Terminating RGM-contract (New Govt. Building) requires 48 million-loan

POSTED: 01/22/13 12:47 PM

St. Maarten – The government wants to save 1 million guilders in the 2013 budget by getting out of the contract with Trinidad-based developer RGM for the new government administration building on Pond Island. This appears from the elucidation the board for financial supervision Cft provided with its comments on the draft 2013 budget.

The Cft notes that the government has to borrow 48 million guilders to get out of this contract, but that this loan is not mentioned in the draft budget.

The Cft criticizes the draft budget’s capital account because there is a difference between the amounts that are mentioned in the text and those in the figures. In figures, the draft budget reports the intention to invest 30.3 million guilders with 30 million guilders in loans, but the text mentions higher amounts.

The Cft reported that it is not possible to assess how the capital account holds up against the interest burden standard. Interest on loans cannot exceed 5 percent of the average government revenue over the past three years. The financial supervisor stated that for the time being there is enough space under the interest burden standard (approximately 15 million guilders) but that a review is only possible once it becomes clear which plans the government has for contracting new loans.

 

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