~ Lost NAf. 8 mil, to date, NAf. 1.1 million in downsizing cost ~
PHILIPSBURG–Prime Minister Leona Romeo-Marlin on Monday painted a grim picture of the “disastrous” and unsustainable financial situation of Postal Services St. Maarten (PSS), which she said has been bleeding funds since it began its operations and has lost close of NAf. 8 million to date.
She told Members of Parliament (MPs) during a public plenary session of parliament on PSS, that the company lost NAf.17,000 in its first year of operation and NAf. 1,100,000 in 2016. No actions, she noted, had been taken to stop this negative financial bleeding at the time. To date, PSS’ debt has ballooned into nearly NAf. 8 million. “PSS was not able to pay salaries and creditors because the monthly income of PSS is simply not sufficient to cover monthly expenses,” the PM told Members of Parliament (MPs).
PSS was established in October 2010 and began its operations as of October 11, 2011, with all staff of its predecessor Nieuwe Post Netherlands Antilles NPNA and no capital investment. In 2012, PSS was officially designated by the Kingdom as the operator responsible for providing postal services in St. Maarten. PSS has been making losses every year since its establishment.
“To keep PSS in operation and to avoid that creditors declare PSS bankrupt, the government of St. Maarten has been financially supporting the operation of PSS. The passing of Hurricanes Irma and Maria has made the operation and financial situation of PSS worse. The PSS building was severely damaged and PSS was forced to look for another location. A solution was found in a building next door, but this building was too small for the entire staff,” she said.
In the midst of the company’s financial troubles, members of PSS’ entire Supervisory Board of Directors resigned and a new board was later installed. Leona-Marlin said the financial development of PPS has been characterized as “disastrous and not sustainable.”
She said immediate measures were necessary to correct and improve the financial situation combined with securing the future viability of the company. Immediate plans included the reorganizing and downsizing of the company. “Government decided not to continue with the unsustainable financial situation of PSS. Several options and financial possibilities were discussed. Due to the negative financial situation of PSS it was and has been difficult to find a third party to invest in PSS. We looked and are still looking,” she said.
The PM said as Shareholder representative of PSS, in May 2018, she requested Government Accounts Bureau SOAB to conduct a manpower and financial assessment of PSS. One of the recommendations included putting the company’s monthly income in balance with its monthly expenses by downsizing personnel.
Based on SOAB’s recommendations, a workgroup consisting of PSS management, St. Maarten Communications Union (SMCU) and SOAB was formed to execute the recommendations of SOAB. Government decided to finance the downsizing from its budget by paying a reduced salary pay-out, lump sum pay-out and voluntary leave pay-out to affected workers in monthly instalments, totalling NAf. 1,173,860.
As the PSS building had been destroyed by the 2017 hurricanes, and PSS was temporarily located in another building, government decided to repair the old Civil Registry office to reallocate PSS on government’s expenses. In October 2018, PSS moved to the new location and began operations with a downsized staff.
The PM said PSS has been managed by an assistant manager for a long time and a manager with commercial and financial expertise has to be appointed to secure “a good and stable future” for the company.
“Government has already proposed to management and the supervisory board of PSS to convert PSS into a postal boutique where different series can be offered to the public such as money transfer, e-commerce, special courier services for government-owned companies, foundations and other businesses in St. Maarten and others.”
She said PSS’ management and its supervisory board are preparing a short- and long-term business. Pending the results of the long-term plan, government will decide to look for a strategic partner for PSS. She stressed that for PSS to compete with giants in postal services such as FedEx and DHL, it is necessary for the postal law to be changed to allow PSS to offer more services. More cooperation with other postal services in the Kingdom can also lower cost of operation and improve service to the public. PSS will also need to continue using the services of the Postal Union of which it is already a member, to remain on top of developments of postal services.
Source: The Daily Herald https://www.thedailyherald.sx/islands/85333-pss-financial-situation-disastrous-bleeding-funds-since-established
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