CAREY LEONARD: LET’S GET FREEPORT TO WORK

REMARKS MADE BY CAREY LEONARD AT

THE ROTARY CLUB OF GRAND BAHAMA SUNRISE

HELD AT “GENEVA’S RESTAURANT”

WEDNESDAY, 17^TH FEBRUARY 2016

“Mister President, Rotary members and guests, let’s get Freeport to work”

I say that because the future of the Port Area, the future economic impact that the Port Area has on East and West Grand Bahama, the future of Grand Bahama as a whole, is in your hands.

“Not my hands,” you say.  To which I reply, “Yes, your hands and mine too”. 

This is the year 2016 and it does not, in any way resemble the years 1991 -1993, the years when the Hawksbill Creek Agreement was last extended. 2016 is different in so many areas of our economy, not just of the Port Area and the rest of Grand Bahama, but that of the entire Bahamas.

According to the latest news reports, unemployment is running at a staggering 15.7% and it is even higher in the Country’s most populous island, New Providence. In 1993 the unemployment rate was 13.1%. The National Debt stands at an almost unsustainable $7.2 Billion.  By comparison the National Debt in 1993 was approximately $1.4 Billion. Today, in 2016, the Country is on the brink of a “down grade” by the all-important international rating agencies of Moody, Fitch and Standard & Poors.  The impact of a down grade to “junk bond status” would have far reaching consequences.  Sadly, few businessmen, even in this room, appreciate the potential for disaster. But if we put Freeport back to work, indeed if we are seen to be putting Freeport back to work in a way that indicates a strong economic resurgent’s, then it is possible, just possible for us to play a major part in the prevention of a down grade.  In 1993 few people had heard of any of the rating agencies and just how they had yet to play a role in any countries future (Greece being the first to show what a junk bond status could do to your economy).

2016 is also different in that the ownership in most, yes most, of the Freeport’s major assets are no longer owned by companies owned by the Hayward’s and St. George’s.  That is a cold hard fact. It is cold and it is hard because it means that the Grand Bahama Port Authority, Limited is no longer affiliated, by shareholding, with substantial assets with which, in 1991-1993, it was able to negotiate the 22 year extension to the Hawksbill Creek Agreement.

In 1991-1993 the Hayward and St. George families owned all of Freeport Power, now Grand Bahama Power, all of The Grand Bahama Development Company, Freeport Harbour, Freeport International Airport, now Grand Bahama International Airport, Freeport Commercial & Industrial Limited (then owner of most of the industrial land), Sanitation Services, Grand Bahama Utility Company, Port Lucaya Resort and Yacht Club, Port Lucaya Marina and Port Lucaya Market Place.  You will recall that part of the agreement for the 22 year extension was that Freeport Power would provide power to both East and West Grand Bahama.  

Today, in 2016, Grand Bahama Power is owned by Emera and ICD Utilities Ltd. (ICD Utilities is a company traded on the Bahamas stock exchange BISIX and has a number of Bahamian shareholders), no Hayward or St. George interests.  Freeport Harbour and our international airport are 50% owned by Hutchison Whampoa and they have the management control.  Sanitation Services is 50% owned by the Violia Group and they manage Sanitation.  The Grand Bahama Development Company is 50% owned by Hutchison Whampoa and its President is one of their men.  Port Lucaya Marina was sold to a group owned by Preben Olesen.  Port Lucaya Market place was sold last year and the Port Lucaya Resort and Yacht Club has been demolished.  Freeport Commercial & Industrial has disposed of the bulk of its industrial land.

So in 2016 we have a very different situation to the one we had in 1991-1993.

In addition, in 1993 the GBPA engaged in meaningful discussions with many of its Licensees to assist in making proposals for the best way forward.  There was a Think Tank and experienced Licensees were involved.  One of your members, Maitland Cates was heavily involved. Not so in 2016.

2016 finds the GBPA and its owners a shadow of what they were in 1991-1993.  The 2016 reality is that we cannot, and ought not,   rely on the GBPA to do this on their own because, put quite simply, they can’t do this on their own.  The 2016 reality is that GBPA Licensees have a very vested interest in seeing that we get an extension and that we get it very soon. The 2016 reality is that the GBPA Licensees must take an active role and they must do this by pooling their talents and resources, and we can.

Yes, I know that the GBPA Licensees, except for a few exceptions, have, in the past sat back and done nothing.  That is why I am coming to you, Rotary. Think about it.  If there is one organization that is able to pull business together for a good cause it is Rotary.

Never in the entire existence of Rotary is there a more important time to get its members to pull together.  Indeed, if Freeport does not get going, Rotary in Freeport will become extinct because there will be no business persons to become members and no money to support your worthy causes.

I am a commercial lawyer and if things don’t pick up soon, I will be forced to go back to Nassau, and I am not the only one.  But be assured, I like Freeport, I like the quality of life that we have here, I like the fact that our streets are not over crowded, I like the fact that my garbage gets collected with clockwork precision, I like my clean verges and better maintained roads.  But all of this can disappear overnight if something is not done.

And Rotarians, GBPA Licensees can play a major part in rescuing Freeport, and you can, as Rotarians, in your Rotarian way, and I know of what I speak as I was a member of the Rotary Club of East Nassau for a couple of years, can assist in accomplishing and or establishing some of the POINTS GOALS NEEDS PROJECTS that are required for Freeport’s, and Grand Bahama’s, economic survival.

So what is it that I am speaking of?

What can be achieved?  What are the Projects that would provide substantial benefits to the Residents and Licensees of the Port Area and, by extension, Grand Bahama as a whole?  I keep referring to the rest of Grand Bahama as those settlements immediately adjacent to the Port Area, Pinder’s Point, Hawksbill, Lewis Yard, Hunters, Williams Town, Smiths Point and, most importantly Eight Mile Rock, the third largest population center in this country, original settlements of Grand Bahama whose enterprising residents have, over the years, turned the Hawksbill Creek Agreement to their advantage, also have a vested interest in an immediate extension of the Hawksbill Creek Agreement, just as we do.

Let us digress for a minute and look at the way Eight Mile Rock’s population has expanded since 1955 verses settlements further away.  Smith Point residents have used the population in the Port Area to establish and develop the now very successful Wednesday night “Fish Fry” and have a thriving business off the tourists attracted by the hotels and resorts in the Lucaya Area.  Eight Mile Rock’s residents provide all sorts of services to the Port Area.  I would venture to say that the bulk of the Eight Mile Rock economy is now tied to the success of the Port Area economy.  The same can be said of Pinder’s Point, Williams and Russell Towns; all are now an integral part of the Hawksbill Creek Agreement economy.

The point is that the economic effect of an extension to the Hawksbill Creek Agreements has a direct impact on the livelihood and wellbeing of the lives of a further 15,000 to 17,000 residents of Grand Bahama not living in the Port Area.  Their jobs and livelihoods must not and cannot be ignored.  

The recent statement by the Prime Minister, in the House of Assembly on 3^rd February, 2016 provides us with a clear picture of the Governments wish list.  I say wish list because, being a lawyer I can say, there are some items that can easily be achieved and others that are extremely difficult to achieve. 

So what projects listed by the Prime Minister can Rotary be involved in?

There are two that come to mind. 

The first is the establishment of an independent investment promotion agency (IPA), with expertise in retaining, expanding and attracting business.

The second is designed to improve the skills and training of the work force so that they have the skill sets required by the business community and are thus employable.  The Prime Minister asked that the Ministries responsible for Education, Training and Labour, the College of The Bahamas, the National Training Agency, Principal Licensees, the GB Chamber of Commerce, Grand Bahama Port Authority be involved. 

As to the establishment of the “independent promotion agency” I have drafted a proposed Articles of Association for the incorporation of such an entity.  I still have to clean up some clauses but the bulk of it is drafted.  The key to the success of such an organization is going to be the necessity for transparency, especially as to where money is spent and accountability.

Some of you may say that promotion is the duty of the GBPA but, as I mentioned before, the GBPA of today is a shadow of its former self and that has been born out by the fact that the GBPA has done no realistic and serious promotion for many, many years. So if the Port Area is to survive and grow it will need the assistance and involvement of its Residents and Licensees.

The Promotion Agency will require the input and support of the heavy industrial businesses as their knowledge and experience in setting up an operation in the Port Area will be invaluable.  They will also be able to advise on industries or services that are lacking which the Investment Promotion Agency can target as potential new business for the Port Area..

The marketing team would need to be fluid in nature depending upon the target business but it would require a core group consisting of:

• Government representative
• Immigration Official
• GBPA Representative
• Second home developer representative
• GB Power representative
• Large industrial representative

Marketing can be an expensive operation as it needs a considerable amount of research.  I won’t go further as I have already set out to you, in a speech in July of 2010 titled “Our Future” under the heading “Attracting new Investment”, what detail and effort is required in a meaningful targeted promotion.  This is not rocket science, but it does require us to take some responsibility for our lives, our future.  All too often we say that we are waiting for government and then complain when we don’t get what we want.  Governments throughout the world have shown that they don’t understand business.  One of the reasons the United States is so successful is that their businesses, unlike ours, are proactive and push an agenda that favours business.  We need to start to do the same if we are to survive.  The effect of doing nothing is what we have today.

As to the requirement to improve skills and training.  This is as important as the independent promotion agency itself.  In many ways, the two are tied together.  Both will need to be implemented in stages as certain steps must be completed before we can move to the next step.  Yet, both need to be started immediately.  You really can’t do one without the other.

How do we begin?  This program will need to accomplish several goals. 

• Ascertain what areas of education and training are most deficient in our work force.  This will require a survey of the business sector. Although our economy is diverse it can be expected that we will find one or two core items that are pervasive.  In addition there will be specialized skills.
• Establish the steps that need to be taken to remedy these deficiencies in our educational and training system.  It may be found that we can use other qualifications, such a certain certificate courses, than just the BGCSE’s for certain fields, though English and Math BGCSE’s at grade “C” will probably be two core requirements.
• Establish the timelines for the implementation of the necessary programs.
• Prepare a public relations program aimed at students in grade 7.  This program will provide career paths for the different fields and show, not just what subjects are needed, but also the grades required in order to achieve a position in a particular field.
• Youth organizations must be included in this.  

 So what can Rotary do?  What role can you play?

Well, you have some of the most valuable human assets of this country.  Being a member of Rotary requires discipline, dedication and, most important of all, a desire to give back to your community in a way that makes it better for all.  Those are the very qualities that are going to be needed here.  Grand Bahama may not have just experienced a hurricane or other natural disaster but we have suffered a devastating recession and a lack of fresh investment.  The reality is that things are bad.

So what steps can you take?

• Be the first to form a committee whose sole focus is to contact and mobilize the businesses in Grand Bahama. 
• Set up a data base of businesses willing to participate in either of,  or both projects.  Further, as you know, we have many “Residents” and Permanent Residents”, who live on Grand Bahama, who are very talented and successful people, who would be only too happy, to volunteer and help in areas where, as a result of doing business outside The Bahamas, they have a different perspective on what is needed to make the Port Area and Grand Bahama successful.  In many, many ways, they know our competition better than we do, as they were our competition.  
• A data base which lists personal and corporate resources would be invaluable.  Without this the two projects that we have just mentioned will never get off the ground.

Doing what I have suggested is no small task, but it is a vital task.  I can think of no organization better suited to accomplish this than Rotary.

I am sure that you are finding it harder and harder to raise money these days for the numerous projects that you have.  The only way you are going to be able to increase this is by improving our business climate and what better way to do it than through better, more meaningful education and promotion of the Port Area.

So I ask of you, I plea with you, I beg you, and I ask for myself and, I think on behalf of many, many residents of Grand Bahama, please help us.

Thank You.