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PM CHRISTIE CONCLUDES MOU WITH GRAND BAHAMA PORT AUTHORITY
The House met on Monday the 9th May 2016 through Wednesday of this week. On Monday Prime Minister the Rt. Hon. Perry G. Christie updated the House on the agreement his government reached with the Grand Bahama Port Authority on a comprehensive tax regime, specifically “real property tax, real property levy, personal property tax, capital levies on taxes on captioned gains or capital appreciation and a zero tax regime in respect of the earnings of the Grand Bahama Port Authority (“GBPA”) – the earnings of Port licensees” according to Prime Minister Christie.
Sweeping reforms affecting the governance and ownership of the GBPA and a strategic economic development plan for the city of Freeport going forward also formed the Memorandum of Understanding between the GBPA and The Bahamas Government.
The Prime Minister pointed out however that “the main broad tax concessions such as customs duties, export taxes, excise taxes, certain stamp taxes granted for a period of 99 years under The Hawksbill Creek Agreement in 1955 (almost sixty-one years ago), remain intact and will not expire until the year 2054.”
A broad summary of the objectives and opportunities contained in the MOU framework include the following:
Immediate investments in strategically important industries;
The commitment of the GBPA to seek an injection of new equity capital into its Group of Companies through new globally respected shareholders or equity partners and project specific investors who will further the development of Freeport and Grand Bahama and to explore the same with Hutchison Ports Bahamas Ltd. and Mediterranean Shipping Company, SA;
Historic changes in the governance, transparency, and regulatory framework that govern Freeport;
Government ownership stakes in prime landholding companies which will allow for enhanced public/private development;
A commitment to social and infrastructure improvements to enhance quality of life
A new framework for performance-based development concessions that will replace the expiring tax concessions of the Hawksbill Creek Agreement;
A focused and collaborative strategy to reshape the approach to attracting, retaining, and expanding investment in Grand Bahama;
h. A commitment to resolve longstanding issues related to Government deficits in Freeport in a way that protects the Government’s rights but creates a path forward in Freeport.
According to Prime Minister Christie, some of the capital injection includes the expansion of the Freeport Container Port through Phase V and VI, to commence later this year; expanded cruise operations; home porting; a container repair facility; a logistics center and creating a maritime training center. These ventures will expand employment and job training opportunities for large numbers of Bahamians as Grand Bahama “is poised for significant expansion as a hub for cruise operations” said Mr. Christie.