Port’s liquidity currently stands over $20 million | THE DAILY HERALD

PHILIPSBURG–The liquidity situation at Port St. Maarten currently stands at more than US $20 million, Minister of Tourism, Economic Affairs, Transport and Telecommunications (TEATT) Stuart Johnson told Members of Parliament (MPs) during a public meeting about the harbour and airport on Friday.

Johnson said that based on draft the 2019 budget, it is expected that a $1-million surplus in cash flow can be anticipated at the port. “Very little cash flow from investment will be generated in 2019,” he stressed.

He was at the time providing answers to questions from MPs.

In outlining the port’s “wish list,” Johnson said the port wants confirmation that it will receive a waiver on its requested two-year exemption on the payment of its concession fees. The port also hopes to get clarity from the World Bank on funding for the further strengthening of Pier 1 that has to be incorporated in the National Recovery and Resilience Plan, he added.

On the subject of business loss at the port as a result of Hurricane Irma, Johnson said that directly after Hurricane Irma, the port’s team had made an estimate of business loss as a result of the hurricane. “We expect that it will take until 2020 to regain and recover business to a point prior to Hurricane Irma.”

Loss of business is a result of less passenger and less fuel bunkering activities. The combined effect over a two-year period is estimated to be at $25 million.

On the issue of staffing, the minister said that as part of cost savings, the vacancies for certain positions were not immediately filled after the hurricane. However, he said that due to quicker-than-expected recovery, these vacancies are expected to be filled this year. For current staff, all benefits were in place and are projected to remain in place.

In answering a question about the status of cruise-passenger business in Philipsburg, Johnson said that, based on statistics, approximately 25-30 per cent of passengers take organised tours. Most tours are three to four hours in duration. The remaining time is left to the passenger to determine how to spend the remainder of the day.

Regarding passenger movement to Philipsburg, he said approximately 20 per cent of the passengers walk to town to either shop or for a beach experience, or take a taxi to venture around the island. Thirty per cent of the passengers take a water taxi to one of the three drop-off points in Philipsburg to either shop, to enjoy the beach experience or venture off on a bus or taxi to see the island, including French St Martin.

In terms of the port’s impact on the country’s gross domestic product (GDP), Johnson said that for the period 2014-2016, the average daily expenditure of a cruise passenger was $173.66. Cruise arrival for same period was 1,870,000 persons.

“With this analysis, it can be said that for the period 2014 to 2016, the cruise sector contributed $325 million on average to the economy of St. Maarten. This represents an average of 30.1 per cent of island’s GDP. For 2018, the cruise industry contributed to country’s GDP approximately 32.9 per cent, given that there were 1.6 million arrivals with average expenditure of $217.25.”

He said that based on the current scenario, the port will have a limited amount of funds available for capital investment. The port is looking for funding for Pier 1 through, amongst other avenues, the World Bank. The port is also looking into a transfer of assets or private-public partnership to raise funds for capital investment.

In giving an outlook for the next five years, Johnson said that, assessing from current cruise visitor reviews, St. Maarten has regained its pre-Irma footing as a destination. However, tour experiences and options need to be enhanced to keep up with the growth of the industry.

In answering questions about Princess Juliana International Airport, Chief Executive Officer (CEO) Brian Mingo told MPs that currently, the airport is renting office spaces in the Simpson Bay and Cole Bay areas. He said these spaces are being used for the executive part of the airport operations. He explained that this is being done so that the airport terminal can be rented for commercial activities, as the value of leasing at the port of entry is premium.

He said all sections of the airport premises that are deemed habitable are currently being used to house human resources, technical and commercial divisions.

The airport has a projected shortfall of around $675,000 per month that is estimated to last over the next 24 months. This is also the projected reconstruction period of the airport.

The airport has been making its payroll in the last few months. PJIA has also requested liquidity support from government, which is being fulfilled. Mingo said that while the airport has a monthly shortfall, it is at the same time breaking even. The monthly shortfall is based on the projects done in the past, he said.

Source: The Daily Herald https://www.thedailyherald.sx/islands/87170-port-s-liquidity-currently-stands-over-20-million