From:TheBahamasWeekly.com
"Hawksbill Creek Agreement area reduced to original 50k acres," says Davies Associates report
By Davies Associates Ltd, (DAL)
Sep 4, 2015 - 4:54:54 PM
Davies Associates Ltd, (DAL), a Freeport based Project
Management consultancy, recently commissioned a
study into the economic development of Grand Bahama Island with the
objective of replacing unproductive criticism of the general climate of
inactivity with new initiatives.
DAL has already proposed the development of
Freeport’s Grand Bahama International Airport to establish a regional hub and
has now released its conclusion that the Hawksbill Creek Agreement (HCA) must
be reformed as a precursor to further economic development.
Andrew Davies said,
“When we
discussed investing in our study we noted persistent hostility between Grand Bahama Port Authority and
dissatisfied residents of Grand Bahama island. It seemed that confrontation was unlikely to
accomplish significant change over the short term especially as Government of
the Bahamas appeared to adopt a neutral role as is wrestled with pressing
problems in Nassau. Another way forward had to be found.”
Davies continued,
“No one can
be content with the recent economic history of Grand Bahama island. There has been little
progress and the GBPA zone has become littered with the dereliction of
commercial failures.
Confrontation
is unlikely to bring a change in the policy of GBPA or the beneficiaries of the
HCA so either the status quo must be endured for another 40 years until the HCA
expires or a new approach must be found.”
The
key issue is that the beneficiaries of the HCA are unwilling to invest further.
Their position is that to create the economic stimulus from which they can
profit new inward investment should be attracted by the established infrastructure
to create the economic stimulus from which they can profit.
This
is unlikely but their mind set is understandable. They inherited an old
fashioned monopoly contracted over too long a term (99 years from 1955). Such
an agreement looks unreasonable and antiquated but it exists and its
beneficiaries are focused on extracting the maximum value as they realize they
are unlikely to have any opportunity to profit from the affairs of Grand Bahama Island when the
HCA expires.
That
they have become exploitative is understandable albeit unattractive.
Public
concern regarding the Grand Bahama Island economy translates naturally into criticism of GBPA
and the beneficiaries of the HCA and frustration that Government of the Bahamas
isn’t more assertive in effecting change.
Rather
than continue with this unproductive standoff Andrew Davies suggests that all
parties recognize that the beneficiaries of the HCA are content with the
impasse and a compromise that facilitates change must originate elsewhere.
The nature of the status quo:
Freeport,
GBPA and the HCA are concepts framed in the 1950’s that have been allowed to
hold sway for much too long and now they have become the impediments to
development.
The
enthusiasm that must have surrounded the establishment and building of Freeport
dissipated many years ago leaving inertia, discontent and the decaying relics
of failed projects.
Government
of the Bahamas’s engagement with the issue is to consider imposing additional
taxation. A proposal that has been characterized as the doctor trying to take a
blood donation from a dying patient.
The
HCA beneficiaries appear to have the singular intent on extracting as much
capital out of Grand Bahama Island as they are able to transfer overseas before the HCA expires
in 2054.
Unemployment,
minimal investment, a civic landscape despoiled by the derelict monuments to
failed projects, a potential increase in tax and a minority elite seeking to maximize
their profit from the final decades of a 99 year monopoly are not the
characteristics that attract overseas investors.
So
it is not surprising that citizens are outraged by the show of indifference the
public record of which further deters potential investors.
If
nothing changes further deterioration is inevitable and no-one who has
committed their future to Grand Bahama Island wants that.
Grand Bahama Island residents want hope for the future and that cannot emerge from such a
dysfunctional status quo.
Change
is necessary.
Reform
the HCA
Public
concern about the economy of Grand Bahama Island and the ineptitude of the HCA will not
dissipate.
Davies said,
“It is clear
to most observers that the HCA is the principal problem. A 99 year monopolistic
agreement entered into in 1955 is an anachronism. It is like sanctioning an
occupying power to decide the fate of 150,000 acres of the island.
The
agreement was initially beneficial. Freeport would not exist without it. But
the establishment of Freeport and the surrounding infrastructure has proved
insufficient to create a vibrant self-sustaining economy. The island is in
danger of becoming moribund.”
What must be done?
DAL
suggests that a compromise would be to modify the HCA such that the
beneficiaries retain the zone that they have developed, which approximates the
50k acres of the original scope of the HCA.
This
zone contains the existing development but also the derelict buildings and
leaves the current HCA beneficiaries with their current developed monopoly.
Their
reward for accepting this modification should be the retention of the tax
benefits associated with HCA. In other words the beneficiaries of the HCA
should be invited to voluntarily cede the remaining land, 100k acres to a new
Trust company operating for the benefit of Grand Bahama island.
The
DAL report proposes that this ‘released’ land should be added to a newly
created development zone to the east of the GBPA area to be developed around a
new town not based on heavy industry but on knowledge industries.
Davies concluded,
“It was
clear from our study that Freeport reached the zenith of its appeal some years
ago and, as an investment brand, it is no longer likely to attract the
investment necessary to invigorate the GBPA zone.
The HCA in
its current form is bankrupt.
The
geographical virtues of proximity to the US mainland and fiscal benefits remain
but new investment is not focused on heavy industry and the living environment
of employees is an important criterion that Freeport no longer satisfies.
Hence the
development of Grand Bahama Island must make use of the virgin land to the east or west of
GBPA.”
Government
of the Bahamas should aim to complete reshaping of the structure of the Grand Bahama Island development zones by the end of 2015 with a new management team in place by
March 2016 with the task of producing a new 10 year economic development plan
by September 2016.
Andrew
Davies said that DAL would be delighted to cooperate by gifting the findings of
its study to the new venture.
For more information please contact:
Andrew Davies on (242) 727 1466
Davies
Associates Ltd. (DAL) is a Bahamian Development Advisory and Project Management
Company based in Freeport.
DAL
has worked extensively throughout the region and has acquired considerable
knowledge of investment strategies and structures.
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