By C. E. HUGGINS, Business Editor
huggins@nasguard.com
During his presentation at the signing of the Heads of Agreement of the joint venture between the government of The Bahamas and the I-Group out of Boston, Prime Minister Perry Christie admitted that the advent of the Joint Venture was a tacit admission that the development model to date [has] failed in part because it had not enabled Bahamians to be "fully involved in development". The government through this new initiative - a 50/50 joint venture - was attempting to find how "to meaningfully integrate Bahamians into the development process".
From information coming in response to articles appearing on the Mayaguana experiment in the Guardian Business, it appears not everyone is as enamoured of the new development model as the government appears.
Land in other parts of the Bahamas is being advertised on the web as followers: Coakely Cay, 340 acres $18 million (approximately $53,000 per acre); Leaf Cay 25 acres (fully developed) $19 million ($76,000 per acre); Little Ragged Island 700 acres $24 million (approximately $34,000 per acre). Admittedly some of these include developed properties and attendant amenities.
On Tuesday 7 when the government of The Bahamas and the I-Group signed the Heads of Agreement, the Prime Minister stated that upon the signing, 5,825 acres of land would be conveyed to Mayaguana Island Developers (MID) the company jointly owned by the Government of The Bahamas via the Hotel Corporation and the I-Group. The I-Group then had 60 days in which to pay $2 million to the government of The Bahamas. That is a mere $343 per acre which is less than one percent for land being sold elsewhere in The Bahamas as demonstrated above. Neither the Prime Minister nor the Minister of FSI stated whether the conveyance was at "market rates".
In an attempt to defend itself against claims that the Government has given away 126 acres to its Guana Cay development, Baker's Bay has issued a press release in which it states that the land it is receiving from the government is being leased at "market rates". Interestingly enough there is not definition of "market rates" or any indication of the terms of the lease. If Baker's Bay "market rates" are along the same lines as the Mayaguana project then it could possibly explain the need for the euphemism "market rates".
A reader of the Guardian Business pointed out that the entire portion of 9,999 acres "being given" to the I-Group represented approximately 14 percent of the entire land of Mayaguana.
The government will point to the fact that a desalination plant, electricity, the airport, and what one reader referred to as the charity trust fund (eventually the developer will be putting aside up to $500,000 per annum to go toward the upkeep of that portion of the island occupied by Bahamians ("public services, public infrastructure and affordable housing"), since the community being created by the I-Group would be paying its handsome annual fees to keep its occupants in the life style to which they are accustomed.
But it cannot be denied that despite the attempts to rewrite the development model that this latest version remains largely ineffective despite the fact that the government is a full partner in the development.
As one reader pointed out it appears the "government is passing the buck of modernisation and infrastructure to foreign entities, I thought this was a basic tenet of government." Unfortunately the Mayaguana experiment is not the only case in which this is becoming evident. During its weekend news, TV 13 ran a news item from Grand Bahama in which a Ginn Development executive in West End stated that the people of West End would soon see some new vehicles namely a fire engine and an ambulance. The grateful people of West End applauded while their representative stood smugly in the background. A similar condition pertains in Mayaguana where they too have received an ambulance from the developer.
But the provision of basic services of health, education, security etc. are the responsibility of The Government of The Bahamas and that includes the provision of ambulances and fire engines.
It was an acknowledgement of the impact of the proposed transformation of Mayaguana into a free trade zone that the Government would enter into a joint venture. Clearly the attempt to ensure that "Mayaguanians, first then other Bahamians" benefit sounds good on paper but in the words of one reader it has the earmarks of the old model.
According to this reader it is just another "mega development" in the form of "land grabs, concessions, natural environment depletion and 'jobs, jobs, jobs'". This reader asks: "Have we learned anything from the other anchor developments [that] bigger is not better?"
It is also important to note that unlike the then Minister of Financial Services and Investment, (FSI) Allyson Maynard Gibson, neither Prime Minister Christie nor the current Minister of FSI Vincent Peet, mentioned the "historic clause" namely, "that all lot sales that involve either a real estate agent or the Developer as real estate agent will involve a Bahamian real estate agent licensed by the real estate association."
This "historic" pronouncement - one of two such clauses; the other dealt with construction - was made a mere four weeks earlier at the signing of the Heads of Agreement between Ritz Carlton and the Government of The Bahamas on the 230-acre multi-use upscale community on Rose Island.
Does this mean that the historic clauses affecting both the sale of real estate and the role of Bahamian contractors apply only to those Heads of Agreement in which the government is not a full partner? It is an important point because the Management company Mayaguana Management Company (MMC) a wholly owned subsidiary of the I-Group rather than of the Mayaguana Islander Developers (MID) the company owned equally by both the Government of The Bahamas and the I-Group is to earn its management fees on the "gross sales price received for the sales of all residential lots in the development area...and of all commercial lots".
A reader asked the provocative question, if the government is going to use Bahamian land to create billionaires why can't these be Bahamian billionaires? Why are they non-Bahamians?
Clearly the new model as espoused in the recent signing between the I-Group and the Government of The Bahamas has shifted responsibility for the development of The Bahamas into the hands of the foreign investor. In exchange for jobs, "entrepreneurial opportunities" for Mayaguanians and other Bahamians, and what amounts to a charitable annual handout, the new model transfers such things as land use planning, provision of maintenance services and the effective control of the island to the developer.
