Oban Chairman VANISHED and an unknown signature shows up on Agreement – PM Minnis has misled PARLIAMENT!
OBAN DEAL TABLED!
By Travis Cartwright-Carroll
The Nassau Guardian
travis@nasguard.com
CLICK TO DOWNLOAD: OBAN Energies DEAL
Nassau- Oban Energies Non-Executive Chairman Peter Krieger did not sign the official heads of agreement with the government as was broadcasted live last week.
According to the heads of agreement tabled by Prime Minister Dr. Hubert Minnis last night, Oban President Satpal Dhunna and Secretary to the Cabinet and Secretary to the National Economic Council Camille Johnson signed the official heads.
The agreement is dated February 19, 2018, the same day the government held a press conference at the Office of the Prime Minister and signed a heads of agreement with Krieger.
During that press conference, which was televised live on ZNS TV and streamed live on Facebook, Johnson and Krieger signed what were said to be the heads of agreement.
Dhunna was absent from that press conference.
The agreement is for the construction of a $4 billion oil refinery and $1.5 billion liquid bulk facility in East End, Grand Bahama.
Krieger, who has said that he has no ownership in Oban and is more of an ambassador, made headlines last week after it was revealed that in 2005 he had been accused of violating the federal securities laws in the United States.
Krieger said he settled the claim.
Agreement
The heads of agreement contains stringent environmental guidelines and fines for environmental infractions in the event of any disasters or failures to comply with the heads.
The agreement also offers Oban full tax exemptions for import duty, export tax, stamp tax, real property tax and value added tax.
“The developer will use commercially reasonable efforts to substantially complete construction of the entire development by December 31, 2030,” the agreement noted.
When the government signed what appeared to be the heads of agreement last week with Krieger, there were concerns that an environmental impact assessment (EIA) had not yet been completed.
At the time, Krieger said the EIA will be completed in 45 days.
According to the agreement, in clause 5.1, once Oban has completed the EIA, the government, upon receipt of it, has 60 days to offer feedback.
That clause also notes that Oban has the right to abandon the project.
“If, as a result of the government’s review of an EIA, the government determines that the relevant portion of the development (as proposed to be constructed) cannot be implemented in an environmentally safe and sustainable manner, then the government shall propose that the developer take additional specific precautions and or make specific modifications to the proposed development in order to address the government’s specific concerns,” the agreement said.
“The developer shall, prior to commencing construction of the relevant portion of the development, take such additional precautions and/or make such modifications to the proposed development as are commercially reasonable to address the government’s specific concerns; alternatively, the developer shall retain the right to abandon the proposed development.
“The parties agree that the government shall not have the right to terminate these heads of agreement based upon any EIA report, but instead shall work with the developer to mitigate any concerns. If the government does not provide any such comments to the EIA within the aforementioned 60-day period, the EIA shall be deemed acceptable to the government.”
Once the EIA is complete and before construction on the project begins, Oban must prepare an environmental management plan, which, among other things, must detail terms and conditions regarding the manner in which construction waste shall be disposed of, mitigation measures and penalties to be imposed on Oban for material environmental infractions caused by the company.
Oban must also pay the government’s reasonable consultant fees and expenses, not exceeding $150,000, for engaging one or more qualified independent experts to monitor the developer’s compliance with the environmental management plan.
Employment
As noted during the Oban press conference last Monday, the company agreed to create 600 direct jobs and 1,000 indirect and induced jobs during the construction period and 250 direct full time jobs during operations.
“It is the goal of the developer to employ 80 percent Bahamians and 20 percent non-Bahamians during the construction period, with a recognition that attainment of this goal shall be dependent on the availability of Bahamians substantially competent to function in jobs to be filled,” the agreement said.
Oban must also put in place a multi-disciplinary on the job technical skills training apprenticeship program designed to equip its Bahamian employees with “the level of technical proficiency reasonably necessary for promotion and advancement”.
Exemptions
Under the heads of agreement, Oban “receives full tax exemption from any and all applicable taxes, including, without limitation, income, import duty, export tax and real property tax” for a statutory period defined in the Export Manufacturing Industries Encouragement Act and Industries Encouragement Act.
Oban is also exempt from value-added tax for non-resident and non-domestic activities and transactions and also exempt from stamp tax.
“All vehicles and gasoline necessary for the construction of the development may be imported into and exported from The Bahamas free of customs duty,” the agreement said.
The government will also designate Oban as an approved export manufacturer.
However, if the company does not create the number of jobs it promised to and does not meet certain performance milestones, the tax benefits and concessions will be reduced on a “proportionate basis”.
Housing
Oban will also be allowed to build housing units for its employees.
“The government and the developer recognize that there is insufficient housing to accommodate personnel to be employed or contracted during the construction period and or during operations,” the agreement said.
“The developer shall undertake commercially reasonable efforts to construct housing on privately owned land – if and to the extent that the developer is able to find suitable acreage at commercially reasonable rates – to accommodate said personnel in accordance with such environmental, health and safety requirements as may be stipulated by the Ministry of the Environment and Housing, and any other relevant government agencies.”
Once constructed, Oban can offer the units for sale or rent to Bahamian citizens and for rent only to non-Bahamians, who are employed on the project.
Fines
Oban will be fined for environmental infractions that are not remedied within 30 days from the initial notification to the government. The heads provide for the government and Oban to seek an amicable resolution to an infraction. However, if a resolution cannot be reached Oban can consult with a qualified independent expert.
“The penalties shall be $5,000 per day for the first 30 days after the 90 day cure period and shall increase to $10,000 per day thereafter until such material environmental infraction is remedied,” the agreement said.
Obligations
As for environmental obligations, Oban agreed to maintain and preserve the environmental integrity of the crown land and the surrounding marine environment in east Grand Bahama.
Oban also agreed to seek to mitigate or remedy any damage to the environment resulting from its negligence or that of a contractor on the project or subcontractor.
The company must also cooperate with the Antiquities, Monuments and Museum Corporation to preserve, restore and conserve any antiquities and or historical sites that may be discovered on crown land during the project.
“The developer acknowledges and agrees that the government shall have the right to enter upon and inspect the facilities, or parts thereof, maintained or operated under these heads of agreement, and when, in the opinion of the government, the safety of The Bahamas demands it, direct by a written order, that operations of the development be suspended for such length of time as may appear to the government to be necessary to secure the said safety of The Bahamas,” the agreement said.
Oban must also enter into a crown lease with the government for the land it proposes to build the project on. Oban will pay $1.2 million per year in rent for the crown lease.
Force majeure
The agreement notes that construction on the project “shall be subject to delays, hindrances and or other adverse effects of any force majeure, which may be reasonably considered to be beyond the control of the developer”.
In the event of a force majeure the agreements in the heads of agreement “shall be extended for such reasonable period or periods as shall be necessary to allow the developer to recoup any and all time lost”.
