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Last Updated: Feb 13, 2017 - 1:45:37 AM |
Parliament approves $150 million loan to fund Matthew’s recovery
Parliament met on Wednesday of this week and as expected, Matthew took center stage with the government moving a resolution for a loan of up to $150m to defray the costs of this country’s recovery and reconstruction efforts as a result of not only Hurricane Matthew, but for last year’s Hurricane Joaquin.
Moving the resolution was State Minister for Finance the Hon. Michael Halkitis.
Prime Minister and Minister of Finance the Rt. Hon. Perry Christie took the opportunity to update the House and the country on the status of the country’s recovery efforts. As expected, the nation’s chief revealed that the losses to The Bahamas from Hurricanes Matthew and Joaquin could total hundreds of millions of dollars.
"Up to the present time, we were indicating that Hurricane Joaquin was over $100 million in cost," Prime Minister Christie said. "The Ministry of Finance is projecting $200 million as the cost for Hurricane Joaquin.
"In fact we have a running debate between the Financial Secretary and myself, who’s projecting that the loss to the country -- combined loss of Matthew and Joaquin -- would be some $800 million." For the sake of clarity, this figure (of $800 million) includes damage and cost of recovery to both public and private properties where private insurance companies will defray most of this cost as claims in the hundreds of millions of dollars are filed, processed and paid. BIA chief Emmanuel Komolafe has already estimated Matthew’s losses at some $400 million.
Commenting on the financing mechanism which will be in the form of a bond issue by the Central Bank, Mr. Christie noted that ordinary citizens and residents of The Bahamas have expressed an interest in participating and as such, the Ministry of Finance has designed a two tranche financing -- a tranche for commercial banks of $120 million and tranche for the public of $30 million.
"In addition, the Central Bank has recommended that non-residents with a nexus to The Bahamas be allowed to participate in this offering," Prime Minister Christie said.
This recommendation by the Central Bank, had been accepted by the Government the day before, he said. Those funds would be exclusively used for the reconstruction effort, he added.
Prime Minister Christie again reviewed the governments 180 days Exigency Order, issued effective October 7, 2016 and expires on the 4th April 20917. The Order allows individuals from New Providence, Grand Bahama, Berry Islands and North and Central Andros to import materials duty and VAT free to repair their dwellings, he said.
"In addition” said Mr. Christie, “it also allowed for the duty free importation of generators, motor vehicles and for the first time bottled water for a two-month period," he added.
Prime Minister Christie also pointed out that for the first time he had authorized the delegation of approval of duty-free status by the National Emergency Management Agency (NEMA).
This means, he noted, that individuals impacted by the storm upon the completion of the relevant NEMA form can import goods or purchase goods duty or VAT free without the prior approval of NEMA.
"The only exceptions to this rule are for purchases or imports where the value is greater than $10,000 or for those individuals seeking to replace motor vehicles," he said. "The Exigency Order has also been granted for 180 days a departure from the traditional 90 days."
The Government has also, for the first time, incentivized the business community by agreeing to give -- after talks with the Chamber of Commerce -- a mechanism by which businesses can see a reduction in their tax bill if they donate to the Bahamas Disaster Relief Fund, Rebuild Bahamas or any other charity duly recognized by the Government, Prime Minister Christie said. Legislation, he added, would soon be presented to the House to give legal effect to this agreement.
"These steps, impressive as they may be, in the normal course do not provide the direct impetus which we believe is necessary to start the rebuilding effort," he noted.
He again posed the question (for national consideration) as to whether it was time for the Government to consider some levy to offset the cost of hurricane reconstruction, which had grown exponentially as the country developed and because of climate change which has increased the frequency of negative impacts of the weather on this country.
Mr. Christie also pointed out the need to continue to service the debt in a tax neutral manner despite the borrowing to fund recovery and reconstruction efforts. There should be no change in existing rates said the Prime Minister.
"This assurance was done by the way of study done on behalf of the Ministry by external experts," Prime Minister Christie said. "This study was commissioned and presented to the Ministry prior to (the) arrival of Hurricane Matthew."
"The key finding of the study is that with a more structured compliance programme, the revenue base could grow by 10% in the short term and up to 20% in the medium term of 3 to 5 years," he added.
The loan resolution was unanimously passed by the House.
Office of the Prime Minister responds to Izmirlian’s Baha Mar offer
The letter written by Mr. Sarkis Izmirlian to Vice Chairman and President Liu Liange of the Export-Import Bank of China (“CEXIM”) about a proposal to purchase Baha Mar was made public last week in a press release; a copy of the letter was sent to Prime Minister Christie.
The Bahamas government determined that the letter and the press release contained “some extraordinary statements” and even though the Government would not normally respond to such a letter and statement, it was compelled to respond “so far as it impacts on what the Government has achieved, which is well documented, in ensuring that the Baha Mar development is finished and Bahamian creditors paid” according to a statement released by the Office of the Prime Minister.
So on Monday of this week, the Office of the Prime Minister officially responded.
“The assets of Baha Mar have been acquired by Perfect Luck Holdings Limited (Perfect Luck)” said the statement following a lengthy Supreme Court supervised and approved marketing process by the Receivers.
“Now that the assets are owned by Perfect Luck, that company may sell the resort to whomever it wishes, subject to the proposed purchaser being acceptable to the Government and other bodies performing their public function” continued the statement.
Reminding the public that “Sarkis Izmirlian, without any prior notice, arranged for the Baha Mar companies to file Chapter 11 bankruptcy proceedings in the United States),” Mr. Izmirlian was advised to demonstrate his seriousness about acquiring Baha Mar.
“If, as he states, Mr. Izmirlian is in a position to, and wishes to work with CEXIM to deliver Baha Mar for the Bahamian people, then he should engage seriously with Perfect Luck and its advisors. If he is in a position to make a credible proposal to acquire Baha Mar from Perfect Luck, then he is free to do so” said the statement.
The government reminded all and sundry that after much hard work (since June 29, 2015), “the project is back on track - re-mobilization has commenced and through high level good faith negotiations a substantial fund has been established by CEXIM for the payment of creditors’ claims and former Baha Mar Bahamian employees are already being paid. Those were two of the Prime Minister’s three stated primary objectives and they have been achieved.” The third objective of the government is to ensure the sale and opening of that resort “in the very best interest of the economy and the people of The Bahamas” said the Office of the Prime Minister.
Matthew dominates Diplomatic Week
The third annual Diplomatic Week was held this week at the Melia Resort on Cable Beach in Nassau. This gathering of the diplomatic corps and heads of foreign missions allow for the entire fraternity to come together, report on their respective missions and discuss ways that the foreign service can be strengthened and more relevant to the needs of the Bahamian Diaspora in the months and years ahead.
Delivering the key note address at the opening ceremony was Bahamas Prime Minister the Rt. Hon. Perry G. Christie and given the recent passage of Hurricane Matthew, the principal message revolved around the devastation left behind by this monster storm and the perseverance, resolve and resilience of the Bahamian people to recover, restore and rebuild The Bahamas.
“The process of recovery, restoration and rebuilding is underway, and it will take time” said Prime Minister Christie, referring to an estimated $400 million in damages and losses incurred at the hands Matthew and the government’s $150 million in short term funding via a hurricane bond.
“I know, however, that my country will persevere due to the resiliency and strong faith of the Bahamian people. I am deeply heartened also by the generous assistance and donations from our friends around the world – national governments, international organizations and individuals - who wasted no time in providing rapid support to, and continue to support, The Bahamas in the aftermath of the hurricane.
“Just last week, after visiting Haiti, which also experienced severe damage and loss of life from Hurricane Matthew, the Prime Minister of Dominica, the Honourable Roosevelt Skerritt, who is also Chair of the CARICOM Heads of Government, visited The Bahamas along with Mr. Irwin Laroque, Secretary General of CARICOM, to see firsthand the destruction. On behalf of the Bahamian people, I thank each and every one of you for all of the help that has been provided.”
Turning his attention to the tragedy in Haiti, Prime Minister Christie extended “sincere condolences on behalf of the Government and people of The Bahamas to our sister CARICOM country Haiti, for the loss of life and the devastation wrought by Hurricane Matthew.”
Mitchell outlines priorities of the Bahamas Foreign Service
Foreign Minister the Hon. Fred Mitchell took the opportunity during his opening remarks at the third annual Diplomatic Week to list the priorities, the triumphs and the challenges of his Ministry, essentially underscoring the scope of the work the Bahamas Foreign Service has before it.
“I am pleased to announce that The Bahamas is seeking election for membership on the Human Rights Council for the term 2019-2021. I ask for the support of all member states for The Bahamas to be elected to the council.
“I also ask for your support for the re-election to the Councils of the International Maritime Organization in 2017
“The Bahamas will also seek a seat on the Security Council in the year 2031” said Mr. Mitchell as he talked about the work ahead for the Bahamas Foreign Service.
The Foreign Minister also addressed existential threats such as de-risking and threats of blacklisting to our financial services sector.
“At the United Nations, I went to some length to speak in defence of our financial services sector.
“In this country and across the region, it is the view that the OECD is intent on destroying financial services as a sector in this country, even as the developed world itself adopts the same model of financial services in special enclaves within their own borders” said Mr. Mitchell.
Public schools in the north to open on Monday, 25th October 2016
On Monday, 17th October, the Education Minister, the Hon. Jerome K. Fitzgerald held a press conference at the Ministry’s headquarters to deliver his fourth update in eight days since the passage of Hurricane Matthew on the status of repairs to and the opening schedule for public schools nationwide.
Fitzgerald confirmed that after stakeholder consultations, “ALL public schools in New Providence, Grand Bahama and North and Central Andros will re-open after the mid-term break on Tuesday, October 25th, 2016.”
“Schools in New Providence with the exception of C.I. Gibson Senior High and the Government High School were scheduled to open tomorrow, Tuesday, October 18th, while schools in Grand Bahama and North and Central Andros were scheduled to open on Wednesday, October 19th, 2016” said Minister Fitzgerald, noting that school openings are to a great extent “contingent on power being restored to our campuses.”
“At present only 25% of schools in New Providence have power and following our meeting with BPL this morning (Monday, 17th Oct), based on the feedback we received, only 50% of our 56 public schools should have power restored by end of day tomorrow” continued the Minister.
Meetings with parents of students attending C.I. Gibson High and the Government High School were held on Wednesday at C.I. Gibson’s gymnasium and the Kendal G.L. Isaacs gymnasium for the students of Government High.
EXIGENCY ORDER PROCEDURES RELEASED
Individuals importing goods and applying for duty and VAT exemption
Individuals will be allowed to import goods valued at $3,000 or less without NEMA approval once they accompany their goods and complete a NEMA application and a C18 Customs form (accompanied baggage form). In these instances, Customs will be able to provide approval at the border.
Individuals importing goods on a Customs form C13 Home Consumption form may do so without prior approval from NEMA provided the value of the goods being imported is less than $10,000. In these instances, Individuals must complete a NEMA VERIFICATION OF DAMAGE AND REQUEST FORM FOR THE REPLACEMENT OF BUILDING MATERIALS, ELECTRICAL, PLUMBING FIXTURES & MATERIALS, HOUSEHOLD FURNITURE, FURNISHINGS, APPLIANCES, AND GENERATORS and a Customs Officer of a rank no less than Superintendent will be responsible for approving the release of the qualified goods at the border. Individuals seeking to import goods under the Exigency Order on more than one occaision will be required to obtain prior approval from NEMA.
In all other instances and for the importation of Motor vehicles, NEMA approval will be required prior to the clearance and release of the goods. Please note that the NEMA VERIFICATION AND REPLACEMENT REQUEST FORM FOR DAMAGE MOTOR VEHICLE FORM must be completed.
BUSINESS importing Goods
Businesses that suffered damages and wish to access duty and VAT benefits under the Exigency Order for foreign and local purchases should have a valid TIN (Tax Identification Number) and must obtain prior approval from NEMA before the clearance and release of goods.
LOCAL BUSINESS Engaging in VAT/Duty free sales
BUSINESSES interested in selling duty free and VAT free qualified goods during the designated hurricane recovery period of 180 days from the passing of hurricane Mathew are invited to make application to the Hurricane Relief Section of Customs Department by completing the required Customs form. Upon approval of such application businesses would be permitted to make duty free and VAT free sales to qualifying customers.
Businesses are required to ensure that customers submit signed NEMA application forms and copies of identification before Duty/VAT free sales are finalized. Forms are to be submitted monthly along with sales invoices to the Department of Inland Revenue through the online tax administration System for verification. In cases where Customs duties have already been paid, businesses can also apply for the refund of duty previously paid
INDIVIDUALS qualifying under the exigency order and purchasing BUILDING MATERIALS, ELECTRICAL, PLUMBING FIXTURES & MATERIALS, HOUSEHOLD FURNITURE, FURNISHINGS, APPLIANCES, AND GENERATORS may make purchases from local business and may do so without prior approval from NEMA if purchases are less than $10,000.00. For purchases of more than $10,000 NEMA approval is required.
Ministry of Finance 14th October 2016
Clothing is not covered by the Exigency Order and is considered a relief good. Duty and VAT free importation of clothing is subject to the approval of the Ministry of Finance. Such approval would only be granted prior to the arrival of the goods.
Individuals and Businesses found to be guilty of fraud will be prosecuted to the full extent of the law.
ALL APPROVALS WOULD BE SUBJECT TO THE POST RELEASE REVIEW BY CUSTOMS, NEMA AND THE DEPARTMENT OF INLAND REVENUE.
Road Traffic Department relocated
The Road Traffic Department advised the public that as a result of the devastating impact of Hurricane Matthew, its headquarters in the Clarence A. Bain Building, and the Examinations Unit in the Munnings building were moved to the Eastern Grandstand of the Thomas A. Robinson National Stadium, effective on Monday 17th October, 2016.
“This temporary location will provide ALL services, inclusive of normal Vehicle Inspection and Licensing, Inspection of Rental Car Company Vehicles, Inspections of Jitneys, Tour Buses, Private Charter Buses and Private Schedule Buses, Renewal and Issuance of Driver’s Licenses and the complete Driver’s Examination process, both theory and practical” said Controller Ross Smith in a press statement last weekend.
“Further” said Mr. Smith, “licensing and Inspection will continue at both the Carmichael and West Bay Centeres, until further notice. Additionally, the West Bay Centre will conduct Inspections of Livery Cars, Taxis and Rental Car Company Vehicles.”
Due to these changes, the roll out of the department’s new computerized automated system, scheduled for October 17th, was delayed to October 21st said the statement.
In Passing…
The Central Bank of The Bahamas donated $150,000 to the National Emergency Management Agency, NEMA at its Gladstone Road headquarters on Wednesday, the 20th October 2016 to assist in recovery, restoration and reconstruction efforts in the wake of Hurricane Matthew. Additionally, China Construction of America (CCA), the general contractor for Baha Mar and owner of the Pointe, donated $100,000 to NEMA in aid of hurricane relief in the aftermath of Hurricane Matthew.
The $10 million parking facility at the Pointe on Bay Street was officially opened this week by Prime Minister Christie. The seven storey facility has some 900 parking slots and will go a long way in alleviating the challenges motorists face with parking downtown. The Prime Minister revealed that the first phase of the development employed 500 Bahamians and 100 subcontractors. He invited China Construction of America, CCA, to assist in solving the problem of flooding in the area from the Ponte to Ferguson Road on West Bay Street.
Pursuant to Prime Minister Christie’s suggestion that there could be a special tax to assist the country in the aftermath of Hurricane Matthew, at its weekly Tuesday meeting the Cabinet reportedly discussed the feasibility of a so called ‘sin tax’ on tobacco and alcohol to accumulate the necessary funding for repair and recovery efforts. However, according to high-level Government sources, this idea was rejected by the majority of Cabinet ministers who believe that to raise money the Christie administration should consider avenues that free Bahamians from additional taxation.
Both Opposition Leader Dr. Hubert Minnis and the Leader of the DNA Branville McCartney said their respective parties are opposed to a Hurricane tax as suggested by Prime Minister Christie. The Prime Minister floated the suggestion while speaking to the media in Marshall Road during one of his many “on the ground” post hurricane Matthew assessments.
There have been no additional confirmed cases of the Zika virus in New Providence in the wake of Hurricane Matthew, with a senior health official claiming there have been fewer reports of mosquito bites in the wake of the category four storm.
Renew Bahamas confirmed that is has “suspended its services” as the New Providence landfill manager, after shootings, tire slashings and widespread theft in Hurricane Matthew’s aftermath made operating conditions unsafe.
Prime Minister Christie sent a strong message to sidelined FNM MPs Richard Lightbourn and Hubert Chipman to “resist with all your might” any attempt by the party’s leadership to end their careers. Mr. Christie told the MPs, both of whom have not been offered a re-nomination, that no one person should be able to dictate whether their political careers were finished, adding that the decision should come from the electorate.
Minister of Tourism with responsibility for Gaming the Hon. Obie Wilchcombe said it was time for the country to consider a national lottery where funds can be raised to defray hurricane recovery costs. On the political front, the member for West End and Bimini suggested that the Progressive Liberal Party not hold a convention this November due to the devastation of Hurricane Matthew and the focus of his constituents in returning their lives to some semblance of normalcy.
During her House presentation, Transport Minister the Hon. Glenys Hanna-Martin revealed the Department of Meteorology’s Doppler radar has been fixed and negotiations over the phased acquisition of four new radars have been completed.
Bahamas Power and Light has temporarily suspended disconnections on overdue accounts in an effort to provide relief to customers after the passage of Hurricane Matthew, according to Corporate Communications Manager Arnette Ingraham.
More than 90 percent of BPL’s residential customers in New Providence have been restored to supply, however, there are still approximately 8,000 customers without power, BPL added. This comes as reinforcement arrived this week from PowerSecure to support the reconnection efforts of the Bahamas Power and Light Company.
About the author: Elcott Coleby is a Deputy Director at the
Bahamas Information Services. He holds a Bachelor of Science degree in
Chemistry (B.Sc) and a Masters of Business Administration (MBA). He provides
frequent commentary on public policy and communicates the works of the
government. Address all comments to the following email:
egcoleby44@gmail.com
© Copyright 2016 by thebahamasweekly.com
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