The resistance to allowing independent, private marine pilots to take control over piloting in Freeport Harbour stems in large part from a concern over how the continued maintenance and expansion of the port will be funded, Guardian Business has learned.
On Friday, the day on which the resignation of the 15 marine pilots from the Freeport Harbour Company and BORCO formally took effect, opinion over the status of the dispute was divided, a day after government officials flew to Grand Bahama to seek to find an "amicable resolution" to what Director of Labour Robert Farquharson called a "potentially dangerous" situation.
While the Bahamas Marine Pilots Association (BMPA) suggested the disagreement over who can provide pilotage remains at a "stalemate", and the only way in which adequate pilotage in Freeport can be available is if the pilots move ahead with their plans to provide their services privately, the Freeport Harbour Company (FHC) is understood to be asserting that it can continue with business as usual, having hired replacement pilots.
In a statement, BORCO said that it "has a team of pilots in place that is more than capable of handling our pilotage needs and (does) not expect any interruption of service."
Now sources close to the matter have alleged that what is at stake for the FHC and the Grand Bahama Port Authority (GBPA) in the tug-of-war over control of pilotage in the harbor, and the entities' unwillingness to deal with the pilots as an independent provider of services, is how they fund the ongoing operation of Freeport Harbour.
A source close to the matter said: "In Nassau Harbour the harbor is owned by government, the dredging of the harbor, maintenance, et cetera, is done by the government. Cruise ship passengers pay a tax that is paid to the government, so the government can cover the cost of maintenance and care of the harbor, so having an independent pilot association that answers to port is not an issue there.
"In Freeport the harbor was a lake. The port authority said, 'we will dredge a
harbour provided these services are ours so we can recover our cost. That is in our Hawksbill Creek Agreement. Those services, including pilotage, are ours to provide'.
"Freeport can't recover the cost where the government recovers it in Nassau. In Freeport because of the services (the FHC) charges for pilots and other services that's the only revenue they have for what they do at the harbour. (The FHC has) $22 million in our budget for maintenance and upgrades this year. Because of the Panama expansion and the bigger cruise ship they have to dredge more. If the company invests all of this money how do they recover that?
"There are also other services that (the BMPA pilots) are looking at acquiring in the harbour; if it starts there (with pilotage services), where does it stop? Those fees they would no doubt go after, too," said the source.
While the pilots themselves have pointed to "control" over the harbour as a fundamental issue that has to date made it difficult for the two sides to find a resolution, suggesting that the GBPA/Freeport Harbour Company fear relenting and offering control over pilotage to the BMPA pilots out of concerns that they will be forced to succumb to demands from other interest groups and lose revenue in the process, to date it has not been suggested that relinquishing the ability to generate pilotage revenue would cause serious financial challenges for the ongoing financing of the harbour.
However, this would go some way towards explaining the adamant stance taken by the FHC over the issue of pilotage and working with the pilots as an independent entity, despite the stakes from the safety perspective and the challenges involved in replacing them.
On Friday, spokesman for the pilots Erin Ferguson remained adamant that the pilots, who have asserted that independent pilotage that is not tied to commercial interests is necessary to ensure safety in the harbour, will go ahead with offering their services to vessels even if challenges having the Grand Bahama Port Authority "reactivate" their license are not resolved.
"We are not relenting. We are going to send a note out (to the companies that send vessels into Freeport Harbour) and say we (the pilots that quit the FHC and BORCO) are available as we stated and our license is good. (The Freeport Harbour Company/BORCO/GBPA) are going to say it's not good, but we have to provide the service because by law the pilots can't refuse to provide their services.
"The warnings have been sent out and the international community has been watching. Personally I know the government wants the harbor to be safe. We're hoping that they'll intervene and give us a license to operate in Bahamian waters, because as far as we've been informed, we can operate in Freeport with a Bahamian license (we) just can't get the benefit for the bond and all of the tax concessions."
With dire warnings from the Bahamas Marine Pilots Association about the sub-optimality of a "competitive pilotage" situation in which pilots from the FHC will be "competing" with BMPA pilots for pilotage business in the harbour - Ferguson has indicated that evidence suggest such scenarios result in a higher safety incident rate - what now remains to be seen is whether this turns out to be true, should both sides forge ahead with attempting to pilot in Freeport Harbour.
It is also unclear how international companies will react to the situation.
International marine insurer, Skuld, sent a notice to its members last week in which it warned them to ensure "extra care is taken for all vessel movements under pilotage" in the Freeport Harbour.
Christian Ott, Vice President Head of Claims, Skuld Singapore Branch and Loss Prevention and Recurring Claims Team Leader, said in an advisory: "Members may be aware of media reports with respect to a dispute between marine pilots and local authorities in the Bahamas. As a result of this situation, there has been a mass resignation of pilots who are now seeking to form a new company locally to provide pilot services. The licensing and status of this new venture are presently not certain.
"The immediate result is that the number of available pilots will apparently be reduced significantly when the resignations take effect on 28 March 2014. This is likely to have a significant delaying effect as the prospective reduced pilot availability will inevitably affect port operations.
"The International Group is monitoring the situation and the Association will release further information when appropriate. In the meantime, Members are advised to relay this information to all vessels that are going to call in the Bahamas going forward, and to ensure that extra care is taken for all vessel movements under pilotage."
Other insurers, including Britannia Steam Ship Insurance Association, also urged their members in a March 20 advisory to be extra cautious when coming into Freeport. They pointed to the resignation of five of seven FHC pilots, and six of nine BORCO pilots over what they stated they were advised by the BMPA were "unsafe working conditions."

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