~ Bondholders concerned about instability ~
PHILIPSBURG–The agreements to finance the reconstruction of Princess Juliana International Airport (PJIA) have not yet been signed, said caretaker Finance Minister Perry Geerlings at the weekly Council of Ministers press briefing on Wednesday morning.
These agreements, which were set to be signed last week in Washington D.C., consist of a grant from the Dutch-sponsored Trust Fund administered by the World Bank, to the government of St. Maarten that government will pass on to PJIA in the form of a loan, a loan from the European Investment Bank (EIB) to the St. Maarten government, two on-lending agreements from the government to PJIA, a concession-undertaking agreement with the bondholders, and a security agreement with the airport which safeguards PJIA’s liquidity support during the estimated 18-month reconstruction period.
Geerlings said the bondholders are concerned about the motion of no confidence against five ministers which was passed by Parliament on September 26, and whether the incoming interim government will honour the agreements with the World Bank and the EIB or instead seek to reverse them.
The motion of no confidence also instructed the caretaker Council of Ministers not to enter into any contracts with third parties, whether collectively or individually. The World Bank and the EIB are considered third parties.
Geerlings also said that legal counsel of the National Recovery Programme Bureau (NRPB) had come out with a legal opinion which said it would be ill advised to sign the airport financing agreements because of the motion of no confidence. He said he does not agree with the opinion of this legal scholar.
Another legal scholar “who is specialised in constitutional law” has since given an opposing opinion, said Geerlings. This opinion says there is no reason to delay the signing, because it is an ongoing government affair. Governor Eugene Holiday requested that both the caretaker government and the incoming interim government follow through with the airport financing agreements.
There are two ways this impasse can proceed, according to Geerlings. One way would be to continue discussions with the bondholders and government lawyers. Geerlings said various legal scholars are currently making a qualified legal opinion, which they aim to finalise this week. This is to be shared with the bondholders to see if this will ease their concerns.
How quickly the agreements can be signed depends on whether government can convince the bondholders that “everything is good,” according to Geerlings.
Another way forward would be for Parliament to pass a motion that clearly supports the signing of the financial agreements with the World Bank and the EIB by the caretaker government. “What would immediately allow us to sign without anyone worrying about [the motion of no confidence – Ed.] … is [for] Parliament to say, ‘There is no problem,’” said Geerlings.
According to him, the NRPB gave government formateur National Alliance (NA) leader Silveria Jacobs a draft parliamentary motion which would enable the caretaker government to sign the agreements. He does not know whether this is “still in the works.”
Jacobs said earlier this month that she would form the next interim government given the conditions and concerns laid down in the formation document.
“The urgency of the matter [means] any further delay … will delay the reconstruction of the airport.
“On top of that, there is also a delay in making the necessary operational funds available to the airport so they can meet their monthly obligations, including the salaries and all the payments they need to make, to do business every day. …
“I am of the opinion that it is totally unnecessary that it reached this point. … I am very sorry that it is still ongoing while everything is ready to move.
“This is my personal opinion: [we are] being held hostage by legal opinions from lawyers left and right who are there to advise us, but we as government, we as people, need to take a decision about where we want to go.
“I am ready to sign, and I am ready to face anything that will come,” concluded Geerlings.
Source: The Daily Herald https://www.thedailyherald.sx/islands/91935-agreements-to-finance-pjia-reconstruction-not-signed