Heyliger urges GEBE to provide information on tariff buildup

POSTED: 06/13/11 1:01 PM

St. Maarten – Shareholder Representative for utility provider GEBE and Vice Prime Minister Theodore Heyliger has advised the company to provide its tariff buildup to the Bureau Telecommunications & Post. The Bureau provides government advice on the company’s tariff.

The government has requested the information on the buildup several times and the company’s management has informed them that they consider some of what has been requested proprietary information. Heyliger does not agree.

“I have said that they have no choice. I don’t know what the issue is. They have to tell us what the costs are so we understand the buildup,” Heyliger said on Sunday’s For the Record with Eddie Williams on Radio Soualiga 99.9 Choice F.M.

The pressure to regulate the tariff has mostly to do with the fuel clause. Residents very often complaint about the clause saying it causes them to pay double and triple what they are charged for actual consumption. In order to ease the burden the Ministry of Tourism, Economic Affairs, Transportation and Telecommunications has now ordered the company to adjust its tariff so that the consumers pay for the cost per barrel of fuel, not the additional costs. That order could lead to the company being in default of its loan agreement with Pacific Mutual Life, which requires they maintain a specific debt to income ratio.

Losses

One of the additional costs covered by the fuel clause is the losses that the company makes in its core business of water and electricity. According to a report by the supervisory board the company is losing between 30 and 40 percent (between 6 million and 6.5 million guilders) of potential revenue on the water side of the operation and has 30 percent fuel wastage on the electricity side of the operation.

“The losses are being compensated by the fuel clause, which means GEBE is charging consumers more money to hide its inefficiencies,” Heyliger said.

Investments

While the minister agrees that the company must keep a profit ratio that will allow it make investments or to respond to an emergency, he believes GEBE having between 70 million guilders and 80 million guilders in cash reserves is too much.

“That kind of money in reserve is bleeding the economy and the consumers,” Heyliger said.

As shareholder representatives he’s now urging the economy to make investments with some of its money to, on the one hand stimulate the island’s economy, and to ensure the company is meeting its commitment to consumers on the other.

“We’re going to need more energy and water production as our population grows. We’ve only probably built one new water tank in recent years. We have not built enough water storage capacity in areas that are growing and that means there is increase pressure on the lines causing them to leak,” Heyliger said.

The minister also believes that GEBE should invest in the Waste to Energy plant that government wants to construct. He’s promoted it as a means to reduce the company’s fuel bill and as a way for the company to contribute to cleaning up the environment by helping to get rid of the Philipsburg landfill.

Cross subsidy

Heyliger also announced on Sunday that he’s written the Supervisory Board of Directors to query whether or not his instruction that the company not use funds generated here in St. Maarten to make investments in Saba and St. Eustatius is being carried out. He has yet to receive an answer. That and the battle over the tariff information have led Heyliger to state “It is very troubling to get information.”

Share division

Heyliger said Sunday he’s also pressing forward with finalizing the share division for GEBE, calling it one of the company’s biggest issues. Three accounting firms have issued reports on the division, which give Saba and St. Eustatius a minimal participation, but those two islands, which are now special Dutch municipalities have not agreed. One report gives them 10 percent, but the governments on both islands have demanded that there be an even split.

The day this matter is resolved Heyliger says GEBE will be able to carry out its full mandate as laid out in its new concession, which took effect on January 1, 2011. That new concession allows for the company to produce and distribute electricity, produce and distribute water, manage solid waste and treat sewerage.

 

Did you like this? Share it:
Heyliger urges GEBE to provide information on tariff buildup by

Comments are closed.