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Financial Safeguards in place for the new St. Maarten General Hospital

Financial Safeguards in place for the new St. Maarten General Hospital

St. Maarten Medical Center (SMMC) has been notified by Italian construction company INSO that its parent company, Condotte d’Acqua (Condotte) has filed for Extraordinary Administration, which is a restructuring procedure aimed at satisfying the creditors on the one side and safeguarding the continuity of the business and the employees’ rights on the other. Condotte’s going through financial turbulence was mentioned by several speakers, including Minister of VSA Emil Lee and SMMC’s General Director Kees Klarenbeek, during yesterday’s Groundbreaking Ceremony for the construction of the new hospital.

Despite these current circumstances, Tripartite members Ministry of VSA, SZV and SMMC have confidence that the project is properly insulated from any financial shocks, thereby safeguarding the SMMC, its lenders and the country of St. Maarten. Until clarity is established, no money will be transferred to INSO by SMMC by its own initiative, that of Minister of VSA, and the lenders, which includes the SZV. This may result in a slight delay on the timetable. INSO, the lenders to the SMMC and the World Bank have been in positive cooperation towards reviewing the current financial safeguards of the project, the objective being to ensure a successful start and quality completion of the new hospital.

“In 2016, SMMC contracted INSO as the general contractor to design, build and maintain the new hospital. We value the professionalism of the international company INSO. Sufficient financial safeguards are in place in the business plan of the new hospital project. SMMC ensures that payments will only be made when construction works are indeed completed at each stage, after proper verification by SMMC’s contracted engineering firm. This arrangement protects the lenders of the project as well”, Kees Klarenbeek stated.

Minister of VSA Emil Lee emphasized: “With any major project such as this, there should always be consideration for unforeseen risks and we are happy to know that the business and project plans were drafted in such a detailed manner that these can be addressed effectively, without endangering the desired project outcome. The Tripartite feels that perhaps this situation is a blessing in disguise as if the construction of the new hospital had started already and this would have arisen then, it could have ended in financial losses, contrary to now - before the start of the construction - financial safeguards can and have been put in place to insulate the new hospital project and its lenders from any turbulence evolving from a parent company’s financial woes.”

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