Published On: Thu, Aug 23rd, 2012

CPA disadvantaged in deal with CDM

WILLEMSTAD Will the debt from Curaçao Docking Company (Dok) owed to harbor authority CPA be cancelled or paid?

In a press report of July 27th El Hakim wrote that the debt from Dok to CPA is cancelled (‘e debe a wòrdu eliminá’). However, in a press report on Tuesday the minister mentions a payment agreement (plan di pago). In any case it still seems that CPA is disadvantaged by the new agreement with the Dock Company.

The reports on Dok’s debt to CPA are due to the signing of a ‘Termination Agreement’ between Dok and CPA on June 28th. This meant a termination of the agreement that Dok had to pay CPS each year for the rent of the EEG-wharf and the cranes on the wharf, plus harbor dues and port charges. On that same day a new contract was signed with an entirely different tenor.

The terminated agreement goes back to 1985. The annual accounts from CPA of 2009 were the last that were approved, in which CPA included a claim on Dok of 41.9 million guilders. This claim has run up through the years. In 2008, this debt was 40 million and must have been around 44 million guilders in 2010.

The ‘Termination Agreement’ was signed by Dok-director Errol Martina and interim-director of CPA, Humberto de Castro. In this agreement, Dok admits a debt of 38.8 million guilders to CPA. After subtracting a claim from Dok to CPA of 3.7 million guilders, it amounts to approximately 35 million guilders. This is interesting considering Dok queried this claim earlier.

The ‘Termination Agreement’ doesn’t mention per which date the debt reached the amount of 38.8 million. According to annual accounts from CPA, this would late 2007. The lawfulness of Dok’s claim on CPA isn’t mentioned either. As long as Dok uses the wharfs and cranes there’s a dispute on both the invoices from CPA to Dok and the so-called claim from Dok on CPA – a dispute that was never solved.

New contract
On June 28th CPA and CDM Holding NV (CDM) signed a ‘Concession and Lease Agreement’ for the duration of 25 years (please note: the terminated agreement was not with the holding). This contract was signed by De Castro and president of the board of CDM, Rudolph Garmes, in which it was agreed that per January 1st this year CDM will pay CPA an annual concession. In 25 years, CPA will pay 23 million guilders in total on concession. Furthermore, CDM pays a rental amount per month, which amounts to 34.5 million guilders in 25 years.

Payment agreement
In the coming 25 years CPA is to receive 57.5 million guilders from CDM. According to the press report yesterday from Minister El Hakim, a payment agreement was reached for the debt of 35 million guilders. Providing there’s no other document – besides the ‘Termination Agreement’ and the ‘Concession and Lease Agreement’ – for a separate payment agreement of the acknowledged debt of 35 million, one may conclude that Dok (the subsidiary company) pay this amount to CPA from the amount that CDM (the holding) in the coming 25 years on concession and rent to CPA. In other words, part of the payment, as included in the new agreement, is actually a payment of the debt.

Cancellation
The rent that is to yield 34.5 million guilders in 25 years is supposedly meant to repay the ‘old’ acknowledged debt of 35 million. However, the remaining amount, 23 million on concession, doesn’t by far equal the amount that CPA is to receive from Dok if the former continues to charge rent for wharfs, cranes, harbor dues and quay charges in the coming 25 years. These charges exceed 2 million guilders per year and will amount to at least 50 million guilders in 25 years.

Considering CPA only receives 23 million on concession, there’s a gap of 27 million on lost revenues. Furthermore, the acknowledge debt almost equals the debt position in the books of CPA per the end of 2007. The years 2008 up to and including 2011 (four years; 2 million per year) will not be repaid at all.

27 million + 8 million = 35 million. Add the approx 4 million guilders from Dok’s claim on CPA (the unsolved dispute) and whether this claim is lawful, the total loss for CPA on this ‘deal’ amounts to at least 40 million guilders, which is pretty close to the total debt from Dok to CPA up to and including 2011. This therefore explains the press report from El Hakim of July 27th where he stated that the debt from Dok to CDM will be cancelled; a debt for which CPA had made a provision on the budget the past years.

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