PHILIPSBURG--The Supervisory Board of Directors (SBOD) of NV GEBE has warned that government’s proposed cut to the fuel clause is “not economically sound” and would cost the company up to XCG 21.9 million per year and threaten its financial stability and long-term operations.
In response to the shareholder’s recent request for the board’s immediate resignation and growing public concerns over GEBE’s performance, the board defended its approach and countered with several relief proposals it says are more sustainable.
“Government’s attempt at a ‘grand political gesture’ is not economically sound and could trigger a new cycle of instability and financial constraint on NV GEBE. The action as proposed will result in a yearly cost of approximately XCG 18.8 million to XCG 21.9 million to the NV GEBE operation. Pay now or pay later; this is not justifiable,” the board stated. “It’s a large number and impacts the cash available to pay the largest supplier (SOL) of NV GEBE, which if not paid the Country goes ‘black’,” The board says in a lengthy advertorial published elsewhere in this newspaper.
The board said it is not opposed to relief and has already presented several options to the Shareholder Representative. These include a social assistance programme in partnership with the Social Services Department valued at XCG 600,000 annually for the most vulnerable, with government asked to match the amount. “But we have not received any feedback,” the board noted.
The board said GEBE is also in discussions with SOL Antilles NV to negotiate fuel cost reductions, which could result in XCG 12 million in savings over three years. “This will be passed directly to its customers on a 1:1 basis. This is something that NV GEBE is busy with on their own,” the board explained.
Other relief efforts currently in place include senior assistance programmes, flexible payment plans, and continued efficiency in managing heavy and light fuel oil ratios in electricity generation.
Additional proposals were made directly to government, including the waiving of the XCG 7.7 million annual concession fee charged to GEBE, which the board says could be passed on to consumers. It also suggested eliminating the XCG 3.8 million throughput fee on fuel charged to SOL, which would allow savings to reach the people of St Maarten. GEBE further proposed a fixed discount on residential bills for low-income earners, to be financed by government, with GEBE contributing in a limited way.
“These proposals aim to ensure that the appropriate entities provide relief to the people of St Maarten. NV GEBE’s contributions must stay within its financial capacity, and this has been clearly communicated to the government,” the board stated. “It is important to emphasise that NV GEBE is a utility company, not a social organisation. While we champion giving relief, NV GEBE must do this within the confines of sound financial decision-making for the company.”
The board also addressed ongoing debate over the fuel clause, reiterating that GEBE does not control global fuel prices. “Any savings made in purchasing fuel are passed onto the people of St Maarten as can be seen when the tariff goes down,” the advertorial read. “NV GEBE cannot guarantee what the fuel price would be and thus are of the opinion that any talk of relief in the fuel clause can only be borne by the supplier of the fuel.”
GEBE warned that forcing the company to absorb fuel costs would “cripple our capacity to invest in infrastructure improvements,” especially as it moves toward sustainable energy solutions. “That also costs money. It’s not magic and will not happen overnight, but if the company cannot afford it, nothing will happen at all.”
To guide future decisions, NV GEBE is conducting a comprehensive tariff study, its first since 2010, which is expected to be completed by September 2025. “The findings and recommendations of the RAC report are being taken into consideration into this study, but the fact is NV GEBE cannot implement a fuel clause reduction across the board or undertake tariff adjustments without a thorough and well-substantiated study,” the board said.
The board also defended the efforts of GEBE staff and management, especially the late Troy Washington, in keeping services running through severe challenges. “Despite facing overwhelming challenges, their tireless efforts kept critical services running, reduced disruptions, and restored essential systems and processes under tough conditions.”
“Ultimately, NV GEBE’s mission is to serve the people of St Maarten while ensuring the business is ran properly,” the board said in the advertorial. “Political rhetoric and short-term ‘popular’ measures should never outweigh careful management and responsible decision-making. It is time to move beyond divisive narratives and engage in transparent, fact-based discussions aimed at achieving financial stability, improving service reliability, and securing a sustainable future for NV GEBE and the community it serves. That’s how trust is restored.”
https://www.thedailyherald.sx/islands/gebe-board-govt-s-proposed-fuel-clause-cut-grand-political-gesture-suggests-its-own-relief-measures
