By Alison Lowe
Nassau Guardian Business Editor
NASSAU, Bahamas -- US officials have expressed “disappointment” and concern over a lack of consensus in negotiations with the Bahamas government about who will pay for $200,000 in ongoing operation and maintenance costs of key port security equipment, which the US government has fully funded at a cost of over $30 million for almost a decade.
Sources close to the matter have suggested that, if the government chooses not to continue to fund the operation and maintenance of equipment, which detects nuclear and other radioactive materials coming into the Freeport Container Port (FCP), come October 2014 it could threaten Freeport’s status as a major logistics hub going forward, along with the government’s ability to access assistance from the US government in the future.
A US government official, who spoke on condition of anonymity on Monday, said that from the US government’s perspective any decision to discontinue funding for the program, which came into being under a memorandum of understanding (MOU) signed with the government in 2004 before becoming operational in 2006, would not result in any economic impact for The Bahamas.
However, the US official did acknowledge that such a decision “could affect future investments with regards to port security and anything in the realm of the Department of Energy”.
The US government official added that it is in the national security and health interests of both countries to have equipment in place which detects nuclear and other radioactive materials that might enter via the port, and added that it is of concern to the US government that the Bahamas government has not yet determined how the cost will be covered once US support ends later this year.
The failure to reach consensus comes as there has been increased scrutiny over whether or not The Bahamas has in place the necessary equipment to detect radioactive materials entering the country, in light of evidence that imports of Japanese cars coming into Jamaica have been tainted with radioactivity arising after the Fukushima nuclear disaster in Japan.
During an interview with Guardian Business, the official said: “In April of last year the Department of Energy started pressing the government on how we would transfer it over to Bahamian ownership and since then essentially they’ve been asking about it. They were here again in January requesting the government to take it over, but it hasn’t gone anywhere.
“Under the MOU we signed with the Ministry of Finance they don’t necessarily have to take on the cost, which has been estimated at about $150,000-$200,000 in maintenance; it could be charged to shipping companies, or per container; different countries manage it differently, but it is up to the government to initiate those discussions with the private sector.”
Guardian Business understands that under the terms of the MOU signed between the US government and the 54 countries in which the initiative, known as the Mega Ports Program, is operational, “ownership” and financial responsibility normally transfers to the host country after three years.
The official said: “This isn’t something the US is doing for us, it scans all containers no matter where they are going. It’s for the benefit of the people of The Bahamas and it could affect health and well-being, so it’s in everyone’s interest to maintain this equipment and keep it functioning after October of this year. The government should really should figure out a way.”
A government official, also speaking on condition of anonymity, claimed that the government’s position is that the program primarily benefited the Freeport Container Port, adding that with the port having indicated they do not want to fund it, the government is not willing to do so.
“The current operating cost is about $200,000 but the cost of capital replacement and maintenance is unknown. In other countries this cost is amortized over the users of the facility, unfortunately the FCP has indicated that the program is not beneficial in their opinion and is unwilling to consider any mechanism to cover any cost with respect to the program.
“We respect the views of the FCP on this matter, as clearly if the only beneficiary of the program is unwilling to pay, then perhaps it is not necessary,” said the official.
An effort to reach the Freeport Container Port on the matter was unsuccessful on Monday, as messages were not returned up to press time.
Republished with permission of the Nassau Guardian