Disaster Reconstruction Authority (DRA) Managing Director Katherine Forbes-Smith said yesterday that the authority has not been able to take advantage of many pledges to assist with Hurricane Dorian reconstruction because they had strings attached.
“A lot of the other pledges were pledges that we probably couldn’t even take advantage of because sometimes, and I don’t want to call out the donor’s name because it would be inappropriate, but we would have had a pledge from someone, for example, who may have said, ‘We will give you $500,000 towards project management.’
“But what it meant was, they wanted us to hire them, for example, to be the project managers for a specific project.
“Or you had someone that said, ‘I’m going to give you $2 million towards a solar grid panel, for example. But they wanted you to engage in a project that would probably cost us about $6 million to $10 million to even do the particular project. So…a lot of people who pledged that day, they pledged to give you something, but you then had to get involved with them also in exchange for a project.”
She explained that the authority was not going to get involved with pledges where “you spend $50 million to get a million”.
“It has to make sense for the country,” she said.
“It has to make sense.”
Forbes-Smith said the government received a total of $1.77 billion in pledges from 49 donors during a United Nations Development Programme (UNDP) Hurricane Dorian pledge conference in January.
Of that, she said, more than $1.6 billion was in equity financing by P3 Group, a private equity firm. However, she said the interest rate was too high.
“They are a private equity firm who pledged $1.67 billion in equity financing if the government or the DRA was interested in taking them up on that,” Forbes-Smith said.
“But when you look at some of these things that people are offering, like that was probably at an interest rate of seven percent. The government or the DRA would not be looking at any kind of financing arrangement to the tune of seven percent. We’ve got to be smarter in terms of talking about financing and the percentage rate and the cost of money.”
Forbes-Smith also noted that while more than $300,000 in pledged in cash, only $109,000 of that has been collected.
“When the minister spoke about this $300,000 in cash that was pledged, that was so,” she said.
“But what happened was we received $109,000 of that cash that day. The other $200,000 or so, we have not gotten that cash yet. And that was pledged by a local donor in The Bahamas.”
However, she insisted that while the donor conference may not have gone exactly as hoped, it has been helpful.
“The pledge conference may not have turned out to be a pledge conference where we got millions and billions of dollars, but I’ll tell you what has happened as a result of the pledge conference, we have been able to engage a lot of local and international donors now that we’re fully into this reconstruction process,” she said.
“And so, what is happening is we have the ability to seemingly engage more donors because they are now more in tune with what the needs of The Bahamas are.”