LEO RYAN PINDER Delivers Heavy Blows on the FNM Government

Introduction

Mr. Speaker …

I am very honoured to stand here on behalf of the wonderful constituents of Elizabeth, who have mandated me to represent their needs and concerns in this honorable place.  But Mr. Speaker, I stand with a full heart because my constituents are hurting, are in need of employment and we owe it to them to operate responsibility and in their best interest.

Today Mr. Speaker we have been asked to come and debate a Resolution to support the Baha Mar Project and the issuance of up to 8,150 work permits for foreign workers on the Project.  Mr. Speaker, I still do not understand the logic in why we, as the legislative arm of the government, are being asked to vote on and approve a decision that is squarely within the responsibility of the Executive Branch, or the Cabinet.  An Executive Branch who has miss-characterized this Project to the Bahamian people, misleading the reality of both the labour component and the land component and Mr. Speaker, I ask WHY?

The Government has Abandoned its Duty to the Bahamian People

Politics above Governance

One would ask then, why would this Prime Minister, with all of his “experience”, bring this Resolution to Parliament in violation of the doctrine of Separation of Powers, a doctrine so fundamental to our democracy, I can’t understand it.  In my opinion, this Government has made this decision for the promotion of politics at the expense of governance for the country.  I believe that contrary to good governance, contrary to what is in the best interest of the Bahamian people, this Government has decided to make decisions in this honourable place based on politics and politics alone!  This based on the dictates of one man.

The Prime Minister said that he was the Prime Minister and what he said was the final decision on the Road Resolution, now is afraid to make a decision on the Baha Mar project and associated work permits.  There is a fear that it is not a politically popular decision, but as the Prime Minister say, “so be it”.  Mr. Speaker, I believe that we as the representatives of the people who elect us here, that we have an obligation to act with accountability, and not bring political rhetoric to this Honourable House.  We as elected representatives have a commitment to do our respective jobs in the best interest of the Bahamian people, in the interest of good governance, not politics.  This Resolution is an example of raw politics.  The violation of the doctrine of Separation of Powers for political cover cannot be good governance!

The Baha Mar Project

By all accounts, the scope of this project is a once in a lifetime development opportunity and is badly needed in the Bahamas today.  Despite this, I was shocked at the misinformation and mischaracterization of the project by the current Government.

Mischaracterization of the Project

Labour – First of all, this Resolution, and at the request of the Prime Minister, the Government seeks to have us authorize 8,150 work permits for foreign workers.  I have reviewed the documents related to this Baha Mar Project – the Heads of Agreement, the Supplemental Heads of Agreement, the Construction Contract, the Credit Agreement, and I still cannot find support for 8,150 foreign work permits.  Is there some document or information that has not been given to us?  The only document that I have seen that has a requirement of foreign work permits is the Credit Agreement, the actual loan agreement from the Export Import Bank of China.  This Agreement states that a condition of the loan is the approval for 5,000 foreign worker work permits.  I ask the question, why has the Prime Minister put a Resolution before us to approve 60% more foreign worker work permits than the agreement with the China Exim bank requires?  The Government seems to have misled the Bahamian people in the number of foreign workers that the Chinese Government requires and actually contracted for on this project.

The Government also has not been completely honest in the number of Bahamian workers that will be employed on the project.  The Prime Minster in his contribution on presenting this Resolution last month stated that the ratio of workers on the project will be 71% foreign and 29% Bahamian.

I think I understand, however, where the Prime Minister gets these numbers from.  He is comparing the total foreign workers over the course of the project (his number of 8,150) to the highest number of Bahamian workers at any given time (3,300).  This is not a fair comparison.  A fair comparison would be the total foreign workers over the course of the project (which should be 5,000 as required by the documents) compared to the total number of Bahamian workers over the course of the project and I am advised there could be more Bahamian workers over the course of the project than the requested foreign workers of 5,000, upwards of 7,000 – 10,000 and these are the numbers before the China Trip.  Bahamas, these are the real numbers, these are the numbers that an objective evaluation of the project as documented should be based on.  A project that will more likely have more Bahamian workers than foreign workers.  I ask, why did the Prime Minister, in my opinion, intentionally misrepresent the labour component of this project, mischaracterize the construction requirements to the Bahamian public, and why does he want to approve more work permits than the documents require?

Land – The Prime Minister stated that the Bahamas Government was transferring Crown Land to the Developers, implying that all 265 acres involved in the project were being transferred to the Development.  This land component has frequently been mischaracterized by this Government in the public domain.

The land agreement is as follows:

• 102.14 acres leased to a joint venture between the Government and Baha Mar for the Golf Course.  Ownership to remain Bahamian.
• 50 acres for the back of the house operations will be leased to Baha Mar, ownership will remain Bahamian
• A swap of 20 acres plus $18 million to re-build government buildings
• Purchase of 92.826 acres of land for $62,575,000.  This includes the following parcels:

o       Wyndham Nassau Resort – 13.450 acres

o       Nassau Beach Hotel – 7.546 acres

o       Hobby Horse Parcel – 70.964 acres

o       Fidelity Bank – 0.866 acres

• Purchase of 170 acres of private lands of which 100 acres will be donated to the Golf Course Joint Venture with the Government, and 70 acres will be donated to a wildlife sanctuary where Hotel guests and Bahamians will be able to experience nature, nature as only The Bahamas can offer.

Based on my discussions with my constituents, they clearly don’t understand this, and believe, based on the Prime Minister’s communication, that the Developer, and some believe even the China Exim Bank, were getting 265 acres of Crown Land in fee simple.  I just want to clear up this misconception, the Developer is acquiring from the Government some land, but much less than 265 acres, and for more than $65 million.  Yes Mr. Speaker, land is precious to Bahamians, and must only be used in their best interest.

Mr. Speaker, I think it is my obligation, as a believer in good governance, and honesty that I explain these facts to the Bahamian people who are confused, and I believe deliberately so, on the transaction, and misunderstand its dynamics.  I also want to explain the benefits to Bahamians of a project like this.

Benefits of the Project

The scope of this project is enormous, 6 operating hotels on Cable Beach.  This presents a number of economic expansion opportunities for Bahamians.  Allow me to provide a couple of examples:

Culture and Artists – We in the Bahamas have a number of successful Bahamian artists / singers who struggle to find venues to perform and make a living.  Artists like the reggae band Willis and the Illist, rake and scrape artist Stileet, Calypso and Soca band Visage and Ancient Man, hip hop artists like El Pedrino and Daddy Whitez and Bahamian Legends like Pennuts Taylor and Ronnie Butler; and which I might add are all too visable by their absence from our current Mega Resort.  Mr. Speaker I say it is about time that our tourist product contain Bahamian culture as a major component.  Baha Mar is a form of economic expansion for their industry.  Baha Mar will operate 6 hotels, each hotel likely to have a restaurant, lounge, bars both inside and outside.  Each of these venues provide a location for our artists to perform, to earn a living, to expand their trade.  This alone could be additional revenue sources for hundreds of Bahamian artists.

Surrounding Economic Opportunities – The Project is not an all inclusive resort.  This creates additional food, beverage and entertainment opportunities outside of the Baha Mar property.  There will be automatic demand for more restaurants, more bars and entertainment establishments, creating more opportunities not only for jobs, but for small business growth, a market for entrepreneurs.  Mr. Speaker in its hey day, Cable Beach was a Mecca for Bahamian Culture and entertainment and her we have an opportunity for it to be so again!

Agriculture / Fisheries – If we as a country are committed to the efficient and effective promotion and development of our agricultural product, this industry has an opportunity to grow exponentially with the addition of Baha Mar and commitment to supplying the hospitality industry with fresh produce.  But Mr. Speaker, it will only do so if the Bahamas Government has a serious commitment to making it so.  Mr. Speaker, we have allowed the foreign entity Bahamas Food Services to control our Food Service Industry, and we should require them to integrate Bahamian produce into their offerings and encourage linkages with this Project to our local Bahamian farmers.

In short Mr. Speaker, yes there will be 7,000 direct employment opportunities as a result of this project, but there will be far more indirect business and employment opportunities not directly tied to Baha Mar.  The project will create a new market for Bahamians because it will attract up to 3,500 visitors a night to Cable Beach, which equates to a minimum of 10,500 meals, which in turn should equate to tons and tons of Bahamian avocados, tomatoes, onions, peppers, pineapples, etc., grunts, snappers, tuna and groupers.  Unfortunately I have no confidence in the ability of this Government to manage the agricultural sector of this country.

Concerns over the Project and Recommendations

Yes, Mr. Speaker, this project presents a lot of opportunities and benefits for Bahamians.  But, it is not perfect, and there are some fundamental concerns.  Mr. Speaker, we are in these challenged economic times, where the China Exim Bank might be the only lending institution capable of financing this project.  Having said that, I think there are things that I would recommend to mitigate these fundamental concerns.

Mortgage on the Land – Speaking to my constituents in Elizabeth, and discussing this Project with my colleagues, there is a concern that I think resonates throughout.  Since an agency of the Chinese Government will be lending the money, and taking a mortgage on the property, if the worst case scenario happens, and the project fails, the agency of the Chinese Government could foreclose and own the property.  Mr. Speaker, it is our responsibly to recognize this concern and propose options that might alleviate these concerns.  This Mr. Speaker is good governance.

Mr. Speaker, I propose that there are two ways to address this concern.  The first is to put a best efforts requirement that within 5 years of the beginning of operations, Baha Mar has to re-syndicate the loan with private lenders.  By doing this, within a reasonably short period of time, the mortgage holder will no longer be the China Exim Bank but would be private institutional lenders.  Another option that I would recommend Mr. Speaker would be to prioritize the remedies that the China Exim Bank can pursue.

Mr. Speaker, when a borrower defaults on a commercial loan, the lender generally has 3 remedies: a) exercising its power to sell the property; b) appointing a receiver to manage the operations and eventually sell the operations; and c) foreclosure.  It is the foreclosure remedy than many people are concerned about.  I would propose that the China Exim Bank be required to exercise its remedies in the order I stated – first to try to sell the property, second to appoint a receiver, and third to foreclose.  In the event of foreclosure, however, I would make a condition of Government approval that the Government be given notice of default on the loan, and the Government have the right of first refusal to raise the money necessary, whether through a bond issue, or even selling equity in the project, to raise the money necessary to satisfy the loan and take possession of the project.  The Government, as the sovereign entity, would have the option of insuring against foreclosure by an agency of a sovereign entity.

Need For Economic Discussion and National Plan

Mr. Speaker, the issues and concerns over this project exemplify the need to explore a new economic model, inclusive of the development of local investment and small businesses, and the expansion of our current economic pillars.  We need to commit ourselves to a long term plan as a country, so we can determine how a project like this fits into our strategy and growth, how we compliment this project with other elements of tourism to help other niches develop and grow.  As we expand and further develop areas of our economy, Bahamians be given an opportunity to succeed.  Mr. Speaker that is what Bahamians want!  They want to be a part of the economy.

As an example, if we understood how we want to develop the tourism industry, we might have as a component of its development the active promotion of bed and breakfasts and family island eco-tourism.  By having a plan and understanding how a mega result fits with these smaller, niche resorts, we would be able to facilitate the Bahamian development and ownership within the industry.  Having a plan for the development of the tourist sector nationally, we would have a plan to link the mega resort with the family island eco-tourist resort, or bead and breakfast, so one supports the other.  This is how a national economic plan works, a plan for the development of the country for the benefit of Bahamians.

We on this side, like most Bahamians, recognize the dire financial and economic straights the Bahamas is in, and one thing is clear, in order to put the Bahamas back on the rails to success, we need a national economic plan. A national economic plan will allow us to plan for the future, plan our education, our worker training, and direct policy to achieve economic expansion in a planned and well thought out fashion.  This is how we assure employment and opportunities for all Bahamians, this is where this Government’s focus should be.

Clearly a national economic plan is required.  The PLP believes this is a matter of urgency, and should be a fundamental component of the development of our country, and part of any major economic development decision such as the Baha Mar project.

Ryan Pinder – Baha Mar debate Contribution from Ryan Pinder on Vimeo.