Monday, May 20th

LATEST:
You are here: Home

Editorial - Costly oversight

The answers on the settlement between the Harbour Group of Companies and Zebec provided to Parliament on Tuesday afternoon were to the point and clear. Deputy Prime Minister Dennis Richardson, assisted by Port St. Maarten Chief Executive Officer (CEO) Mark Mingo, said there was nothing sinister about the matter and it basically boiled down to a dispute over giving further content to a general property lease agreement for a Dutch Village to be built by the developers of Blue Mall.

The latter’s interpretation of the deal was not deemed favourable for the Harbour, particularly its separate arrangement with Royal Caribbean Cruise Lines (RCCL) that initiated an own US $100-150 million venture, including a hotel near the area in question. There also could be a negative impact on financing schemes with several cruise companies and the related growth strategy of the port.

The impasse led to a $100 million damage claim in court of which the final outcome and duration was uncertain, with all possible consequences for other plans and vested interests. Hence a settlement ultimately had been preferred by both parties, the minister explained.

Richardson replaced Prime Minister Marcel Gumbs, who is abroad and would have addressed the issue as Minister of General Affairs, also because the new Tourism, Economic Affairs, Transport and Telecommunication (TEATT) Minister Ernest Sams only recently took office. In any case, the idea is to make the entire Council of Ministers, not just one of its members, shareholder representative, because – it was revealed during the meeting – in the past individual ministers had taken actions regarding Government-owned companies that did not reflect the position of the remaining cabinet.

A $10 million loan with five per cent interest and a 60-day term from Social and Health Insurance SZV for the Port to help settle the case has now been confirmed, with the argument that it was seen as a solid local investment of which the agency has many also abroad. SZV is one of the holders of Harbour bonds issued via the Central Bank of Curaçao and St. Maarten (CBCS) too, while its director had the authority to do this.

At the end of the day one still has to wonder, as did DP leader Sarah Wescot-Williams, how an agreement of such magnitude and taking into account prior commitments could be so broad that apparently insurmountable differences arose over the land surface to be developed, after a building permit even was given out for what turned out to be the “wrong” number of square metres. If this case can be called an oversight it was certainly a costly one, where apparently the best was made of a basically bad situation.