|The Bahamas Investor Magazine
January 19, 2012
January 19, 2012
In an effort to position The Bahamas as the premier destination for investment in the region, the government has allocated a record amount of money for improvements to ports, roads, bridges, buildings and public spaces. The public spending drive is part of the most ambitious and comprehensive infrastructure programme the island nation has ever seen.
The extensive enhancements have a threefold aim, explains Minister of Public Works and Transport Neko Grant: to improve quality of life for Bahamians; provide employment opportunities; and “pump up” the tourism product.
“Nobody wants to invest in a country with a rundown infrastructure,”?says Grant, who in August 2008, launched the Trust Agenda Infrastructure Crusade in Eleuthera, with the signing of more than $15-million worth of roadwork contracts. “The world economy will not remain as it is forever, so it is very important for us to have our infrastructure in place for when the economy rebounds.”
Three years into his “crusade,” Grant is still awarding contracts for public infrastructure works.
The Bahamas is not alone in this line of thinking when it comes to investing in infrastructure at this time, notes the Cabinet Minister.
“When Minister of National Security Tommy Turnquest returned from England he shared with me the massive infrastructural works that are taking place there. Prime Minister Hubert Ingraham has been to New Hampshire and says they are engaged in serious infrastructure programmes there also,”?continues Grant. “Zhivargo Laing, Minister of State for Finance, has been to Atlanta. He brought back footage of the massive infrastructure works they are doing there, centered on roadworks.”
Such projects are undertaken during times of economic slowdown for two main reasons: Firstly, public spending tends to act as an economic stimulus; and, secondly, projects can be a completed at a fraction of the cost due to deep discounts in labour and material.
Moody’s Analytics, a leading provider of economic research and data, estimates that every dollar spent on public infrastructure yields a $1.59 boost to gross domestic product (GDP).
In The Bahamas, investment in improving and repairing ports and roadways has to be ongoing to remain competitive and keep the economy moving. Large projects of this nature, not only improve the attractiveness of the country for investors, but also provide thousands of jobs for Bahamians.
By air and land
One of the major planks of improvement initiatives on the nation’s most populated island is the $120-million New Providence Road Improvement and Infrastructure Project. The initiative encompasses 19 major corridors and intersections and is funded by the Inter-American Development Bank. Upon completion in the first quarter of this year, the initiative is expected to improve driving conditions through new and reconstructed road corridors and intersections across the island.
Another development moving forward at full speed is the $67-million JFK Airport Gateway Project funded by the Export-Import Bank of China. The dual lane highway will run from the Lynden Pindling International Airport to Bethel Avenue heading into downtown Nassau. Upon its completion in October 2012, the new highway is expected to improve motoring capacity to and from the airport, reducing traffic congestion and shortening travelling time from the transportation hub to the capital.
The road improvements are in tandem with a massive $409.5-million overhaul of the airport, Stage One of which was completed with the opening of the US Departures Terminal building in February last year.
“Airports and seaports are critical to island nations’ economic growth and development,”?said the Prime Minister at the official opening. “That is why we consciously and deliberately set about, during the midst of the worst recession the world has seen in 80 years, to rebuild our physical plant and prepare our people for better days ahead.”
The second stage of the airport’s redevelopment involves the demolition of the old US Departures Terminal and construction of a new International Arrivals Terminal and Pier at a projected cost of $129 million. Stage Two is expected to be completed by fall this year. Stage Three involves the construction of a new Domestic/International Departures and new Domestic Arrivals Terminal. The projected cost is $84 million. It is set for completion in fall 2013.
Airport upgrades are not restricted to the capital, however. In the government’s 2011/2012 budget, $10 million was allocated for upgrades, including the construction of Marsh Harbour’s Airport terminal and control tower. Allocations were also in the budget for repairs to the island’s Treasure Cay Airport runway and Long Island’s Deadman’s Cay Airport. On Ragged Island, the airport’s runway was completed in the government’s 2010/2011 budgetary cycle.
On Mayaguana, Boston-based I-Group is expected to carry out repairs to the airport’s runway as part of a joint venture with the government to build new hotels, golf courses and health centres and commercial activities, among other amenities.
Work is also moving ahead on a variety of infrastructure projects on many of the Family Islands. In Abaco, for instance, contracts totalling $3.5 million were awarded for physical infrastructure upgrades, inclusive of roads, sidewalk construction, water main installation and airport runway resurfacing. Additionally, roads on Grand Bahama, Eleuthera, Andros, Long Island, Ragged Island and Acklins have been brought up to standard.
A major artery for the country’s imports and vital to life and business in The Bahamas is the port system. Four years ago, Nassau, the hub of tourism and cruise line activity in The Bahamas, could not accommodate the large superliners entering the market. A $50-million harbour dredging project improved navigation and accessibility for these bigger ships.
Since the project’s completion, The Bahamas has remained a favoured cruise destination, with inaugural visits to Nassau by the world’s largest cruise ship the Oasis of the Seas and its sister ship the Allure of the Seas in December 2009 and December 2010, respectively.
Additionally, commercial freight operations were recently relocated from the confines of downtown Nassau to a $70-million, state-of-the-art port facility. The new facility on nearby Arawak Cay is scheduled to be operational by the second quarter of this year. The relocation of shipping to this new 56-acre site has freed over 20 acres of prime real estate for retail and mixed-use development in the city’s revitalization effort.
The development and upgrades of ports also extends beyond New Providence. In the 2011/2012 fiscal year, the McLean’s Town ferry terminal building and dock at Grand Bahama was completed. Constructed at a cost of $212,000, the 1,900 sq ft complex is designed as a multi-purpose building, housing a ferry ticket booth and waiting area for passengers, a post office and a police station. “This new facility will facilitate the provision of a more structured ferry service that affords a greater level of comfort and convenience to its passengers,”?said Grant at the ferry terminal contract signing in February 2009.
Dock work in Eleuthera is costing the government just under $3.6 million. Of that amount, $3.2 million is earmarked for the reconstruction of North Eleuthera’s Three Island Dock. The Caribbean Development Bank is financing the project. The reconstruction of a freight dock and repairs to a ferry dock in Current Island cost just under $215,000, while the Hatchet Bay Dock reconstruction carries a $170,000 price tag.
Docks are also being reconstructed or improved in Central Andros, Exuma, Ragged Island and Long Island.
The Bahamas has always been synonymous with sun, sand and sea, but the government is intent on adding sports tourism to the destination’s global appeal with the construction of a first-class sporting complex. In June 2011, the People’s Republic of China officially handed over a new, ultra-modern $30-million stadium as a gift to the Bahamian people. “This Thomas A Robinson National Stadium is the flagship structure of the Sports Centre redevelopment project, which represents the single largest investment in sports development in the history of The Commonwealth of The Bahamas,” said Minister of Youth, Sports and Culture, Charles Maynard at the time.
The stadium has 15,000 fixed seats, meeting rooms, offices and suites and state-of-the-art security surveillance, among other features. Some $9.5 million was injected into the Bahamian economy over the two-year construction period.
The new stadium is the “jewel in the crown” of what is expected to be a thoroughly modern, top-class Queen Elizabeth Sports Centre, with facilities extending over some 450 acres, inclusive of new roads, parking, drainage systems and green space. In April 2011, two phases of a five-phase overall development plan commenced at a cost of $48.5 million.
Another facility with a significant impact on economic development and the tourism sector is the new $11.3-million Straw Market. Seen as a catalyst for future downtown developments, the 37,000 sq ft downtown facility became fully operational in late 2011, replacing the old market that was destroyed by fire in 2001.
Substantial investments have also been made to popular tourist and recreational spots. Work commenced on the redevelopment of Saunders Beach in 2010. Casuarinas trees that once lined this coastal strip were replaced with mature sea grape trees, park benches were installed and landscaping completed, while a portion of West Bay Street was realigned and a parking area created.
Similar landscaping enhancements were also carried out at Montagu Beach just east of Nassau.
Throughout the length and breadth of The Bahamas, the government has been busy in recent years constructing sea walls, administration buildings, schools and bridges, among others, and generally improving the country’s infrastructure, as it waits for the world economy to rebound.
“The infrastructure will encourage investors to come and invest in our country and that’s why we have not restricted work to New Providence,” says Works Minister Grant. “There’s no question that we can expect to see a more modern, efficient and attractive Bahamas.”