Draft budget 2014: Limited space for investments

POSTED: 01/13/14 1:28 PM

St. Maarten – The wish list of investments by different ministries totals almost 300 million guilders, but there is no money available in 2014 to execute all these plans. This appears from the draft 2014 budget that is scheduled for handling in the Central Committee this morning. The government intends to contract 200 million guilders in loans – an option that opens up after the parliament approves the budget and the Board for financial supervision Cft gives it a positive advice. Notably missing in the investment plans is the purchase of the Emilio Wilson Estate.

“Because the government was unable to contract loans during the past couple of years there is now an arrear within all ministries with regard to the realization of necessary investments,” the draft budget states. “The largest bottlenecks have been solved with a number of investments in 2012 and 2013 that have been pre-financed from our own resources.”

The government still intends to apply for loans for these investments. About the 300-million guilder wish list, the budget states: “It is considered unrealistic to think that it is possible to invest this amount within one year.”

Instead the government intends to borrow 200 million guilders, expecting that the realization of all projects will not be possible within one year either. This makes it possible to spread the loans.

Investments by the Vromi-Ministry attract most of the attention, because they should have included the purchase of the Emilio Wilson Estate this year. Last year it was understood that the purchase hinged on a balanced 2013 budget. When that approval finally came in 2013, the Board for financial supervision Cft reluctantly let it go, but it also advised the government to wait with contracting loans until after the approval of the 2014 budget.

In 2013, the government booked a 30.6 million guilders post for the purchase of the estate, but it has been completely removed from this year’s budget. Vromi-Minister Maurice Lake hinted in a press statement last week that the government is committed to purchasing the estate, but he also hinted at the possibility to return to the plan to involve the cruise industry – and with it the plan to establish a Rain Forest Adventure Park on the premises – is on the government’s mind. Environmentalists vehemently oppose the adventure park.

Which investments Vromi will do is not immediately clear from the draft budget either: “The investments are predominantly in infrastructural projects, including the ring road. These projects will be executed over a number of years.”

There is no reference to the plans for the construction of a $100-million waste-to-energy plant on Pond Island and it seems that this year nothing will be done with the ring road either.

Investments by the Ministry of Justice include the expansion of the Pointe Blanche prison and the completion of a youth detention center in Cay Bay.

How exactly the government intends to finance the expansion of the St. Maarten Medical Center remains unclear as well. The draft budget states, rather mysteriously: “The loan for the expansion of the SMMC will be contracted for or by the realization of the new wing for the Foundation Sint Maarten Medical Center.”

In its preliminary advice about the 2014 budget, the Cft did not approve of the intention to borrow money on the government’s ticket for the expansion of the medical center. The Cft noted that investments must meet the requirements of capital investments based on the System of National Accounts It is not possible to take loans for entities that operate outside of the government’s direct influence, the Cft concluded its advice with a clear reference to the St. Maarten Medical Center.

It seems now that the hospital intends to sell the land for the expansion to the government, that the government then will build the expansion and that the hospital will lease it back. Confronted with such a construction, Dutch politicians told this newspaper last week that they doubt whether the construction of the hospital-expansion could be brought under the umbrella of capital investments.

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