Madame Chairlady
This morning at the closing of the parliamentary year 2012 / 2013 I will like to rest for a moment on the following two issues. The financing of government and its budget and government owned companies and semi government institutions.
On the issue of the budget 2013 we all know the history of the budget 2013, the balancing act that successive governments has been doing etc etc. we need to carefully look at the role government owned companies play in assisting government.
Before like in the years 1990 to 1994 several of these companies were created in order for them to function in a more business like fashion. Which I may say was a good idea. That was the way companies like the harbor, the airport, Telem could have attracted external financing without it directly affecting the budget of the former Island Territory.
These companies on St. Maarten have grown together of having more that 1 billion guilders in assets. How is it possible then that government is challenged in making ends meet, while its companies hold more than 1 billion in assets and they are sitting on millions of reserves.
While we understand the need for these companies to have reserves in order for them to meet the established debt service ratio and the desires of the financers, these companies should never hold more reserves than strictly desired by the financers and the shareholder.
In the coming parliamentary year government and parliament will have to sit together to determine were these companies are heading. The Council of Ministers in its capacity as shareholder of these companies together with the Corporate Governance Council will have to play a more active role, in the as we say in Dutch the reilen en zeilen within these companies.
While we understand the hands of approach in terms of the civil code and the corporate governance council, supervisory boards of directors, management should adhere to strict rules and regulations in terms of expenditures, long term investment programs, expense accounts, bidding processes within these companies. While it is expected that government comply with the compatibility ordinance in terms of when government intends to issue a bid . Government must ask for 3 proposals when doing a bid for less than Nafl 50.000,– and when issuing works above the Naf 150.000,– government must do a public bidding, unless it is thoroughly motivated that the interest of the country St. Maarten does not permit the public bidding.
If government is to adhere to these strict rules and regulation then it should be expected that government owned companies adhere to the same rules and regulations across the board. The question is do they. I don’t know but I would like to know and I would like to see in the next parliamentary year an overview of how this is been done by government owned companies.
For every work issued by these companies if the correct process is not followed this may affect the bottom line of the companies and restrict the companies from paying much needed dividends to its shareholder.
The same goes for long term investment. If a managing director of a company and the supervisory board are to issue a contract to 3rd parties, what’s wrong with these companies having strict policies laid down how to go about issuing contracts to 3rd parties. Any citizen or member of government should be able to on a yearly basis have the opportunity to review the business activities of government owned companies, especially companies in the utility sector to be able to verify if the rates they are paying for the services are actually the real cost, plus the amounts determined for reasonable investment and ROI.
In the upcoming parliamentary year the DP faction will propose to parliament that we hold extensive meetings with the persons designated by the Council of Ministers as shareholder representative together with the managing directors of these companies to find out where they are at with having these types of checks and balances in place. Were these checks and balances are not in place they should be further legislated by parliament. All doubt must be taking away in terms of the running of these companies and semi government institutions such as the SZV, Bureau Telecommunicate and Post, the Pension fund etc etc. Maybe it is about time that these matters are laid down in strict guidelines established by whom one would ask. Established by the Shareholders of these companies and semi government owned institutions. When I hear of the inability of government owned companies and semi government institutions to pay dividend or to pay government what should be paid by law, because all future ability of these companies to pay a decent dividend, concession fees or from proceeds charged to the consumer, to its shareholder have been usurped in terms of long term commitments then it make me scared and make me realize that something should be done about this.
I repeat while I understand the hands of approach as established by the civil code and the responsibility of the supervisory board and the managing directors to execute their task as described in the civil code and other such regulations I also understand the need for these companies to adhere to one strict uniformed policy where it pertains to matters such as investments, dividend policies, concession agreement, a reasonable return on investment policy, strict adherence to rates for public utility companies etc etc. Only with these checks and balances in place will government be in a position to expect a reasonable return on its investment and to be able to receive a reasonable dividend or payout as the ultimate shareholder. Maybe tomorrow I may be criticized for this stance taken today during the closing of this parliamentary year, but this stance is a stance for the people of St. Maarten who are the ultimate beneficiary of these companies and semi government owned institutions.
The DP faction in Parliament is prepared to champion this process during the last parliamentary year of this term in office. I would hope that all factions in parliament are prepared to do the same in the interest of the ultimate shareholder, the people of St. Maarten.
Madame Chairlady I thank you.