By: SXM Talks
PHILIPSBURG – After years of blackouts, billing chaos, and boardroom shake-ups, the call to reform St. Maarten’s sole electricity and water provider, NV GEBE, is growing louder. Now, a bold proposal is on the table: take day-to-day operations out of government’s hands and lease them to a private operator under a strict concession agreement.
A troubled history
For over a decade, GEBE has wrestled with governance instability and technical breakdowns. In 2022, a ransomware attack crippled its billing and financial systems, leaving thousands of customers in limbo. Since then, residents have endured delayed bills, disputed charges, and lingering cybersecurity risks.
Power generation has fared little better. Mechanical failures—including crankshaft problems in major engines—have repeatedly forced GEBE into rolling blackouts. Outages continue to plague neighborhoods, with a country-wide blackout as recently as March this year triggered by a short circuit in the utility’s medium-voltage room.
Meanwhile, leadership turbulence reached a peak this summer when the government, as shareholder, requested the resignation of GEBE’s entire Supervisory Board. For many observers, the turmoil highlights what years of internal reform have failed to fix.
The privatization pitch
The proposed model would not be a full sell-off. Instead, government would retain ownership of the power plants, water facilities, and distribution networks but lease operations to a private operator under a long-term concession—likely 15 to 20 years.
In return, the operator would pay government an annual concession fee while agreeing to tariff caps, a transparent fuel-cost formula, and a service-level agreement (SLA). The SLA would lock in hard metrics: limits on outages, maximum restoration times, water quality standards, billing accuracy, and cybersecurity protections.
Consumers would be protected from runaway prices by maximum electricity and water tariffs. A “lifeline” block of power and water could be guaranteed at lower rates for households, the hospital, and schools.
Perhaps most importantly, the concession would require new investments in reliable generation, grid automation, water-line replacement and renewable energy: areas where GEBE has struggled to deliver.
Lessons from abroad
St. Maarten would not be the first to explore such a model. In the Dominican Republic, electricity distribution was privatized through concession-style arrangements in the late 1990s, improving collection rates and attracting new investment to stabilize the grid. Similarly, Chile’s water sector was successfully privatized under a regulatory framework that capped tariffs while obligating private operators to meet strict service and quality standards, transforming one of Latin America’s weakest systems into one of its strongest.
Closer to home, Bermuda offers an instructive island example. Its sole power provider, BELCO, is privately owned and regulated under a government concession that sets service standards and tariff controls. Despite challenges common to island grids such as hurricanes, fuel dependence, and high import costs, BELCO has maintained reliable supply while investing in new generation and grid upgrades.
These cases show that, with proper safeguards, a concession can attract capital, improve efficiency, and still protect consumers.
A crossroad for St. Maarten
The debate over GEBE comes at a critical moment. The island’s economy, highly dependent on tourism, relies on dependable electricity and water services. Continued outages, billing disputes, and uncertainty risk damaging investor confidence and eroding public trust.
By moving to a concession model, St. Maarten could set clear rules (including guarantees for moving to renewable energy), enforce accountability, and ensure that every household and business enjoys the reliable service they deserve.
For now, the question is whether government and those at the helm at GEBE are ready to let go of direct control of GEBE’s operations in exchange for a promise: affordable, reliable electricity and water, delivered on time and without excuses.
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