Published On: Wed, Sep 27th, 2023

Dutch senate gives green light for capital expenditures

PHILIPSBURG — The Dutch Senate approved a 60.9 million guilders ($34 million) loan for capital expenditures on Tuesday, September 26, Finance Minister Ardwell, Irion announced in a press release.

The minister mentions seven projects that will benefit from the loan: a shade for the Martin Luther King School playground, renovation of various sports facilities, expansion and reconstruction of the John Larmonie Center and the Philipsburg Cultural and Community Center, completion of the Prince Willem Alexander School, hard surfacing of various dirt and main roads, the Dutch Quarter road development program, expansion of the sewage network (co-financed by the Trust Fund and the Netherlands) and improved software and hardware for various departments.

The Netherlands granted an additional 29.1 million guilders ($16.25 million) to cover the financing of a new tax and financial management system and the first phase of the construction of the new prison.

The capital expenditures are part of the 2023 budget that was approved by Parliament earlier this year.

The minister’s press release states that St. Maarten faced challenges in the past to meet the standards for capital investments set forth in articles 15 and 16 of the consensus kingdom law on financial supervision.

“Capital expenditures requests went unapproved for several years, with the last successful approval and allocation of funds occurring in 2014.”

To overcome these challenges, the ministry committed to enhance transparency, accountability and the substantiation of investment proposals. Investments plans were “meticulously explained in the budget,” and future expenses were accurately disclosed in multi-annual budgets. Investment plans were also supported by “comprehensive calculations or quotes, substantiating the amount of each investment item,” the press release states.

In a reaction to the approved 2023 budget financial supervisor Cft stated in a letter to Minister Irion dated April 19, according to the minister’s press release: “St. Maarten budgets a total of 90 million guilders ($50.2 million) for investments in 2023. These investments are sufficiently substantiated, including a multi-year impact assessment on the budget.”

The press release does not mention that the Cft also noted: “The 2023 budget shows a balanced budget for capital investments but it lacks a multi-annual estimation. This way it does not meet the requirements of article 15.1.b of the Rft (Kingdom Law Financial Supervision).”

The Cft advised the government to compose a multi-annual estimation for the capital budget and to create a multi-annual investment agenda.

Article 15 of the Rft states that capital expenditures must be covered by available resources and that it is not allowed to exceed the interest burden standard. Article 16 establishes the rules for obtaining loans.


Related article: Unlocking Capital Expenditure (CAPEX) for Sint Maarten: A Journey to Investment