The Daily Herald

PHILIPSBURG--The GEBE operated in Saba and Statia at a loss of approximately NAf. 12 million from 2007 to 2009.
The findings, outlined in a report from the Dutch firm Deloitte dated June 17, lends credence to the claims of Commissioner Theo Heyliger that consumers in St. Maarten have been subsidising losses on the two sister islands for a number of years.
The Dutch Ministry of Economic Affairs commissioned the report following a request from BES Commissioner Henk Kamp.
The report identified the high cost of the fuel Saba and Statia use (light fuel compared to the cheaper heavy fuel used in St. Maarten) and very high operational cost as some of the reasons the operations on those two islands continue to lose money.
The indirect cost in Saba from 2007 to 2009 averaged NAf. 554,000 (17 per cent) per year of the total operational cost. In Statia, the indirect cost from 2007 to 2009 averaged NAf. 714,000 (19 per cent) per year of that island's operational cost.
Additionally, the operational cost relative to the revenues in Saba and St. Eustatius is also much higher than in St. Maarten. In Saba the operational cost is some 40 per cent higher than St. Maarten and in Statia more than 30 per cent.
As a result, Saba and Statia consistently record net losses while St. Maarten records a profit that subsidises the losses of the other islands.
The report also pointed out that Saba and Statia used an outdated division method when calculating indirect cost: Saba three per cent and Statia four per cent, much lower than the actual percentages of 17 per cent and 19 per cent respectively that are calculated now.
To include more accurate figures, the report recommended implementing Activity-Based Costing, a cost allocation model based on actual activities. The report also stated that generators and engines in Saba and Statia were not as efficient as those in St. Maarten. There is also a lack of holding structures for fuel and further research should be done on the reasons for the net losses and high fuel cost in Saba and St. Eustatius.
Commissioner Heyliger has stated repeatedly that the cross-subsidy has been going on for a very long time, with St. Maarten residents footing the bill. The infrastructure in St. Eustatius and Saba has grown over the years and has been upgraded to surpass St. Maarten's. Power plants and related infrastructure are self-sufficient and with more active involvement of the Dutch in the two islands, St. Maarten, as it becomes a country, can now focus on its own electricity situation.
Discussions on GEBE are expected to increase in the coming days to arrive at an agreement that will be mutually beneficial to St. Maarten, Saba, and Statia.