Govt. eyes majority Bahamian ownership in $250 million project
NASSAU, BAHAMAS – The Ministry of Tourism yesterday announced Global Ports Holding (GPH) Limited as the preferred bidder for the redevelopment of Nassau’s cruise port, marking the beginning of negotiations to formulate an agreement with the government.
“The proposal put forth by Global Ports was unanimously considered by the Evaluation Committee, which reviewed and evaluated each of the three responses to the request for proposals (RFP), as the best proposal,” D’Aguilar advised the media during a press conference.
“All Global Ports does is manage and operate cruise ports and is considered the largest cruise port operator in the world with 15 ports, one of which is located in the Caribbean, Havana, although, with the recent signing of a memorandum of understanding with the government of Antigua and Barbuda they are hoping to increase that number to 16 in a very short order.”
Three bids were submitted to the government.
The government said it would focus on several factors of each bid, especially the financial impact provided by them.
The RFP called for the successful bidder to provide plans for the redevelopment of parts of the port and Bay Street, enhance the guest experience by expanding tourism offerings, improve traffic and circulation and engaging merchants and vendors to increase foot traffic to their establishments, among other things.
The minister stressed that the future arrangement does not represent a sale of the port.
As part of the $250 million proposal, GPH intends to add two additional ship births; a landmark modern building; an auditorium for concerts with a capacity of 10,000 people, and outdoor movie feature.
The company also intends to not add any large international retailers to its port and commit $5 million in micro loans to entrepreneurs of small businesses.
GPH is the world’s largest cruise port operator, with 15 cruise ports and two cargo ports in nine countries.
Of its proposal, the minister said it creates a sense of space and openness that would remove the present “harassing type environment” that confronts passengers.
Insisting that the GPH has gone beyond what was asked of them in the RFP by incorporating suggestions of how the redevelopment will act as a catalyst for the revitalization of downtown Nassau, D’Aguilar said business opportunities for small businesses are expected to flourish.
“We expect the number of small businesses to grow exponentially and we can assure the Bahamian people that every single retail business and restaurant, and service provider will be owned by Bahamian,” he said.
GPH Chairman Mehmet Kutman said he has long held a dream to transform the port and is excited to get started.
He insisted that GPH has and will continue to work hard to meet the expectations of all stakeholders.
“We are at the end of the day a tenant, which is very, very important,” the chairman said.
“I keep saying to my team, ‘guys we are a tenant’. Our neighbours have to be happy, all of our neighbours.”
He continued, “Who has to be happy? The taxi drivers, the straw market, the boat people, the downtown Nassau restaurants; mum and pop shops. If they are happy they will support us. If they support us, basically the government will also support us in the process. This is very important. At the end of the day, this port is the Bahamian people’s asset. We are just a tenant, temporarily.”
Kutman said he hopes to complete the concession agreement within 30 days, paving the way the 24-month transformation of the port “together with the Bahamian public”.
Colina Financial Advisors Ltd. (CFAL) President Anthony Ferguson said Bahamians will have majority interest of the investment with a 49 per cent equity stake and the dividends of a two per cent stake being provided to a foundation for youth development and sports.
Ferguson said there will a maximum buy-in, explaining there will be a bottoms-up approach with a minimum investment of $1,000. He said up to $10 million will be loaned to Bahamians to borrow the minimum investment needed.
“We anticipate that this will be the largest investment available to Bahamians to date,” Ferguson said.
“As you know, the Arawak Port Development was the largest with 12,000 shareholders, which we work very closely with them. We are planning to see if we can get between 20,000 and 30,000-plus investors in this project.
He also noted that GPH will open a headquarters in The Bahamas.
Concessions
While it has yet to be finalized, the government is eyeing a 25-year concession period.
The minister said the government wants wide Bahamian participation so there is “no concentration of ownership in the hands of a particular group”.
“I want to be clear: This is not a sale of the Prince George Dock,” he stated.
“The Bahamian people, through the Government of The Bahamas will always retain ownership of that asset.
“This is simply the granting of a concession to an entity that will invest $250 million to transform the Cruise Port of Nassau into an iconic; must visit; must see gateway with overwhelmingly positive passenger experiences and in return, earn the right to manage and operate the Prince George Dock for 25 years.”
Bias
When asked about concerns that the government’s selection may give further rise to criticisms of bias, D’Aguilar said he has no concerns, as Global was the best choice.
As has been widely reported, the RFP process was triggered by an unsolicited proposal from GPH.
“We had an unsolicited bid from Global Port, and then we decided let’s do an RFP, and so everybody knew there was going to be a RFP,” he told Eyewitness News Online on the sidelines of the presser.
“The RFP came out and everybody had 60 days to put together a [proposal], which we thought was sufficient time.
“We got three bids. Every bid included Bahamian ownership.
“And then, we had an evaluation committee of seven, and then the evaluation committee unanimously selected Global Port.
“…We even allowed the top two bidders to make proposals to embellish and to enhance on their proposals and they are hands down the best.”
D’Aguilar was also asked whether the government plans to conduct a public consultation process.
“There wasn’t a plan to,” he said.
“We have reached the point now where we are ready to have the discussion about formulating the agreement.
“[We] have been talking about this for forever, and the time is to act.
“This is what we felt was the best deal.
“It includes Bahamian ownership, not only in the debt, but in the equity.
“…When you look at all the other deals and you look at the import for example, you know, 75 per cent of the debt is held by foreigners.”
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