STATEMENT FROM THE NV GEBE SUPERVISORY BOARD
PHILIPSBURG:--- This statement by the Supervisory Board of NV GEBE responds to recent calls for its resignation and to public concerns about the company’s performance. The Board emphasizes that current challenges, including the impact of the 2022 cyberattack, ongoing power outages, and delays in reporting, stem from decisions and omissions made in the past. Since then, significant efforts have been undertaken by new senior management and a new Board to restore systems, strengthen governance, and prepare essential investments. The Board warns that political interference and unsubstantiated tariff reductions could undermine the company’s financial stability, and calls on all stakeholders to work constructively towards securing a reliable and sustainable energy supply for Sint Maarten. The Cyberattack In March 2022, NV GEBE experienced a devastating cyberattack that severely compromised critical customer data, billing records, and financial systems. However, it is not accurate to say that this crisis was our fault; instead, it was inherited by this Board. The current Supervisory Board and Interim Manager, Mr. Troy Washington, took on responsibility in late 2022, well after the incident occurred. The cyberattack was an accident waiting to happen. Previous managers and supervisory boards failed to carry out the explicitly recommended IT audits and safeguards, creating vulnerabilities that the attack exploited. Their inaction led to the cyberattack, wiping out databases as there were no recent backups. Restoring systems involved building a new IT security infrastructure and reconstructing customer records and databases for the period that was not backed up. It was a massive, time-consuming effort carried out with dedication and exceptional commitment by the interim manager and our staff, whose resilience deserves praise, not criticism. ICT was not the only neglected area, on the day of the breach in 2022, NV GEBE just issued the audited financial statement of 2019; we thus also encountered a tremendous backlog in financial reporting. SUPERVISORY BOARD OF DIRECTORS N.V. GEBE Power Generation Challenges The frequent blackouts of 2024 didn't occur “out of the blue”; they were a foreseeable result of years of underinvestment, ongoing neglect, and political interference. Much of NV GEBE’s power generation equipment (genset) is over 25 years old, surpassing its typical operational lifespan. The diversion of financial resources to unrelated Government projects and unapproved financing proposals limited the company’s ability to maintain and upgrade its infrastructure, IT systems, and invest in human resources. The aforementioned widespread neglect left NV GEBE financially vulnerable and unable to secure essential external funding for critical capital investments. The Government narrative blames the current Board, but this is neither fair nor accurate; nonetheless, we have been proactive and continue to implement measures to tackle these challenges. Along with the interim management mentioned earlier, we developed a long-term capital investment plan, which involved identifying and engaging with institutional investors to fund the venture. The success of this initiative depended on resolving several problems we inherited. - - - - Restoring invoicing (status: completed) Removing the backlog in financial statements (status: 2020-2022 completed and 2023-2024 is pending finalization this year) Ensuring a secure IT infrastructure and practical business continuity framework (status: completed) Safeguarding stable corporate governance by proposing to Government permanent C-level management (status: completed since July 31, 2024) Management and the Board did their part, but despite these proactive measures, the repeated completely unnecessary delays of more than a year (!) by the Government in appointing permanent C-level management, have damaged stakeholder trust and confidence, as well as impacted operational stability. To date the Shareholders' decision-making regarding the appointment of C-level management is still pending. In reality, the process took so long that the COO candidate withdrew after accepting another position, and, unfortunately, the CEO candidate passed away. We want to note that at the time, both candidates nominated for CEO and COO roles were local. As the Supervisory Board, we believe it is important to emphasize these ongoing governance issues that have severely undermined NV GEBE's stability. This persistent uncertainty hampers NV GEBE’s ability to secure long-term financing, plan strategically, SUPERVISORY BOARD OF DIRECTORS N.V. GEBE and ensure operational continuity. It creates a vicious cycle that predates us, and we are dedicated to breaking it. Relief It must be stated that we, as a Board, are not at all opposed to relief and presented the Shareholder Representative with options such as: Being executed by NV GEBE: 1. Social Assistance in collaboration with the Social Services Department to an amount of XCG 600.000 annually to the most vulnerable. Government was asked to contribute by matching the amount but we have not received any feedback. 2. NV GEBE is in discussion with SOL Antilles NV providing reductions on the fuel. This will lead to a savings of approximately XCG 12 million over a 3 year-period which will be passed directly to its customers on a 1:1 basis. This is something that NV GEBE is busy with on their own. 3. Senior Relief continues to be offered. 4. Actively offering payment plans. 5. Continued efficient application of HFO and LFO ratios in electricity generation. Proposed to Government by NV GEBE: 1. Waiving the yearly Concession Fee charged to NV GEBE which is currently XCG 7.7 million. This amount, can be passed on to the people of Sint Maarten as relief for as long as Government waives this. 2. Waiving the throughput fee on fuel being charged to SOL which would in turn have the benefit passed on to the people of Sint Maarten. The throughput fee stands at XCG 3.8 million a year. 3. Exploring the possibility of giving a fixed discount on residential bills for customers with a minimum income, to be financed by the government. NV GEBE would see whether it can give a limited contribution to such a scheme. These proposals aim to ensure that the appropriate entities provide relief to the people of Sint Maarten. NV GEBE's contributions must stay within its financial capacity, and this has been clearly communicated to the Government. It is important to emphasize that NV GEBE is a utility company, not a social organization. While we champion giving relief, NV GEBE must do this within the confines of sound financial decision-making for the company. We are of the opinion that broader relief measures, that may be possible in the forms of fuel price regulation and tax reform would also be contributing in country relief but these fall within the regulatory authority and responsibility of the Government. SUPERVISORY BOARD OF DIRECTORS N.V. GEBE Regarding the fuel clause, NV GEBE passes the fuel costs from its suppliers directly to the customers. NV GEBE does not control the cost of fuel as it is dependent on world prices. Any savings made in purchasing fuel are passed onto the people of Sint Maarten as can be seen when the tariff goes down. NV GEBE cannot guarantee what the fuel price would be and thus is of the opinion that any talk of relief in the fuel clause can only be borne by the supplier of the fuel. This would also not be guaranteed to offer relief in the manner it is being proposed. The Government's proposal to reduce this charge would force the company to subsidize costs from its already fragile finances, crippling our capacity to invest in infrastructure improvements. Our long-term plans and those of the Government also require NV GEBE to move to sustainable energy production. That also costs money. It’s not magic and will not happen overnight, but if the company cannot afford it, nothing will happen at all. In this regard, NV GEBE is conducting its own comprehensive tariff study, the last study being in 2010, which is expected to be completed by September 2025. The findings and recommendations of the RAC report are being taken into consideration in this study, but the fact is that NV GEBE cannot implement a fuel clause reduction across the board or undertake tariff adjustments without a thorough and well-substantiated study. The government’s attempt at a “grand political gesture” is not economically sound and could trigger a new cycle of instability and financial constraint on NV GEBE. The action as proposed will result in a yearly cost of approximately XCG 18.8 million to XCG 21.9 million to the NV GEBE operation. Pay now or pay later; this is not justifiable. It’s a large number and impacts the cash available to pay the largest supplier (SOL) of NV GEBE, which, if not paid, the Country goes ‘black’. The NV GEBE family, our dedicated staff, and management, especially the late Troy Washington, deserve special recognition. Despite facing overwhelming challenges, their tireless efforts kept critical services running, reduced disruptions, and restored essential systems and processes under tough conditions. Their commitment demonstrates the resilience and dedication at NV GEBE. Ultimately, NV GEBE's mission is to serve the people of Sint Maarten while ensuring the business is run properly. Political rhetoric and short-term ‘popular’ measures should never outweigh careful management and responsible decision-making. It is time to move beyond divisive narratives and engage in transparent, fact-based discussions aimed at achieving financial stability, improving service reliability, and securing a sustainable future for NV GEBE and the community it serves. That’s how trust is restored.
Denniscio Boasman, Dennis Richardson, Emanuel Brooks, Charlesworth Sydney
