NV GEBE takes another two weeks to consider disconnections (Updated with Commentary) – StMaartenNews.com – News Views Reviews & Interviews
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~ “Financial situation critical” ~
PHILIPSBURG — Embattled utilities company NV GEBE is “counting on people to come in with their payments,” Temporary Manager Sharine Daniel said in an interview with Lady Grace during the radio broadcast The Breakfast Lounge on Thursday. Daniel acknowledged that GEBE is in financial dire straits but that it will take another two weeks until it will consider disconnecting non-paying clients.
See interview recording online here>>>
GEBE has put its clients in four different categories, simply labeled A, B, C and D (see images below). Those in the A-category (residential, commercial and industrial users) are the most at risk of being disconnected Daniel said.
“In the A-category are 76 percent of our customers. There is no discrepancy, the bills are accurate but there is no payment,” Daniel said. “This is where GEBE will go back to its procedures, to disconnect them, because Category A-clients have no reason not to pay. If you have not made a payment we will disconnect because consumption is taking place. If you have a bill and you don’t pay but you are still using the service, that is not fair to GEBE.”
GEBE closed its doors on March 17, after it was hit by a ransomware cyber attack and it only reopened its offices on June 6. The effect of the attack on the company’s finances are significant, due to the fact that people stopped paying because they did not receive any bills.
NV GEBE collections down to 30 to 40% of monthly revenues after attack.
“GEBE was accustomed to making 15 million guilders in revenue per month,” Daniel said. “After the attack it went down to 5 or 6 million.”
Daniel said that GEBE was able to bill 76 percent of its client-base after the attack; that is the complete A-category. She noted that GEBE adopted its cyber security internet response protocol and that under this regime the company was unable to say much in public about the situation.
She said that she is open to Prime Minister Jacobs’ suggestion to establish a crisis management team, but added that GEBE already has such a team in place.
The temporary manager claimed that negative publicity has not been helpful. ”Our vendors are reading that and this has had a negative effect on GEBE’s credibility.”
However, Daniel insisted that GEBE has not stopped paying its vendors, after Lady Grace suggested that suppliers are no longer willing to extend credit to the company. ”That is somewhat true,” she said. “But it has nothing to do with GEBE. It has to do with the negative publicity that has caused suppliers to think that we are almost bankrupt. So they wonder whether they can still trust us and whether they will still get their money.”
NV GEBE has tapped into its reserves; unsustainable
Daniel acknowledged that GEBE’s financial situation is “critical” and that the company has financed the continued supply of electricity and water to the community from its reserves, but that approach is obviously not sustainable in the long run.
Daniel declined to discuss numbers or to say how long GEBE can continue using its financial reserves “because our vendors are watching.”
Between March and July 2021 GEBE produced 132 million KWh of electricity. Over the same period in 2022 production increased to 139 million KWh. “GEBE is producing and distributing, but it is not collecting,” Daniel observed soberly before finally providing some numbers.
Before the cyber attack GEBE collected at times 550,000 guilders a day. Now it is down to 20,000 of 30,000 guilders a day.
“GEBE also has expenditures,” Daniel pointed out. “GEBE has to sustain GEBE.”
What is going to happen next and what does this mean for GEBE-clients? That mostly depends on the category they fall in. The A-category-clients are the most at risk for disconnection if they fail to pay their bills.
The B-category consists of clients who have disputed their bill. “They will never be disconnected because it is up to GEBE to rectify incorrect bills,” Daniel said.
Customers have approached GEBE after they received bills for four months (March to June) and wondered how they could pay this in one go. Daniel said that the company has encouraged clients from category C (who have not received a bill) to pay at least their estimated average into their account. “You don’t have a bill but you know it is coming,” she said. “And yes, I know the struggle out there is real but we still have to run GEBE as a business. We are urging these clients to pay, not only to protect GEBE, but also to protect themselves.”
In category D are new clients and clients who have recently moved whose details have not been uploaded into the system. “They can pay through the bank using their name or their account number. We will reconcile it,” Daniel said.
While category A-clients have to be concerned about a disconnection, Daniel also had a stern warning for clients from the other three categories. “Guys, the bills are coming. GEBE can no longer use its reserves to finance the people of St. Maarten. You have had April, May, June, July and August to make provisions. When these bills come GEBE will revert to its procedures; that means a 30-day notice.”
During the next two weeks, GEBE will evaluate its disconnection process and when the situation has not improved by then, it will have to take the unpopular decision of disconnecting non-paying customers.
COMMENTARY
The news coming out of NV GEBE changes by the day and now by the hour. The latest news today is that the Temporary Temporary Manager is no longer the Temporary Temporary Manager as the Temporary Manager is back from sick leave and is now the COO and the Temporary Temporary Manager who was the prospective incoming CEO is now being suspended pending an investigation while an external Crisis Management Team, which NV GEBE already has its own in place within the company, is now being appointed by the Shareholder Representative and will be headed by an External Financial Consultant, who now as a financial wizard has to work his financial magic since NV GEBE’s reserves is precariously down to 30M while owing SOL 10M and owing the extremely nervous Wartsila an unknown amount that only the Temporary Temporary Manager as Head Internal Auditor would know better than anybody else within the company while a lien on the company’s bank accounts is hanging over the company’s proverbial head like a ‘Sword of Damocles’.
We can’t keep UP, can you?
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