Kingdom demands action in exchange for liquidity support

THE HAGUE — The Kingdom Council of Ministers supported in its meeting of Friday, May 28, the decision of State Secretary Raymond Knops (Kingdom Relations) to freeze the fifth tranche of liquidity support for St. Maarten. The government in Philipsburg will have to take decisive action first before the kingdom will transfer 39 million guilders ($21.8 million) to the treasury in St. Maarten.

The decision by the Kingdom Council of Ministers is a blow for Prime Minister Silveria Jacobs and Finance Minister Ardwell Irion who were both present in The Hague in an attempt to bring the sorely needed liquidity support home.

State Secretary Knops explains the decision in a letter to the Second Chamber. “Extremely worrisome developments in the field of corporate governance at the Princess Juliana International Airport have made me propose a change in the decision of April 23 to the Kingdom Council of Ministers.”

Initially, the Kingdom Council discussed the fifth tranche of liquidity support in its meeting of March 26. It postponed a decision because it was unclear whether the parliament of St. Maarten supported the proposed kingdom law COHO and the associated country package. After the parliament expressed its support, the Kingdom Council of Ministers approved payment of the fifth tranche on April 23.

But the developments at the airport changed everything and Knops froze the decision.

“Reconstruction of the airport is crucial for the island’s economic viability,” Knops writes. “The physical reconstruction is important, but Building Back Better is also about improving good governance at the airport.”

Knops points out that good governance is one of three Dutch priorities for the reconstruction, next to the waste processing project and repair of the airport. “This is part of the country package but things are going wrong in the field of good governance. The airport violates the framework of good governance again and again and several airport managers do not act according to the principles of good governance.”

Knops writes that this attitude has “serious negative consequences” for executing the reconstruction project and for realizing good governance.

In a letter dated May 12, Knops already wrote that Prime Minister Jacobs had not lived up to promises of restoring good governance at the airport. He also identified holding director Dexter Doncher and supervisory board members Glenn Daniel and Rochelle Hodge as those who violated the framework of good governance and who left the Schiphol Group representative James Fazio out of the loop when it came to taking decisions.

“Repeated warnings from the World Bank, the special representative for the reconstruction (Frans Weekers), the Royal Schiphol Group and myself have not resulted in corrective measures by country St. Maarten as the airport’s shareholder,” Knops writes, adding that Schiphol will withdraw from the project if problems are not solved.

On Friday, Jacobs informed Knops during a private conversation about the current state of affairs. “I have said that the government of St. Maarten now really has made the first steps that contribute to the restoration of good governance at the airport. But it is the implementation that matters. Based on the current state of affairs we cannot pay out the fifth tranche of liquidity support.”

The Royal Schiphol Group is positive about recent developments but it is still waiting for the implementation of measures before it decides to continue offering its support. “The prime minister expects that she will be able to restore good governance sufficiently within short. We will keep talking with each other,” Knops writes.

The state secretary repeats in his letter that the Kingdom Council of Ministers will only approve the payment of liquidity support after the government of St. Maarten has acted “sufficiently decisive” to structurally repair the problems at the airport and to safeguard the successful progress of the airport terminal reconstruction.

The Kingdom Council of Ministers has mandated Knops to assess, in consultation with Prime Minister Rutte and Finance Minister Wopke Hoekstra, whether St. Maarten has acted “sufficiently decisive.” Once this is the case, St. Maarten will receive the liquidity support, after Knops has informed the Second Chamber of his decision to make the payment.