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Charlotte Amalie
Monday, August 15, 2022
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Malone: DeJongh Must Negotiate with Hovensa

The administration must try to negotiate a new agreement with Hovensa, incorporating Senate suggestions, Senate President Shawn-Michael Malone said Wednesday, responding to Gov. John deJongh Jr.’s radio address demanding the Senate reconsider legislation codifying a negotiated framework to try to sell the shuttered refinery.

“Rather than go on the air to frighten the public and blame the 30th Legislature for all of this territory’s fiscal woes, the governor should take steps to send down a wholly legal agreement with Hovensa that protects the interests of the people of the Virgin Islands,” Malone said in a statement following deJongh’s radio broadcast.

Earlier this year, the government and Hovensa agreed on a proposed amendment that would have set the stage for the sale of the facility to a company that might operate it again as a refinery.

But on Aug. 7, the Senate rejected the proposed amendment by an 11-3 vote. Within a week Hovensa announced that, in the face of the deal’s rejection and the re-imposition of the Third Concession Agreement, it could not profitably run the oil storage facility. As a result, officials said, Hovensa would close the facility and the fuel rack, which is the source of fuel oil for virtually everything in the territory, from automobiles to airliners to WAPA’s electrical generators.

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In Wednesday’s address, deJongh said, “It is time for the Legislature to ratify the Fourth Amendment to the Hovensa agreement and get St. Croix’s economy going again. If they have an alternative that will give us the same level of economic boost, then propose it, let’s discuss it and, if it promises to do what they say, I’ll approve it. But they and I each know well that there is none.”

DeJongh also castigated the Senate for not finalizing a 2014 budget, although the administration recently announced the federal government is reducing advance rum tax cover over payments, blowing a new hole in projected revenues that must be accounted for in the budget.

Malone took umbrage at deJongh casting blame on the senators for the failure of the agreement with Hovensa.

“I sent a letter outlining very specific suggestions for improving the Hovensa agreement so that senators would be able to ratify it in good conscience and the governor refused to reopen negotiations,” Malone said. “Approving such a flawed agreement would be an outright violation of the public trust by the Senate,” he said.

Senators that suggested changes “were doing their due diligence,” Malone said. “The 30th Legislature is not going to rubber stamp anything. It is my belief that if a reasonable effort were made to address some of the issues we could move forward. But instead of working with Hovensa to renegotiate, the governor is taking to the airwaves and placing blame,” he said.

Malone said that senators were scheduled to meet with the governor Tuesday night to discuss the territory’s pressing financial issues but that the governor canceled the meeting in favor of making the Wednesday morning broadcast.

After months of meeting with the governor’s financial team and holding numerous budget hearings, Malone said his colleagues were “blindsided” by the announcement that revenues associated with the Internal Revenue Matching Fund were not going to be paid at the rate anticipated in budget projections and that this could result in a $71 million shortfall.

“This is something that the governor should be aggressively working to repair; however, his lackluster response in regard to this serious issue is very troubling,” Malone said.

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The administration must try to negotiate a new agreement with Hovensa, incorporating Senate suggestions, Senate President Shawn-Michael Malone said Wednesday, responding to Gov. John deJongh Jr.'s radio address demanding the Senate reconsider legislation codifying a negotiated framework to try to sell the shuttered refinery. "Rather than go on the air to frighten the public and blame the 30th Legislature for all of this territory's fiscal woes, the governor should take steps to send down a wholly legal agreement with Hovensa that protects the interests of the people of the Virgin Islands," Malone said in a statement following deJongh's radio broadcast. Earlier this year, the government and Hovensa agreed on a proposed amendment that would have set the stage for the sale of the facility to a company that might operate it again as a refinery. But on Aug. 7, the Senate rejected the proposed amendment by an 11-3 vote. Within a week Hovensa announced that, in the face of the deal's rejection and the re-imposition of the Third Concession Agreement, it could not profitably run the oil storage facility. As a result, officials said, Hovensa would close the facility and the fuel rack, which is the source of fuel oil for virtually everything in the territory, from automobiles to airliners to WAPA's electrical generators. In Wednesday's address, deJongh said, "It is time for the Legislature to ratify the Fourth Amendment to the Hovensa agreement and get St. Croix’s economy going again. If they have an alternative that will give us the same level of economic boost, then propose it, let’s discuss it and, if it promises to do what they say, I’ll approve it. But they and I each know well that there is none.” DeJongh also castigated the Senate for not finalizing a 2014 budget, although the administration recently announced the federal government is reducing advance rum tax cover over payments, blowing a new hole in projected revenues that must be accounted for in the budget. Malone took umbrage at deJongh casting blame on the senators for the failure of the agreement with Hovensa. "I sent a letter outlining very specific suggestions for improving the Hovensa agreement so that senators would be able to ratify it in good conscience and the governor refused to reopen negotiations," Malone said. "Approving such a flawed agreement would be an outright violation of the public trust by the Senate," he said. Senators that suggested changes "were doing their due diligence," Malone said. "The 30th Legislature is not going to rubber stamp anything. It is my belief that if a reasonable effort were made to address some of the issues we could move forward. But instead of working with Hovensa to renegotiate, the governor is taking to the airwaves and placing blame," he said. Malone said that senators were scheduled to meet with the governor Tuesday night to discuss the territory's pressing financial issues but that the governor canceled the meeting in favor of making the Wednesday morning broadcast. After months of meeting with the governor's financial team and holding numerous budget hearings, Malone said his colleagues were "blindsided" by the announcement that revenues associated with the Internal Revenue Matching Fund were not going to be paid at the rate anticipated in budget projections and that this could result in a $71 million shortfall. "This is something that the governor should be aggressively working to repair; however, his lackluster response in regard to this serious issue is very troubling," Malone said.