Timeshare industry,
GEBE clash over
electricity rates
PHILIPSBURG--The St. Maarten Timeshare Association (SMTA) is accusing water and electricity company GEBE of imposing a fictitious electricity surcharge on resorts in St. Maarten, forcing the island’s timeshare industry to the verge of recession.
But, according to GEBE’s Managing Director Julius Lambert, not only are GEBE’s rates very realistic, the SMTA also spoke too soon because reductions are on the way. “And if these reductions are not enough, then I would recommend that they look at their operations, because GEBE’s rates are the lowest in the region,” Lambert told The Daily Herald in reaction to statements by SMTA President Jules James.
James said in an exclusive interview on Monday that the timeshare industry, “the bedrock of our stay-over tourism,” was suffering and that, according to recent estimates, the island was actually losing ground with a loss of some US $10 million of economic activity annually.
He explained while there was a slight increase in sales, the escalating cost of maintenance, the high fares for flights to the island and the direct tax on timeshare visitors were causing a downward slide in occupancy figures.
He took direct aim at GEBE. “There are many factors that have driven cost up, but there has been one large culprit in recent years. And it is something that can be fixed,” he said. According to him, the cost of electricity is the largest item in resorts’ budgets after payroll.
“St. Maarten’s timeshare owners are being forced by GEBE, controlled by the Central Government, to pay a fictitious fuel surcharge. The fuel surcharge was originally based upon the cost of light fuel for the generators and for some time now GEBE has been using mostly heavy fuel at a considerable saving. That saving is not being given to us on our utility bills.
“St. Maarten is one of the few places in the world that do not give large users a discounted rate, but rather pay at a higher premium rate. Hotels are also negatively impacted. Is it any wonder that St. Maarten does not attract hotel investors?” said James.
But, said GEBE Managing Director Julius Lambert, “If Mr. James would pay attention to his November bill, he would notice a 6.23-guilder-cent per kwh reduction. That’s somewhere between 12 and 13 per cent.” And according to Lambert there are more reductions underway.
He explained that indeed a partial transition had been made from light to heavy fuel, but that hadn’t automatically brought about a reduction of the company’s fuel clause. “Heavy fuel needs to be treated and our equipment has to be cleaned regularly. And we have to make special arrangements to get rid of the sludge. It’s a more aggressive fuel and there is more wear and tear on the equipment. That affects our operational cost,” said Lambert.
He said the formulas on which the fuel clauses were based were outdated and a new tariff structure was being developed to be introduced in about six month. This tariff structure, he said, will also include a reduction, as it will consider the average difference between the light fuel and heavy fuel rates.
“We figured that since the rates for heavy fuel didn’t increase a lot in recent years, while those for light fuel did, we could give that as a benefit to the customers. GEBE is not here to make extra benefits. We’re here to provide a service,” he said.
Lambert also said GEBE was ordering new equipment – which should be commissioned in the next 10 months – that would be able to handle heavy fuel at lower operational cost. The new tariff structure will reflect this more efficient operation. “The tariff structure is projected for the next 10 years. We don’t want to be introducing new tariffs every month,” he said.
Regarding the accusation that GEBE’s rates were high, Lambert produced the operational audit that was done on the company last year and cited a passage that said its rates were the lowest in the region. “And if other islands are not having the problems the timeshare resorts here are having, then maybe the SMTA members should look at their operations,” he said.
He recommended energy-saving measures like introducing motion detectors that turn off appliances such as heavy users like air conditioners. “In a lot of hotels, air conditioners are left running unnecessarily,” he suggested.
He extended an invitation to the SMTA board to discuss their grievances. (Marvin A. Hokstam)
