~ Says CEO reportedly making unilateral decisions ~
PHILIPSBURG–United St. Maarten Party (US Party) leader Frans Richardson said on Monday that the current United Democrats/St. Maarten Christian Party (UD/SMCP) government and its indecisiveness on Princess Juliana International Airport (PJIA) is a “riches of embarrassment” with one minister contradicting the next while facilitating a developing rift at the airport that is stifling any kind of vital development there.
Richardson also said that while Prime Minister (PM) Leona Romeo-Marlin and PJIA Chief Executive Officer (CEO) Brian Mingo stated that they are not looking at any other financing options for the airport, apparently Mingo, with the PM’s knowledge, has reportedly signed an agreement to source alternative funding.
“There are too many contradictions and twisted stories surrounding funding for the airport,” Richardson said in a press statement on Monday. “And our country is the ultimate loser.
“Making matters worse, we have reports of the CEO signing off and reversing decisions unilaterally without getting the support or approval of the Chief Operations Officer (COO), both of whom form part of the Managing Board along with the [Chief Financial Officer – Ed.] CFO. Many fear that the actions of the CEO are leaving the company at risk for court cases should these decisions be challenged or annulled. There is no direction at the airport from government or the CEO.”
Richardson said that while United States (US) pre-clearance is one aspect that should come along with a financing option, he does not want the discussion to just focus on that. He said the World Bank/European Bank financing option falls far short of what is needed, has proven to be a political football, and allows the Dutch too much control over St. Maarten’s most significant strategic asset.
According to Richardson, what PJIA needs is consolidated funding under favourable conditions to allow, among other things, restructuring or buyout of the balance on existing bondholders’ loan to allow more flexibility; additional liquidity support for operations cash flow shortfalls during the reconstruction period; funds to construct a new, modern fire and rescue facility at the airport; funds to construct a proper fixed-base operations (FBO) facility to maintain and attract more private jet business and to prevent losing this business to other islands; and funds to construct a US pre-clearance terminal facility that would allow for significant growth of US passenger traffic and increase in new airlines landing at PJIA, with an associated increase in revenues for the airport and St. Maarten as a whole.
It also needs to have released and thus obtain access to the insurance funds being held by the bondholders; to execute the reconstruction of the airport using its own human resources to manage projects as it has done in the past, without unnecessarily having the project cost increased due to being forced to hire additional project management firms while already having the capabilities locally and in-house; and use its already established in-house procurement processes that were used in previous expansion projects, thereby avoiding implementation of new, lengthy third-party procurement processes which will only increase cost and time for executing the project.
Richardson said the JPF Corporate financing option of US $240 million seems like an alternative option that, once studied carefully and with due diligence conducted, would allow all of the above, including the possibility of establishing a dividend policy which benefits the country and, by extension, the people. The JPF option, he said, offers a complete financing package, and released insurance proceeds can be placed in a hurricane reserve account or other reserve.
“It offers a low interest rate despite the current Moody’s non-investment grade rating, a debt service coverage ratio flexibility which will be initially low and with increases over time in alignment with the company’s recovery, and the minimisation of potential need for waivers, no prepayment penalties, pre-clearance, financial closure can be completed in two months, thereby allowing for construction to start already by January 2020 and completed by June 2021, and [PJIA] would be committed to one loan with one institution, namely Vidanova Pension Fund and consortium, which will be easier to manage,” Richardson said.
He stressed that this back-and-forth playing politics with the airport is making St. Maarten look amateurish to the rest of the world and to people who are thinking of doing business here.
“It is obvious that this government is in a state of confusion, mired in distrust and in-fighting. This government is the biggest impediment to progress at the airport and something will have to be done soon to address this issue and finally get our airport on the path back to one of the best in the Caribbean. It will not happen with the current cast of characters in government,” Richardson said.