~ SLAC regulates and competes with industry ~
PHILIPSBURG--St. Maarten Marine Trades Association (SMMTA) has reiterated its plea for authorities to strip Simpson Bay Lagoon Authority Corporation (SLAC) of its regulatory powers and have the regulation handled by an independent body.
SMMTA's call stems from the fact that SLAC functions as a regulatory body for the industry and functions as its competitor, a situation which SMMTA says is a glaring conflict of interest.
"If you're regulating the industry you shouldn't be competing with it," SMMTA President Brian Deher told Members of Parliament (MPs) in Thursday's continuation of a meeting of the Central Committee of Parliament that started in March.
The association also called for the structure of the bridge fees for vessels entering Simpson Bay Lagoon to be revised, as the current fee structure is stifling the industry.
SLAC had been given a specific set of objectives when it originally was established to protect the industry. However, new objectives were added when SLAC was turned over to the Harbour Group of Companies in 2010, which concerns SMMTA.
SLAC has a concession to charge fees for access and length of stay; employs the Harbourmaster; controls access to the waterway; while at the same time its parent company (the Harbour) owns docks and fuelling facilities in an area outside of Simpson Bay, the zone where the heaviest fees are levied. It is less expensive for a vessel to be docked or anchored in Great Bay than in Simpson Bay.
Deher argued that Harbour Chief Executive Officer Mark Mingo should not be given the authority to oversee the regulatory body.
He said the Harbour had a few slips that it leased out on a long-term basis. He provided an example of a vessel that had been a client of one of the marinas in the lagoon and used to stay there for most of the season until the slip at the Harbour became available. He said it was factually incorrect to say that the Harbour only catered to vessels that were too large to enter the lagoon.
The lagoon has more than 160 slips that can accommodate yachts more than 80 feet long, while there are fewer than 20 in Philipsburg. However, there are development plans at Bobby's Marina and Dock Maarten that will add additional slips in Great Bay, Deher said.
He said too that there was a significant difference in the mooring fees charged to stay in Great Bay compared to those charged in the Simpson Bay area and there were no fees at all to stay in Oyster Pond. These discrepancies, he noted, create at best confusion and at worst an unfair disadvantage to the facilities in the Simpson Bay area.
"Perhaps SLAC/the Harbour have a justification for the price discrepancy, but this question has been posed to them by the SMMTA for several years and they have yet to provide us with an answer," he said.
Another area of concern was the fact that the Harbour openly sells fuel to anyone who wants to come to the port, but does not charge the five per cent turnover tax (ToT) that marinas are compelled to charge. Deher said, "This is a direct violation of the current tax laws imposed on the marinas in the lagoon and presumably on the rest of the island."
He said when this point had been raised with the Tax Inspector, SMMTA had been told that the Inspector would not be auditing a Government-held NV. Deher said this was a clear issue of an unfair competitive advantage.
Marinas in the lagoon risk being audited and fined if they don't include the five per cent ToT on fuel sold to privately held vessels, but the Harbour Group of Companies can quote and sell to the same clients at a rate that is five per cent lower than all other facilities and still claim it is not competing, he noted.
While the Harbour Group of Companies did not necessarily create this problem, it is well aware of it and continues to exploit it to its advantage, he said.
According to Deher, it is Government's responsibility to create a fair business environment by doing away with the discrepancy between taxes imposed on the private sector that are not imposed on Government-owned NVs that compete against the private sector.
This, he stressed, sets "a very dangerous precedent" for Country St. Maarten and certainly will be noted by international companies looking to invest on the island.
The Association also called for a change to the fee structure charged to vessels entering the lagoon, as this is driving away vessels.
Deher said SLAC charged a minimum weekly fee to enter the lagoon. There is no daily fee. A 20-foot yacht, for example, would be charged around US $500 each time it enters the lagoon. If a yacht decides to take daily trips to neighbouring islands and return through the bridge seven times in the week it has to pay the $500 fee each time it enters, translating into its paying for seven weeks.
Deher said this deterred yachts from wanting to dock in the lagoon and instead they chose to go to French St. Martin or another location. He suggested that the fee be restructured to, perhaps, a daily fee.
Deher said too, that there was no transparency with SLAC's budget and it was unclear how it used the approximately US $1 million it generated yearly from bridge fees. Several areas of suggestions were made where SLAC could use its resources.
The association suggested that the mandate given to SLAC be revised to eliminate the conflict of interest.
Several MPs expressed concern about the issues raised by SMMTA.
United People's (UP) party MP Theo Heyliger, who had responsibility for the harbour as commissioner and then minister for several years, said removing the regulatory aspect of SLAC should be relatively easy and is something the Ministry of Tourism, Economic Affairs, Transport and Telecommunications (TEATT) should address with haste. He said, however, that the bridge fees were another matter, but this too is a matter for the TEATT Minister.
SMMTA member Michael Ferrier said government should consider giving the Maritime Authority the power to regulate the industry.
Parliament's TEATT Committee is expected to meet on the concerns expressed by SMMTA. A tour of the lagoon for MPs also will be planned.
Also attending Thursday's meeting were National Alliance (NA) MPs Louie Laveist, George Pantophlet, Dr. Lloyd Richardson and Hyacinth Richardson; UP MPs Silvia Meyers, Jules James, Johan "Janchi" Leonard and Parliament President Gracita Arrindell; and Democratic Party (DP) MP Roy Marlin.