The government of The Bahamas is projected to rake in revenue of $85.3 million next year as a result of the redeveloped Nassau Cruise Port Ltd. (NCP), up from $72.3 million in revenue in 2019, according to numbers released yesterday by NCP.

The NCP release came on the same day that a Cabinet minister claimed the Bahamian people are being robbed as a result of the deal the Minnis administration entered into for a public-private partnership arrangement for the new, state-of-the-art $300 million port.

The $85.3 million in revenue would include $82.8 million in head tax and $2.5 million in lease payments.

Minister of Labour and Immigration Keith Bell claimed that over a five-year period - from 2023 to 2027 - the port will get $575,800,000 in revenue while the government gets a mere $18 million, which he claimed amounts to a deficit when one considers the $44 million The Bahamas government invested over a decade ago to dredge Nassau Harbour.

NCP did not reference Bell in its statement yesterday but outlined facts on the port deal and its projected impact, which directly contradict the information he provided in Parliament while contributing to the budget debate.

NCP noted that it completed the construction of the new berth six and extension of berth one in early 2022, which has materially improved the cruise port's vessel capacity and consequently the number of passengers coming to Nassau.

In 2023, Nassau is forecasted to surpass 2019's passenger count by approximately 300,000 passengers and in 2024 the total number of cruise passengers is estimated to climb to 4.6 million passengers.

"As we look forward, Nassau Cruise Port Ltd. forecasts from FY2024 to FY2027 are based on cruise passenger bookings for the next two years and future estimates," NCP said.

"Notwithstanding the addition of berth number six and the expansion of berth number one, passenger capacity and revenue generation is limited by the number of berths available and the size ships each berth can accommodate. It is also impacted by The Bahamas tourism seasonality."

The cruise port projects that 4.6 million passengers will visit in 2024 for a total revenue for the port of $34.1 million; five million passengers are expected in 2025 for a total revenue of $47.4 million; 5.2 million are projected for 2026 for a total revenue of $60.4 million; 5.4 million passengers are expected in 2027 for a total revenue of $64.7 million and 5.6 million are forecast for 2028 with a projected revenue of $68.9 million.

The revenues do not represent profits as expenses and dividends to investors are included.

"In summary, the development of the new Nassau Cruise Port is the envy of the Caribbean," NCP said.

"During the grand opening of May 26, 2023, cruise executives from the five top companies made a point of congratulating the good people of The Bahamas for opening this wonderfully new Downtown Nassau waterfront and associated cruise piers. The Nassau Cruise Port is increasing the earnings potential for the government of The Bahamas and the thousands directly and indirectly dependent and/or invested in cruise tourism."

Deal structure

On August 28, 2019, the government and NCP executed the Port Operating and Lease Agreement.

The agreement states that Prince George Wharf located in the City of Nassau is the city's sole cruise port facility and integral to the city and the economic well-being of New Providence and its residents.

"The redevelopment of Prince George Wharf (PGW) was seen as necessary and urgent given that a) PGW was and remains the country's largest tourism gateway to The Bahamas; b) the cruise port was in a state of significant decay; c) the downtown economy was dependent on the cruise port visitor traffic, and d) for over 10 years, visitors, downtown businesses and their employees had voiced their concern with the deplorable condition of the cruise port and surrounding areas," NCP said. "Cruise passenger surveys have ranked Nassau in the bottom 10 percent of all cruise port in The Bahamas and Caribbean."

The corporate structure of NCP Ltd. is 49 percent Global Ports Holding, two percent YES Foundation, and 49 percent the Bahamian people via the Bahamas Investment Fund.

The NCP Board consists of four people appointed by Global Ports Holding, one appointed by the government of The Bahamas, and two appointed by the Bahamas Investment Fund. The concession term is 25 years with an option for a further 15 years should the government of the day agree.

The handover of PGW from the government to NCP occurred on October 9, 2019.

The handover meant that NCP would assume operations, health and safety, sales and marketing, and security of PGW, and that NCP could proceed with the project development plans, NCP noted in its statement.

The government retained final authority for cruise berthing and seabed policing.

NCP said during this period, it hired "a very capable all-Bahamian team" to support the cruise port business. In early 2020, the company formally engaged ENKA Construction as the project's general contractor along with ISD, a local civil works contractor, and other local construction firms.

In May 2020, NCP undertook a debt raise to advance construction of a new cruise port facility and $134 million was raised.

During the following 18 months, an additional $110 million was raised in the US capital markets and, in December of 2021, $50 million in equity was raised with $25 million funded by Global Ports Holding and $25 million invested by over 3,000 Bahamians.

NCP noted that the project costs increased from $250 million to $300 million because of the pandemic with materials prices increasing, supply chain challenges, and loss of revenues.

It said, "The ability of Nassau Cruise Port to complete its project financing was remarkable and has provided a competitive advantage to Downtown Nassau, the island of New Providence and The Bahamas.

"While Caribbean debt levels soared to unprecedented levels and port infrastructure was starved of funding to make repairs to aged infrastructure and superstructure, Nassau increased cruise tourism capacity and developed 11 acres of new Bahamian offerings and experiences for visitors and Bahamians to enjoy for decades to come."

Click here to read more at The Nassau Guardian