected to provide a minimum of 120 jobs for Bahamians during the construction phase, with an additional 150 permanent jobs once construction is completed.
“Apart from job opportunities, the project is intended to provide business opportunities for local vendors and other residents of Eleuthera for the provision of authentic Bahamian arts and crafts, tours and other tourist attractions. The project also proposes to construct a sustainable development that features a 100-unit ecolodge and learning and research center.”
While a deal has yet to be finalized, the report points to Royal Caribbean and ITM’s $275 million project as an important post-Dorian economic driver. The project, which is slated for Grand Bahama, is expected to create 2,000 jobs and become an economic stimulus for Grand Bahama.
“The government and Royal Caribbean International, in conjunction with its partners the ITM Group, signed a letter of intent (LOI) in March 2019 for the purchase of the Grand Lucayan resort and the redevelopment of the Freeport Harbour,” the report notes.
“The first phase of the project will feature a $195 million initial investment – inclusive of the $65 million resort purchase – and will span over a 24-month period.
This development is projected to bring two million passengers to Grand Bahama annually.
Royal Caribbean and ITM’s facilities will include a five-star hotel property, water-based family entertainment, dining, gaming and myriad entertainment features.
The report adds: “The additional cruise passengers will also present an opportunity for local vendors, taxi drivers, arts and crafts artisans and other souvenir businesses to benefit from increased sales. Negotiations to finalize this sale are expected to be completed by the end of 2019.”
Also on Grand Bahama, Carnival Cruise Line is expected to begin its $100 million port development in Sharp Rock, Freeport.
The development is expected to be the largest Carnival cruise port in the world.
“The port is expected to provide 1,000 direct and indirect permanent jobs to Grand Bahama, with a number of entrepreneurial opportunities available for local vendors,” the report points out.
“Once completed, the port is anticipated to feature aquatic facilities, a shopping plaza, restaurants, night clubs, food and beverage pavilions, open air concert facilities and other entertainment amenities.”
The government and Carnival signed the heads of agreement for the development in late September.
The report also includes Holland America Line’s $80 million expansion of its private island, Half Moon Cay.
A heads of agreement was also signed for that project in late September.
Holland America Line’s redevelopment project will include a shopping plaza, aquatic facilities, sports and entertainment facilities, restaurants and night clubs, beach restoration, nature trails and the development of park and natural reserves areas.
On New Providence, the report points to the economic impact of Baha Mar’s $300 million resort expansion, which includes the development of a water park on the site of the former Crystal Palace hotel.
Baha Mar’s development includes $100 million in renovations to the Melia Nassau Beach hotel and a $200 million investment in the waterpark and upgrades to the company’s private island.
“Collectively, this will bring the property’s total investment to $4.8 billion,” the report states.
“It is anticipated that the development will be completed in 12 to 24 months and will provide 500 direct and 1,000 indirect jobs.”
Other investments cited recently by the government as economic drivers are the Goldwynn project, currently under development adjacent to the Office of the Prime Minister, and the continued development of The Pointe project next to Junkanoo Beach.