Territorial Councillor for the “Generation Hope” faction Opposition, Jules Charville.
MARIGOT--Opposition Councillor in the Territorial Council Jules Charville claims the Collectivité is risking bankruptcy if it continues paying the cost of keeping Air Antilles afloat with no significant revenue. Investment has reached 20 million euros over 15 months from a deal that he warned from the outset was “a big mistake to enter into.”
During an extensive interview, Charville went into detail about the offer to take over the airline a year ago after the parent company Compagnie Aérienne Interrégionale Express (CAIRE), went into compulsory liquidation. The Collectivité acquired four aircraft for 400,000 euros and 120 of the original 218 employees.
Once the deal was closed the airline was grounded to wait for the Air Transport Certification (ATC) approval for the planes to fly. This was first estimated at three months but in the end took 11 months to obtain.
“It was a risk because those aircraft were attached to the remaining part of a 21.5-million-euro loan to be paid back at 300,000 euros per month. First of all you don’t know when you are going to fly, you have 120 employees to pay every month, and the 300,000 euros has to be paid every month, not knowing when you will have any revenue,” Charville explained.
“Costs for the Collectivité then were approximately 2 million euros per month. The deal required an amount of 6 million euros to be put on a chequeing account and 6 million euros requested by Civil Aviation to guarantee the payment of those costs for three months without activity. And in the meantime the four planes were sitting idle and needed maintenance, again more money needed to maintain them.”
According to the Territorial Accounting Chamber (CTC) the Collectivité as 60% shareholder is paying 100% of expenses while CIPIM, the holding company of EDEIS, operator of Grand Case Airport with the 40% share is not paying anything. The question was asked why that is, at the Council’s plenary session on November 14, but no answer was received, according to Charville.
With 13.2 million euros already invested, a 4-million loan was subsequently requested for maintenance of the planes, taking loans up to 17 million euros which created a huge hole in the budget. As it stands only one plane out of the four is operating.
However, President Mussington insisted all four planes will be flying by the end of the year with revenue coming in and the airline will be profitable in four years.
“Air Antilles is operating at a loss,” Charville argued. “Air Caraïbes has five to six flights a day compared to two flights a day for Air Antilles. You can’t compete like that. My advice to the President was to cut your losses and stop the bleeding.”
10-million-euro loan to finish two Colleges
He said the consequence of the 17 million expenditure is that the Collectivité does not have the money to finish the two Collèges under construction in La Savane and French Quarter, and pay contractors. But that has been resolved with approval of a 10-million-euro loan from Agence France Developpement (AFD) as a matter of urgency, to be paid back over 20 years.
It also emerged that there is an outstanding balance of 3 million euros to be paid to a company, taking money put into Air Antilles up to 20 million euros.
“The Collectivité is gradually going to go bankrupt if it continues down this path. In my opinion
it should try to sell the company and get back some of the money. It was a big mistake to be the biggest shareholder because it has the biggest part of liability. It should have taken a smaller stake.
“It’s very concerning to me that projects cannot be finished, and even new projects cannot be started because of this financial situation. It’s why nothing is happening at Albéric Richards Stadium and Omni Sports Hall. It’s very worrying. We’ve been trying to save Air Antilles and in the process bankrupting the Collectivité.”
Beauperthuy succession land
In other agenda points from the November 14 Council meeting, on the Beauperthuy succession land issue Charville disclosed a deal was agreed with the administrator whereby Semsamar will buy three lots and the Collectivité will buy, with a loan, other lots, and land agency Terres Caraïbes will buy the remaining lots; in other words, three owners.
“The problem with that scenario is that when Terres Caraïbes buys something it gets a title for it. As owner they will hold those lots for five years and then sell them back to the Collectivité, if it has the money to buy them back,” Charville explained. “The question was asked what happens if the Collectivité doesn’t have the money, and the answer came back to extend for another year, and if still can’t pay, Terres Caraibes will retain ownership.”
Terres Caraïbes already has plans to purchase other plots of land on behalf of the Collectivité via expropriation or pre-emption, which it has rights to do when the plot is needed for “public utility”. Land is earmarked for a new power plant in the Agrèment roundabout area.
“Within a year millions will be invested and after five years you better have the money to pay the agency back; if not, they will remain owners. In my view this method is too risky and we could lose the land instead of the original intention of preserving the land for future generations of St. Martiners.”
Charville said Mussington was negotiating for that time limit to be extended to 10 years.
Separately, he said the recent agreement to create a land agency to “create order of disorder” and facilitate titles for St. Martiners is a good initiative. He disagreed with the 50-50 partnership with the State instead of the Collectivité being in control, but did not vote against it.
Domain land
On the domain land issue (50 pas Géometrique), the zone that stretches from the water’s edge to a distance of 80 metres inland, this zone was owned by the State where legally one was not allowed to build.
But in the ’60s the mayor at the time, Dr. Hubert Petit, authorised building in these zones as there were not enough areas to build on. Today there are owners of many houses and dwellings, particularly in Sandy Ground, who need to purchase the land their property is occupying, in order to get a title.
Since 2007 the competence for this issue was transferred from the State to the Collectivité and it has full authority to decide on the price per square metre to be paid in order to obtain title. The price has varied over the years and is currently set at 33 euros per square metre.
Given that many inhabitants in these zones are of poor means, they are unable to pay, requiring the price per metre to be reduced to a lesser or symbolic amount, which most are in favour of.
However, Charville objects to the State advising the President on this issue when it is the Collectivité that decides the price.
“The President is reluctant to lower the price, although he’s not saying it, because the Collectivité needs money, but the people should not have to wait so long for a lower price.”
Préfet intervention
In a further embarrassment for the Collectivité, Préfet Vincent Berton issued a formal notice for the Collectivité to pay two outstanding invoices after suppliers complained when there was no response. The two outstanding invoices were in the amount of 19,200 euros for legal fees and 91,925 euros to a company that had been doing work since 2020. The State has stepped into the budget of the Collectivité to insure payment to those suppliers.
Mussington explained at the Council meeting that the Collectivité was “not in a position to assess the services provided because the agents in charge of the dossier had left” and in the second case “unable to pay because the contract had ended and had no legal basis.”
The préfet also ordered the Collectivité to construct a drainage system at the new college in La Savane to prevent the Gendarmerie and fire station from being flooded in heavy rains, and gave the administration two months to do it. The State has done the work and he will force the Collectivité to pay the bill.
