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WEDNESDAY, APRIL 1, 2020
$4.38 Pandemic to expose NIB delinquents
By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net THE COVID-19 pandemic will âexposeâ Bahamian employers who have failed to pay National Insurance Board (NIB) contributions on behalf of their workers, a Cabinet minister warned yesterday. Brensil Rolle, minister for the public service who has responsibility for NIB, said the government and social security system will likely exploit the situation to negotiate with delinquent companies and agree payment plans to bring them current. âWhat I will say is that we are negotiating with these businesses,â Mr Rolle said. âThis process will really expose businesses that have not been forthright in making payments to NIB, but this is a time where we can negotiate with those businesses, come up with arrangements and get things done.â His comments came after the Fusion Superplex movie and entertainment complex, located at the junction of Gladstone Road and the airport highway, was exposed after it temporarily laid-off 350 staff and sent them to claim unemployment benefits at NIB. Those workers subsequently went public on social media after encountering difficulties in obtaining essential financial assistance from NIB, and after learning that contributions deducted from their salaries had not been passed to the social security system. Carlos Foulkes, Fusionâs chief executive, admitted that the company had been placed on a payment plan with NIB but blamed delays in processing paperwork and contribution forms for the problems. And Fusion is far from the only Bahamian employer in this situation. Mr Rolle last year said noncompliant employers owe NIB between $14m to $17m in unpaid contributions. The minister, asked yesterday whether selfemployed persons who have failed to pay the necessary NIB contributions will also be impacted in their efforts to obtain financial assistance, replied: âWe want persons to acknowledge that a Bill exists, and we will set some parameters upon which we could make those arrangements to soften the blow of COVID-19.â Without giving a definitive position, Mr Rolle added: âIt depends on the number of payments in some cases, but again come into NIB, talk with one of our representatives. Get on the phone and talk with one of our representatives, and they will tell you exactly what your status is at the Board.â Mr Rolle continued: âThis emergency order has caused NIB to become one of the government agencies that must work from home, because of the
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$3.93
Bahamas faces $2.7bn tourism shutdown loss By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
BRENSIL ROLLE
$3.89
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HE Bahamas stands to lose $2.7bn in tourism revenues if the COVID-19 pandemic shuts down stopover visitors for the rest of 2020, Royal Bankâs (RBC) former top Caribbean economist is warning. Marla Dukharan, analysing the pandemicâs likely impact on the region, revealed that this nation stands to lose up to 83 percent of its highyielding land-based tourists if the global crisis lasts through year-end in a âworst caseâ scenario. Should that play out, her research suggests The Bahamasâ annual revenue earnings from stopover visitors will plummet to $548m from $3.244bn in 2019 - a drop of some $2.7bn, which again highlights the potentially catastrophic fall-out from COVID-19 for this
nationâs largest industry and the wider economy. Ms Dukharan said the âbest caseâ and âbase caseâ scenarios for The Bahamas were a 60 percent and 80 percent drop in annual stopover visitor numbers, respectively,
the latter of which mirrored the Ministry of Financeâs initial estimates albeit for a four-month period. Both assumed a complete loss of cruise ship passengers. Should the COVID-19 pandemic clear up quickly,
BAHAMIAN life and health insurers were yesterday said to be âup in armsâ after the government ordered them to continue paying multi-million dollar claims without receiving any income in return. Multiple industry sources, speaking on condition of anonymity, described this aspect of the Minnis administrationâs Emergency Powers (COVID-19) (Special Provisions) Order 2020 as âabsurdâ and akin to âproviding free food from Super Value for the durationâ of the pandemic. Tribune Business was told that the Bahamas Insurance Association (BIA) was taking legal advice ahead of a meeting today where the industry will plot its response to a measure that mandates it receive no premium income on all life and
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âą No life and health premiums for almost 3 months âą Yet expected to still pay multi-million dollar claims âą Govt edict âabsurdâ, like âfree food at Super Valueâ health insurance policies for at least three months. The government order, which was published yesterday after being signed by the prime minister on March 30, states: âIn respect of any health, medical and life insurance policy, the obligation to pay any insurance premium under any policy of insurance is suspended from the day of March 17, 2020, for the duration of the state of public emergency and extending 60 days thereafter. âShould any insured event occur giving rise to the liability of the insurer to pay a claim to the insured, the insurer shall honour the claim and only deduct the renewal fee and any deductible from the money paid under the claim.â
The governmentâs move was said to have taken the $2bn life and health insurance industry by complete surprise, with sources adding that the sectorâs regulator, the Insurance Commission of The Bahamas, had also been blindsided. It was also suggested that the governmentâs external legal advisers, Graham, Thompson & Company, were unaware of its intentions. This newspaper was told that the insurance-related order âcame out of the Attorney Generalâs Officeâ but that could not be confirmed. Carl Bethel QC, the attorney general, did not return Tribune Businessâ call and message, so the rationale for the governmentâs move is unknown.
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
However, several contacts speculated whether the blanket premium waiver was designed - at least in part - to reward Atlantis and Baha Mar for committing to pay the health insurance for their combined 13,000-plus employees for a period of 60 days following the two hotelsâ closure Given that the nationwide lockdown has been extended until at least April 8, the governmentâs order means that the earliest life and health insurance underwriters - the likes of Colina Insurance Company; Family Guardian; BAF Financial; and Atlantic Medical - can expect to receive premium
the former RBC chief economist said The Bahamas will only lose 50 percent of its 1.78m stopover visitors and half last yearâs revenues. That, though, would still drop 2020 stopover earnings to $1.627bn. As for the âbase caseâ, The Bahamas would lose 64 percent - or nearly two-thirds - of its annual stopover visitors, slashing earnings from this sector to $1.088bn. That would result in a more than$2bn drop on 2019 figures, further exposing the countryâs dependency on a single industry and relatively few source markets for almost half its economic output and employment. Ms Dukharanâs figures also
Insurers âup in armsâ on no income order By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
BPL to resume disconnections BAHAMAS Power & Light (BPL) last night confirmed it will resume disconnecting delinquent consumers as of today following a week-long pause amid the COVID-19 pandemic. Quincy Parker, the state-owned energy monopolyâs spokesperson, confirmed that BPLâs previous statement on the April 1 disconnection resumption âstandsâ. He added: âShould our policy position change, weâll advise immediately.â The move is likely to be greeted with anger and outrage by many Bahamians, especially those individuals and businesses who have either lost their jobs, suffered income and hours reductions, or been forced to shut down as a result of the governmentâs national lockdown to counter the virusâs spread. Philip Davis, the oppositionâs leader, last night said his party was âdeeply concernedâ about BPL resuming disconnections of non-paying customers at a time when many Bahamians were suffering from the loss of jobs and/or income. Arguing that the move breached the Special Provisions Orders 3.1, released yesterday as part of the governmentâs Emergency Powers Orders regulations, Mr Davis added: âThis decision could not have come at a worse time when massive increases in jobs losses, and applications for social assistance and unemployment insurance benefits, are with us. âSuch a decision is also no in keeping with the spirit of state assistance and subventions to both companies and workers.â The opposition leader also argued that disconnections âfly in the faceâ of the governmentâs pledge to put health and sanitary measures first in the COVID-19 fight, as power was essential for the provision of water. However, the week-long blanket disconnection halt is likely to have been exploited by some who can still afford to pay their bill. Such a blanket disconnection waiver benefits those who do not need it as well as those who do.
âą Loss of 83% of stopovers in âworst scenarioâ âą Ex-RBC economist: Still $2bn âbase caseâ cut âą Caribbean suffering biggest shock for century
BAHA MAR RESORT
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âDelicate tightropeâ for commercial landlords By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
COMMERCIAL property landlords are âwalking a very delicate tightropeâ through offers of 50 percent rental discounts/deferrals to ease the COVID-19 pain, a prominent Bahamian realtor said yesterday. David Morley, Morley Real Estateâs president, told Tribune Business that his company was advising retail, restaurant and office landlords that âtenant retention is the number one priorityâ amid the economic shutdown and uncertainty created by the coronavirus pandemic. Warning that it will âtake a lot longerâ to find new tenants once the crisis ends, Mr Morley said landlords will find their income streams recover much more quickly by retaining existing clients even if it means giving âconcessionsâ such as discounted or deferred rental payments. Revealing that âweâre all in this togetherâ is the main message he is delivering to commercial
âą 50% rental discounts/deferrals discussed âą Tenant retention is ânumber one priorityâ âą Realtor: All owners working with clients
DAVID MORLEY property owner clients, the veteran realtor said they also have to be âfluidâ and flexible in monitoring tenants and responding to the ever-evolving COVID-19 situation. Urging landlords to deal with their tenants on a âcase-by-case basisâ, dividing them into those who can still pay versus those who cannot, Mr Morley advised retail mall and office owners that it would take several months before the situation returned to some form
of ânormalcyâ once the COVID-19 pandemic has eased. With The Bahamasâ major industry, tourism, likely to take some time to recover, he predicted that the economic tap âwill not have the same pressure and volume of water coming out as beforeâ due to high unemployment and reduced consumer spending. These factors, Mr Morley said, were likely to impact tenantsâ business earnings, and their ability to make due rental/lease payments in full, for some time to come. Yet he told Tribune Business he was unaware of any commercial landlord refusing to work with tenants on compromise arrangements. âOur number one advice to existing clients is that tenant retention is the number one priority, and therefore you have to work with existing tenants to do everything you can to keep
them in there,â said Mr Morley, whose firm is one of The Bahamasâ major commercial property managers. âOur view is simple. If you lose any tenants itâs going to take a lot longer to replace them after this virus than to start back up with existing tenants even if you give concessions. Itâs a delicate tight rope to wall right now.â Unlike residential tenancy/lease agreements, Mr Morley said few of the commercial variety included so-called âforce majeureâ clauses dealing with unforeseen circumstances - such as a global pandemic - that prevent one or both parties from fulfilling their contractual obligations. He added that he had been studying other countries to see how commercial property landlords are responding to the COVID19 crisis, including the US, where most owners were only passing on the tax and
mortgage loan concessions/ deferrals they are receiving from governments and lenders. âThe number two thing I say to clients is that you have to monitor this very closely, whether on a weekly, bi-weekly or weekly basis, and you have to remain fluid,â Mr Morley added. âYou donât know when this is going to end, and what impact it is going to have on essential and non-essential tenants. âItâs very important to retain your tenants. If they go out of business during this time itâs going to be even more difficult to find new ones to come in. This is almost a two-step process taking place. We have overnight shutdown.â Asked how commercial landlords were responding to their tenantsâ cries, Mr Morley said: âIt depends on landlord to landlord. From most of the landlords weâre hearing from, and tenants at properties we donât manage, it seems whatâs being discussed right now is 50 percent [rental] discounts altogether or asking
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