~ Question need for third-party operators of port ~
PHILIPSBURG--“We are happy with the port we have,” was the consensus of representatives of St. Maarten’s taxi associations and tour operators speaking to The Daily Herald on Monday.
They are opposed to third-party companies potentially operating Port St. Maarten and raised concerns about the loss of local control over the commercial aspects of the port if a concession deal like the one proposed by Global Ports Holding (GPH) is struck between St. Maarten and a third party.
“[Persons in the cruise industry – Ed.] are saying we have the best port, why we can’t manage our port ourselves? Why our government can’t manage the port themselves?” said one representative of a taxi association who wished to speak on condition of anonymity.
The port’s management has been lacking in previous years, they said. However, the solution is to get someone locally “who can manage the port; not an outside party,” according to them.
Speaking directly about the potential concession deal GPH discussed in this newspaper last week, they were concerned that St. Maarten will gain only a percentage of the port’s profits for 20 to 30 years. Moreover, it is unclear exactly how much St. Maarten’s share in the profits would be.
GPH is the world’s largest private operator of cruise ports, currently operating 18 cruise ports around the world. GPH Head of Business Development in the Americas Colin Murphy, when asked what percentage is usually returned to concession-issuing governments in these types of arrangements, did not specify a number, saying percentages depend on several factors, including the amount of the initial investment.
However, he did stress that, as a private company, GPH is seeking to “operate it [Port St. Maarten – Ed.] as appropriately as we can to maximise the return for us and for the government and the people of St. Maarten.”
“You are losing a lot of revenue up front just to get a lump sum that is pretty,” said one of the representatives.
The most critical aspect for them is the loss of local control over the port’s finances. GPH confirmed last week that in a potential concession deal the company would control all the commercial aspects of the port (including tariffs, mooring fees, and operating cost) for a definite period.
They are concerned that a third-party company could raise fees and tariffs, or change the fee structure, and taxi drivers and tour operators would have no recourse.
“They could take it over tomorrow, and in one year the fees increase. We just signed a new agreement [with a cruise line], so for two years he has this new agreement [with a cruise line]. He can’t go back to the cruise line and say, ‘Hey, I told you $10, make it $20 now because the fees went up.’ They are not going to do it,” said a tour operator.
Even a structured fee change (like charging $1 per person instead of a flat rate per tour) may not seem like much, said another tour operator. But this would represent a five-fold increase in concession fees for every tour.
All this, he said, also affects St. Maarten in indirect ways. “I pay around $1,000 per month [in concession fees]; it would mean paying $5,000 per month. This means I’m not going to hire four guides, I’m going to be squeezing drivers to be guides. I might tell the mechanic to change the oil every six months instead of every three.”
When the issue of the company increasing fees was raised with Murphy last week, he said GPH always consults with locals about any potential fee changes, adding that the company “did not become the world’s biggest cruise port operator by making silly fee increases.” He also said the company would set up an oversight board to approve any fee or tariff changes. This board would be advised by local government and other stakeholders, according to him.
However, this explanation does not sit well with the group of taxi drivers and tour operators, who said a private company is only interested healthy profits for its investors. According to them, if the private company needs more income, it would undoubtedly raise fees.
For them, the loss of control over the port spells trouble for St. Maarten in more than just tourism. Speaking about GPH’s interest to operate the cargo port in addition to the cruise port, they said that the company could increase import tariffs, which would raise the cost of living as supermarkets and merchants would be forced to increase prices of goods moved through the port.
Port St. Maarten also controls Simpson Bay Lagoon, they said. Handing over the port and its entire operation to a third-party company, they warned, is effectively handing over the keys of St. Maarten’s economy to a private company.
In their view, the solution is to maintain the management of Port St. Maarten in the hands of government. “Why can’t we finance the upgrades of the port without losing our say in what happens there?” they asked.
