THE joint venture company behind the $1.7 billion project to develop Mayaguana into a free-trade zone has been given powers that rival the Grand Bahama Port Authority's (GBPA), including the ability to licence businesses on the island, and a host of 20-year investment incentives for itself and its licensees.

The Heads of Agreement for the project, tabled finally in the House of Assembly by the FNM government, confirm via the powers conferred on Mayaguana Island Developers Ltd - the 50/50 joint venture between the Boston-based I-Group and Hotel Corporation of the Bahamas - that the former Christie government intended to turn the island into another Freeport, albeit with government ownership and control this time.

On the licensing of Bahamian and foreign-owned businesses in Mayaguana, the Heads of Agreement states: "The Government agrees that Mayaguana Island Developers shall have the exclusive and unconditional right at all times to grant licences to any licensees."

The only condition that Mayaguana Island Developers and its licensees have to abide by, in an arrangement and relationship that appears to mirror that between the GBPA and its licensees, is that the licensees still apply to the Government in Nassau for any approvals and permissions they need.

Otherwise, the Heads of Agreement say: "Nothing in this Agreement shall be deemed to prevent or restrict in any way Mayaguana Island Developers from licensing any person, firm or company to carry on any lawful business, undertaking or enterprise within the development on such terms as Mayaguana Island Developers shall in its absolute discretion deem fit and proper."

When it comes to investment incentives, the Heads of Agreement gives Mayaguana Island Developers and its licensees a 20-year exemption from real property taxes, stamp taxes (including on money remitted by banks to foreign countries), all licence fees (including Business Licences), taxes upon earnings, interest or dividends, and "direct fiscal impositions uponor against earnings".

Other incentives, which the Heads of Agreement say are granted under the Bahamas Investment and Incentives Act and the Family Island Economic Enterprise Zones Act, duty- free importation for 20 years co all manufacturing supplies required by industrial firms that establish themselves in the 9,999 acre development area on Mayaguana.

The agreement provides, though, that these exemptions only apply to products exported from Mayaguana or sold to visiting cruise ship and yacht-passengers that are not classified as "consumable stores".The Heads of Agreement defines "consumable stores" as anything imported into Mayaguana for personal use or sold for personal use.Twenty-year customs duty exemptions are also granted for a whole host of equipment and material necessary to fit out factory plants and for construction.The Mayaguana Heads of Agreement also allows for Mayaguana Island Developers, after complying with its obligations and completing the initial build-out, on the 18th anniversary of the agreement's signing to apply for these exemptions to be extended for a period ranging from five to 15 years.

"The Government recognises that the exemptions and incentives set forth... are of paramount importance to Mayaguana Island Developers to enable the company to achieve its goal of developing Mayaguana as a resort/second home destination, with viable commercial and industrial sectors competitive with other premier destinations/mixed-use communities," the Heads of Agreement says.

The agreement also says that Mayaguana Island Developers will look to develop.the island as a port of call for cruise ships, with the Hotel Corporation helping "in attracting a cruise operator of sufficient standing and international repute".

Source: The Tribune