Democratic Party on Statia warns Executive Council for economic troubles

In a letter to the Executive Council of Statia, the Democratic Party of Statia has expressed their serious concerns about the economic developments on the island. The document reads as follows:

While St. Eustatius is strongly divided on the issue of our constitutional future, the island is lagging further and further behind. While our focus should be on curbing the downward trend of our economy, strengthening government and improving our infrastructure and investment climate, our leaders are spending all their energy arguing about more autonomy.

The Democratic Party is extremely worried about the effects the present instruction applied by the Minister of Interior Affairs, Mr. Ronald Plasterk, has on the economic development of St. Eustatius. The Party is in particular very critical about the stand our government takes towards this instruction. Refusing to cooperate in the steering committee, which has been established to work out a plan to get the government of the island back on track, is weakening the position of government in the entire process. Non-cooperation is also a disservice to Statia and it is giving a very negative signal to potential investors. The appearance of an unstable and indecisive government will deter investors.

There are plenty opportunities to attract or stimulate economic activities and investment for Statia. These opportunities will not be there forever and will eventually disappear if we do not assertively go after them. The island is in dire need of economic growth. Growth will result in jobs for our people. It will increase the spending power of our people and it will increase the income of government.

EUTEL

In the last central committee meeting on request of the Democratic Party Commissioner Zaandam reported on a meeting he and representatives of our telephone company EUTEL had with KPN, the largest telecom company in The Netherlands. The meeting was a follow up on discussions between EUTEL and KPN that are ongoing for quite a while already. These discussions are aimed at getting KPN interested in doing business on Statia with the goal to secure a future for telecom on Statia. Involvement of a large player like KPN will improve the service and will make the cost of these services more affordable for the public and our business sector. The telecom infrastructure will be brought up to Dutch standards, allowing high speed internet, 4G mobile services and IP-TV. It should not be difficult to imagine that these improvements will have a positive impact on economic development. Our island will become a frontrunner where it comes to IT and telecom infrastructure in the Caribbean region with very competitive rates.

However in order for KPN to move forward the company is suggesting a takeover of EUTEL. This proposal is not to be discussed according to Commissioner Zaandam. He is of the opinion that he cannot defend politically a sale of our national telephone company to KPN. The DP is wondering if he has even tried. We are wondering if our people and businesses would prefer to continue paying very high rates for poor services.

Our party is wondering if the Commissioner is aware of the difficult financial position EUTEL is in as a result of the smalls scale of the market and the challenges they are facing where it comes to much needed investments. We are wondering if the Commissioner is realizing that with his stand he basically is closing the door for many economic opportunities the island so desperately needs.

We are wondering if the Commissioner understands what a first class telecom infrastructure means for potential investors and economic development. The DP is urging the Commissioner to let go of his emotional motivations with regard to giving up our national company. A decision should be motivated based on a S.W.O.T. analyses of the proposal. He should bear in mind the enormous advantages the investments by a company like KPN will have on not only our economic potential but also directly on the spending power of our people and existing businesses.

NUSTAR

For about thirty years the oil terminal has been by far the most important economic pillar for Statia. The economy of our island is highly dependent on the existence of the terminal. Although the DP believes that the existence of the terminal on our island should have and can be more beneficial to Statia, the situation we have right now is threatening the existence of the company. On one hand the national government is claiming an increasing amount in taxes from NuStar, while on the other hand our island government has increased the harbor fees rather steeply. On top of this the new environmental permit makes it obligatory for the oil company to invest over 200 million dollars in improvements in the coming years. This entire scenario is threatening the operations of the company. It may leave them with insufficient capital to expand, which is necessary to maintain their competitive position in the region.

Although many on Statia do not believe that NuStar might decide at some point to cease operations on the island, the DP is of the opinion that this is a scenario we have to seriously take into consideration. An eventual departure of NuStar will be detrimental to Statia and will have far reaching consequences for everyone on our island. Hundreds of jobs will be lost and many businesses will cease to exist. Our local government needs to take this situation very seriously.

It should be avoided that the national government introduces taxes or other levies for the oil terminal, without involving the local government as well as the other way around. This is happening thus far and is working counterproductive. Hereby Statia, as the lower government, has the most to lose and it is threatening the position of the oil terminal and in extension the very future of our island. Our government has to start getting involved in a dialogue with NuStar and the national government in order to reach a solution that will secure the continuation of the terminal operations, while at the same token it needs to have a direct benefit for Statia. With the Ministry of I&M an understanding needs to be reached in order to keep the cost for NuStar for investments to meet the environmental requirements affordable, without compromising the same environment and safety. It should be abundantly clear that to be successful in this process our government has to recognize its lack of sufficient expertise and the need for high level support.

 

 

STUCO

It is still unclear what the financial status of our electricity and water company STUCO is after a year of being in operations. Negative results of STUCO may also have financial consequences for the island government budget, since they are the sole shareholder.

Financed by the Ministry of Economic Affairs the construction of a 2 megawatt solar farm will commence soon. Although the use of solar energy will have a positive impact on the cost of producing electricity, it will not solve the financial woes of the company.

The small scale of the market will make it extremely difficult, also with the use of the solar plant, to break-even while at the same time maintaining affordable electricity rates. A full capacity back-up diesel fueled generator plant will remain a requirement. It is therefore important to engage in talks with NuStar. The company consumes more electricity than the entire island combined. Connecting the two grids will therefore more than double the capacity and may warrant the switch from diesel fuel to the much cheaper heavy fuel. This in turn may have a positive effect on the operational cost.

Reliable and affordable electricity is not only beneficial for households, but also a prerequisite for economic development.

HOTEL DEVELOPMENT

For some years already we hear about possible hotel developments on the island. For about two years there is a sign at Lower Town that claims a hotel development is coming soon. Ownership of a parcel of land appears the matter that is holding up this development. A large scale resort development at White Wall seems not to come of the ground. The initial hold up apparently was an amendment of the spatial plan. It is unclear what the matter is now. For the former La Maison sur la Plage property at Zeelandia appeared to have been a prospective developer available. The requirement by the developer of a connection to the water distribution network is said as being the delaying factor.

 

These are three potential developments in the hotel sector that can strengthen and diversify our economy. These projects will create jobs and will contribute to a more self-sustainable Statia. The DP is urging government to spend their energy on these projects and facilitate their development as soon as possible. All stumbling blocks that prevent these projects from becoming a reality need to be taken out of the way without delay.

 

The above described developments are in our opinion the most urgent to be addressed. Next to this much urgency needs to be placed to get the multi annual program, delayed due to the ministerial instruction, on track together with the implementation of the Development Plan for St. Eustatius.

 

It is time that Statia is taking a more pragmatic approach. Even if we want autonomy for the island the first requirement is to strengthen the economy and make the island more self-sufficient. Let’s therefore do first things first. The Democratic Party is convinced that Holland can and will play a positive role.

The party therefore requests the coalition government to stop fighting the government in The Hague and obstructing the functioning of the steering committee. Instead we need to work together and cooperate. The goal needs to be to get the island back on her feet as soon as possible and start working on the matters that can improve the economy and the wellbeing of our people.

 

 

 

 

 

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