Heyliger sells share transfer agreement ahead of cabinet vote

POSTED: 04/12/12 12:34 PM
Minister of Energy Affairs Theodore Heyliger
 

“There’s going to be a lot of pressure”

St. Maarten – Minister of Energy Affairs Theodore Heyliger is selling the share transfer agreement he signed with Commissioners of Energy Affairs of St. Eustatius (Koos Sneek) and Saba (Chris Johnson) as a means to finally get Gebe to comply with the wishes of the Government of St. Maarten. The agreement, signed in Heyliger’s office last Thursday, establishes the share division between the three islands and stipulates the time frame (18 months) and procedure for the Gebe St. Maarten to buy out shares from St. Eustatius and Saba, which will create their own electricity companies.
“We have now a clear concise position done with Saba and Statia. For years this issue of having a foundation owning the shares of the company and then having a Supervisory Board consisting of all three islands has basically put a major divide between the company and that of government. And basically the policies that government has set out, the company basically doesn’t give a hoot what government says. So I would believe that now with the share transfer happening and then basically the dissolution of the foundation that now the company would have to adhere to the policies that government has brought about,” Heyliger said at Wednesday’s Council of Ministers press briefing.
The share transfer agreement is on the agenda of next Tuesday’s meeting of the Council of Ministers and Heyliger is expecting approval. Once the process is in full swing the minister expects that the new board will begin complying with the government’s push for it to invest in renewable energy sources and for a more permanent management to be installed.
“You can’t have it that the price of oil continues to be escalating and we’re doing nothing about it. We’ve asked the company on numerous occasions to do a renewable energy study. They basically never even bothered to answer to do it, so government itself commissioned a renewable energy study and that was done in, I believe January of this year, because it still takes some time for to get an advice through government even though we’ve changed to this country status, so I believe we should have the first draft of the renewable energy study by next month,” Heyliger said.
Though he will push the company harder on renewable energy after the agreement is approved Heyliger has said that he will not press the company to put itself at financial risk in order to comply with the government’s wishes. The latter is being done to ensure that jobs are not lost.
Heyliger also stressed on Wednesday that he does not expect Gebe to start using solely renewable energy, because that could be a threat to the consistent supply of power.
“One day the sun may not shine and one day the wind might not blow and you can’t tell the population: O K, well guess what guys, you gotta burn some candles for the day. So it requires a lot of thought and not just going out there and going haywire,” Heyliger said.

Board restructuring
Last Thursday’s signing will lead to changes in Gebe’s supervisory board of directors. The actual next step after the ratification of the agreement is that the Executive Councils of Saba and St. Eustatius and the Government of St. Maarten will send letters to the Board of Shareholding Foundation requesting the shares be transferred to each island. Heyliger hopes that will then lead to the share transfer. After that the government will have to appoint a new board, which will be vetted by the Corporate Governance Council based on an established profile. Heyliger sees the need for people with legal backgrounds, technical backgrounds, financial and economical backgrounds and people who have an open mind.
“Now that we’re going to be in charge of our electricity company finally, we cannot continue to overlook the issue of renewable energy. We cannot continue to overlook the issue of Liquid Natural Gas (LNG) for St. Maarten. We can’t continue not to look at net metering. We can’t continue not to look at a smart grid. We can’t continue hearing forever that we have seaweed problems with the cooling of our power plant. These things have to be solved. They have to be tackled and I expect that the new board and the management looks at these issues,” Heyliger said.
Other issues that Heyliger wants the company to move on are sewage and the waste to energy plant.
“Now this gives us the opportunity to fix the garbage problems, the sewage problems and tackle the issues of the water losses that has not been done over the last few years,” Heyliger said.
When it comes to the management Heyliger has said that the administration will follow the rules and not seek to appoint a new management but he believes that settling the share transfer will open the door “for the ball to start rolling.”
“There’s going to be a lot of pressure on the new board to show immediate results and not results that will take 10 years. The issue of management will have to be taken up, by the new supervisory board, as a matter of one of the first agenda points for the new board. Because again, with new management you get to lead also the new vision,” Heyliger said.

Regrettable
The minister also called it “rather unfortunate” that the current chairman of the Supervisory Board Julius Lambert has said he will not step down from the supervisory board until his legally stipulated term ends at the middle of this year. Based on a request from government sent by Prime Minister Sarah Wescot-Williams two other board members have already resigned as of April 15.
“I think with this new juncture where Gebe will be at in terms of finally the share transfer and I think a lot of new horizons and new vision, we need to create a new semblance for the company as well and basically start in a brand new direction. I believe it is time that Gebe, which used to be for all three of the islands in the Windward Islands and now will be only for St. Maarten and will be doing several different avenues, which means expansion of the company, rather than contraction of the company, because of the issue of sewage as well. So I foresee that by next year a new name for the company, new ideas for the company and it means then that we need to have a total new direction for the company, because now the company will have to begin to respond to government as its new shareholder,” Heyliger said.
‘End all and Be all’
Heyliger was also asked why he seemed to make the share transfer agreement the end all and be all of dealing with Gebe, when the government has the tool of the concession in its hands. His reply to that was “using the big stick policy” of putting the company in default of its concession has too many risks for the company’s loan agreements – including the one with Pacific Mutual Life – and for the 300 plus employees at Gebe.
“Then what? We go over to burning candles and using generators. That one decision can have drastic consequences. And that is why for example the share transfer was such a big issue. If you don’t own the company and it’s constantly in state of flux and someone else owns the company that is de facto St. Maarten’s. I think the governments of Saba and Statia now understand that they are really holding back St. Maarten. So if we can come to an agreement that for now 93 percent of the shares will come to St. Maarten and the other islands will share the seven percent, I think that is a far better route than going to battle with very costly results,” Heyliger said.

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