Hutchison Whampoa will be referred to throughout this presentation as it is the one that basically controls and owns fifty percent or more of the various subsidiaries that own and operate business on Grand Bahama and everyone in those businesses ultimately report to Mr. Li Ka-shing who, according to Forbes magazine, is the 8^th richest man in the world being worth 31 billion dollars as a result of his Hutchison Whampoa interests.

Hutchison Whampoa owns 50% of our “Grand Bahama International Airport” and it owns 50% of our “Freeport Harbour” and has the management control of both. Please note Hutchison Whampoa controls both the Harbour and the Airport (not including Air Services). Yes Hutchison Whampoa has “Control,” not the GBPA, Hutchison Whampoa.

In addition Hutchison Whampoa owns 51% of the Container Port. Between these three enterprises, Hutchison Whampoa controls the employment, on a part time or full time basis, of over 1,200 Bahamians.

In addition to the Airport, the Harbour and the Container Port, Hutchison Whampoa owns and operates the Grand Lucayan Hotel where a further 500 Bahamians are employed.

The claws of Hutchison Whampoa go even deeper into Grand Bahama because it owns a 50% interest in the largest land holder in the Port Area, “The Grand Bahama Development Company Limited (“GB Devco”) with some 60,000 or 70,000 acres of land. And, you guessed it, the President is a Hutchison Whampoa man and thus has the day to day control of what happens. By the way, remember that GB Devco controls the Lucaya Service Company Limited (“Lusco”), the company responsible for the maintenance of all the roads and verges (other than GB Highway) in the Lucaya area.

And it does not end there. Hutchison Whampoa has a 50% interest in, and management control of, the 742 acre “SeaAir Business Center.” The SeaAir Business Centre is that large almost completely undeveloped mass of land located on the north side of the Queens Highway. It has only one small piece that has been developed where VTrade is located.

Are you now beginning to see who is impacting your life? Do you now see who can really do something to boost the economy on Grand Bahama if they wanted to? Hutchison Whampoa has control of the Airport, the Harbour, the SeaAir Business Centre, the Container Port, the Grand Lucaya Hotel, The Grand Bahama Development Company Limited and the Lucaya Service Company Limited. No matter how you look at it, each on its own has a significant impact on the economy of Grand Bahama. Control of all of them puts you in a position to make or break the Grand Bahama economy. Perhaps with the exception of The Bahamas Government, Hutchison Whampoa is the largest employer on Grand Bahama.

In terms of resources Hutchison Whampoa is several times larger than The Bahamas Government. Our Government employs approximately 35,000 people versus a worldwide employment of approximately 260,000 persons for Hutchison Whampoa.

For the year 2011 the annual revenue for our Government was approximately $1.9 billion dollars. For that same year (2011), the revenue for Hutchison Whampoa was $50.6 billion dollars. Hutchison Whampoa’s net profit for 2011 was $7.28 billion dollars.

Now I don’t want you to think that you will now get on the phone and call the Bahamian management at any of these organizations. It is Hutchison Whampoa’s board of directors that decides our fate. All the decisions are made, outside of Freeport, outside of The Bahamas, in Hong Kong where Hutchison Whampoa is located. Hutchison Whampoa must take responsibility for much of the unemployment and hardship currently experienced by Grand Bahamians. Hutchison Whampoa’s Hong Kong management must take responsibility as they are the ones who make the decisions 9,000 miles away. Nothing gets done here without Hutchison Whampoa’s Hong Kong management’s approval.

Now at this point you may think that I will suggest that The Bahamas get a hand out. I advocate no such thing.

I want much more. I want Hutchison Whampoa to be a good corporate citizen. To date, Hutchison Whampoa has fallen miserably short of what it can, and should, deliver to Grand Bahama in the terms of their management and, in some instances, the quality of their operations. We should query if any management, administrative or similar charges are made by Hong Kong for the services rendered to their local Bahamian companies. Have they charged any fees since they started to set up their business here? If so, what did we get?

Hutchison Whampoa first came to this island in 1995. Yes, they have been operating here for nearly 20 years. The question is, what have they done in those 20 years, and what could and should they have done?

Our Lucaya/Grand Lucayan Hotel

Hutchison Whampoa is reported to have spent $400 million, some say $450 million, in the redevelopment of Our Lucaya, as I will refer to it as “Grand”, perhaps one day but definitely not now. Compared to the $500 million Kerzner spent, it is clear that Kerzner got much better value for the $500 million on the first phase of Atlantis at Paradise Island than Hutchison Whampoa did for its $400 million on Our Lucaya. Kerzner put Atlantis Paradise Island on the map.

In addition to getting poor value for their money, Hutchison Whampoa failed to properly market Our Lucaya. This has had a knock on effect on the number of passengers passing through our airport. Unlike the Bahamas Princess, who supported Laker Bahamas Airways, which brought up to 400,000 tourists to our island each year, Hutchison Whampoa has sat back and done nothing. Bahamas Princess supported not only 1,100 employees (almost the same number as Hutchison Whampoa’s Our Lucaya), but it’s guests also supported the International Bazaar and thus all the businesses and all those employed in those businesses.

So what is Hutchison Whampoa doing to fill the Our Lucaya complex? They have given up on the old Holiday Inn. No they did not sell it; they are extracting as much rent from it as they can from the Canadian Hotel operator SunWing. In addition they have withdrawn, shut down, about 200 rooms ready and available for guests with the commensurate reduction of employees adding to the unemployment on Grand Bahama.

But why? Hutchison Whampoa is located in area of the world, Asia, that contains the largest population on earth. The tourist market there is much larger than Grand Bahama’s traditional tourist market in the Northeast corridor of the United States.

When Hutchison Whampoa opened Our Lucaya it had two fine golf courses. When Hutchison Whampoa opened Our Lucaya, Japanese golfers traveled half way around the world to South Africa to play golf yet no promotion was made, or is being made, to bring them to Grand Bahama. At that time there were four good courses (the Lucayan, the Reef, the Ruby and the Emerald) all within a ten minute drive. The Taiwanese airline Eva Air already had Boeing 777s capable of making the trip from Tokyo to Freeport non-stop. All of the courses were, as they still are today, grossly underutilized and in desperate need of players. Each course then needed over 10,000 additional rounds a year, that’s how underutilized they were and are.

Imagine 300 golfers coming in. It would take them a day each way to travel from and back to Tokyo and they may need a day to recover from the jet lag. They then could play on a different golf course on four consecutive days before retuning having had a 7 day or one week golfing experience.

Now we all know that golfers have money and are constantly gambling, they bet on their golf matches and then go to the 19^th hole where they play cards and backgammon etc. They also like to dine well. In other words they are some of the best visitors Grand Bahama could want. They would be here 5 nights times 300 equals 1500 room nights per week and 300 rounds per golf course (green fees, golf carts, caddies etc).

They were doing it in South Africa so why not Grand Bahama? Hutchison Whampoa could have and should have made Grand Bahama a golfing destination. Kerzner was able to make Paradise Island Atlantis a destination recognized around the world. For example, the Michael Jordan Invitational which attracts golfers and Hollywood big name stars each year.

And no large yachts are calling here. Why not? Atlantis has yachts and they have much further to go. Freeport is the ideal destination for yachts as it is just off the US coast.

What I am saying is that it is time for Hutchison Whampoa to step up to the plate and make Our Lucaya a success. Perhaps Hutchison Whampoa’s Hong Kong management has stifled creative thinking, of the local executives, by micro managing everything? Perhaps previous Hutchison Whampoa investments made money no matter how badly they were managed? Maybe this is the first time the Hong Kong management has had an investment that is actually challenging and they just aren’t up to the challenge? If that is the case then they should cut their losses and sell out. Instead it would appear that in order to save face Hutchison Whampoa has dragged the good people of Grand Bahama along in their self created economic doldrums. There are many, hundreds perhaps, Grand Bahamians who should be working but are not because of this unimaginative, and maybe, incompetent Hutchison Whampoa’s Hong Kong micro management style.

Enough said about the Hutchison Whampoa hotel debacle.

Grand Bahama International Airport

Grand Bahama International Airport (GBIA) is one of the largest privately owned airports in the world. I don’t want you to think that it is small either. GBIA’s runway is some 900 feet longer than Boston’s Logan International Airport’s main runway. It is an airport with great potential, potential that has yet to be realized, maybe even recognized, by those that control it in Hutchison Whampoa’s Hong Kong management. It sits a mere two miles from one of the deepest harbours in the North American region, a harbour that transships the equivalent of over one million 20 ft containers a year. It sits at the eastern end of the 742 acre “SeaAir Business Centre.” GBIA is located between South America and Europe and next to the world’s largest economy. It is perfectly situated for air cargo between these regions, especially as it is next to Freeport Harbour and the SeaAir Business Centre. Are you beginning to get the picture?

Now one must question what Hutchison Whampoa’s Hong Kong management, which controls the livelihood of over 260,000 employees are doing?

I have been told that they will not sell any property, or give a ground lease for the construction of cargo warehousing. Just as, I am told, that when Hutchison Whampoa was approached by successful Fixed Base Operators to build an FBO they refused and instead built what can only be referred to as a cheap second rate FBO owned and operated by, you guessed it, Hutchison Whampoa. Why turn down a first rate operator? Is it possible Hutchison Whampoa’s Hong Kong management is afraid that someone might show them up? Why turn away investment to Grand Bahama? This failure to encourage investment penalizes Bahamians. This is not the way a good corporate citizen is to behave.

Firstly, we are told that the cost of bringing aircraft to GBIA is very high. When asking various people why this is, one is given a variety of reasons:

· Ground handling is too costly

· The cost of fuel is too high

· Landing fees are too high

· Security fees are too high

· There are not enough passengers going through

It is clear that everything the Hutchison Whampoa Hong Kong management has done, or should I say not done, has exacerbated the problem. They have done nothing to encourage an increase in passenger numbers. Remember, when Kerzner invested in Paradise Island and created Atlantis, he required that the airport in Nassau be upgraded at considerable cost to be of a standard, commensurate with the quality of his new tourist destination. I am told that Hutchison Whampoa also required that GBIA be upgraded to compliment their new hotel “Our Lucaya”. The difference is that Sol Kerzner delivered the passengers to Nassau, thus justifying the expense incurred. Atlantis then went on to expand. Hutchison Whampoa, on the other hand, has failed miserably to deliver the results that would justify what was demanded by them. We now have an airport designed for a hotel that has yet to exist. Our Lucaya closed most of its rooms so instead of 1260 rooms that it should have operating, it only has 542 rooms. Yes, that is correct, Hutchison Whampoa’s Hong Kong management has shut over 700 rooms, so when they talk about occupancy they are referring to the section of the hotel they have open, which often is even less than the 542 rooms as sometimes they have shut down entire floors of the 542 room complex, rather than out of the 1260 rooms in the complex, and even then the occupancy is appalling. So where are the passengers for the airport?

Indeed, Hutchison Whampoa’s Hong Kong management has sent us backwards as the lower the number of passengers the greater, proportionately, the cost for ground handling, cost of fuel, landing and security fees. It seems clear that Hutchison Whampoa’s management must take the blame for the high cost of GBIA and its failure to reach a fraction of its potential.

This failure means that many who should be employed at the airport and businesses that support an airport are not employed. Again, this inability of Hutchison Whampoa’s Hong Kong management to deliver has cost 10’s, maybe 100’s, of Grand Bahamians to remain unemployed.

The Grand Bahama Development Company Limited (“GB Devco”)

In 1999 Hutchison Whampoa acquired a 50% interest in GB Devco. A Hutchison Whampoa man is the President of GB Devco and thus it is Hutchison Whampoa who controls GB Devco. This is a company that all Grand Bahamians are familiar with. It owns somewhere between 60,000 to 70,000 acres of land located east of the Lucayan Circle out as far as the old US Missile Base.

GB Devco is responsible for the subdivisions of Greening Glade, Arden Forest, Lincoln Park, Chesapeake, Fortune Bay, etc. and the water front subdivisions of Barbary Beach, Surrey Bay, Discovery Bay, Colony Bay, Pearl Bay, Coral Bay and so on. Not to mention the thousands of acres east and south of Grand Bahama Highway once you get east of the Grand Lucayan Waterway.

GB Devco, read Hutchison Whampoa, controls the development in all those areas. Hutchison Whampoa decides when and what property is going to be sold and at what price. They decide what property to take off the market. Anyone notice how little waterfront property has been available for sale over the last 5 or 6 years?

They have not initiated any development since the Chesapeake and Lincoln Green subdivisions ten years ago. These developments provide housing and construction jobs for many Grand Bahamians. They added millions of dollars to the Grand Bahamian economy.

We heard rumors about projects in Barbary Beach and all over parts of Lucaya east of the Grand Lucayan Waterway. But for some reason none, yes none, of them have come to fruition. How can this be?

With its 260,000 employees, let us call upon Hutchison Whampoa to step up to the plate and create a marketing program that would stimulate sales and stimulate construction. We need construction jobs and they have the power, if they were to allocate just a fraction of their resources, remember Hutchison Whampoa had a net profit of US$7.28 billion dollars in 2011, a year in which we all struggled to survive, to stimulate land sales and construction what a positive effect it would have for us all, including Hutchison’s shareholders.

Every other company made efforts to sell and when we look at Albany, on New Providence, we can see that a determined effort can have a positive effect. And let us not forget that when Hutchison Whampoa‘s Hong Kong Management had taken waterfront property off the market that Shoreline was able to sell theirs and at million dollar price tags.

Yes, GB Devco is another of Hutchison Whampoa’s Hong Kong management disasters.

Lucayan Service Company Limited (“Lusco”)

Because GB Devco controls Lusco, remember that is the Lucayan Service Company to whom we all pay service charges, it means that Hutchison Whampoa’s Hong Kong management decides on where Lusco will spend your service charge money, yes your money.

Just recently, the Freeport News carried an article about the construction of a bridge to cross the Grand Lucayan Waterway joining the Grand Bahama Highway over that waterway, note that Lusco was included and mentioned.

I have not seen anything that has clarified why Lusco was included. I have heard “rumors” to the effect that Lusco is to pay for the bridge, by way of loan or otherwise. I hope that is not the case. First of all, Lusco service charges are not paid so that they can be used to improve the only Government road going through the Port Area. This is the only road, in the Lucaya area, that Lusco is NOT responsible for. The Articles of Lusco are very specific.

Is it possible that the multi-billion dollar company, Hutchison Whampoa which made a US$7.28 billion dollar profit in 2011, that’s profit not turnover (US$50.6 billion), has decided to use the hard earned money of hard working Grand Bahamians to pay for a bridge that will ultimately fatten Hutchison Whampoa’s pockets by substantially increasing the value of the land on the eastern side of the Grand Lucayan Waterway? Guess who owns most of the land on the eastern side of the waterway? GB Devco, read Hutchison Whampoa, of course.

So has Hutchison Whampoa’s Hong Kong management decided to increase the value of their land, not yours, by using your money? And guess who, I am told, pays no services charges for their undeveloped land? GB Devco, read Hutchison Whampoa.

Instead of Lusco building a bridge, which I hope is not the case, it should be spending that money on repaving the north portions of Fortune Bay Drive and Churchill Drive. They should also provide proper bike paths for the many tourists and residents that bike to Port Lucaya, further increasing the value of everyone’s property.

And why not put in a proper round about at the junction of Churchill and East Sunrise? This is a road junction that has witnessed the death of too many people over the years.

Now does anyone have any doubt about how deeply Hutchison Whampoa affects the Grand Bahama economy? How Hutchison Whampoa affects your finances, your employment opportunities? Perhaps why you are out of work?

SeaAir Business Centre

This consists of some 742 contiguous acres of land located on the eastern side of the Fishing Hole Road and north side of the Queens Highway. The land is designated for the establishment of a zone that consists exclusively of duty free businesses whose primary purpose is to take advantage of Freeport’s unique geographical location and its unique facilities, namely a Container Port that serves as a hub for goods traveling to and from several different parts of the world and an international airport capable of handling all but the world’s largest cargo aircraft at maximum takeoff weight. Yet after nearly twenty years in existence under the management of Hutchison Whampoa’s Hong Kong management team we see only one business, “VTrade.” And then neither VTrade nor their predecessors International Distributors were brought here by Hutchison Whampoa.

There has been no proper marketing and no money has been spent on the development of infrastructure which is required if anyone is to make a go of the area. Twenty years have passed and absolutely nothing has been done. I recall in late 1996 or early 1997, when still living and working in Nassau, I visited Freeport with clients and was introduced to two Hutchison Whampoa employees who went to great length to explain how the “SeaAir Business Centre” was going to be developed in the next couple of years. After twenty years one would expect to see at least twenty or thirty businesses at the least and over a hundred if it had been done successfully. But what do we have after twenty years, one small operation.

Freeport Harbour

Now, whilst Freeport Harbour appears to be doing well, there is still much to be desired. Over the last year there have been a series of mishaps, both inside and outside Freeport Harbour. First we had the Containership whose hull was ruptured below the waterline as it exited the harbour with the resulting fuel leak. Then we had two incidences where a ship dropped anchor outside the harbour and damaged BTC’s underwater cable thus disrupting communications to the whole of the island.

I am told that the entrance to Freeport Harbour needs to be widened. I am informed that no ships Pilots are required when a ship drops anchor outside the harbour.

There are still walls of the harbour that could accept a ship if it was bulk headed. Indeed, I am told that, recently, a cruise ship was unable to dock because no bulk headed birth was available.

Yes the Harbour makes money, but any idiot could make money with the number and type of ships that call at Freeport Harbour. Just imagine what some good management could do with an asset like that. Think of all the extra income it could earn. Hutchison Whampoa shareholders, think of the dividends. Instead they are laying off staff and, I am told, capping wages.

Container Port

I really don’t have time to go into the Container Port. But we also know that it too has many short comings and could have been more successful. Better relations with Panama, more than one shipping line as its customer base etc.

Hutchison Whampoa’s failure to deliver shareholder value.

If I were a shareholder of Hutchison Whampoa I would be asking questions. It is clear that large sums have been wasted. If the Our Lucaya Hotel had been properly marketed the island would have become a golfing destination (and the hotel a money maker rather than massive money loser) with the commensurate increase in value of the Hutchison Whampoa (GB Devco) property. There would have been other operators who would want to build resorts and golf courses in the Barbary Beach area and east to the old missile base; all owned by Hutchison Whampoa (GB Devco). Property value would have gone from the hundreds of thousands to the hundreds of millions. Not to mention the ordinary housing boom that such activity would create. One has to ask is Hutchison Whampoa pushing away other hotel chains who wish to invest in the Lucayan area so that they have no competition? No dividends from the Our Lucaya operation.

Poor return on GB Devco operation.

Think of the number of passengers who could have come through the Hutchison Whampoa airport thus making it a profitable operation. Instead the airport is a big money looser. No dividends from the airport.

With economic activity the SeaAir Business Centre would have been more attractive to investors, instead it just sits there. No dividends from the SeaAir Business Centre.

Could have and should have more dividends from the Harbour operations.

When compared to the other billion dollar plus investments in The Bahamas, like Buckeye and Atlantis, it is clear that Hutchison Whampoa is underperforming by a large margin.

If I were a Shareholders of Hutchison Whampoa I would be asking some questions because if Hutchison Whampoa is unable to make their Bahamas investment work what are they doing with their other investments around the world? What is the value of the dividends that the shareholder should have received if they had run the businesses properly? At what level would the shares be trading at if the real potential of the assets was being realized?

If I were a shareholder I would want to review Hutchison Whampoa’s Hong Kong management structure and how it was managing assets on a worldwide basis, for their Bahamas investments have received no proper management at all. The interconnectivity of the individual units of the investment has not been recognized by Hong Kong management . Indeed, Hutchison Whampoa’s Hong Kong management has, if anything hindered any possibility of success by an unimaginative, take no risk, show no ingenuity approach.

Who wants that type of management running your investments?

Hutchison has let us down, or what if?

How many thousands of jobs would have been created if Hutchison had developed Our Lucaya like Sol Kerzner did with Atlantis. When Kerzner went to Paradise Island, Resorts International employed just over 3,000. Today Atlantis employs over 7,000.

Think of all the construction jobs that would have been created by developments at Discovery Bay and Barbary Beach and all the Hotel jobs at the hotels constructed. It is quite likely that Princess Hotel property would still be open and the International Bazaar. If Our Lucaya had 1260 rooms operating properly the casino and Port Lucaya would be doing much better thus employing many more staff.

What if there were 20+ viable businesses, like a Fedex Caribbean Hub, or a Microsoft Server Centre etc., operating in the SeaAir Business area? Think of the hundreds of construction jobs and then the jobs at those enterprises.

Think of how much extra freight would need to be transported. Think of the number of jobs that would be created in the transport of the goods. Think of all the extra freight that would come through the Harbour and the airport. Jobs, Jobs, Jobs. Think of all the extra revenue for Government and it would be extra for the more successful Freeport is the greater the net profit for our Government.

Yes, had “if” happened, there would be thousands and thousands more people employed on Grand Bahama and the Government would have millions and millions more in revenue.

Hutchison Whampoa needs and can do.

So what should be done? Hutchison Whampoa, that multi-billion dollar company that employs 260,000 people around the world, that company that made US$7.28 billion dollars in 2011 could do one of two things: publically admit that they misled their investors, and everyone in The Bahamas with their statements about Our Lucaya and especially the SeaAir Business Centre, for leading all of us to think that Hutchison Whampoa could run an airport or a harbour on a proper commercial basis.

Or alternatively, and preferably, the Board of Directors should recruit and engage the services of persons capable of making the investments realize their true potential and fund them appropriately.

They only have to look at PharmaChem, Polymers and Buckeye to see what effective management can achieve in The Bahamas. Look at Albany and Atlantis to see how to run a hotel operation or a land development. Seek advice from successful organizations. Engage the services of people who know what they are doing.

I truly believe that with properly directed effort, considerably less, to no, micro management from Hong Kong, and the engagement of the services of two or three experts in the fields of large resort development, property development and Sea/air freight operations, Hutchison Whampoa could and should become a very successful investor in The Bahamas.

We all know that you need a good plan and the money to execute it with. All Hutchison Whampoa needs are the personnel to provide the vision and persons capable of executing that plan, it already has the money.

There is nothing that I would like more than to see Hutchison Whampoa turn its failure into success, and I truly believe that it can.

Thank you