St. Maarten Minister Meyers clarifies the way forward with GEBE

POSTED: 06/20/11 12:56 PM

St. Maarten – Minister Franklin Meyers was caught flat-footed on Thursday night when a local TV-program dealing with that day’s GEBE press conference created the impression that he had been lying at the Council of Minister’s press briefing on Wednesday about the content of a letter he had sent to GEBE about the new tariff structure. So yesterday, he gave a press conference of his own to clarify matters.

The Minister made clear that the purpose of the press conference was not to engage in a fight with GEBE.

“This is not about a fight between GEBE and myself. I just want clarity. I believe that Mr. Brooks (GEBE’s managing director – ed.) is a very capable engineer.”

Meyers provided the media with a copy of his letter to GEBE wherein he announces the conditional approval for the implementation of the new tariff structure on August 1.  Apart from what we already reported yesterday, the letter confirms that the government awaits a second opinion on the Kema-report about the new tariff structure from the Bureau Telecommunication and Post in Curacao.”

“I should have elucidated more on the way forward on Wednesday,” Meyers said.

“The tariff structure that was put in place in 1960 allows GEBE to charge 17 cents per kilowatt. As times changed and the operation became bigger, the company was allowed to add a percentage to the fuel clause to cover the additional cost. But when fuel prices soar, GEBE benefits, because it adds the same percentage to the fuel clause. Two percent of ten dollar is more than two percent of a hundred dollar.”

Meyers said that GEBE will not be able to continue its operations at 17 cents per kilowatt.

“That does not reflect the time. We have to find a balance that gives people electricity and allows GEBE to remain operational.”

The Minister wondered about the profit GEBE manages to make in spite of its inefficiencies.

Clarifying this term, he identified 34 percent water loss on the water distribution system and regular power outages as such.

“When there are outages, GEBE is not making any money, but at the end of the year they still manage to show a profit of 10.9 million guilders. GEBE’s return on investment is 12 percent; that is high. A company making 8 percent on its investment is doing really well.”

The Minister added that the water loss represents “free water for 5,000 households.” He also wondered about what happened to all the profits GEBE has been making over the years.

“The people need relief, though this should not go to the detriment of GEBE. Why can’t they give people relief?”

Questioned about this last statement, the Minister conceded that the GEBE-tariffs are set by the government and not by the company.

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