Knops withholds liquidity support and bashes Prime Minister Jacobs

PHILIPSBURG — State Secretary Knops has put the fifth tranche of liquidity support on hold until the government has acted “sufficiently vigorous” to rectify the problems at Princess Juliana International Airport and to safeguard the reconstruction project for the airport terminal. The Kingdom Council of Ministers will take a decision about the 39 million guilders ($21.8 million) support in its meeting of May 21.

Knops does not mince his words in a letter dated May 12 to Prime Minister Jacobs. He notes that the trust in St. Maarten’s government has been damaged and that Jacobs has not lived up to promises to establish good governance at the airport.

“Signing of the loan-agreement for the fifth tranche of liquidity support has been suspended due to the very worrisome developments in the field of corporate governance at Princess Juliana International Airport,” Knops states in his letter, that refers to repeated warnings to the government by the special representative of the Netherlands for the reconstruction (Frans Weekers), the World Bank and the Royal Schiphol Group. “All these warnings have not resulted in corrective actions from St. Maarten as the airport’s shareholder.”

In March Knops released the financing from the trust fund for the airport-reconstruction in good faith, after much delays caused by St. Maarten “because of a search inside and outside of the government for alternative and remarkably much less favorable financing.”

Knops points out that Jacobs had assured him that she was fully committed to executing advices from the Taskforce Corporate Governance and the improvement of corporate governance at the airport. Those promises became part of the country package Jacobs signed on December 22, 2020. “To my great disappointment this project still has not taken off and there are now serious problems in the field of corporate governance at the airport.” All this, the state secretary writes, has damaged the trust he put in the government when he released the financing.

Knops writes that the director of the airport holding (Dexter Doncher) and two members of the supervisory board (Glenn Daniel and Rochelle Hodge) have violated the framework of good governance over and over again and that they enforced their own decisions without following the correct procedure. The third member of the board (James Fazio) is often left out of the loop, while he is the appointee of the Royal Schiphol Group based on his relevant international experience.

As examples of these questionable decisions, Knops mentions the dismissal of PJIAE-director Brian Mingo (who has in the meantime been reinstated by court order) and the appointment of three new members to the supervisory board of PJIAE. “Without giving any reasons, the holding has ignored a binding nomination from PJIAE. Not acting in good faith by the relevant persons within PJIAH has increasingly serious consequences for the ability to execute the reconstruction project and for the realization of good governance.”

Knops also notes that the Royal Schiphol Group will terminate its assistance “unless you have realized structural adjustments before May 26 that safeguard good governance in a sustainable way and that address past violations of good governance.”

The state secretary remarks that the potential withdrawal of the Royal Schiphol Group is a reason for serious concern about the airport’s future. “I do not expect that the World Bank-project can be brought to a successful ending without the support of the Royal Schiphol Group, while it is of crucial importance for St. Maarten and its population that the airport is repaired as soon as possible.”

Knops writes that he has seen “little decisive action” from the government to safeguard the airport’s reconstruction project and to improve corporate governance. “You dismissed signals we discusses earlier as rumors and said repeatedly that the government as shareholder has to keep its distance. In general, this is correct, but in case of gross negligence and of directors that are not acting in good faith (as is happening now at PJIAH) it is up to the shareholder to take decisive action.”

The government does not abide by two agreements from the country package, due to its lack of decisive action, Knops writes to Jacobs. “As a result, the trust in the cooperation with your government has been damaged. By acting consistently too late and not decisive enough your government puts the repair of the airport and the economic recovery of the whole country at risk. Under those circumstances, it cannot be expected from the Netherlands that it continues to invest tens of millions of euro’s in this economic recovery.”

Knops will visit St. Maarten next week. “I hope that you can present me with a satisfying solution for this situation,” the state secretary states at the conclusion of his letter. “That is in the interest of St. Maarten and its population.”