That GEBE is continuing with expansion of its electricity production and water storage capacity despite being in a difficult position is quite reassuring. In the last two days it confirmed the purchase of another 11-megawatt engine for about 30 million Antillean guilders, demolishing the main Philipsburg office to eventually construct a new building there, and boosting St. Maarten’s drinking water reserve from the current one day to three days.
Hurricane Irma in September 2017 damaged 80 per cent of the country’s streetlights while many of the resorts and other businesses that are normally the government-owned company’s biggest clients stayed closed for an extended period or are yet to reopen. In fact, the utilities provider lost a third of its revenues practically from one moment to the next, dropping monthly income from between NAf. 15 million and 18 million to between NAf. 8 and 11 million.
Seven of the 15 existing water tanks at the time were left in need of repair to the tune of more than US $7 million and five are still out of commission up to now. The overall damage to GEBE’s facilities was estimated at 40 million Antillean guilders, while NAf. 6 million had been spent on the recovery by the end of March 2018.
Nevertheless, NAf. 9.9 million was to be spent on trench works until 2021, including NAf. 1.32 million in 2017 after Irma, NAf. 2.29 million in 2018 and NAf. 2.14 million this year. A grant of 9.7 million euros for the restoration and improvement of the company’s infrastructure is being allotted from the Dutch-sponsored Trust Fund managed by the World Bank, be it with special requirements such as public tenders for all projects concerned.
The Committee for Financial Supervision CFT had warned last November that GEBE could be insolvent by early 2019 if nothing is done. A month later the General Audit Chamber of the Netherlands added that the company was losing NAf. 2 million per month with an income reduction of 22.3 per cent since Irma, while cash assets dwindled from NAf. 67 million in 2014 to NAf. 24 million in April 2018.
To be sure, GEBE’s situation remains serious, but if government pays what it owes the company and refrains from collecting the concession fee plus dividends, the problem can be kept manageable. The main priority is securing an adequate supply of water and electricity that is obviously also essential for fully reviving the local tourism economy.
