Oranjestad- St. Eustatius Utility Company N.V. needs to work on further strengthening of its Governance. This is one of the main conclusions from an audit performed by the Kingdom Audit Service (Auditdienst Rijk).
The main focus of the audit was the financial management at STUCO. While the Audit Service does not come to dramatic conclusions about the way the company’s finances are managed, the report does note that an agreement to strengthen STUCO Management and general Governance have not materialized so far.
“On 14 March 2017, the second administrative meeting discussed the importance of better governance, long-term planning and sustainable exploitation. In addition, problems were identified with regard to the drinking water supply and the financial management of Stuco. According to EZK, the problems outlined have not been addressed and agreements about strengthening the management of Stuco have not been met”, according to the report compiled by the Audit Service.
The report also concludes that STUCO generates a profit on Electricity, but looses money on drinking water production and distribution. “….the profits on the electricity supply are indirectly used to continue the loss-making situation with regard to the drinking water supply”, according to the report.
The Audit Service also concludes that there should be no cross-subsidy between electricity and water supply. Using profits from electricity to subsidize water would jeopardize further subsidies of electricity tariffs by the Ministry of Economic Affairs.
In the meantime and despite ongoing discussions, the Ministry of Economic Affairs has approved subsidies both for Electricity and Water in St. Eustatius, both the the tune of about 1.3 million dollars.