The Committee for Financial Supervision CFT is very concerned about the finances of Princess Juliana International Airport (PJIA), Port St. Maarten and utilities provider GEBE (see related story). Mind you, these are three of the most important and basically indispensable institutions for the country and its tourism economy.
The news does not come as a huge surprise. The World Bank in its recent report stated that GEBE would be insolvent by early next year, while Prime Minister Leona Romeo-Marlin last Wednesday confirmed worrying liquidity issues at SXM airport.
Further details were not provided on the harbour, but it’s no secret that the facility took quite a hit in terms of both lost business and physical damage from Hurricane Irma. What’s more, not too long ago this government-owned entity had to pay a settlement of US $10 million in the botched Zebec deal, while according to the Prosecutor’s Office approximately $8 million was embezzled from the company between April 2012 and July 2017, plus another $3 million from July 2012 to June 2014.
One does not have to be a rocket scientist to figure out that being deprived of such amounts would negatively affect the bottom line. Expecting the Harbour Group of Companies to come up with the annual concession fee of five million Antillean guilders next year is therefore most likely not very realistic.
The same can be said for GEBE, which was still awaiting its final insurance payment and a grant from the Recovery and Resilience Trust Fund managed by the Wold Bank to complete the post-Irma restoration of facilities, including streetlights. Increasing the already relatively high water and electricity tariffs is not a desirable option certainly under the current social circumstances.
PJIA does not pay a concession fee due to its running commitments for financing the now unusable terminal. Although at least part of the insurance claim has been collected via the courts, that reconstruction money cannot be used to cover operational cost. An intermediate loan is now being sought from the World Bank to tide over the airport. Management had been criticised for not securing the roof with the then-available help of Dutch military to dry out the facility more quickly, presumably because of the pending insurance. This reportedly only added to problems such as water-logged walls and equipment, mould, etc. On the other hand, getting a provisional facility with tents that was later expanded and improved up and running understandably had priority, as is now the case with a project to put the building’s ground floor back into service for the upcoming high season.
One thing is clear. These companies for the time being may best be considered as government’s “cash cows” no more.
