PM put GB economy in jeopardy

Prime Minister Hubert Ingraham’s decision not to renew the work permit of former Grand Bahama Port Authority (GBPA) Chairman Hannes Babak at the end of 2009 placed Freeport’s economy in “jeopardy” and possibly stalled several major projects planned for Grand Bahama, claimed a classified diplomatic cable obtained by The Nassau Guardian through WikiLeaks.

Babak’s work permit was not renewed after it expired on December 31, 2009.

Ingraham publicly announced the decision about Babak’s work permit earlier that December.

According to the cable, which was classified on December 18, 2009, Babak asked the U.S. Embassy to help change the prime minister’s mind about the work permit.

The embassy official Babak reportedly spoke to remained “noncommittal”, according to the cable.

The GBPA was the subject of a bitter, protracted ownership dispute between Sir Jack Hayward and the family of the late Edward St. George.

In December 2009, Babak was in negotiations to sell Sir Jack’s significant stake in the GBPA to Mid-Atlantic Projects (a U.S. company).

The cable stated that the embassy felt that Babak's ultimate departure, “…could result in further delays in Grand Bahama's development just as the expected sale to Mid-Atlantic had sought to jump-start progress.”

The Mid-Atlantic deal fell apart in April 2010.

The embassy official claimed that the refusal to allow Babak to continue to legally work in the country was, “likely made out of anger at Babak's move not to obtain Ingraham's blessing before moving forward with the Mid-Atlantic deal as well as a not-so-discreet desire to increase Chinese involvement in Grand Bahama's development plans through Hutchison-Whampoa (a Chinese company with major business interests in Freeport).”

During the time Babak was seeking renewal of his work permit, he was in the midst of brokering several deals with major U.S. companies intended to help alleviate Grand Bahama’s economic woes.

The embassy official said Babak’s removal, “(put) into jeopardy ongoing negotiations with major U.S. firms to bring liquid natural gas (LNG) re-gasification facilities and other badly needed commercial ventures to the country's second largest city, which suffers from nearly 15 percent unemployment.”

There were also several other deals reportedly in the works with U.S. entities — including energy and medical care companies — that Babak was overseeing at the time.

One deal under negotiation involved the establishment of an offshore, ship-based Liquid Natural Gas (LNG) re-gasification plant and on-shore LNG storage facilities operated by Texas-based Excelerate Energy and Virginia-based AES, the cable noted.

“The arrangement would enable electricity delivery services via underwater cable to Florida Light and Power as well as Bahamas Electricity Corporation (BEC),” justified the cable, which also cited possible savings for BEC if the deal was to go through.

The status of that deal is unclear.

The cable further stated that Babak was negotiating with a U.S. hospital construction company to build a facility in Grand Bahama that could have been worth up to $100 million.