Saturday, February 25, 2012

BERMUDA: Is it a bird? Is it a plane? No, it’s a revenue stream

The skies and seas were eyed as potential sources of revenue in Government’s latest Budget Statement.

Charging a user fee for Bermuda’s commercial airspace could take in $18 million annually in just five years’ time, Premier Paula Cox told the House of Assembly, while a licensing regime for foreign vessels trawling in Bermuda’s exclusive economic zone (EEZ) stands to net the Island an undisclosed sum.

Ms Cox hinted at a public-private partnership to take in fees “assessed on flight paths through our commercial airspace”. The Ministry of Transport declined to comment further.

The Premier added that discussions were underway to start charging international ships that harvest from the 200-mile EEZ surrounding the Island.

“What we’re looking at, in addition to facilitating the development of a local fishery within our EEZ, is licensing, which will generate some government revenue for the consolidated fund, from vessels that come in and can take up to 100 tons of fish,” said Environment Minister Marc Bean.

The Minister speculated that a seasonal, or annual licence, would be levied on foreign vessels that fish near Bermuda but are not bound by British Overseas Territories quotas.

The difficulty, he said, would be enforcement.

“What I’ve spoken of before is the need for us to have maritime and aerial capabilities to enforce our EEZ,” he said. “This also ties in with the Sargasso Sea Initiative, which includes certain parts of our EEZ. It could be a collaborative approach. Sargasso Sea protection will require monitoring. I think the same mechanisms we use to monitor and protect the Sargasso Sea we could also use to protect and monitor our EEZ.”

The Minister suggested an unmanned aerial vehicle, or UAV, as a means of keeping watch over tracts of open ocean.

“I don’t have the exact figures on hand, but UAVs range from $100,000 for a vehicle that can go up to two miles, to in the range of a couple of million for a vehicle that would have an extensive offshore range,” he said. “If you compare that initial cost to the operation costs of a surveillance aircrafts, the initial outlay might be higher, but if we are able to put in licensing and regulation that brings, say, $10 million per annum, the costs are worth it. UAVs might be the best approach for early detection and warning. They can take photographs and gather evidence of vessels operating and fishing. That would then allow our marine capabilities to go out and make an interception.”

The Minister said local fishing of the EEZ stood to provide another revenue stream, worth millions annually on the international market.

As Government works to set up a land facility to service offshore fishing, he said, the question would be how to raise money for boats and equipment.

“What I’m considering is a model borrowed from the Bahamas, where they developed the Arawak Cay Port,” the Minister said.

“They had a public offering to the citizens and residents, and the shares were oversubscribed by three times. It was taken up by Bahamian citizens. By a public offering, Bermudians could invest in this private enterprise, and people can have a direct benefit and interest in our fishery. I know we have quite capable fishermen on this island, and in addition it would create employment opportunities for a lot of our young men who are more trade-oriented.”

According to a Ministry of Transport spokesman, plans to cash in on commercial airlines will be elaborated on in a forthcoming press conference.

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