More questions than answers over $975m pledge

NASSAU, BAHAMAS- A top private sector exeutive said that while he is ‘absolutely in favor of public-private partnerships’ (PPPs) the recent $975 million pledge by the P3 Group raises more questions than answers.

The US-based commercial real estate and public-private partnership (PPP) specialist pledged almost two-thirds, or $975 million, of the $1.5 billion pledged at Monday’s conference.

The group’s president Dee Brown has indicated he was seeking a PPP-type structure where it would provide funding for various infrastructure and public services projects but expects to get a return on investment.

Abaco Chamber of Commerce president Ken Hutton said: “It raises questions to me what they were doing and the fact that they came up with this big number that was not truly a donation at a donors conference.”

In a recent interview with Eyewitness News, Brown said his company focuses on public private partnerships, specifically high impact transformative projects to invest in.

“We use a lease purchase agreement that have concessional interest rates, so very low interest rates and the repayment is tied to the actual revenues of the project and not from an actual requirement that the government pledge credit or anything to that obligation,” said Brown.

Brown explained that under his company’s model, that $975 million will be broken into several buckets for technical assistance, and healthcare capital works.

Under the lease purchase agreement, according to Brown, “the entity we establish would own the facility until the final payment is made, and then the government could pay one dollar and the asset would transfer to them and so that doesn’t count against the national debt by using that particular methodology.”

Yesterday, Hutton questioned how the PPP’s are being guaranteed.

“If there is a default does this company then become the owner of vital infrastructure of the economy,” Hutton said.

“I’m absolutely in favour of PPPs but there are just a lot of unanswered questions. What is the finance and payment structure. When you talk about $600 million for healthcare I suspect that the majority of that would go towards the Rand.

He added: “We have a fairly new clinic on Abaco that just needs some equipment and some staffing. It came through the storm quite well.

“What is it that they have got, what is their thinking. I’m absolutely in favour of PPPs but there are a lot of questions still to be answered.”