St. Maarten Government gets back payment on stamp duty this month

POSTED: 06/13/11 1:01 PM

St. Maarten – The government expects to collect a back payment of stamp duty from GEBE this month. The company has not paid the 25 cent duty, which it applies to all bills it sends consumers, since October 10, 2010.

The company has also told government that it cannot provide relief on the fuel to consumers until the Supervisory Board of Directors approves it. The management sent a proposal to the board on May 6, but has not yet received a reply. The relief would be on the fuel clause, which fluctuates based on fuel prices on the world market. The calculation is based on what the company pays for heavy fuel oil, meaning any additional expenses for purchasing light fuel oil is not passed on to consumers. GEBE’S plant uses 70 percent heavy fuel and 30 percent light fuel.

GEBE’s Managing Director William Brooks also announced in a recent letter that the company is experiencing a loss of 30 percent on its water distribution because of deficiencies in the water distribution grid. These deficiencies have increased over time and the company has decided to do repairs. The first step is for a team of specialists to conduct leak detection tests and repair the leaks they find. This is expected to reduce the current losses from 30 percent to 25 percent.

“We will do all in our power to reduce these losses in a short, sustainable, cost effective and timely manner,” Brooks wrote in his letter.

The plans announced by Brooks are confirmed by the Supervisory Board. A letter signed by the board chairman Julius Lambert reveals that the company will also conduct a verification of the electricity meters to identify thieves.

The Board also paints a darker picture of the losses when it comes to water distribution stating that losses have been 34.4 percent.  Losses for electricity are a lot lower (9.1 percent). IN terms of fuel efficiency the company uses heavy fuel oil for 67 percent of its operation and light fuel oil on 33 percent.

“The Supervisory Board has engaged management and requested management to come up with a plan of action to address this drain on financial resources of the company. These financial losses are all being passed on to consumers in the fuel clause, as GEBE has agreed with our major lender to comply with yearly financial performance measured by a debt service coverage ratio of no less than 1.5 each year,” Lambert writes in his letter to the Ministry of Housing, Physical Planning, Environment and Infrastructure.

 

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