WILLEMSTAD - Oversight of companies in which the government of Curaçao holds a stake is severely lacking, according to the Financial Management Report (FMR) of September 2024.
Several state-owned enterprises, including HNO Vastgoed en Beheer NV, Selikor NV, and Curaçao Ports Authority NV, fail to provide up-to-date financial reports. This lack of transparency exacerbates financial risks for the government and hampers effective management of public funds.
Missed Financial Reports and Outstanding Debts
The report highlights that companies such as Selikor NV, responsible for waste management, and Curaçao Ports Authority NV, which oversees the ports, have not submitted their financial statements on time. Selikor owes the government more than 41 million guilders, while Curaçao Ports Authority has 10 million guilders in overdue payments. The absence of current financial data makes it challenging to assess the fiscal health of these organizations.
The situation at HNO Vastgoed en Beheer NV, which manages the Curaçao Medical Center, is particularly alarming. Key financial agreements related to loans and payments remain unformalized, leading to uncertainties about the true value of government investments. The government is set to take over management of this entity on January 1.
Financial Dependency and Risks
The government relies on dividends from its state-owned enterprises to balance its budget. Without effective oversight mechanisms, there is a risk of lower-than-expected revenue. At the same time, many of these companies carry significant debts to the government, further straining Curaçao’s financial position.
The College of Financial Supervision has repeatedly warned about the consequences of inadequate oversight and untimely reporting. Without stricter monitoring and improved transparency, the risks to Curaçao's budget and public trust in its financial policies remain high.
Mounting Debt Obligations
The government of Curaçao faces significant debt obligations to various public entities and funds, jeopardizing budget discipline and the stability of these institutions.
Curaçao Ports Authority NV: The government owes 10.4 million guilders, including payments for bridge maintenance and dividend contributions.
Selikor NV: Outstanding debts to the waste management company total 41.4 million guilders, placing immense pressure on its financial operations.
Algemeen Pensioenfonds Curaçao (APC): The government owes 95.1 million guilders for public employee pensions and faces a long-term debt of 42.2 million guilders.
Sociale Verzekeringsbank (SVB): Unpaid obligations amount to 113.4 million guilders, primarily for social security funds covering healthcare and pensions.
External and Local Debts
The government also has considerable debts to the Netherlands, including 11.5 million guilders in short-term loans, 11.3 million guilders related to the former Giro Bank settlement, and 911 million guilders in COVID-19 loans.
Locally, entities like Fundashon Kas Popular (FKP), responsible for maintaining social housing, are owed 5 million guilders.
Financial Challenges Ahead
The scale of these debts underscores the financial challenges facing Curaçao. Delayed payments not only burden the government but also hinder the operations and stability of key institutions and funds. Without significant improvements in oversight and fiscal management, these issues are likely to persist, threatening the financial future of the island.